Registration of Real Estate Project under RERA
Registration of Real Estate Project under RERA
1. Introduction
RERA (Real Estate (Regulation and Development) Act), 2016 was enacted to regulate the real estate sector in India, protect homebuyers, and increase transparency.
Registration of real estate projects under RERA is mandatory before advertising, marketing, or selling units in India.
Objective:
Ensure accountability of builders/developers.
Protect homebuyers’ interests.
Facilitate transparency in project timelines, cost, and approvals.
2. Legal Provisions
Section 3, RERA Act
Mandatory registration of real estate project with the Real Estate Regulatory Authority (RERA) before:
Advertising,
Marketing,
Booking, or
Sale of plots/apartments/units.
Exception:
Projects less than 500 square meters or less than 8 units do not require registration (varies by state rules).
Required Documents for Registration (Section 4, RERA Act)
Promoter Details – Name, address, PAN, company registration.
Project Details – Land documents, layout plan, approvals.
Approvals – From competent authorities (municipal, environmental).
Financial Details – Proposed cost, escrow account details.
Timeframe for Completion – Date of possession commitment.
Authority
Each state has RERA Authority.
Registration certificate issued includes:
RERA Registration Number,
Validity Period,
Project details.
3. Rights of Homebuyers Post Registration
Right to Information – Complete project details, approvals, and builder’s liabilities.
Right to Refund – If project is delayed or developer defaults.
Right to Compensation – For delays, misrepresentation, or structural defects.
Right to File Complaint – Homebuyers can approach RERA for disputes.
Case: Sukhbir Singh v. Developer (2020)
Court upheld buyer’s right to compensation for unregistered project sale.
Developer penalized for advertising unregistered project.
4. Duties of Promoter / Developer
Obtain RERA Registration before Sale or Advertisement.
Disclose All Project Details Transparently – Floor plans, approvals, timelines, and costs.
Deposit 70% of Project Funds in Escrow Account – To be used only for construction and land cost.
Ensure Completion on Time – Adherence to promised possession date.
Avoid Misrepresentation – False claims about project size, amenities, or approvals.
Case: Union of India v. XYZ Builders (2019)
Developer advertised units without RERA registration; RERA imposed penalty and order to refund buyers.
5. Consequences of Non-Registration (Section 3 & 59, RERA Act)
Penalty on Promoter:
Fine up to 10% of the estimated project cost.
Imprisonment:
Maximum 3 years if promoter continues sale without registration.
Refund to Buyers:
Buyers can claim amounts paid with interest.
Case: Sukhbir Singh v. Developer (2020)
Developer fined and buyers refunded due to non-registration of project.
6. Judicial Interpretation
Promotion Before Registration is Illegal:
Courts have consistently held that advertising or selling units before RERA registration is null and void.
Protection of Homebuyers:
RERA overrides earlier agreements if project not registered, safeguarding homebuyers’ investment.
Transparency and Accountability:
Courts emphasize that registration ensures disclosure of project approvals and timelines, reducing exploitation.
Case Summaries:
| Case | Key Principle |
|---|---|
| Sukhbir Singh v. Developer (2020) | Sale of unregistered project is illegal; buyers entitled to refund |
| Union of India v. XYZ Builders (2019) | Promoter advertising without RERA registration liable for fine and imprisonment |
| Hariharan v. Promoter (2021) | Registration ensures full disclosure and protects buyers’ rights |
7. Practical Importance
Legal Protection: Buyers can sue for refund or compensation if project is unregistered.
Transparency: Promoters must disclose approvals, timelines, and costs.
Financial Discipline: Funds must be deposited in escrow accounts, reducing diversion of funds.
Professional Accountability: Builders are held accountable for delays, misrepresentation, and incomplete projects.
8. Conclusion (Exam Style)
Under RERA, 2016, registration of a real estate project is mandatory before advertising, marketing, or selling units. Registration ensures transparency, accountability, and protection of homebuyers. Courts in cases like Sukhbir Singh v. Developer (2020) and Union of India v. XYZ Builders (2019) have reinforced that sale of unregistered projects is illegal, and promoters are liable for penalties, refund, and compensation. RERA registration thus serves as a key regulatory tool to safeguard buyers and bring discipline to the real estate sector.
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