The real estate development act in Bangladesh, formally the Real Estate Development and Management Act 2010, is the law that governs developers who build apartments or sell plots. It sets their duties to landowners and buyers, fixes compensation when delivery is late, and makes serious breaches criminal offences.
- The Real Estate Development and Management Act 2010, with the Real Estate Development and Management Rules 2011, regulates apartment and land development projects by private developers.
- Developers must be registered, must build only to an approved plan and must state approval details in their advertisements.
- Under section 15, if a developer fails to deliver on time, the buyer can recover the money paid plus agreed compensation, or 15 percent if the agreement is silent, within six months.
- Agreements for sale of immovable property must be registered under the Registration Act 1908, and a development power of attorney is an irrevocable power that must be registered.
- Disputes usually go through negotiation, mediation or arbitration before the courts, but criminal complaints are available for serious breaches.
What the real estate development act in Bangladesh covers
Before 2010, the relationship between developers, landowners and flat buyers in Bangladesh was governed mainly by general contract and property law. Buyers who paid instalments for years and then saw projects stall had to rely on slow civil suits. Parliament responded with the Real Estate Development and Management Act 2010, which created a specific regime for the sector.
The Act applies to real estate development: building apartments, commercial floor space or mixed-use buildings for sale, and developing land into plots for sale. It deals with three relationships: the developer and the government authority, the developer and the landowner, and the developer and the buyer. The real estate development act in Bangladesh is supported by the Real Estate Development and Management Rules 2011, which fill in procedure and forms.
Which authority applies
The Act works through the development authorities that control planning in each area, such as RAJUK in Dhaka, the Chittagong Development Authority, the Khulna Development Authority and the Rajshahi Development Authority, and through the government elsewhere. These authorities approve building plans and land development projects, and they are the first port of call when a developer builds outside its approval.
Developer registration and project approvals
Under the real estate development act in Bangladesh, a developer must be registered before it can carry on real estate business, and it must obtain the necessary approvals before starting a project. In practice this means a company incorporated with RJSC, enlistment or registration with the relevant development authority, and approval of each project's plan and design. Since 2017, membership of the Real Estate and Housing Association of Bangladesh (REHAB) has also been mandatory for housing developers under the trade organisation rules.
The real estate development act in Bangladesh also controls marketing. Brochures, prospectuses and advertisements must carry the developer's registration number and the approval number and date of the plan. A developer that advertises a project with no approval, or with features that are not in the approved plan, is in breach. Buyers should treat a missing approval number as a red flag, however attractive the brochure.
Ask for the approved plan itself, not a summary, and compare the number of floors, units and parking spaces with what the developer is selling. Projects that sell more units than the approval allows are a recurring source of disputes and demolition orders.
The landowner and developer agreement
Most apartment projects in Dhaka and Chittagong are built on land owned by individuals or families who contribute the land in exchange for a share of the finished flats and often a signing payment. The real estate development act in Bangladesh requires this arrangement to be documented in a written agreement that sets out each side's rights and obligations.
Key terms to negotiate
- Share ratio. The proportion of flats, floor space and parking that goes to the landowner, identified unit by unit where possible.
- Timeline. Dates for plan approval, start of work and handover, with a defined grace period.
- Rent during construction. Monthly compensation or rent for the landowner while the building is under way and after any delay.
- Quality and specifications. A schedule of materials and finishes that applies equally to the landowner's units.
- Sale of the developer's share. How and when the developer may sell its units, and how deeds will be signed.
- Termination. What happens if either side defaults, including the return of the land and approvals.
The development power of attorney
Under the real estate development act in Bangladesh and general property law, landowners usually give the developer a power of attorney so that it can obtain approvals, build and sell the developer's share. Under the Power of Attorney Act 2012, a power given for land development in exchange for consideration is an irrevocable power of attorney and must be registered.
It cannot be cancelled at will, which protects the developer but also means the landowner should limit it carefully to the developer's units. Our guide to the power of attorney in Bangladesh explains the formalities.
