Non-registration of real estate projects by promoters

Non-registration of real estate projects by promoters is a punishable offense under the RERA Act. Real estate projects that are applicable for registration under this act: promoters of that project are not allowed to advertise, market, book, sell, or offer that project for sale or even be allowed to invite customers to purchase that plot, apartment or building before completing the registration of the project under this Act. Promoters do not even offer or invite any part of that project in any real estate project planning area. 

Registering real estate projects creates more benefits for the promoters as well as helps to build the belief of the consumers in your project. Once consumers know your real estate project is RERA-approved, consumers feel safe investing in or purchasing any plots, homes, or commercial property from your project. It will automatically increase the sales of the projects; consumers will choose the RERA-registered project over non-registered projects. 

Registering under the RERA for property projects creates transparency in agreements between the buyers and promoters. When any buyer purchases property in the RERA-registered project, it gives them assurance that they can get timely possession of the property and the property project’s build quality is maintained by the promoters. The registration aims to protect the rights of buyers in the real estate sector and also increase investment. 

The objective of registration under RERA is to create more transparency for customers, and they have the assurance that any rights in the real estate agreement will not be violated. It also helps to solve the consumers’ complaints by creating a dispute resolution mechanism. It also helps to reduce fraud from promoters and delays from promoters for any process in this contract. So it helps to create smooth operations in this process for buyers or consumers.

Who are the promoters, and what are the duties of the promoters

A promoter is a person or company that builds or develops real estate projects and sells those projects in the market to buyers or consumers. It also included redevelopment of any old building when they add new buyers in that project, commercial projects, contractors, or any person acting as the holder of attorney for the owner of the land.

• Once the promoter makes a plan for the construction of the project, before starting the construction, it’s mandatory to register that project under the RERA.
• Once the registration of the project is completed, the promoters must create a web page and display the project on the RERA official website. So the consumers can get every detail of the project easily on the RERA website.
• Before registration, promoters can’t make any advertisements or offers for sale for their real estate project.
• The promoter is required to mention the timeline for completion of the project, including all the basic needs of the project, like water, sanitation, and electricity. 
• Before the day of possession, promoters are required to obtain the completion certificate, occupancy certificate and any other certificates as per the local laws. 
• Promoters must provide the necessary documents at the time of booking the project to consumers, like an allotment letter and sanctioned layout plans, along with the approval documents from the competent authority. 
• Promoters have to return the amount to the consumers when they fail to provide possession of the property within the decided time limit. 

Non-registration of the real estate projects under RERA

Section 3 of the RERA Act 

As per Section 3 of the RERA Act, promoters cannot do any advertisement booking or marketing or create any invitation for purchase to consumers, as the case may be, for any real estate project or part of that project or even for the area where they are planning to do that project before registering that real estate project with the Real Estate Regulatory Authority as per this Act.

As per this act, if any project is built beyond the planning area of the RERA but with the official permission of the local authority. But if that project is popular among people and many consumers are interested in investing in or buying property in that project, then the RERA Authority can ask the promoters to register that project with RERA. The main aim of authority in this situation is the priority of protecting the rights of the consumers; once the project is registered with the RERA, all rules and regulations of the act apply to that project from the date of registration of the project. 

As per Section 3(2) of the RERA Act, there are some real estate projects that do not require registration.

In any project where land does not exceed five hundred square meters or the total number of apartments, including all phases, does not exceed eight. In some cases, the government reduces the terms to below five hundred square meters or eight apartments, including all phases and exempts the project from registration under this Act.

This Act also exempts the projects that get a completion certificate of the real estate project before the commencement of this Act.

Registration is also not required for the renovation, repair or redevelopment when they do not include marketing, advertising or selling a new allotment of any apartment in the real estate project.

Punishment for non-registration under the RERA Act

Section 59 

As per Section 59, if any promoter fails to comply with the provisions mentioned in Section 3, then they face a penalty that extends up to 10% of the estimated cost of the real estate project as decided by the authority. If any promoters continue to commit the same crime, then that person is liable to punishment with imprisonment up to three years, along with a fine that may extend to more than 10% of the estimated cost of the project, or with both.

What is the process of RERA registration followed by Promoters? 

The registration process for RERA is different in each state; the promoter can apply on the official website of their own state’s RERA website. In this process, promoters have to submit relevant documents along with the application for registration.  Let’s see a list of the documents that are similar for the registration process in all states.

• Identity proof of the promoters, like a PAN Card.
• Parking slots’ availability in the real estate property project.
• Proof of the title of the promoter on the land where the real estate project is planned.
• Encumbrance Certificate for the land of the project
• Commencement Certificate of the real estate project
• Layout plan, Sanction plan, and location details of the property project
• Development plans to work to be executed in the project.

If the promoters have any previous experience in developing real estate projects, then they need to submit some extra documents at the time of registration. 

Documents about the previous project experience of the promoters

• All the details of the project created by the promoters in the last five years.
• Name of the projects
• Completion status of the projects
• If any of the projects makes a delay in completion or possession of the project documents related to that project.
• If there is any pending case on the promoters, then the case name and number. 

If any enterprise acts as a promoter, then additional documents relating to the promoter’s enterprises are required:

• Name, registered address and type of the enterprise.
• Documents related to the registration of the company or enterprise, like registration certificates, Memorandum of Association, Articles of Association and date of incorporation. 
• The previous three-year balance sheet of the company.
• Director, promoter, partners, chairman’s address, name, contact details and identity proof must be submitted at the time of the registration process.

Documents required to be submitted by promoters when he is not the owners of the land where they want to develop the real estate project:

• Title deed documents of the owner
• Documents that show the consent of the owner for the development of the real estate project on the owner’s land.
• Development agreement between the owner and the promoter
• Collaboration Agreement between the owner and the promoter
• Joint development agreement between the owner and the promoter

Once the registration is completed, promoters receive the Registration Number, Login ID, and Password. Registration fees are different for each state, and fees are decided according to the area of the real estate project. This RERA registration is valid till the project is completed as per the timeline declared by the promoters. This registration validity only increases in case of natural calamities like floods, massive fires, etc.; that extension is only valid for up to one year. The login ID and password are used by promoters to update the status of the project on the RERA website. 

Frequently Asked Questions