Andhra Pradesh Real Estate Laws and Regulations

Andhra Pradesh Real Estate (Regulation and Development) Rules, 2017 (AP RERA)

Introduction

The Andhra Pradesh Real Estate (Regulation and Development) Rules, 2017, were notified by G.O.Ms.No. 115 on March 27, 2017, and came into force on May 1, 2017, in line with the central Real Estate (Regulation and Development) Act, 2016. This regulatory framework established the Andhra Pradesh Real Estate Regulatory Authority (APRERA) as the state’s dedicated real estate regulator. Since its inception, APRERA has issued several clarifications and procedural updates to address implementation challenges and to further strengthen consumer protection and market discipline.

Objectives and Scope

• To regulate and promote the real estate sector in Andhra Pradesh, ensuring transparency and efficiency in transactions.
• To protect the interests of homebuyers and introduce accountability among promoters, agents, and allottees.
• To establish a fast-track dispute redressal mechanism and create a level playing field for all stakeholders.
• The rules apply to all new real estate projects exceeding 500 sq. meters or more than eight units, as well as all ongoing projects that have not received a completion certificate as of May 1, 2017. They also cover real estate agents operating in the state.

Key Provisions

• Mandatory Registration: All eligible real estate projects and agents must register with APRERA before any advertisement, sale, or booking. Unregistered projects or agents are prohibited from operating.
• Comprehensive Disclosure: Developers are required to upload project details (title, approvals, layout plans, timelines, financials, etc.) on the APRERA website for public access. This includes quarterly updates on construction progress and status of approvals.
• Escrow Account: 70% of the amounts realized from allottees must be deposited into a separate escrow account to be used only for the specific project’s construction and land cost. As per the latest AP RERA Directions (2025), promoters must maintain three distinct bank accounts for each registered project:
  • RERA Collection Bank Account: Receives 100% of allottee payments (excluding taxes and pass-through charges), with funds auto-swept to the other two accounts.
  • RERA Separate Bank Account: Receives 70% of collections for land and construction costs only, free from liens or third-party control. Withdrawals require architect, engineer, and CA certificates, proportional to project completion.
  • RERA Transaction Bank Account: Receives 30% of collections for operational and tax-related expenses.
• Standardized Agreements: Sale agreements must be registered and must include clear clauses on possession date, payment schedule, and penalty for delays.
• Obligations of Promoters: Promoters must obtain all necessary approvals, adhere to declared timelines, and are liable for structural defects for five years post-possession.
• Rights and Duties of Allottees: Buyers are entitled to timely possession and accurate information, and are responsible for making payments as per the agreement.
• Complaint Redressal: APRERA provides a dedicated platform for filing complaints and ensures time-bound adjudication, with the possibility of appeal to the Andhra Pradesh Real Estate Appellate Tribunal (APREAT).
• Transparency and Public Database: The APRERA website maintains a public database of registered projects, defaulting promoters, and penalized agents, enhancing market discipline.

Limitations

• Exemptions: Projects completed before May 1, 2017, or those with all slabs laid or amenities handed over, are exempt, leaving some buyers outside the Act’s protection.
• Implementation Gaps: Enforcement and awareness are still evolving, especially in rural and semi-urban areas. Some buyers may not be fully aware of their rights or the complaint process.
• Jurisdictional Limits: APRERA cannot adjudicate on land title disputes or certain criminal matters, which must be resolved in civil courts.
• Administrative Delays: High caseloads and limited resources can sometimes result in delays in registration and dispute resolution.

Impact on Homebuyers

• Transparency: Buyers can verify project approvals, timelines, and promoter track records online, reducing the risk of fraud or misinformation.
• Financial Security: Escrow requirements ensure that buyers’ funds are used only for the intended project, minimizing fund diversion and project abandonment.
• Legal Recourse: Homebuyers have access to a dedicated, time-bound grievance redressal mechanism, leading to faster and fairer dispute resolution.
• Market Confidence: The regulatory framework has increased trust in Andhra Pradesh’s real estate sector, attracting more buyers and investors.
• Deterrence of Malpractices: Strict penalties, public disclosure of defaulters, and standardized agreements have reduced the prevalence of unfair practices and project delays.

