RERA, 2016: registration of real estate projects and real estate agents

1. Background

Before 2016, buyers of flats and plots had little protection against delayed possession, diversion of their money to other projects, changes to sanctioned plans and false advertisements. Consumer fora gave relief case by case. The Real Estate (Regulation and Development) Act, 2016 (Act 16 of 2016) was assented to on 25 March 2016; its remaining provisions, including registration (sections 3 to 19), came into force on 1 May 2017. The Karnataka Rules were notified on 10 July 2017. The Act applies both to new projects and to ongoing projects without a completion certificate; in Newtech Promoters and Developers Pvt. Ltd. v. State of U.P., 2021 INSC 716, (2021) 18 SCC 1, the Supreme Court held that this is not retrospective operation: the Act regulates ongoing contracts from its commencement.

Key definitions in section 2: a real estate project (section 2(zn)) is the development of a building or apartments, the conversion of a building into apartments, or the development of land into plots or apartments, for sale, including common areas and development works. A promoter (section 2(zk)) includes a builder, a land developer who sells plots, and a development authority selling to allottees. A real estate agent (section 2(zm)) is any person who negotiates or acts for one party in a sale of a plot, apartment or building and receives remuneration, including one who introduces buyers and sellers through any medium.

2. Prior registration: section 3

• No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase any plot, apartment or building in a real estate project in any planning area without registering it (section 3(1)).
• Ongoing projects without a completion certificate had to apply within three months of commencement (first proviso). The Authority may require projects beyond the planning area but with local permission to register (second proviso).
• Exemptions (section 3(2)): (a) land not exceeding 500 square metres or not more than eight apartments, inclusive of all phases (a State may lower these thresholds); (b) projects with a completion certificate before commencement; (c) renovation, repair or re-development not involving marketing, advertising, sale or new allotment.
• Each phase is a stand-alone project and is registered separately (Explanation).

The Karnataka Rules define an “ongoing project” and exclude, among others, layouts whose streets and civic amenity sites have been handed over to the local authority, apartments whose common areas have been handed over to a registered association, and projects where development is complete and sixty per cent of the units have been conveyed or an application for a completion or occupancy certificate has been filed.

3. The application: section 4

The promoter applies in the prescribed form with the fee, enclosing:

• details of his enterprise, and of projects launched in the past five years with their status, delays, pending cases and payments;
• authenticated copies of approvals and the commencement certificate, phase-wise;
• the sanctioned plan, layout plan and specifications, the development plan and facilities;
• location details with boundaries and latitude and longitude;
• pro formas of the allotment letter, agreement for sale and conveyance deed;
• number, type and carpet area of apartments, garages, and names of agents, contractors, architect and structural engineer; and
• a declaration on affidavit that he has legal title (with documents if the land belongs to another), that the land is free of encumbrances or giving details, the period within which he will complete the project, and that seventy per cent of the amounts realised from allottees will be deposited in a separate account in a scheduled bank to cover the cost of construction and land, withdrawn only in proportion to completion and on certification by an engineer, an architect and a chartered accountant.

Under the Karnataka Rules the registration fee depends on the type of project: for group housing, five rupees a square metre up to 1,000 square metres and ten rupees above, subject to a cap of five lakh rupees; higher rates for mixed and commercial projects; and five rupees a square metre, capped at two lakh rupees, for plotted development.

4. Grant, extension and revocation: sections 5 to 8

• Grant (section 5). Within thirty days the Authority grants registration with a registration number and login to create the project web page, or rejects it for recorded reasons after a hearing. If it does neither, the project is deemed registered, and the number must be issued within seven days. Registration is valid for the period declared by the promoter for completion.
• Extension (section 6) on application for force majeure (war, flood, drought, fire, cyclone, earthquake or other natural calamity), and in reasonable circumstances without the promoter’s default for up to one year in aggregate, after a hearing.
• Revocation (section 7) on complaint, suo motu or on the competent authority’s recommendation, where the promoter defaults under the Act, violates approval conditions, indulges in unfair practices (false statements about standards or approvals, advertising services not intended to be offered) or fraudulent practices. Thirty days’ notice is required. Instead of revoking, the Authority may continue registration on conditions. On revocation it debars the promoter from its website, lists him as a defaulter with his photograph, informs other Authorities, freezes the project account and facilitates completion.
• After lapse or revocation (section 8) the Authority may, in consultation with the Government, have the remaining work done by the competent authority, the association of allottees or otherwise; the association has the first right of refusal.

5. Real estate agents: sections 9 and 10

• Registration required (section 9(1)). No agent may facilitate the sale or purchase of any plot, apartment or building in a registered project in a planning area without registration.
• Application in the prescribed form with fee and documents (section 9(2)). In Karnataka the fee is twenty-five thousand rupees for an individual and two lakh rupees for others.
• The Authority grants a single registration for the whole State or rejects after a hearing (section 9(3)); if no deficiency or rejection is communicated within the period, registration is deemed (section 9(4)). The registration number must be quoted in every sale (section 9(5)). It is valid for the prescribed period and renewable (section 9(6)). It may be revoked or suspended for breach, misrepresentation or fraud, after a hearing (section 9(7)).
• Functions (section 10). An agent must not facilitate sale of an unregistered project; must keep prescribed books and records; must not indulge in unfair trade practices (false representations, advertising services not intended to be offered); must help the allottee obtain all information and documents he is entitled to at booking; and discharge other prescribed functions.

Penalties: up to ten per cent of the estimated project cost for a promoter who fails to register, and imprisonment up to three years for continuing violation (section 59); ten thousand rupees a day, up to five per cent of the unit cost, for an agent in breach of sections 9 or 10 (section 62). See the Unit V note on penalties.

How this is examined

“Explain the provisions relating to registration of real estate projects and real estate agents” was the Unit V essay in January 2026 and June 2025, and in April 2023 (“the steps involved”). “Registration of real estate project” is a frequent short note (August 2024, November 2021). Answer with sections 2 to 5 in that order.