Samiul Al Nafi: For most middle-class Bangladeshis, a flat is the result of a lifetime of savings. Yet delayed handovers, incomplete registration, construction defects and sudden demands for extra payments remain among the most common complaints against developers. The Real Estate Development and Management Act, 2010 was meant to end such practices. Whether buyers can truly count on it is another question.
Before 2010, developers operated without specific legislation, and many landowners and purchasers suffered heavy losses. The Act, passed in October 2010 as Act 48 of 2010, brought the sector under a regulatory framework for the first time. On paper, it offers genuine safeguards.
Hidden costs are the first concern. A developer may not collect money beyond the agreed instalments unless the flat is ready, with structural work and utility connections in place. Delay is the second. Under section 15, if a developer fails to deliver within the agreed time, it must refund the full amount paid, together with the compensation specified in the agreement, by account payee cheque within six months. A buyer who cancels an allotment is also entitled, under section 17, to a refund within three months, after a 10 per cent deduction for administrative costs. A buyer reading the Act might feel well protected.
The weakness lies in enforcement. Section 36 requires disputes to be settled mutually first, then through arbitration under the Arbitration Act, 2001, and a court case is possible only if the arbitration tribunal cannot be constituted. In practice, buyers cannot sue developers directly in civil or criminal courts. They must apply to the district judge, who forms an arbitration tribunal. The law sets no binding timeline for these tribunals, so cases drag on for years. One Azimpur buyer who booked a flat in July 2010 was still without possession years later.
Criminal remedies are no stronger. Offences under the Act are tried summarily before a magistrate, but prosecutions are reportedly slow. Even on refunds, practicing advocates have noted that the Act is silent on what a buyer can do when a developer ignores section 17. The industry association, REHAB, is not empowered to take action under the Act either, despite receiving over a hundred complaints of fraud. A former Chief Justice, as chairman of the Law Commission, has called for urgent amendment, saying the law undermines the rights it was meant to protect. The High Court has also issued a rule questioning the validity of the relevant sections.
So what should change? First, buyers need either a direct right to sue or special courts with mandatory deadlines for disposing of cases. Without fast-track mechanisms, the system will keep buyers failing. Second, arbitration clauses should be compulsory in sale agreements, since without one arbitration may not be available at all. Third, regulators must act against defaulting developers rather than leave buyers to fight alone.
Buyers can also protect themselves before signing. They should verify the land title, check the flat’s specifications, and collect all relevant documents. A written agreement with clear handover dates and a clear arbitration clause is the best defence against later disputes.
So, can flat buyers count on the law? Only partly. The Act recognises their rights to timely delivery, refunds and protection from extra charges. But a right that takes a decade to enforce is a weak right. Until remedies become faster and more direct, the law will remain a promise, and the developer’s brochure will often be the more convincing document.
