RERA Promoter / Project Registration

RERA stands for the Real Estate (Regulation and Development) Act, 2016. It was enacted to address the most persistent problems in Indian real estate — project delays caused by cross-project fund diversion, lack of transparency in project disclosures, absence of a fast-track dispute resolution mechanism for homebuyers, and no standardised carpet area measurement or Agreement for Sale format. Section 3 of the Act requires every promoter to register a covered project before any advertising, marketing, booking, or collection activity. The Act created state-level Regulatory Authorities, Appellate Tribunals, and Adjudicating Officers to enforce these obligations and adjudicate allottee complaints.

Under Section 3 of RERA, a promoter must register a real estate project where (a) the proposed land area exceeds 500 square metres, or (b) the total number of proposed apartments exceeds 8. Either threshold independently triggers registration — both must be absent for the exemption under Section 3(2) to apply. The obligation covers residential projects, commercial projects, mixed-use developments, plotted layouts, and township projects. Phase-wise development is expressly contemplated — each phase requires separate registration.

Yes. Section 3(2)(b) of RERA required all ongoing projects — those that had not received a Completion Certificate or Occupancy Certificate as on 1 May 2017 — to register with the state RERA Authority within three months of the Act coming into force, i.e., by 31 July 2017. Promoters who did not register by that date are in continuing violation. Belated registration is still required and reduces further penalty exposure, but does not eliminate liability for the period of non-registration.

Section 2(zk) of RERA defines 'promoter' broadly to cover: any person who constructs or causes construction of an independent building or apartments for sale; any person who develops land into a project for the purpose of selling plots or buildings; development authorities and public bodies that sell plots or apartments; co-operative housing societies and apex societies; any person who acts as builder, coloniser, contractor, developer, estate developer, or by any other name; holders of Power of Attorney from a landowner who market or sell the project; and even purchasers of plotted layouts who further sub-divide and sell. In Joint Development Arrangements, both the landowner and the developer can be co-promoters, depending on the specific terms of the JDA.

Section 4(2)(l)(D) of RERA requires the promoter to deposit 70% of all amounts realised from allottees (advances, installments, and any other charge) into a separate, dedicated bank account maintained exclusively for that real estate project. The funds can only be used for land cost and construction cost of that specific project. Each withdrawal from the account requires simultaneous certification from the project Chartered Accountant (certifying proportionality to completion), the project Architect (certifying completion percentage), and a registered Engineer (certifying structural progress). The remaining 30% can be used freely by the developer.

No. Section 3(1) of RERA explicitly prohibits any advertising, marketing, booking, selling, or offering for sale of any plot, apartment, or building in a real estate project meeting the threshold criteria before obtaining RERA registration. This covers digital advertising, social media posts, hoarding boards, newspaper advertisements, email campaigns, brochure distribution, 'soft launches', 'expressions of interest' campaigns, and collection of even token amounts. The prohibition is absolute — there is no provision for a pre-registration marketing window.

Section 59(1) of RERA provides that if any promoter fails to register a project that is required to be registered under Section 3, the Authority shall impose a penalty which may extend up to 10% of the estimated cost of the real estate project. Section 59(2) provides that where the violation continues or is wilful, the promoter shall be punishable with imprisonment for a term which may extend to three years, or with a further fine which may extend to an additional 10% of the estimated project cost, or with both.

Section 5(1) of RERA provides that the Authority must grant or reject an application within 30 days of receipt of the application. However, the '30-day clock' begins only on receipt of a complete application — Authorities issue deficiency notices that effectively pause the clock while the promoter responds to queries. In practice: with a complete, well-prepared application, MahaRERA typically processes in 30–60 working days. TNRERA, K-RERA, and Rajasthan RERA have varied timelines. UP-RERA and HRERA have at times experienced longer queues. Total end-to-end timeline including document preparation: typically 60–120 days from first engagement.

Registration fees are set by each state Authority individually and vary by project type, size, and location. Different states use different calculation bases — some charge per sq.m. of proposed land area, others charge per proposed apartment, others calculate on the estimated project cost. There is no single national fee rate under the central RERA Act. PNPC calculates the applicable fee using the current state fee schedule at the time of application rather than applying a generic figure, because fee schedules are periodically revised by state Authorities.

