This Article is written by Abhyuday Agarwal COO, lawSikho after obtaining inputs from Dhruv Kumra, Pranay Agrawala, founding partner at Panda Law and Vishakha Gupta)

When you decide to work as a litigator or a corporate lawyer with respect to a particular area, it is important to break down the types and categories of work and the clients you could work for in that area. You can then start identifying the skills one by one.

And there is one area that is hard to ignore: that is real estate litigation. The sector is not doing particularly well, and that has increased the legal work phenomenally.

If you want to be a litigator, even if you do not want to exclusively handle real estate litigation, you should know that it does form a tangible chunk of the practice of most litigators, at least in their initial years. 

This is especially true if you are outside of the two largest legal markets, Delhi and Mumbai. In those cities you may still manage to survive without doing real estate in the initial years, but that’s not so if you are anywhere else city or town.

Some of the real estate litigation work is traditional or classical – property disputes around sale transactions, succession-related work, eviction of tenants etc. but there are various other categories of work which lawyers frequently fail to pay attention to and therefore miss a big opportunity.  

Lawyers who are not skilled in the kind of work I am talking about will have no option but to refuse matters periodically. It could be worse, too, and some of them may not even realise that they are missing out on a big opportunity. 

Our view is that performing real-estate related work is really mainstream, it is easy to learn and will complement your practice with respect to other areas, so it’s best not to ignore it.  

If You are a Litigator, You can’t Afford to Miss out on this Work

Consumer Protection (for consumers and builders) 

Consumer-related litigation has been common in case of delayed possessions, refunds and interest or compensation for some defect in the flat or change of terms of allocation. 

If you are representing a builder, you may need to defend the builder in multiple litigations across multiple consumer forums. 

Claims of consumers may not individually be of a huge amount, so many lawyers assist consumers in creating a consumer association and in filing a combined claim. It may also enable one to bring such a claim within the jurisdiction of a higher forum (state commission or even National Commission). 

RERA-related regulatory and litigation work

RERA-related litigation work has been brought online in many states. In other words, you can go online on the state RERA’s website and file a claim against a developer for circumstances such as not providing possession. Personal presence is only required at the stage of a hearing.  

However, some of the drawbacks or disadvantages of this route are: 

RERA doesn’t have appropriate staff and tribunals constituted in all states

  • The interest awarded is lower than in a consumer dispute 
  • Adequate enforcement-related powers are not provided

If you are working for a builder, you may primarily perform compliance-related work and maybe even defend the builder in criminal proceedings, through compounding and other methods. 

IBC-related litigation

Insolvency and Bankruptcy Code (IBC) related litigation against builders is very common since the Code was passed. Such litigation could be initiated by one or more flat-owners, or from banks or financial institutions in respect of loans they may have provided to construct a project. For example, in the case of Jaypee insolvency proceedings were first initiated by lenders, but proceedings against Emaar MGF were initiated by flat-owners. 

After the proceedings are initiated, all the operational and financial creditors get involved, and where the claims are of a high amount, each party may have its own lawyers. 

You could also represent the builders’ case, or work for a resolution professional after the petition against the builder has been admitted by the National Company Law Tribunal.

Where all other litigation and enforcement action proves to be ineffective, IBC-related action usually comes to the rescue of those who are adversely impacted.  

If you intend to specialize in such litigation, you will need to know how IBC proceedings can be initiated in the context of real estate developers and how subsequent steps of restructuring pan out, the kinds of settlements (if any) or restructuring plans that are arrived at, etc. Industry research about past scenarios and how they have been handled will be very important. 

Remember that both flat-owners and lenders qualify as financial creditors under the IBC (flat-owners are to be treated as financial creditors through an amendment of IBC).

Competition Act-related litigation

The competition law judgment in the case of homebuyers against DLF is famous. However, a significant chunk of flat-owner litigation against builders under Competition Act had taken place in the pre-RERA and pre-IBC era, where flat-owners approached the Competition Commission for abuse of dominance-related malpractices such as change of area, layout, etc. I also found an interesting case filed by an association of real estate developers (CREDAI) against Haryana Urban Development Authority (HUDA) for allocation of development licenses in the Sohna region. It was an innovative use of the law. 

Sometimes, as an emerging lawyer, you may not have the opportunity to represent an industry behemoth. In such cases, acting for an underserved category of people may also be worthwhile, even if they cannot remunerate you. It is a great opportunity to build your own credibility, get face-time before a court in a relevant matter (which could be accompanied with a lot of press coverage). For example, representing the homebuyers in the competition case against DLF was an important moment in the professional journey of Vaibhav Gaggar, a Delhi-based litigator who runs a full service law firm Gaggar and Associates and has also entered into an SPV with Anand and Anand (see here).  

Title, ownership-related and land-use disputes

This is the classical property-related litigation that any general practitioner who litigated would come across. 

