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Registration under RERA

RERA requires Real Estate Projects by Promoters to be registered with the State Real Estate Regulatory Authority.

In March, 2016, the Real Estate (Regulation and Development) Act, 2016, established the Real Estate Regulatory Authority (RERA) and Real Estate Appellate Tribunal for providing impetus to the interests of consumers and henceforth, regulating the real estate sector which makes major contribution in employment creation and GDP of our country. RERA has strengthened the Sector by bringing transparency to it.

RERA now mandates each developer to ensure accountability in their dealing with consumers.

The Act defines a ‘Promoter’ as:
  • Person who constructs or causes construction of an independent building or a building consisting of apartments or converts existing structure into apartments to be sold in open market.
  • Person who develops land into a project consisting of plots which may or may not comprise any structures, to be sold in full or parts.
  • Public body or Development Authority in respect of allottees of buildings or apartments constructed by them or plots on land either owned by them or placed at their disposal by the Government, for the purpose of being sold.  
  • Apex State level and primary co-operative housing finance society which constructs apartments or buildings for its members or allottees.
  • Person who acts as a builder, coloniser, contractor, developer, estate developer or goes by any other name or claims to be holder of power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale.
  • Any other person who constructs building or apartment to be sold to public in general.
For the purposes of RERA, in situation where a developer or constructor is different from the seller of the property, both will be deemed as promoters and would become jointly responsible under this Act.

‘Real Estate Project’ is defined as the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartment, for the purpose of selling them. The definition covers common areas, development works, all improvements and structures installed, and all easement, rights and appurtenances belonging to these projects.

The Act further requires Real Estate Projects coming under the planning areas by the Promoters to be registered with the State Real Estate Regulatory Authority. Without this registration, the Promoter is banned from advertising, marketing, booking, selling or offering for sale, or inviting anyone to buy any part of the real estate project.

Section 3 of the Act provides for real estate projects which are exempted from registration:
  • The land proposed to be developed does not exceed 500 square meters or the number of apartments do not exceed 8 (eight) in number;
  • In cases where ‘Completion Certificate’ for the project has been awarded to the promoters prior to commencement of RERA; and
  • A project where the work is limited to re-development, repair or renovation and does not encompass marketing, advertising, selling or new allotment of any apartment, plot or building thereof.
Is RERA applicable to only registered projects?

In Simmi Sikka vs Emaar MGF, it was held that it was not specifically pointed anywhere in the RERA that certain projects are out of the ambit of the Act. Section 3(2) only provides for those categories of projects where no registration is required. It was further held that Authority’s ambit even extends to those projects which have not been registered, and also not exempted from registration.

Section 4 of the RERA provides for ‘Application for Registration’ of real estate projects wherein every promoter is enjoined to apply for such registration along with the documents enumerated as follows:-
  • 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 launched by the promoter in last five years, whether completed or not including the current status of ongoing projects, delay in completion, details of pending cases, land type and any payments pending.
  • The authenticated copy of the approvals and commencement certificate from the competent authority, if applicable.
  • Sanctioned plan, layout plan and specifications of the proposed project or phase thereof and the entire project as sanctioned by the component authority.
  • Plan of development works to be executed in the proposed project and the proposed facilities to be provided including fire-fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy.
  • Location details of the project, with clear demarcation of land dedicated for the project along with its boundaries including the latitude and longitude of the end points of the project.
  • Proforma of the allotment letter, an agreement for sale, and the conveyance deed offered to be signed with the allottees.
  • Number, type and the carpet area of apartment for sale in the project along with the area of the private balcony or verandah area and the exclusive open terrace area with the apartment, if applicable.
  • Number and area of garage for sale in the project
  • Name and address of the real estate agent for the proposed project, if any.
  • Name and address of the contractor, architect, structural engineer and also other people concerned with the development of the proposed project.
  • A declaration, supported by an affidavit, which should be signed by the promoter or any person authorised by the promoter stating that:
    • The promoter has a legal title on the land which the development is proposed along with the legally valid documents with authentication of such title, in case the land is owned by another person.
    • The land is free from all encumbrances or details of encumbrances on the land including any rights, title, interest or name of any person in or over the property.
    • Time period within which the promoter proposes to complete the project or phase, as the case maybe.
    • Promoter to take all the pending approvals on time from competent authorities.
    • Furnish other documents as required.
Rejection of Application:

The Authorities have the power to reject an application if it does not conform to the provisions of the Act. The reason for rejecting an application has to be recorded in writing.

