1. When is RERA registration mandatory for real estate projects
Introduction
The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted to bring transparency, accountability, and efficiency in the real estate sector. One of the foundational requirements under the Act is the mandatory registration of real estate projects with the Real Estate Regulatory Authority before any form of marketing or sale.
The objective of this requirement is to ensure that promoters disclose complete project details, comply with regulatory standards, and protect the interests of homebuyers.
Legal Framework
Section 3(1) of the Act provides that:
No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase any plot, apartment or building in any real estate project without registering the project with the Real Estate Regulatory Authority.
Thus, registration is a pre-condition for undertaking any commercial activity relating to a real estate project.
Applicability of RERA Registration
A real estate project is required to be registered under RERA if it satisfies any of the following conditions:
1. Threshold based on land area
Where the land proposed to be developed exceeds 500 square meters
2. Threshold based on number of units
Where the project consists of more than 8 apartments
3. Nature of project
The requirement applies to:
- Residential projects
- Commercial projects
- Mixed-use developments
- Plotted developments
Applicability to Ongoing Projects
RERA also applies to ongoing projects which have not received a completion certificate as on the date of commencement of the Act.
Many promoters assume that only new projects require registration. However, ongoing projects without completion certificate are equally covered, which is a common area of non-compliance.
Phase-wise Development
In case of large projects developed in phases:
- Each phase is treated as a separate real estate project
- Separate registration is required for each phase
Artificial splitting of projects to stay below thresholds may be questioned by the authority. The intent of development is often examined, not just structure.
Activities Restricted Without Registration
A promoter cannot undertake the following activities without obtaining RERA registration:
- Advertising the project
- Marketing or promotional campaigns
- Inviting bookings
- Accepting advance payments
- Entering into agreements for sale
Consequences of Non-Registration
Failure to comply with registration requirements may lead to:
Financial Penalty
- Up to 10% of the estimated project cost
Continuing Default
- Additional penalties for continued violation
Criminal Liability
- Imprisonment up to 3 years
Business Impact
- Prohibition on sale or marketing
- Loss of credibility and buyer trust
Regulatory action often starts with buyer complaints, not inspections. Even one aggrieved buyer can trigger proceedings.
Practical Considerations for Promoters
From a practical perspective, promoters should:
- Evaluate RERA applicability at the project planning stage
- Ensure all approvals and documentation are ready before application
- Avoid pre-launch marketing without registration
- Maintain consistency between disclosed information and actual execution
Importance for Homebuyers
For homebuyers, RERA registration provides:
- Access to verified project information
- Transparency in project timelines and approvals
- Legal remedies in case of delay or default
Buyers should always verify the RERA registration number on the respective state portal before investing.
CABTA Insights
- Registration risk is often underestimated at pre-launch stage
- Project structuring should be aligned with RERA thresholds
- Consistency in disclosures is critical to avoid litigation
- RERA compliance enhances credibility and buyer trust
- Early advisory involvement reduces long-term risks
Next Article → 2. Projects Exempt from RERA Registration