Registration with Real Estate Regulatory Authority (RERA)
Abhishek Rathee 28 Mar 2020

Registration with Real Estate Regulatory Authority (RERA)

The month of March 2016 saw a new sunrise in the Real Estate sector in the form of Real Estate (Regulation and Development) Act, 2016, creating the Real Estate Regulatory Authority and the Real Estate Appeals Tribunal to give impetus to the interests of consumers and henceforth to the regulation of the real estate sector, which makes a significant contribution to job creation and to the GDP of our business. RERA has brought openness to the sector, improved it and brought home a certain degree of professionalism.

RERA requires each developer to ensure transparency when communicating with customers.

The Act describes ‘Promoter' as ‘Owner, ‘Developer'Development Authority' or ‘Holder of the Power of Attorney’ from the Land-Lord of the Construction / Development Site: 

  • Person who builds or starts the construction of an individual building or a building consisting of apartments or transforms the current structure into apartments for sale on the open market.
  • An individual who develops land into a project consisting of plots that may or may not include any buildings, to be sold in whole or in part.
  • Public body or development authority in respect of allotments of buildings or apartments constructed by them or plots of land either owned by them or made available to them by the Government for the purpose of sale.
  • Apex State level and primary cooperative housing finance society that builds apartments or buildings for its members or designated individuals.
  • Person acting as builder, colonizer, contractor, investor, estate investor or by some other name or claim to be the holder of the power of attorney from the owner of the property on which the house or apartment is being built or the plot is being created for sale.
  • Any other person who builds a house or apartment to be sold to the general public.

For the purposes of RERA, where the developer / constructor is different from the seller of the land, both shall be considered promoters and are jointly liable under this Act.

‘Real Estate Project' is defined as the construction of a building or a building consisting of apartments, or the conversion of an existing building or part of it into apartments, or the construction of land into plots or apartments, for the purpose of selling all or some of the said apartments or plots or buildings, and includes common areas, development works, all improvements and structures.

In addition, the Act requires compulsory "Registration" with RERA of Real Estate Projects within the limits of the Promoters ' Planning Areas with the State Real Estate Regulatory Authority under which the Promoter is prohibited from advertising, promoting, booking, selling or offering for sale, or from inviting anyone to purchase any part or portion of a real estate project.

In addition, Real Estate Agents are obligated to register before they can facilitate the sale / purchase of a real estate project or any part thereof.


RERA is equally important to commercial projects as it is to residential ones.

However, the Act referred to in Section 3 provides for some exceptions in the field of real estate projects which are excluded from registration:

·         The land proposed for development does not exceed 500 square meters or the number of apartments does not exceed 8 (eight) in number;

·         In cases where the Completion Certificate' for the project was given to the proponents prior to the start of the RERA; 

·         Work is limited to refurbishment, repair or restoration and does not cover the promotion, advertisement, sale or reassignment of any apartment, plot or house.

Section 4 of the RERA provides for registration of real estate projects, where each Promoter is required to apply for registration along with various documents listed below :-

·         Brief details of the enterprise including name, registered address, enterprise type and particulars of registration of such enterprise along with promoter’s names and photographs.

·         Brief details of the projects undertaken by the sponsor in the last five years, whether completed or not, including the present status of ongoing projects, delays in execution, details of pending lawsuits, land type and any unpaid payments.

·         Authenticated copy of the approvals and the certificate of commencement from the competent authority, if applicable.

·         Approved design, construction design and specifications of the proposed project or phase thereof and of the entire project as approved by the Component Authority.

·         Plan of construction work to be carried out in the proposed project and the proposed facilities to be provided, including fire-fighting facilities, drinking water facilities, emergency rescue services, use of renewable energy.

·         Location descriptions of the project, including a simple demarcation of the land allocated to the project along with its borders, including the latitude and longitude of the end points of the project.

·         Performa of the allocation document, the sale agreement and the conveyance act agreed to be signed with the allocated parties.

·         Amount, size and carpet area of the apartments for sale in the project along with the private balcony or veranda area and the exclusive open terrace area with the apartment, if applicable.

·         Number, location and size of the garage for sale in the project

·         Names and addresses of the real estate brokers for the proposed project, if any.

·         Names and addresses of designers, architects, structural engineers and other individuals associated with the construction of the proposed project.

·         A declaration, accompanied by an affidavit, to be signed by the promoter or by any individual approved by the promoter, stating that:

·         The Promoter shall have legal title to the land proposed for creation, along with legally valid documentation authenticating that title, in the event that the land is owned by another individual.

·         Land shall be free from all encumbrances or encumbrances on the land, including any ownership, title, interest or name of any person in or over the property.

·         Timeframe during which the promoter aims to complete the project or process, as the case may be.

·         Promoter shall take all outstanding approvals on time from the appropriate authorities.

·         Furnish additional documents as needed.