Andhra Pradesh Apartment (Promotion of Construction and Ownership) Act, 1987

Introduction

The Andhra Pradesh Apartment (Promotion of Construction and Ownership) Act, 1987, was enacted to regulate the promotion, construction, sale, and transfer of apartments in the state. The Act has undergone amendments to address issues related to apartment management and the rights of flat owners, with the latest significant changes focused on streamlining association formation and maintenance responsibilities.

Objectives and Scope

• To provide a legal framework for the ownership and transfer of apartments and common areas.
• To regulate the relationship between promoters, apartment buyers, and associations.
• To ensure proper maintenance and management of apartment complexes.
• The Act applies to all apartment buildings constructed or promoted in Andhra Pradesh, whether residential or commercial.

Key Provisions

• Mandatory Registration: Promoters must register apartment projects and execute a Deed of Declaration, specifying the details of each apartment and common areas.
• Formation of Associations: Promoters are required to facilitate the formation of apartment owners’ associations or societies for collective management.
• Transfer and Inheritance: Apartments can be transferred, sold, or inherited as independent property units, with undivided interest in common areas.
• Maintenance and Repairs: The Act mandates that associations are responsible for the maintenance, repair, and regulation of common facilities.
• Defect Liability: Promoters are liable for structural defects or deficiencies in workmanship for a specified period after possession.
• Bylaws: Associations can frame bylaws for governance, maintenance charges, and dispute resolution.
• Dispute Resolution: Provides a framework for resolving disputes among owners, associations, and promoters.

Limitations

• Some provisions are outdated and do not fully address issues arising from modern high-rise living, such as fire safety, parking, or electronic voting.
• Enforcement of association formation and maintenance norms is inconsistent, with some promoters failing to fulfill their obligations.
• Dispute resolution mechanisms can be slow and cumbersome, often requiring recourse to civil courts.
• The Act does not cover informal or unauthorized apartment constructions.

Impact on Homebuyers

• Legal Certainty: Offers clear legal recognition of apartment ownership and the right to participate in association governance.
• Collective Management: Enables owners to collectively manage and maintain their property, ensuring better upkeep and value retention.
• Dispute Framework: Provides a mechanism for resolving disputes, though practical enforcement remains a challenge.
• Need for Reform: Increasing demand for a more robust and modern law to address new challenges in apartment living and redevelopment.

Andhra Pradesh Town Planning Act, 1920 (as amended)

Introduction

The Andhra Pradesh Town Planning Act, 1920, is one of the oldest urban planning statutes in the state, with several amendments over the decades to address evolving urbanization, infrastructure, and environmental needs. The Act has been supplemented by more recent regulations and master planning guidelines.

Objectives and Scope

• To regulate land use, zoning, and development in urban and semi-urban areas.
• To empower local authorities to prepare and enforce master plans and development plans.
• To ensure orderly and sustainable urban growth, infrastructure provision, and environmental protection.
• The Act applies to all municipalities and urban development authorities in Andhra Pradesh.

Key Provisions

• Master Plans: Mandates the preparation and enforcement of master plans and detailed development plans for cities and towns.
• Zoning Regulations: Specifies permitted land uses (residential, commercial, industrial, etc.) and development controls.
• Building Permissions: Requires planning permission for land development and construction, ensuring adherence to approved plans.
• Latest Update (2025): For residential buildings on plots up to 60 square yards (50 square meters), no building permission is required for ground or ground plus one floor construction. The applicant must register on the online portal with a token fee of ₹1 and self-certify title, plot size, and floor details. No completion or occupancy certificate is required. This provision cannot be misused to split larger plots or construct on government, disputed, or prohibited land.
• Enforcement Powers: Authorities can demolish unauthorized constructions and impose penalties for violations.
• Public Participation: Provides for public consultation in the preparation of development plans.

Limitations

• Implementation and enforcement can be inconsistent across local bodies, leading to unauthorized developments.
• Bureaucratic delays in granting permissions can slow down legitimate projects.
• Discretionary powers may lead to irregularities and corruption.
• The Act is less effective in controlling unplanned urban sprawl and encroachments.