No. Section 13(1) of RERA provides that a promoter shall not accept a sum of more than 10% of the apartment cost as an advance payment or application money without first entering into a written Agreement for Sale with the person. This AFS must be duly stamped and registered under the applicable state stamp duty and registration laws to be enforceable. Collecting more than 10% without a registered AFS is an independent violation of Section 13, separate from the Section 3 registration obligation.

Section 84(2)(g) of RERA empowers state governments to prescribe the format of the Agreement for Sale by rules. Most states — Maharashtra, Karnataka, Uttar Pradesh, Rajasthan, Tamil Nadu, and others — have issued model AFS formats. The model AFS sets minimum mandatory terms including: carpet area basis of sale, committed possession date, maintenance obligations, delay interest under Section 18, defect liability under Section 14(3), and the buyer's right to withdraw with refund. Promoters can add supplemental terms but cannot delete or dilute any mandatory provision. Section 23 makes any contractual waiver of allottee rights under RERA void ab initio.

Section 11(1) of RERA requires every registered promoter to upload the details of the project on the state RERA portal within three months of the end of each quarter (or as prescribed by the state Authority). Required updates include: current construction status (with percentage completion), number of apartments booked, number of apartments for which allotment letters have been issued, number of apartments for which AFS has been executed, amounts realised, amounts deposited in the RERA escrow account, and status of any litigation. Some state Authorities also require a CA certificate with the quarterly update.

Section 18(1) of RERA provides that if the promoter fails to give possession on the date committed in the Agreement for Sale, the promoter must — if the allottee wishes to withdraw — refund the entire amount paid along with interest from the date of payment at the prescribed rate (typically SBI MCLR + 2% per annum). If the allottee does not wish to withdraw, the promoter is liable to pay the same interest rate on the delayed possession amounts for each month of delay until actual possession is delivered.

Yes. Section 6(1) of RERA allows the Authority to extend the registration period of a project on an application from the promoter. Extensions are typically granted in cases of force majeure (war, flood, drought, fire, cyclone, earthquake, or other natural calamity under Section 2(m)) or other circumstances beyond the promoter's reasonable control. Extension applications must be filed before the current registration's completion deadline expires, accompanied by documentary justification and payment of the applicable extension fee.

Section 14(3) of RERA imposes a structural defect liability obligation on the promoter for five years from the date of possession. During this period, if any structural defect, or any defect in workmanship, quality or provision of services is brought to the notice of the promoter, the promoter shall within 30 days of receipt of the complaint rectify the defect free of cost. If the promoter fails to rectify within 30 days, the allottee shall be entitled to compensation as determined by the Adjudicating Officer.

Section 14(2) prohibits a promoter from making any addition or alteration in the sanctioned plans, layout plans, and specifications of the apartments, plot, or building, as disclosed to the Authority and allottees, without prior written consent of at least two-thirds of the allottees. This covers changes to external features, common areas, amenity specifications (swimming pool replaced with garden, clubhouse design changed), structural modifications, and changes to common parking or utility infrastructure. Minor alterations within the developer's discretion under the original sanctioned plan are not covered.

Section 17 of RERA requires the promoter, upon receiving the occupancy certificate, to execute a registered deed of conveyance in favour of the allottee — and Section 11(4)(e) requires the promoter to enable the formation of the Residents' Welfare Association (RWA) or Association of Allottees and to facilitate its registration. Common areas, common facilities, and common amenities must be handed over to the RWA or local authority within the period specified in the AFS or state regulations. The promoter cannot continue to charge maintenance fees beyond the period contemplated in the AFS once the RWA is formed.

Section 15 of RERA provides that no promoter shall transfer or assign his majority rights and liabilities in respect of a real estate project to a third party without prior written consent of two-thirds of the allottees in the project and without prior written approval of the Authority. Any transfer without compliance with Section 15 is void and the original promoter remains liable. Upon a Section 15-compliant transfer, the new promoter inherits all obligations under RERA for the project.

