Data Privacy Risks For Real Estate And Proptech Businesses Under India’s DPDP Regime – Surveillance, KYC And Customer Trust

Posted On - 2 February, 2026 • By - Aniket Ghosh

Introduction: Why Data Privacy Is the Next Regulatory Fault Line in Real Estate

India’s real estate sector traditionally document-heavy and relationship-driven, is undergoing a quiet but profound digital transformation. Developers, brokers, property managers, housing societies and PropTech platforms now rely extensively on digital KYC, CRM systems, visitor management software, CCTV surveillance, smart access controls and online transaction platforms.

As a result, real estate businesses today process large volumes of highly sensitive personal data, including:

  • Identity and KYC information
  • Financial and transaction data
  • Biometric and facial recognition data
  • Continuous surveillance footage
  • Location and movement data

Unlike many consumer-facing industries, real estate data processing is often persistent and unavoidable and residents, tenants, employees and visitors cannot meaningfully opt out.

With the enactment of the Digital Personal Data Protection Act, 2023 (“DPDP Act”) and the Digital Personal Data Protection Rules, 2025 (“DPDP Rules”), these practices are now subject to direct statutory scrutiny for data privacy risks. For real estate and PropTech players, data privacy compliance is fast becoming a licensing, governance and reputational issue, not merely an IT concern.

Applicability of the DPDP Act to Real Estate and PropTech

A. Entities Covered

The DPDP Act applies to any entity processing digital personal data, including:

  • Real estate developers and builders
  • PropTech platforms and marketplaces
  • Real estate brokers and aggregators
  • Housing societies and Resident Welfare Associations (RWAs)
  • Property management companies
  • Facility management and security service providers

Both commercial and residential real estate operations fall squarely within the scope of the Act.

B. Real Estate Entities as Data Fiduciaries

Developers, RWAs and PropTech platforms typically qualify as data fiduciaries, as they determine:

  • What data is collected (KYC, access logs, CCTV footage)
  • Why it is collected (security, compliance, marketing)
  • How it is stored and shared

Security agencies, CCTV vendors, visitor-management providers and cloud vendors generally act as data processors, though primary liability remains with the fiduciary.

Large PropTech platforms and township developers may be designated as Significant Data Fiduciaries (SDFs) due to:

  • Scale of data processing
  • Continuous surveillance
  • Use of biometric technologies

KYC and Identity Data: A Core Compliance Risk

A. Digital KYC in Property Transactions

Real estate transactions routinely involve collection of Aadhaar and PAN copies, Passport and visa details (for NRIs) and bank statements and income proofs. While KYC is often legally required, the DPDP Act mandates that:

  • Collection must be limited to necessity
  • Purpose must be clearly disclosed
  • Retention must be justified and time-bound

Indefinite storage of KYC documents “for record purposes” creates compliance exposure.

B. Brokers and Informal Data Sharing

Real estate brokers often circulate client documents across WhatsApp, email and shared drives and these practices pose serious data security and breach risks under the DPDP regime.

Surveillance, CCTV and Smart Infrastructure

A. CCTV as Continuous Personal Data Processing

CCTV footage constitutes personal data, particularly where individuals are identifiable. Common risk areas include:

  • Lack of adequate notice
  • Overbroad camera coverage
  • Excessive retention periods
  • Unrestricted access to footage

Under the DPDP Act and Rules, surveillance must be:

  • Purpose-limited (security, safety)
  • Proportionate
  • Transparent

B. Facial Recognition and Biometric Access

Use of biometric systems for gated communities, office buildings, or co-working spaces significantly heightens compliance exposure. While not prohibited, such systems require:

  • Strong necessity justification
  • Enhanced security safeguards
  • Clear consent architecture

Visitor Management and Resident Data

A. Visitor Apps and Gatekeeping Software

Digital visitor management systems collect:

  • Names and phone numbers
  • ID proofs
  • Vehicle details
  • Entry and exit timestamps

Such data is often shared with security vendors, residents, or property managers. Uncontrolled sharing and long-term retention pose clear legal risks.

B. Resident Databases and CRM Systems

Developers and RWAs maintain extensive resident databases covering:

  • Family details
  • Emergency contacts
  • Vehicle information
  • Payment histories

These systems are frequently under-secured and poorly governed.

PropTech Platforms: Marketing and Profiling Risks

A. Lead Generation and Data Monetisation

PropTech platforms rely heavily on:

  • Online lead generation
  • Cross-selling of financial and interior services
  • Targeted advertising

Using customer data for secondary commercial purposes without fresh consent violates purpose limitation under the DPDP Act.

B. Sharing with Developers and Third Parties

Ambiguity often exists regarding:

  • Who is the data fiduciary
  • Who provides notice and obtains consent
  • Who bears breach liability

Clear contractual and governance frameworks are essential.

Data Breaches and Incident Response

A. Mandatory Breach Notification

Under the DPDP Act and Rules, real estate entities must notify:

  • The Data Protection Board of India
  • Affected individuals

This applies even where breaches involve “only” surveillance or access-log data.

B. Reputational and Safety Implications

Data breaches in real estate contexts can:

  • Compromise physical security
  • Enable stalking or harassment
  • Lead to resident unrest and litigation

The physical safety dimension amplifies regulatory concern.

Penalties and Enforcement Exposure

A. Monetary Penalties

The DPDP Act permits penalties up to INR 250 crore per contravention, considering:

  • Nature of data involved
  • Continuous or systematic violations
  • Harm to individuals

Large residential townships and commercial developers face systemic exposure.

B. Governance and Operational Impact

Beyond penalties, non-compliance may result in:

  • Regulatory directions to modify surveillance systems
  • Contractual disputes with residents
  • Loss of market trust

Compliance Roadmap for Real Estate and PropTech

1. Data Inventory and Mapping: Identify KYC, surveillance and resident data flows.

2. Notice and Transparency: Install clear notices for CCTV, visitor management and data use.

3. Surveillance Rationalisation: Limit camera coverage and retention to necessity.

4. Vendor and Security Contracts: Update agreements with security agencies and PropTech vendors.

5. Governance and Training: Train staff, brokers and facility managers on privacy obligations.

Conclusion: Privacy as a Component of Liveability and Trust

As real estate becomes increasingly digitised, privacy will emerge as a core component of liveability, safety and trust. The DPDP Act and Rules signal that surveillance and data collection cannot be unchecked simply because they are convenient or customary.

Developers, RWAs and PropTech platforms that proactively embed privacy-by-design will be best positioned to avoid enforcement risk and build sustainable, trusted communities.