REIT

Registration of real estate investment trusts
R. 3. (1) No person shall act as a REIT unless it is registered with the Board
under these regulations.
(2) An application for grant of certificate of registration as REIT shall be made,
by the sponsor on behalf of the trust in Form A as specified in the Schedule I
to these regulations and shall be accompanied by a non-refundable
application fee of such amount and shall be payable in the manner as
specified in Schedule II to these regulations.
(3) The Board may, in order to protect the interests of investors, appoint any
person to take charge of records, documents of the REIT and for this purpose,
also determine the terms and conditions of such an appointment.
(4) The Board shall take into account requirements as specified in these
regulations for the purpose of considering grant of registration.
Eligibility of REITs(Refer R. 4)
As the name itself denotes, a REIT is a trust and thus must be setup in
accordance with the provisions of the Indian Trust Act, 1882, duly registered
under the SEBI REITs Regulations. It is imperative that the trust deed of a
REIT desired to be established is duly registered, which specifies the main
objective and the responsibilities of the Trustee(s). It must be further ensured
that no disciplinary actions are taken by the SEBI or any other regulatory
authority against the REIT or any related party. For a company to qualify as
a REIT, it is vital that the following criteria are satisfied:
• 90% of the income must be distributed to the investors in the form of

dividends;
• 80% of the investment must be made in properties that are capable of
generating revenues;
• Only 10% of the total investment must be made in real estate under-
construction properties;
• The company must have an asset base of at least INR 500 crores;
• Net Asset Value must be updated twice in every financial year.
Procedure for grant of certificate
R. 6. (1) The Board on being satisfied that the 51[trust] fulfils, the
requirements specified in regulation 4 shall send intimation to the [trust] and
on receipt of the payment of registration fees as specified in Schedule II, grant
certificate of registration in Form B under Schedule I.
(2) The registration may be granted with such conditions as may be deemed
appropriate by the Board.
RIGHTS AND RESPONSIBILITIES OF TRUSTEE
Regulation 9 prescribed the rights and responsibilities of a Trustee of a REIT.
These are the discuss below:-
1. The Trustee shall hold the REIT assets in trust for the benefit of the unit
holders.
2. The Trustee shall enter into an investment management agreement with
the manager on behalf of the REIT.
3. The trustee shall oversee activities of the manager in the interest of the unit
holders, and shall obtain compliance certificate from the manager in the form
as may be specified on a quarterly basis.
4. The trustee shall ensure that the manager complies with the reporting and
disclosures requirements in these regulations and in case of any delay or
discrepancy, require the manager to rectify the same on an urgent basis.
5. The trustee shall review the transactions carried out between the manager
and its associates and where the manager has advised that there may be a
conflict of interest, shall obtain confirmation from a practising chartered
accountant that such transaction is on arm’s length basis.
6. The trustee shall periodically review the status of unit holders’ complaints
and their redressal undertaken by the manager.
7. The trustee shall make distributions and ensure that the manager makes
timely declaration of distributions to the unit holders.
8. The trustee may require the manager to set up such systems and submit
such reports to the trustees, as may be necessary for effective monitoring of
the performance and functioning of the REIT.
9. The trustee shall ensure that subscription amount is kept in a separate
bank account in name of the REIT and is only utilized for adjustment against
allotment of units or refund of money to the applicants till the time such units
are listed.
10. The trustee shall ensure that the remuneration of the valuer is not linked
to or based on the value of the asset being valued.
11. The trustee shall ensure that the manager convenes meetings of the unit
holders in accordance with these regulations and oversee the voting by unit
holders and declare outcome of the voting.
12. The trustee may take up with SEBI or with the designated stock exchange,
any matter which has been approved in an annual meeting or special meeting,
if the matter requires such action.
RIGHTS AND RESPONSIBILITIES OF MANAGER
Regulation 10 provides for the rights and responsibilities of a Manager

of a REIT. Which as followings:-
1. The manager shall make the investment decisions with respect to the
underlying assets of the REIT including any further investment or divestment
of the assets.
2. The manager shall ensure that the real estate assets of the REIT or SPV
have proper legal and marketable titles and that all the material contracts
including rental or lease agreements entered into on behalf of REITs or SPV
are legal, valid, binding and enforceable by and on behalf of the REIT or SPV.
3. The manager shall ensure that the investments made by the REIT are in
accordance with the investment conditions specified in these regulation.
4. The manager shall undertake management of the REIT assets including
lease management, maintenance of the assets, regular structural audits,
regular safety audits, etc. either directly or through the appointment and
supervision of appropriate agents.
5. The manager, in consultation with trustee, shall appoint the valuer(s),
auditor, registrar and transfer agent, merchant banker, custodian and any
other intermediary or service provider or agent for managing the assets of the
REIT or for offer and listing of its units or any other activity pertaining to the
REIT in a timely manner.
6. The manager shall appoint an auditor for a period of not more than five
consecutive years.
However, the auditor, not being an individual, may be reappointed for a period
of another five consecutive years, subject to approval of unit-holders in the
annual meeting.
7. The manager shall arrange for adequate insurance coverage for the real
estate assets of the REIT.
However, in case of assets held by SPV, the manager shall ensure that real
estate assets are adequately insured.
8. If the REIT invests in under-construction properties as per these
regulations, the manager-
(a) may undertake the development of the properties, either directly or
through the SPV, or appoint any other person for development of such
properties; and
(b) shall oversee the progress of development, approval status and other
aspects of the properties up to its completion.
9. The manager shall ensure that it has adequate infrastructure and sufficient
key personnel with adequate experience and qualification to undertake
management of the REIT at all times.
10. The manager shall be responsible for,- (a) filing the draft and final offer
document with SEBI and the designated stock exchange.
(b) obtaining in-principle approval from the designated stock exchange;
(c) dealing with all matters relating to issue and listing of the units of the
REIT.
11. The manager shall ensure that disclosures made in the offer document or
any other document as may be specified by SEBI contain material, true,
correct and adequate disclosures in accordance with these regulations and
guidelines or circulars issued by SEBI.
12. The manager shall declare distributions to the unit holders in accordance
with these regulation.
13. The manager shall ensure adequate and timely redressal of all unit
holders’ grievances pertaining to activities of the REIT.

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Registration of real estate investment trusts

• 90% of the income must be distributed to the investors in the form of

Regulation 10 provides for the rights and responsibilities of a Manager

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