GST applicability to real estate is governed by the CGST Act 2017, IGST Act 2017, and notifications issued thereunder. For residential projects: under-construction apartments sold before the issuance of the Completion Certificate attract GST. Since 1 April 2019, the applicable GST rates (with the condition that Input Tax Credit cannot be claimed) are 1% for affordable housing units and 5% for other residential units. Commercial under-construction property sales attract GST at 12% (with ITC available). Completed properties sold after the Completion Certificate has been issued are not subject to GST — they attract stamp duty and registration charges only.

Section 43CA of the Income-tax Act applies to sellers of immovable property (including land and buildings) held as stock-in-trade. It provides that if the actual sale consideration for a transfer is less than the stamp duty value (the value adopted by the state stamp authority for charging stamp duty), the stamp duty value shall be deemed to be the full value of consideration for computing business income. This means the promoter may be taxed on a higher notional income even if actual collections were lower. An amendment introduced a tolerance band — currently, the stamp duty value up to 110% of the actual consideration is not deemed as additional consideration.

Section 194-IA of the Income-tax Act requires any buyer of immovable property (other than agricultural land) where the consideration is ₹50 lakh or more to deduct TDS at 1% of the consideration at the time of payment to the seller / transferor. For RERA-registered projects, this applies to each instalment payment by the allottee where the total consideration crosses ₹50 lakh. The buyer (allottee) must deposit the TDS on Form 26QB and issue a TDS certificate on Form 16B to the promoter. The promoter can claim credit for TDS deducted from allottees against the company's TDS liability.

Foreign Direct Investment (FDI) in the construction-development sector in India is governed by FEMA 1999, the RBI's FDI Policy, and Press Notes issued by DPIIT. As per current FDI policy, FDI in construction-development projects is permitted under the automatic route subject to certain conditions including minimum project size, minimum capitalisation norms, and a three-year lock-in on the original investment before repatriation. A foreign promoter operating in India must invest through an Indian incorporated entity (wholly-owned subsidiary or JV), which entity then obtains the RERA registration. The FEMA reporting obligations (FC-GPR for fresh equity infusion) are separate from RERA.

Yes. Section 2(zn)(iii) of RERA expressly includes plots in the definition of 'real estate project'. A plotted layout or township project meeting the 500 sq.m. land area threshold or 8-unit threshold requires RERA project registration. Several state Authorities have issued specific regulations for plotted layouts — some states exempt purely agricultural land subdivisions below a certain size; others treat plotted layouts as covered unless specifically exempted. Check the state Authority's regulations for plotted development-specific rules, and obtain clarification on township project phasing.

Section 2(k) of RERA defines 'carpet area' as the net usable floor area of an apartment, excluding the area covered by external walls, areas under services shafts, the exclusive balcony or verandah area, and the exclusive open terrace area. This is a statutory definition that supersedes the varying 'super built-up area' metrics previously used by developers. Section 12 mandates that allotments and pricing must be on the basis of carpet area — promoters cannot continue to sell on a super built-up area or built-up area basis. Any increase or decrease in carpet area at the time of handover must be adjusted proportionally in the consideration.

A CA has several mandatory and legally required roles in RERA compliance: (1) Preparing and certifying the project cost estimate at registration — required by most state Authorities. (2) Certifying each withdrawal from the dedicated RERA escrow account — the three-party certificate (CA + Architect + Engineer) is mandatory before the bank can release funds under Section 4(2)(l)(D). (3) Maintaining separate project accounts — RERA requires project-level financial segregation. (4) Annual audit of project accounts — Section 4 requires the project accounts to be audited annually. (5) Tax compliance for the developer entity — GST, TDS, income tax, and FEMA reporting are all areas of CA practice directly relevant to RERA projects.

A deficiency notice identifies specific documents, information, or compliance gaps in the application. The Authority typically prescribes a response period (which varies by state — commonly 15–30 days). The promoter must address each deficiency in the notice precisely and resubmit the required documents or information through the state RERA portal. Failure to respond within the prescribed period can result in rejection of the application. The 30-day statutory processing period under Section 5 is effectively paused during the query period.

