Law analysis
Revisiting Real Estate Act, 2010
Quazi Ariffur Rahman
Three or four conglomerates started limited-scale real estate dealings in Dhaka before 1971. After the emergence of Bangladesh a handful of local entrepreneurs followed suit and, observing that the business was fairly lucrative, numerous others gradually embarked upon the same business in and outside Dhaka. No legislation was enacted to regulate their activities, as a consequence of which many among them flouted ethical standards resulting in myriad landowners and purchasers of real estate suffering loss, some even utter ruination, not to speak of mental tribulation.
The present government considered it expedient to bridle such dishonest developers and placed a Bill in the Jatiyo Shangsad in September 2009 which, after scrutiny in the relevant Standing Committee, was enacted in October 2010 as wi‡qj G‡óU Dbœqb I e¨e¯’vcbv AvBb, 2010 (Real Estate Development and Management Act, 2010) (Act 48 of 2010). Having gone thorough the Act, I feel that certain stipulations in it is required to be revamped, as some of those go against a landowner and some against a developer, while a few others may give rise to controversy. In my evaluation of the Act, I am referring to a developer as a company or a firm and am describing a purchaser as a singular numbered male which would include more than one individual and also belonging tot he female gender. As per the definition given in section 2 (12) of the Act, the words "real estate" connote any residential, institutional, commercial plot or apartment or flat.
Conditions of purchase and sale of real estate
Under the heading Òwi‡qj G‡óU µq-weµ‡qi kZ©vejx, Section 8(1) of the Act, dealing with sale-purchase, registration, transfer, et cetera, states that a developer shall elaborate in its prospectus or allotment letter (to be issued to an intending purchaser) outstanding features of a property it proposes to develop. Every developer in our country brings out a prospectus (or a brochure) for an upcoming project. The highlights of such prospectus often allure a prospective purchaser to invest his money in the project but, to the latter's detriment, certain unscrupulous developers do not incorporate all such features in their allotment letters, which an unwary purchaser may fail to perceive.
The innocent-looking single-lettered word ÒevÓ (in English, "or") in the section grants latitude to a dishonest developer to disperse allotment letters ignoring or bypassing certain provisions depicted in its prospectus. To protect an intending purchaser and for him to keep away from a situation that may go against him, it should be made obligatory that allotment letters do not add, alter or omit any feature specified in the prospectus. As such, the word ÒevÓ (or) in the section should be replaced by the word Ges (and). The same word ÒevÓ (or) also appears in sections 12(1), 13(1), 14(1) and 14(2) of the Act, which deal with discharge by a purchaser of the consideration for his real estate, handing over to him possession, et cetera. To shield a prospective purchaser from the uncanny clutches of a sinister developer, the very same word ÒevÓ (or) should be substituted by the word Ges (and) in these sections.
Interest rate
Section 14(4) of the Act provides that in the event of a purchaser requiring to clear any of his installments beyond the time limit agreed upon by him with a developer, he may do so by paying interest at the rate of 10% (ten percent), but the law is silent as to whether discharge of such interest would be evwl©K (per year) or gvwmK (per month). In the case of an understanding between a developer and a purchaser [proviso to section 15(1) remaining tacit about the quantum of compensation, or payment of damages to be paid by a developer to a purchaser for failure to deliver possession of the latter's real estate within the stipulated date. Section 15(2) of the Act provides that the compensation should be at the rate of 15% (fifteen percent). Here, too, this section does not mention whether payment of interest should be made evwl©K (annually) or gvwmK (monthly). To avoid any variance of opinion between a developer and a purchaser with regard to the period for which interest is to be calculated, and to keep an aggrieved party away from suffering any loss, monetary or otherwise, the span of time for such computation should be specifically mentioned in both these sections.
Bargaining power
Section 11(3) of the Act, dealing with advantage of a real estate, states that a developer shall comply with the conditions of an Agreement executed by and between a landowner and itself [section 10 (1)]. Such Agreement, compulsorily registrable under the Registration (Amendment) Act, 2004 (Act 25 of 2004), requires a developer to take care of a real estate of a landowner for a minimum of one year after handing over its possession. As nowadays a landowner in Dhaka city often gets from a developer half (or almost half) after a property is developed, and as the section precisely provides that 'as per the Agreement entered into by and between the parties', I feel that section 11(3) should be repealed, because it is doubtful whether any honest and truthful developer would agree to insert such a condition in its Agreement with a landowner, as taking care of half (or nearly half) of the developed property for a minimum of one year would entail financial burden on itself.
Conclusion
From the perspective of all concerned parties a landowner, a developer and an intending purchaser of a real estate-I strongly feel that the Act should be remodeled I am not sure whether REHAB has formally reacted to any provision of the law, but better late than never. The lawmakers and concerned standing committee of the parliament may think over it to make the law more humane and jurisprudentially sound.
The writer is a Solicitor and Advocate, Bangladesh Supreme Court.
