Is RERA Applicable to Commercial Projects?
📌 Applicability of RERA to Commercial Projects
RERA was enacted to regulate real estate in India, primarily to protect homebuyers and ensure transparency in the real estate sector. While initially focused on residential projects, the applicability to commercial projects has been clarified by law and authorities.
🔹 Legal Framework
Section 2(k) of RERA, 2016 – Definition of “Real Estate Project”:
“Real estate project means the development of a building, apartment, plot, or a building together with land, where development has been undertaken by the promoter, and includes commercial as well as residential units.”
Observation: The Act does not exclude commercial projects, but most states have rules focusing on residential projects for registration and consumer protection.
Section 3 of RERA – Registration of Projects:
Mandatory for promoters selling units (residential or commercial) exceeding 500 sq.m or more than 8 units.
Registration includes project plan, approvals, and timeline.
Section 2(zb) – Homebuyer Definition:
“Homebuyer” means a person who buys or agrees to buy a residential unit, but does not explicitly include commercial buyers.
🔹 Key Points on Applicability
Residential vs Commercial Projects
Residential projects: Covered fully under RERA; homebuyers enjoy all rights (possession, compensation, refund, grievance redressal).
Commercial projects: Applicability depends on State RERA Rules and whether promoter voluntarily registers the project.
Voluntary Registration for Commercial Projects
Many state RERA authorities allow commercial promoters to register their projects voluntarily to provide transparency to buyers and tenants.
Once registered, commercial buyers can enforce rights like possession, disclosure, and refund.
Mandatory Registration in Some States
Some states (e.g., Maharashtra, Karnataka) require all projects, including commercial, to register if certain thresholds are crossed.
Unregistered commercial projects may be liable for penalty under Section 59 of RERA.
🔹 Case Laws / Authority Decisions
1. MahaRERA Advisory on Commercial Projects (2018)
Clarified:
Commercial projects can be registered voluntarily.
Promoters who register are bound by RERA provisions, including timely possession and disclosure.
2. Prestige Estates Projects Ltd. v. MahaRERA (2019)
Facts: Promoter sold commercial units in a mixed-use project.
Held: If registered under RERA, buyers have same rights as residential buyers, including compensation for delay.
Key Observation: Registration brings legal accountability, irrespective of residential or commercial nature.
3. DLF Ltd. v. Haryana RERA Authority (2018)
Facts: Mixed project with commercial spaces; promoter claimed RERA applies only to residential units.
Held: Authority directed voluntary registration of commercial units to ensure buyer protection.
🔹 Rights of Commercial Buyers (if RERA registered)
Right to Disclosure (Section 4)
Promoter must disclose project details: layout, carpet area, approvals, amenities.
Right to Timely Possession (Section 11 & 18)
Commercial buyers can claim interest or compensation if possession is delayed.
Right to File Complaints (Section 31, 37)
Buyers can approach RERA Authority for grievances.
Right to Refund or Compensation
If promoter fails to deliver or misrepresents the project, buyers can claim refund with interest.
🔹 Practical Implications
| Feature | Residential Project | Commercial Project |
|---|---|---|
| Mandatory RERA Registration | Yes | Optional (State-specific) |
| Buyer Rights under RERA | Full rights | Only if registered |
| Compensation for Delay | Yes | Yes (if registered) |
| Disclosure of Project Details | Mandatory | Mandatory if registered |
| Penalty on Promoter | Yes | Yes (if registered) |
🔹 Key Takeaways
RERA applies fully to residential projects, but commercial projects are covered only if registered.
Voluntary registration of commercial projects is encouraged to provide transparency and enforce buyer rights.
Buyers of commercial units in registered projects enjoy the same remedies as residential buyers:
Compensation for delayed possession
Right to refund
Right to approach RERA authority
State rules determine the mandatory registration threshold for commercial projects.
RELATED Blog
0 comments