Before the independence of Bangladesh, only a few conglomerates were involved in real estate on a limited scale. But that escalated quickly with the emergence of Bangladesh after 1971. More and more business entities started embarking on the real estate business after realizing its huge potential for growth in Bangladesh except for one huge problem. There were no real estate laws in Bangladesh to govern the businesses and their activities. As a result, many businesses were involved in unethical practices and resort to unfair means in order to please their own interests.
To put an end to all these unethical practices, the government of Bangladesh finally passed a bill in 2010 (Real Estate Development and Management Act, 2010). Be you a landlord or a real estate developer; if you are dealing with properties, you must have to abide by the laws that were established to regulate relevant activities. In the first part of this article, there will be two sections, each describing different laws and regulations of real estate development and management according to the Real Estate Development and Management Act, 2010.
Real estate buying, selling, registration, and transfer
When it comes to dealing with real estate, you have to be careful about a lot of things. Failing to comply with the real estate laws in Bangladesh can result in serious penalties, hence having a clear understanding of all the laws and regulations becomes that much important.
Terms of a real estate sale and purchase
- The prospectus or allotment documents shall specify the appropriate explanation or analysis including the division of the salable area of real estate.
- Every condition relating to the development and sale of real estate shall be specified in the agreement concluded between the parties in detail.
- If a developer wants they can change the specified plot or flat allotted with the consent of the buyer.
- No developer is allowed to take additional money from the buyer outside the terms of the contract (However, this provision shall not come into force if either party executes a supplementary agreement proposing the addition of any advanced equipment by mutual consent).
Execution of registration and transfer documents
- After paying the full value of the real estate, the developer shall complete the transfer of possession of the real estate, execute the registration process and transfer all the documents to the buyer within 3 (three) months.
- If the value of real estate fluctuates at the time of transfer of possession, adjustments must be made within 3 (three) months according to the rate it was purchased.
- When a developer obtains land from a landowner or a power of attorney and proposes to construct real estate on that land and sell it to the real estate buyers thereof, the developer may perform the sale or transfer the real estate acquired on his part by executing or preparing the deed themselves.
- If the developer is not granted the power to sell or transfer the real estate as per sub-section (3), a written request needs to be made by the developer after the real estate is ready to sell or transfer. And within 15 (fifteen) days after the request, a deed must be prepared in favor of the buyer by the landowner or on his behalf.
- Regardless of any conventional law that is in place if the deed is not executed within the prescribed time by the landowner or on his behalf after being requested by the developer under sub-section (4), the developer shall be granted the power to prepare the deed as if the developer himself is the owner of the land and real estate.
Agreements and others
Agreement between landowner and developer
- The landowner shall execute a written joint venture agreement with the developer for the purpose of real estate development.
- As mentioned in sub-section (1), the agreement shall contain the exact portion of the proprietary and the rights that the developer will possess. The agreement shall also contain the terms of the power of attorney for the purpose of giving power to the developer to execute and register the deed with the nominated buyer with reference to the time of commencement and completion of development or construction work.
- Real estate development or construction work shall be started and completed in accordance with the terms of the agreement mentioned in sub-section (1).
Required amenities of a real estate
Real estate laws in Bangladesh also states clearly the amenities required for real estate and it
- When it comes to real estate development projects, civic amenities shall be ensured as much as possible in accordance with the Land Development Rules of Private Residential Projects, 2004.
- All types of real estate created by the developer
– Must be well lit and well ventilation;
– Must be connected to all types of utility services such as water, electricity, gas and sewerage, waste management, fire protection, etc. (if applicable) before handing over;
If repairs are required due to construction defects after the transfer, the repair work shall be completed at the developer’s own expense for at least 2 years from the date of transfer.
- In accordance with the terms of the agreement executed between the parties, each developer shall maintain the real estate for at least 1 year after the transfer.
- Neither deviation from the approved design of real estate nor any reduction in facilities or change of common space shall be allowed.
- Every developer shall, at the time of allotment of real estate, provide a statement containing information relating to the civic amenities identified in the architectural design and layout of the project.
Real estate laws in Bangladesh are very elaborated and well detailed. It may seem a lot on the surface but it is essential for tackling the huge real estate market and all the activities in it. However, this was the first part of our two-part long series. In the last part, we will discuss everything about payment, transfer of possession, and more.