·         Seventy per cent of the allocated real estate project sums are deposited in a separate account to be held in a scheduled bank to cover the cost of land and building expenses, which are only used for that purpose.

The applicant shall deduct the sums from the separate account to cover the expense of the project, in proportion to the percentage of completion of the project after it has been approved by the builder, the architect and the chartered accountant, in effect, that the withdrawal is in proportion to the percentage of completion of the project.

The promoter shall also, within six months of the end of each financial year, be audited by a chartered accountant in practice and shall produce a statement of accounting duly certified and signed by that chartered accountant.

Grant for Registration

Registration of real estate projects is discussed in Section 5 of RERA. Within a period of thirty days [of what], the Authority shall grant registration subject to the provisions of this Act and shall provide the Applicant with the registration number, including the login I d and the password, for access to the Authority's website and for the establishment of its website and for the details of the proposed project.

The Authority can also refuse the application with reasons to be communicated in writing [to whom] if the application does not conform the the procedure under the Actunless the applicant has been given the opportunity to be heard on the matter.

If the Authority refuses the application, the Project shall be deemed to have been registered and, within seven days of the expiry of the said date, the Authority shall, within thirty days, provide the promoter with the registration number, the login Id and the password for access to the website of the Authority and the website of the Authority and fill in the d page.

Validity of  Registration  of  RERA.

The registration accordingly accepted shall be valid for the time specified by the Promoter for the completion of the real estate project or for the process indicated in the affidavit with the application form.

The registration granted can be extended by the Authority upon receipt of an application from the Promoter in the event that' Force Majeure' has a significant effect on the project.

The authority can also extend the registration for a maximum duration of one year if the circumstances so justify.

It is important to notice the judgment of the Supreme Court in Bikram Chatterji vs. Union of India in 2019, where it was held that, as RERA envisages the timely completion of projects once the registration under section 5 and the extension under section 6 have been granted, it is only in the event of force majeure and no default on the part of the petitioner that the registration can be extended overall for a term. Force majeure means war, flood, drought, storm, cyclone, earthquake or some other calamity caused by nature.

Cancellation of Registration

Registration granted may also be revoked by the Authority upon receipt of a complaint suo-moto or on the advice of the Competent Authority after giving a 30-day written notice to the Promoter of such a real estate project on the basis of the grounds for the proposed revocation, after having considered any reason identified by the Promoter and having been satisfied that:-

  • The promoter has failed to perform anything necessary under RERA
  • The promoter has violated any of the terms and conditions of the approval issued by the Authority.
  • The promoter is engaged in some unfair practice or irregularities (for example, false representation of services is of a specific quality or grade, or that the promoter has the approval or affiliation that the promoter does not have, and makes inaccurate or misleading representations about the services, along with the publishing of some advertising or prospectus, whether in a newspaper or otherwise.)
  • The promoter indulges in some dishonest activity.

The Authority can, in the alternative of canceling the registration, permit it to remain in force subject to such additional terms and conditions as it considers necessary to be imposed in the interest of the authorized parties which are binding on the promoter.

Consequences of cancellation of Registration

Upon the cancellation of the registration, 

  • The Promoter shall be barred from accessing its website in relation to the project and the Revocation of the Promoter's Project Registration shall be reported to the other Real Estate Regulatory Authority in other States and Union Territories and the name and image shall be shown as normal on the website.
  • The Authority shall order the scheduled bank to hold the project back, freeze the account and then take the required further action, including the consequent de-freezing of the said account, to facilitate the remaining development work.

The Authority may also provide directives as it considers appropriate to protect the interest of designated individuals or in the public interest.

The Authority shall also encourage the remaining development work to be carried out by consultation with the appropriate Government in order to take such action as it may find necessary, which may include the execution of the remaining development work by the competent authority or the association of allocated persons or in any other manner as may be decided by the Authority and only after the expiry of the duration.

Penalties for Non-Registration

Where a real estate project is not registered, Section 59 of RERA comes into play, which imposes a penalty of up to 10% of the estimated project cost and if the default is continuous, an additional fine of up to 10% of the estimated project cost or imprisonment of up to three years or both may be imposed.

RERA has given comprehensive powers to the Authority in cases of non-compliance on the part of the Promoter containing a penalty clause, as well as in cases where the Authority may find it necessary to protect the interests of consumers.  Any individual aggrieved by a proponent of violation of the RERA provisions may also file a complaint with the Authority.

In conclusion, it can safely be said that the registration of projects with RERA has brought a great deal of value to customers. In particular, as it decreases the risk of insolvency / bankruptcy of the builder and offers a timeline for the execution and prompt delivery of real estate projects, structured agreements and accountability on the use of money by the developer. The proponents, on the other hand, have also earned the RERA's stability and accountability in negotiating, improving consumer trust and a controlled climate. RERA has improved productivity and strengthened the real estate sector with higher investment and an improvement in the coordinated financing of real estate projects.

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