Buying an apartment or plot under the 2010 Act
For buyers, the most important document is the agreement with the developer. The real estate development act in Bangladesh expects the agreement to state the unit, its size, the price, the payment schedule, the delivery date, the specifications and the consequences of delay or default. The table below is a checklist we use when reviewing buyer agreements.
| Clause | What to look for | Why it matters |
|---|---|---|
| Unit description | Floor, unit number, net and gross area, parking space | Prevents disputes over size and common area loading |
| Price and schedule | Total price, instalments tied to construction stages | Avoids paying ahead of actual progress |
| Delivery date | A fixed date and a limited grace period | Triggers the section 15 remedy if missed |
| Compensation | Rate or amount for late delivery | If absent, the statutory 15 percent applies |
| Specifications | Materials, fittings, lifts, generator, utilities | Defines what the developer must provide |
| Title transfer | Timing of the registered sale deed after full payment | Ownership passes only on registration |
| Cancellation by buyer | Deductions and refund timing | Limits forfeiture if you need to exit |
| Dispute clause | Mediation and arbitration before court | Decides the forum and speed of any dispute |
Register the agreement for sale
Section 17A of the Registration Act 1908 requires an agreement for sale of immovable property to be in writing and registered. Many developers use unregistered booking forms or allotment letters. A registered agreement gives the buyer a much stronger position if the developer later tries to sell the same unit to someone else or mortgages it.
Pay through banks only, keep every receipt, and make sure each payment is acknowledged against your unit. For the general steps in buying a home, see our guide on buying a house in Bangladesh.
Delivery delays and refunds under section 15
Late delivery is the most common complaint about developers. Section 15 of the real estate development act in Bangladesh gives buyers a specific remedy. If the developer fails to deliver the unit within the time set in the agreement, it must return the full amount paid together with the compensation fixed in the agreement. The refund must be made by account payee cheque within six months.
Where the agreement does not specify the amount or rate of compensation, the Act fixes it at 15 percent of the total amount paid. The developer may repay the money plus compensation in up to three instalments, but the whole sum must be paid within six months. If the buyer and developer instead agree in a supplementary agreement to extend the delivery date, the buyer is entitled to compensation for the delay under the same provision.
Many agreements contain broad force majeure clauses covering political unrest, price rises and utility delays. Developers rely on them to resist section 15 claims. Negotiate a narrow clause before signing, and record in writing every time the developer claims an extension.
Choosing between a refund and waiting
The statutory remedy is a refund, which ends your interest in the unit. Buyers who still want the flat usually negotiate a revised date with compensation instead. Compare the 15 percent compensation with what the same flat would cost today before deciding; in a rising market, a refund may leave you worse off.
Handover, title transfer and defects
Possession and ownership are different things. Handover of keys gives possession, but legal ownership passes only when a sale deed is registered in the buyer's name at the sub-registry. Commentary on the real estate development act in Bangladesh notes that the developer must arrange the sale deed and registration documents within a short period, commonly cited as three months, after the buyer pays in full. Do not accept possession indefinitely without a registered deed.
After registration, apply for mutation of your proportionate share of land and the flat in the land records, and start paying holding tax and land development tax. Our land registration guide explains the registry and mutation steps.
Defects and common facilities
Under the real estate development act in Bangladesh, the developer must deliver the facilities promised in the agreement and the approved plan, such as lifts, generator, water, gas connection where available and parking. Commentary on the Act describes a duty to repair construction defects for a period after handover, commonly cited as at least two years.
Record defects at handover in writing and send formal notice promptly. Once most units are handed over, the owners should form an association to manage common areas and take over service charges and maintenance from the developer.
Offences and penalties
The real estate development act in Bangladesh makes a range of developer and landowner misconduct criminal. Offences include carrying on business or starting a project without registration or approval, selling the same unit to more than one buyer, mortgaging a sold unit without the buyer's consent, using substandard materials or departing from the approved design, failing to provide promised facilities, and deliberately withholding handover. Landowners can also commit offences, for example by cancelling the development power of attorney without proper notice or obstructing possession in bad faith.
Published commentary describes penalties of imprisonment of up to several years and fines that run into lakhs of taka depending on the offence; for example, operating without registration or starting a project without approval is commonly cited as punishable by up to two years' imprisonment, a fine of up to Tk 10 lakh, or both. Because the penalty provisions of the real estate development act in Bangladesh are detailed, check the exact section of the current Act before filing a complaint.
Resolving disputes under the real estate development act in Bangladesh
The Act encourages disputes to be resolved first by negotiation and arbitration. Where the agreement contains an arbitration clause, the Arbitration Act 2001 applies, and an award in favour of the buyer or landowner is enforced through the court. Our guide to the arbitration process in Bangladesh explains how a tribunal is formed.
Other routes
- REHAB mediation. REHAB has run a mediation and customer service cell since 2004 for complaints against its members, at a nominal fee.
- Civil suit. Buyers and landowners can sue for specific performance, refund, compensation or injunctions under the Specific Relief Act 1877 and the Code of Civil Procedure 1908.
