Government Drafts Law to Regulate Sale of Houses and Apartments by Licensed Developers

Government Drafts Law to Regulate Sale of Houses and Apartments by Licensed Developers

The government has tabled a draft bill in the parliamentary Agriculture, Cooperatives, and Natural Resources Committee proposing legal provisions to allow licensed real estate companies to develop and sell residential plots, houses, or apartment units exceeding the land ceiling limit set by the government.

The bill, an amendment to the Land-Related Acts, 2025, would permit companies holding a government-approved real estate license to construct and sell housing units on land classified for residential or commercial use by the local land use council, even if it falls beyond the government-prescribed limit.

If development requires land exceeding the set limit for public or private purposes, the developer must submit certified copies of a Detailed Project Report (DPR) and Environmental Impact Assessment (EIA). The draft also proposes stricter criteria for sales, considering land type, size, valuation, duration of possession, and whether the buyer or their family owns other residential property in urban areas.

The proposal seeks to close legal loopholes that previously allowed landholders to bypass the original purpose of land granted under land ceiling exemptions.

Under the bill, if land was approved for agricultural, industrial, or institutional purposes—such as farms, tea estates, factories, educational or health institutions—but has been left idle, used for other purposes, or later transferred to a real estate company, it cannot be redeveloped into housing plots or apartments for sale. This restriction also applies if such landholders have applied for or obtained approval for housing development without first using the land for its approved purpose.

In cases where a housing or apartment project is built on legitimately approved land, any area or structures designated for common use must be registered under the collective ownership of the buyers.

During Sunday’s committee session, several lawmakers expressed concerns over ambiguous language that could lead to multiple interpretations. The meeting was postponed to August 12 for further discussion after members requested more time for review, warning against hasty approvals similar to past legislative lapses.

Senior officials from the Ministry of Land Management and the Ministry of Law stated that the revisions were based on lawmakers’ feedback and emphasized the need to finalize the provisions after careful study.

If passed, the bill could open the door for more structured and regulated housing and apartment sales in Nepal, while introducing safeguards to prevent misuse of land-use exemptions.

Note: This news has been revised.