Real Estate Law: Adaptation Beyond COVID-19 Pandemic

Name: Rahil Setia

           College Name: Army Institute of Law, Mohali

 “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”

                                                                                                                                 -- Franklin D. Roosevelt


The COVID-19 Pandemic ushered us into uncertain times bathed in ambiguity. Governments across the world have imposed restrictive measures in the form of lockdowns/curfews. These measures, though essential to protect the lives of people, have had an appreciable adverse effect on the economic health of countries around the world. This led to instances such as mass migrant exodus in labour-intensive countries like India, transportation crises, availability of essential supplies to people living in complex topographical regions., etc. Shutting down of raw material and cement factories have brought the real-estate sector to a grinding halt.[1] The Domino effect due to the clogging of the real-estate sector could impact a large fraction of the population, since it employs a substantial number of people, especially in countries like India. Therefore, it becomes indispensable to analyse the impact of COVID – 19 on the real-estate sector from various perspectives and across various nations with special emphasis on the Republic of India.



India has lately witnessed tremendous growth in the real estate sector as a result of more influx of industries, corporates, and hence population in the metropolitan cities.[2]Laws to govern real estate are necessary for the flawless functioning of constructions, sale, purchase of immovable property[3], timely redressal of grievances that may be aired in these uncertain times. Federation of Indian Chambers of Commerce and Industry has, in its report titled “Impact of COVID-19 on Indian Economy” had observed that the real estate sector suffered major setbacks from economic slowdown resulting in poor housing demand and on the other hand COVID-19 has acted as another jolt that has potential to bring India's real estate market to a grinding halt, which is further coupled with falling demand.[4]The National Real Estate Development Council has predicted that the pandemic could lead to a loss of about 1 lakh crore to the sector.[5] Real Estate is the second-largest employment sector in India after agriculture and contributes about 6-7% to the GDP of the country.[6]



The legal corpus which regulates the real estate sector in India includes various legal statutory instruments such as The Transfer of Property Act, 1882, The Registration Act, 1908, The Indian Stamp Act, 1899, The Indian Contract Act, 1872, The Specific Relief Act, 1963, The Foreign Exchange Management Act, 1999 for Transnational and Cross-Border Transactions and the much-awaited and more recently enacted, The Real Estate (Regulation and Development) Act, 2016.[7]


This Regulator of the Real Estate sector ought to be established and incorporated by the Appropriate Government in accordance with the powers conferred by Section 20 of the Real Estate (Regulation and Development) Act, 2016.[8]It regulates residential and commercial transactions in the real estate realm and thereby serves to instil confidence in investors and thus ensure timely completion of projects.[9]


The legal fraternity until now, did not attach much importance to the concept of Force Majeure and it was seldom employed as a legal concept.[10]The Jurisprudence on the concept of Force Majeure was a parochial one, encompassing only a handful of judicial pronouncements.[11] Black’s Law Dictionary defines Force Majeure as ‘an event or effect that can be neither anticipated nor controlled. It is a contractual provision allocating the risk of loss if performance becomes impossible or impracticable, especially as a result of an event that the parties could not have anticipated or controlled.’[12]

It is a certainty that the timelines under the Real Estate (Regulation and Development) Act, 2016 will be adversely affected as far as various legal and other procedural compliances are concerned.[13]Section 6 of the Real Estate (Regulation and Development) Act, 2016 provides for the extension of registration of projects that have been registered under Section 5 of the Act, which cannot be extended beyond a period of one year in aggregate.[14]It must, however, be noted that the invocation of Section 6 of the Act does not absolve the promoter or developer of its obligations under the contract but only serves to delay the execution of various requirements under the contract.[15]

A statement was released by the Confederation of Real Estate Developers Association of India (CREDAI) given the crises, wherein certain policy interventions were sought by the Ministry of Housing and Urban Affairs which, inter-alia, included measures such as, the extension of the registration period by up to one year, to not declare the loans procured by real estate developers as Non-Performing Assets, recovery of the principal amount along with the interest thereon be undertaken over nine months instead of the earlier three months.[16]