- Criminal complaint. For offences under the Act, or cheating and breach of trust under the Penal Code 1860, a complaint can be filed before the competent court.
- Development authority. Unauthorised construction can be reported to RAJUK or the relevant authority.
The Commercial Court Ordinance 2026 created commercial courts for many business disputes, but whether developer disputes fall within it, and whether Parliament has re-enacted the Ordinance, should be checked before choosing a forum.
Step-by-step checks under the real estate development act in Bangladesh
Before paying a booking amount, run these checks, which follow the protections in the real estate development act in Bangladesh. They take a few days and can save years of litigation.
- Check the developer. Confirm its registration, its REHAB membership and its record of completed projects. Visit two finished buildings and talk to owners.
- Inspect the approval. Obtain a copy of the approved plan and compare floors, units, parking and land area with the brochure.
- Verify the land. Check the landowner's title, the khatian and mutation, and the registered development agreement and power of attorney.
- Review the agreement. Have a lawyer check the unit description, schedule, delivery date, compensation, specifications and dispute clause.
- Register and pay safely. Register the agreement for sale and pay only through banks against receipts that name your unit.
- Monitor progress. Visit the site, keep photographs and keep all letters about delays or changes.
- Complete the transfer. Take handover with a defects list, register the sale deed and finish mutation in your name.
Planning rules and the 2025 reforms
A project that complies with the real estate development act in Bangladesh must also comply with planning law. In Dhaka, building approvals follow the Detailed Area Plan (DAP) 2022 to 2035 and the Bangladesh National Building Code 2020. In October 2025 an advisory committee approved amendments to the DAP that raise permitted building heights and floor area ratios in most areas of RAJUK's jurisdiction, make sewerage treatment plants mandatory on larger plots and introduce an appeals committee; the ministry said the revised plan would be gazetted.
The government has also proposed a new RAJUK law to replace the Town Improvement Act 1953, with heavier penalties for planning violations. Its enactment status should be checked. For buyers, these changes matter because a project approved under the old limits may be redesigned, and because unauthorised floors remain at risk of enforcement action.
Common mistakes buyers and landowners make
These are the mistakes we see most often in disputes under the real estate development act in Bangladesh:
- Paying on a brochure. Booking a flat before seeing the approved plan.
- Unregistered agreements. Relying on allotment letters instead of a registered agreement for sale.
- Wide powers of attorney. Landowners giving powers that cover their own units.
- No delay clause. Accepting vague delivery dates and unlimited force majeure.
- Cash payments. Paying without bank records or receipts tied to the unit.
- Possession without title. Living in a flat for years without a registered sale deed.
Frequently asked questions about the real estate development act in Bangladesh
Does the 2010 Act apply to all developers?
It applies to persons and companies carrying on real estate development, meaning apartment or land development for sale. Individuals building for their own use are governed by planning and building law rather than this Act.
What can I claim if my flat is delivered late?
Under section 15, you can recover the full amount paid plus the compensation in your agreement, or 15 percent of the amount paid if the agreement is silent, within six months. If you agree to extend the date, you are entitled to compensation for the delay.
Do I own the flat once I get the keys?
No. Ownership passes when a sale deed is registered in your name. Insist on registration promptly after full payment and then complete mutation.
Can a landowner cancel the developer's power of attorney?
A development power of attorney given for consideration is irrevocable under the Power of Attorney Act 2012 and must be registered. It can be ended only as the Act allows, and improper cancellation can itself be an offence.
Should I go to court or arbitration?
If your agreement has an arbitration clause, arbitration usually comes first. Otherwise civil suits and criminal complaints are available. Mediation through REHAB is often a quick first step.
How we can help
We act for flat buyers, landowners and developers on projects under the real estate development act in Bangladesh: reviewing and negotiating development and buyer agreements, checking title and approvals, registering agreements and deeds, and pursuing refunds, compensation and handover through negotiation, arbitration or the courts. Learn more about our real estate and construction practice.
Dealing with a developer?
We review your agreement against the 2010 Act, check the project's approvals and title, and help you enforce your rights if delivery is late.
Book a consultationReal estate practicePrimary sources: the Real Estate Development and Management Act 2010, Power of Attorney Act 2012 and Registration Act 1908 on the Laws of Bangladesh portal; planning approvals from RAJUK; land records from the Ministry of Land.
This article is general information about Bangladeshi law as of 2026 and is not legal advice. Penalties, planning rules and procedures change; confirm current requirements with the relevant authority or a qualified lawyer before acting.
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