Yes. Section 31 of RERA allows any aggrieved person — an individual allottee, an association of allottees, or any other person — to file a complaint with the Adjudicating Officer or directly with the Authority. Before the Adjudicating Officer (Section 71): complaints for compensation under Sections 12, 14, 18, or 19. Before the Authority: complaints for enforcement of the Act's provisions, including compulsion to deliver possession, disclose project information, or maintain escrow properly. Remedies available include directions to deliver possession, full refund with interest, compensation, and penalties on the promoter.

Section 43 of RERA provides for a Real Estate Appellate Tribunal in each state to hear appeals against orders of the Authority or Adjudicating Officer. Any person aggrieved by an Authority or AO order can appeal to the Appellate Tribunal within 60 days of the order. The Tribunal can stay the challenged order and must decide the appeal within 60 days (extendable for reasons recorded in writing). Appeals against the Tribunal's orders lie before the High Court. Promoters use the Appellate Tribunal to challenge penalty orders, enforcement directions, or compensation awards.

The Supreme Court's decision in Pioneer Urban Land & Infrastructure Ltd v. Union of India (2019) held that homebuyers are 'financial creditors' under the Insolvency and Bankruptcy Code (IBC) and can initiate Corporate Insolvency Resolution Process (CIRP) against a defaulting developer. RERA and IBC can run concurrently — RERA does not oust IBC jurisdiction. The Resolution Professional under IBC must factor in RERA obligations in the information memorandum and the Resolution Plan must address allottee claims under RERA. Allottees must choose whether to participate in IBC or continue RERA proceedings — the remedies are different and the strategies depend on the specifics of each case.

PNPC Global has been providing CA services to the real estate sector since before RERA's enactment. Since 2017, we have guided residential and commercial promoters through project registrations with MahaRERA (Maharashtra), TNRERA (Tamil Nadu), K-RERA (Karnataka), HRERA (Haryana), UP-RERA (Uttar Pradesh), and RERA Rajasthan. Our Chennai office covers South India (Tamil Nadu, Karnataka, Andhra Pradesh, and Telangana state RERA Authorities); our Mumbai-connected services cover Maharashtra; our Delhi NCR contacts cover UP-RERA and HRERA; and our Dubai office advises UAE-based NRI promoters and foreign investors structuring Indian real estate projects. We provide: initial project assessment, CA-certified cost estimates, portal filing, quarterly update management, escrow withdrawal CA certification, annual project audit, and tax compliance for the developer entity.

PNPC structures its RERA engagement in two components: (1) an initial registration fee covering document review, CA cost certification, proforma document review, state portal filing, and query resolution through registration number issuance; and (2) an ongoing compliance retainer covering quarterly RERA updates, CA certificates for each escrow withdrawal, and annual project account preparation and audit. The initial registration fee varies by project size, state Authority, and document complexity. We provide a fixed-scope engagement letter with all deliverables specified before engagement begins — no hidden charges for Authority queries.

Pre-launch collections made before RERA registration constitute a violation of Section 3 — the prohibition on selling or collecting in an unregistered project applies from the very first rupee. The promoter should immediately: (a) apply for RERA registration without further delay, (b) regularise the escrow position by depositing 70% of all prior collections into the dedicated RERA escrow account, (c) issue retrospective allotment letters where more than 10% of apartment cost has been collected without an AFS, and (d) engage a CA to certify the historic collection and escrow position in the disclosure at registration. A candid disclosure with remediation steps is the recommended approach.

Section 19 of RERA sets out allottee rights, and Section 11 sets out promoter obligations, which together create an expectation of responsive engagement with allottee queries. State RERA Authorities have prescribed specific timelines for responding to Authority-forwarded complaints — typically 10–21 days depending on the state. Failure to respond to Authority-directed communications within the prescribed time results in ex-parte orders against the promoter. Section 22 of RERA provides that the Adjudicating Officer shall, as far as possible, decide complaints within 60 working days of filing.

The starting point is a project assessment conversation with PNPC's RERA specialist. We review: project type and location (to identify the applicable state Authority), proposed land area and unit count (to confirm registration is required), title and approval status (to identify documentation gaps), and promoter entity structure (company, LLP, individual, JDA) to ensure the application is filed in the correct names. We then provide a structured gap analysis identifying what documents are ready, what needs to be obtained, and the realistic timeline and cost. From there, we issue a fixed-scope engagement letter before any work begins.