Title-related disputes around ownership of property or eviction of an unauthorized occupant are the most standard kind of real estate litigation. These litigations can be of the following kinds: 

  • Litigation around agreements to sell 
  • Litigation involving tenancy rights, eviction and contractual lease termination 
  • In some cases arbitration-related work may be prevalent
  • Litigation-related to succession laws (testate and intestate succession to property) 

There may also be land-use and other disputes with a local authority. In Delhi, property sealing-related litigation is common. 

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Writ petitions are usually filed under Article 226 to handle a dispute with a local authority. 

Contractual disputes around joint development agreements

Various kinds of contractual disputes around joint development agreements may arise between the developer and land owners who have given the developer the right to develop, market and sell the flats as per a joint development agreement. This is largely around the terms of the contract.  

Usually, such disputes involve contractual matters, such as insufficient share of land or revenue being allocated to the landowner, cost-related aspects or timely delivery of the property. If you are acting for a builder, there can frequently be stamp duty and other tax-related work to take care of. 

If a developer is working with multiple landowners, these matters can be of a sizable value.  

Joint development contracts frequently contain arbitration clauses. (Note that where the dispute does not involve statutory terms such as tenancy-related rights, the subject matter is capable of being determined by arbitration.)

Slum Rehabilitation-Related Litigation

Many states have passed slum redevelopment-related legislation, which enables a private builder to create a housing complex for a set of slum-dwellers, and sell additional floor space to third-party buyers. 

This method serves a dual purpose – it results in the builder making a commercial profit and also results in resettlement of slum dwellers. 

As an example, slum redevelopment work in Maharashtra is performed pursuant to Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 and the applicable  Development Control Regulations. 

Litigation around the issuance of letter of intent by the slum redevelopment authority, non-performance by the developer, etc. Sometimes, a developer may challenge the action of the SRA, the housing society or the individual slum dwellers before the slum development authority. 

If you are an in-house counsel representing a real estate developer or you have a retainer arrangement with a developer, you are likely to be involved in litigation on with respect to one or more of the above areas. 

Urban Development Authority-Related Matters

Many Indian cities and states such as Ahmedabad, Haryana, Mysore, Surat, Vishakhaptnam, etc. have an urban development authority to take up development-related work for the city. State-level laws regulate the functioning of such an authority. Any city where rapid urbanization is happening can be a promising place to perform such work. 

One such example is the Haryana Development and Regulation of Urban Areas Act, 1975. Under this statute, private landowners can offer their land to the authority by making an application to the urban development authority for development into a colony. As they may not themselves have prior experience of having constructed a colony, they enter into a collaboration agreement with a builder who can show such experience in the industry. The Haryana law allows this.  

Litigation against the authority may be initiated by a developer or an individual for various kinds of development-related work. 

Land Acquisition-Related Litigation

Where land is acquired by the government and later developed into a private colony, such litigation will be prevalent. You could represent a class of farmers or people whose land is acquired or represent the government (by being on a panel for a state authority). 

Note that land is acquired either under the Land Acquisition Act or under special statutes such as the NHAI Act (for construction of highways), AAI Act (for aerodromes, airports, etc.). 

Who will be your clients?

As a real estate litigator, you may act for real estate builders, contractors, engineers, service providers of all sorts, individual property buyers, landlords, tenants, lessees and lessors, represent a category of consumers in a bulk matter, a state entity as its standing counsel or in some cases for a lender or financier. 

Preparation

Now that you have a perspective of the types of litigation work real estate lawyers perform, it is time to create a strategy for preparation. 

How you prepare is important. As is evident from reading above, mere knowledge of Transfer of Property Act as we study alone is not sufficient to build the skills necessary to perform the work in this area. 

Real estate is a vast sector, and knowledge of real estate-related laws, contracts, development practices (see this course to learn these in 12 weeks) and various other laws (not specific to real estate) and litigation proceedings is important to perform such work regularly. 

In a way, real estate litigation, and most other forms of litigation is also inter-disciplinary. One cannot restrict oneself to one or two statutes or types of work anymore. It is important to develop your strength in using multiple systems of law, strategies and processes to achieve an effective litigation outcome for a client. You need to learn about IBC, Company Law, Arbitration, Consumer Law and what not. This forms the underlying philosophy of a new Litigation Library we have created, which consists of a combination of existing and to-be launched courses.

All these courses have a unique exercise-driven methodology (along with 24×7 access to online study materials) and online classes that enable you to acquire specific skills pertaining to each type of work and service that a legal practitioner practising in each of the areas covered can provide. It is highly interactive and focussed on problem-solving skills, to develop one’s capacity of performing real work.

We are currently testing this at a deeply discounted membership model price with 20 seats only, and have very few seats available now. Those who are interested can reach out to us.

 

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