One of the essential attributes for invocation of the doctrine of Force Majeure is the presence of such circumstances that pose a ‘real impossibility to fulfil one's obligation’. This ‘real impossibility has to be ascertained from the facts and circumstances of the case, as was observed by the Delhi High Court in the case of M/s. Halliburton Offshore Services Inc v. Vedanta Ltd & Anr.[17]Invocation of this doctrine requires that impossibility must solely be attributable to the event of Force Majeure and not to any past activities of the person himself.[18]Whether COVID -19 affects the ‘regular development of the project’[19] would be ascertained from the facts and circumstances of the case and the terms of the contract.[20] 



Given the pandemic, the Maharashtra Real Estate Regulatory Authority, extended by three months, the period of validity of all registered projects, whose completion date expired on or after 15th March 2020.[21]Timelines for various statutory compliances under the Real Estate (Regulation and Development) Act, 2016 have also been extended.[22]The Karnataka Real Estate Regulatory Authority also extended by three months, the period of validity of all registered projects, whose completion date expired on or after 15th March 2020[23] and time limits for various statutory compliances have also been extended.[24]Securities and Exchange Board of India on March 23rd, 2020 extended timelines for various filing and compliance obligations of Real Estate Investment Trusts and Infrastructure Investment Trusts.[25]Reserve Bank of India brought certain measures to ensure access to working capital and imposed a moratorium of 3 months on loan repayments,[26]this will provide relaxation to allottees in their home-loan repayments and promoters suffering from a liquidity crunch.



For efficacious redressal of workforce crises, an advisory was issued by Union Government under Section 60 of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996[27] to States/UTs to transfer funds from the ‘Cess Fund’ directly to the accounts of workers.[28]Hon’ble Apex court directed all concerned stakeholders for effective compliance with various advisories and directives by the Government.[29]




Construction activities, being categorised as non-essential activities, ceased. Federal Government introduced financial packages to inject liquidity into federally funded projects.[30]  Washington D.C. observed sales of only 530 homes, substantially lower than the average of 2017 to 2019 March months and a steep drop from January and February of 2020.[31]



States like Ontario have labelled construction activities as essential activities, this is in addition to the Canadian Government's mitigation in the form of a liquidity injection of $27 million to assist workers in the construction sector.[32]The Government is also relying on immigration as a wildcard to mitigate the loss to the real estate market.[33]Bank of Canada decided to buy Canada bonds to keep markets in a well-functioning condition and maintained the benchmark rate at 0.25%.[34]



The Reserve Bank of Australia decided to cut rates for installing an economic milieu conducive to extensive lending practices, this is further fostered by the stimulus package, and funding facility amounting to AUD 90 billion,[35] released by the Government.[36]In commensuration with the  Government directives, a moratorium has been imposed on evictions, rents have been deferred, banks have suspended repayment of mortgages.[37]



A law was enacted by the French Parliament to provide for two months of 'state of emergency', from 24th March to 23rd May, further extended up to 10th July.[38] Also, Ordinance no. 2020-306 suspended certain clauses that provided for sanctions for non-fulfilment of contractual obligations.[39]



Given the pandemic, nations all over the world have been compelled to lay more emphasis on developing a robust and strengthened medical infrastructure. The National Real Estate Development Council called for a Governmental intervention in the form of a fiscal stimulus of $200 Billion.[40]Schemes like ’Aatma Nirbhar Bharat’, could be leveraged to reduce dependency on global supply chains.[41]Many measures have been undertaken to mitigate the concerns of people, it would be interesting to observe how Governments across the globe henceforth react.


[1] Diva Rai, Real Estate, RERA and COVID-19, IPLEADERS (Jul. 14, 2020, 8:07 PM),

[2] Khyati Dhuparr, Real Estate Laws – An Overview, LAWYERED (Jul. 16, 2020, 3:52 PM),

[3] Ibid.

[4] Abhinav Sood & Tejpal Singh Rathore, Impact Of COVID-19 On The Real Estate Sector In India, LIVE LAW (Jul. 16, 2020, 5:43 PM),

[5] Ibid.

[6] Amit Kumar Sinha et al., An Overview on the Indian Real Estate Sector, 7 IRJET 4633, 4633 (2020).

[7] Dhuparr, supra note 2.

[8] The Real Estate (Regulation and Development) Act, 2016, No. 16, Acts of Parliament, 2016 (India).