Impact on Homebuyers

• Orderly Development: Ensures homes are built in planned, well-serviced areas with proper infrastructure.
• Protection from Illegal Construction: Reduces the risk of investing in unauthorized or illegal projects.
• Infrastructure Assurance: Promotes the provision of roads, water supply, and other amenities.
• Clarity in Land Use: Buyers can verify zoning and permissible uses before purchase, reducing legal risks.

Andhra Pradesh Stamp Act, 1899 (as amended)

Introduction

The Andhra Pradesh Stamp Act, 1899, is a state-specific adaptation of the central Indian Stamp Act, governing the levy and collection of stamp duty on property transactions. The Act has been amended periodically to update rates, procedures, and to incorporate digital initiatives.

Objectives and Scope

• To ensure the legal recording of property transactions and generate state revenue through stamp duty.
• To provide a framework for the execution, valuation, and adjudication of property documents.
• The Act applies to all sales, transfers, leases, mortgages, and gifts of immovable property in Andhra Pradesh.

Key Provisions

• Compulsory Stamping: All property documents (sale deeds, gift deeds, lease agreements, etc.) must be duly stamped as per the prescribed rates.
• Valuation: Stamp duty is calculated based on the higher of the declared transaction value or the government’s guideline value.
• Latest Update (2025): Starting February 1, 2025, the Andhra Pradesh government revised land registration values, increasing them by 15–20% in several areas to align with market rates.
• E-Stamping: Andhra Pradesh has introduced e-stamping and digital payment options to improve efficiency and reduce fraud.
• Adjudication: The Collector of Stamps is empowered to adjudicate disputes regarding stamp duty valuation.
• Penalties: Undervaluation, evasion, or non-payment of stamp duty attracts penalties and prosecution.

Limitations

• High stamp duty rates can increase transaction costs and sometimes encourage under-reporting of sale prices.
• Manual processes and delays in adjudication can slow down transactions in some districts.
• Does not guarantee clear title—buyers must still conduct independent due diligence.

Impact on Homebuyers

• Legal Security: Properly stamped documents are essential for establishing legal ownership and protecting against future disputes.
• Financing: Registered and stamped documents are required for obtaining home loans.
• Transparency: E-stamping and digitization have made the process more transparent and accessible.
• Due Diligence: Buyers must ensure all documents are correctly stamped to avoid legal complications.

The Registration Act, 1908 (as applicable in Andhra Pradesh)

Introduction

The Registration Act, 1908, is a central law governing the registration of property documents, applicable in Andhra Pradesh since independence. The Act has been amended by the state to address local requirements and to facilitate digital registration and anti-fraud measures.

Objectives and Scope

• To ensure the legal recording of property transactions and provide public notice of ownership changes.
• To maintain a transparent and accessible public record of property rights and interests.
• The Act applies to all sales, transfers, leases (over one year), mortgages, and gifts of immovable property in Andhra Pradesh.

Key Provisions

• Compulsory Registration: All sale deeds, gift deeds, and leases over one year must be registered at the Sub-Registrar’s office.
• Verification: Sub-Registrar verifies the identities of parties, the legality of documents, and the absence of encumbrances.
• Digital Initiatives: Andhra Pradesh has implemented partial digitization of land records and e-registration to improve efficiency.
• Certified Copies: Registered documents are stored and certified copies can be obtained for legal purposes.
• Public Access: Registration records are accessible for title verification and due diligence.

Limitations

• High transaction costs due to registration fees and associated charges.
• Manual processes and understaffed offices can cause delays, especially in rural areas.
• Registration does not guarantee clear title; buyers must conduct independent due diligence.
• Risks of document forgery and impersonation, though digitization is reducing these.

Impact on Homebuyers

• Legal Security: Registration is essential for establishing legal ownership and protecting against disputes or claims.
• Access to Finance: Registered documents are required for home loans and other financial transactions.
• Transparency: Digitization is making the process more transparent and accessible.
• Due Diligence: Buyers must verify registration and title to avoid fraud or defective ownership.