Grant of Registration:

Registration of real estate projects comes under Section 5 of the RERA. The registration must be granted by the relevant Authority within a period of thirty from the date of receipt of application. If the Authority fails to grant the registration or reject the application, the project is deemed to have been registered.

Validity of Registration under RERA:

The registration obtained under this Act is valid for the period of time specified by the promoter in the registration application.

Extension of the Registration Period:

The registration granted can however be extended by the Authority after receiving an application from the Promoter in case of ‘Force Majeure’ having major effect on the project. The authorities can also extend the registration for a maximum period of one year if the circumstances permit.

The Supreme Court of India in the case of Bikram Chatterji v. Union of India held that ‘as RERA envisages timely completion of projects once registration is granted under Section 5 and extension under section 6, it is only in the event of ‘force majeure’ and no default on the part of the promoter that registration can be extended in aggregate for a period not exceeding one year. Force majeure shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature’.

Cancellation of Registration:

The Authorities have the power to revoke a registration they granted on receipt of a complaint or on recommendation of a competent authority after giving thirty days’ notice in writing to the Promoter. The Authorities must consider any cause shown by such promoter for the not being able to adhere to the rules prescribed. The Authorities have the power to cancel a registration if any of the following is satisfied:-
  • The promoter has defaulted in performing anything required under RERA.
  • The promoter has violated the terms and conditions of approval granted by the Authority.
  • The promoter is involved in any unfair practice or irregularities (for e.g. falsely representing their services, false or misleading publication of any advertisement or prospectus whether in any newspaper or otherwise of services that are not intended to be offered.)
  •  The promoter indulges in any fraudulent practices.
Consequences of cancellation of Registration:

Following are the consequences of cancellation of registration:
  • Once the registration granted is revoked, the Promoter would be barred from accessing its website in relation to the project.
  • Other Real Estate Regulatory Authority in different States and Union territories are notified about the promoter’s project registration revocation. In addition to this, their name and picture is also displayed as defaulter on the official website.
  • Upon cancellation of the registration, the Authorities have the power to direct the scheduled bank holding the project back account to freeze the account and take such further necessary actions, including consequent de-freezing of the said account, towards facilitating the remaining development works.
  • The Authority may also issue such directions as it deems necessary to preserve the interest of allottees or in public interest.

Penalties for Non-Registration:

When a real estate project is not registered, through Section 59 of RERA, a penalty of up to 10% of the estimated project cost can be imposed. Wherein cases where the default is continuous, an additional fine up to 10% of the estimated project cost can be levied coupled with imprisonment up to three years or even both.

RERA has assigned the Authority with inclusive powers in cases of non-compliance on the part of the Promoter comprising  penalty provision and other steps which the Authority may deem fit for protecting interest of the consumers.  Any person aggrieved by violation of provisions of RERA by a promoter has the option of filing a complaint with the Authority.

Registration of projects with RERA has brought upon a lot of benefits for the consumers primarily because it reduces the risk of insolvency/bankruptcy of the builder and provides a timeline for real estate projects completion and timely delivery. It provides balanced agreements and transparency on utilisation of money by the promoter. The promoters, on the other hand, have also got governance and transparency in bargain from the RERA, enhancing confidence of investors and a regulated environment. RERA has increased efficiency and consolidated the real estate sector with higher investments and surge in organised funding of real estate projects.


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