[9] PTI, Big Cheer for Homebuyers! Rajya Sabha Passes Real Estate Bill, THE ECONOMIC TIMES (Jul. 18, 2020, 10:19 PM),

[10] Kanika Singh, [Force Majeure] Taking Cue From Courts: What Worked, What Didn’t, LIVE LAW (Jul. 18, 2020, 10:50 PM),

[11] Ibid.

[12] Poorvi Sanjanwala & Kashmira Bakliwal, What is force majeure? The legal term everyone should know during the Covid-19 crises, THE ECONOMIC TIMES (Jul. 18, 2020, 10:36 PM),

[13] Sood & Rathore, supra note 4.

[14] The Real Estate (Regulation and Development) Act, 2016, supra note 8.

[15] Sood & Rathore, supra note 4.

[16] Rai, supra note 1.

[17] O.M.P (I) (COMM.) No. 88/2020 & I.As. 3696-3697/2020.

[18] Singh, supra note 10.

[19] The Real Estate (Regulation and Development) Act, 2016, supra note 8.

[20] Sood & Rathore, supra note 4.

[21] Ankit Sharma, MahaRERA extends completion deadline for projects by three months, THE ECONOMIC TIMES (Jul. 21, 2020, 10:08 PM),

[22] Kailash Babar, COVID-19 Impact: MahaRERA extends projects’ completion deadlines by 3 months, THE ECONOMIC TIMES (Jul. 21, 2020, 10:12 PM),

[23] Prahalad Singh, Karnataka RERA: Realty Projects Get Deadline Extension By Three Months, COMMON FLOOR (Jul. 22, 2020, 11:41 AM),

[24] Avantis RegTech Legal Research Team, Karnataka RERA issues a circular on extension of project and compliant hearing, AVANTIS (Jul. 22, 2020, 11:45 AM),

[25] Sood and Rathore, supra note 4.

[26] Vishwanath Nair & Advait Rao Palepu, Coronavirus Crisis: RBI Announces Moratorium On Loans, Targeted Liquidity Measures, BLOOMBERG QUINT (Jul. 22, 2020, 12:08 PM),

[27] Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, No. 27, Acts of Parliament, 1996 (India).

[28] PTI, Covid-19 outbreak: Santosh Gangwar asks CMs to provide financial aid to 3.5cr construction workers, FINANCIAL EXPRESS (Jul. 22, 2020, 1:01 PM),

[29] Alakh Alok Srivastava v. Union of India, Writ Petition (Civil) No. 468/2020.

[30] Rai, supra note 1.

[31] Jenny Schuetz, COVID-19 is already affecting the Washington, D.C. real estate market, BROOKINGS (Jul. 22, 2020, 1:47 PM),

[32] Rai, supra note 1.

[33] Bryan Borzykowski, Coronavirus is shaking up Canada’s housing market, but don’t expect a crash, MACLEANS (Jul. 22, 2020, 2:23 PM),

[34] Lydia McNutt, Bank of Canada Makes Interest Rate Announcement, REMAX (Jul. 22, 2020, 2:35 PM), 

[35] Rai, supra note 1.

[36] Nigel Stapledon, How will coronavirus affect Australia’s real estate market and house prices?, THE GUARDIAN (Jul. 22, 2020, 3:13 PM),  

[37] Dr James Brugler & Dr Jonathan Dark, The Impact of COVID-19 on Australia’s Housing Market, PURSUIT: THE UNIVERSITY OF MELBOURNE (Jul. 22, 2020, 3:39 PM),

[38] Denis Charles & Elodie Seddoh, Coronavirus: Impact on French Real Estate, PINSENT MASONS (Jul. 22, 2020, 4:00 PM),

[39] Ibid.

[40] Vandana Ramnani, Coronavirus Impact: Real estate sector to incur a loss of Rs 1 lakh crore, NATIONAL REAL ESTATE DEVELOPMENT COUNCIL (Jul. 22, 2020, 11:06 PM),

[41] Explained Desk, Explained Ideas: What Aatma Nirbhar Bharat slogan means for Indian agriculture, INDIAN EXPRESS (Jul. 22, 2020, 11:15 PM),