Compulsory Registration Of Real Estate Projects

Compulsory Registration Of Real Estate Projects


Real estate sector has emerged as one of the most valuable contributors to the Indian economy. In recent times has been making rapid strides. Besides witnessing a slowdown course, the sector stretches its metamorphosis from being largely fragmented and unorganized. To become as structured and organized as its peers in developed economies across the orbit.

Kimberley Amadeo defines real estate as real, or physical, property. A few groups of authorities opined that the word ‘Real’ comes from the Latin root ‘res’, or things. Some claimed that since all the kings used to own all estate in their kingdoms the word ‘real’ is derived from the Latin word rex, meaning ‘royal’. 

Real estate is one of the oldest and most preferred assets of all classes. It refers to land as well as any physical property or improvements affixed to the land, including residences, buildings, landscaping, fencing, walls, etc.

In view of the above, Parliament passed the Real Estate (Regulation and Development)Act, 2016 aiming to protect the rights and interests of consumers and promoting uniformity and standardization of business practices and transactions in the real estate sector.

Union Budget 2017-18

Union Budget 2017-18 gave a push to Real Estate Sector, the implementation of a single regulator RERA, the announcement of ‘infrastructure status’ to the affordable housing sector, can serve as a significant step in delivering the government’s Housing for All under Pradhan Mantri Awas Yojana by 2022’ mission.

These could be game-changing steps for developers who already have a good presence in the market. Further, the Central Government has identified 305 cities and towns under the housing for all by 2022 mission (Pradhan Mantri Awas Yojana), to build 2 crore homes for urban poor by the year 2022. This mission is expected to need a 38 million workforce by 2030 from 29 million at present, predicted to be the key job producer.

Despite being such an important part of the economy, the real estate sector was unchecked for numerous years. The real estate sector has been one of the significant contributors to the nations GDP and employment creation. 

Registration and enrollment under RERA

One of the salient features of RERA is the requirement of registration of the real estate project by the ‘Promoter’ with the Real Estate Regulatory Authority, which falls within the planning areas. In the absence of such registration, the Promoter of the project is not permitted to advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner in any real estate project or any part of it.

Section 3 of Regulation and Development) Act, 2016 deals with the Registration of Real Estate Projects.

According to Clause (1) of this section, without registering the real estate project with the Real Estate Regulatory Authority, no promoter shall be allowed to advertise, market, offer for sale, book, sell or, invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project, in any planning area.

Concerning projects that are already in the ongoing stage on the date of commencement of this Act and for which the completion certificate has not issue, an appeal by the promoter to the Authority for registration of the said project within three months from the date of commencement of this Act.

Section 3 Clause(2) of RERA, put forward the following real estate projects that are not require to register:
  1. Where the area of the land does not exceed 500 square meters or the number of apartments proposed to be developed does not exceed 8 inclusive of all phases. If the appropriate Government considers it necessary, it may reduce the threshold for exemption from registration under this Act
  2. Where the Promoter has received completion certificate for a real estate project before commencement of RERA; and
  3. Where the labor involved is limit only to renovation or repair or re-development and does not involve marketing, advertising, selling, or new allotment of any apartment, plot, or building.

Why is prior registration is compulsory?

A lot of marketers, promoters, and developers with the aim of greater profits indulge in a common practice of pre-launching a project without securing the required approval from the appropriate local authorities. Even the consumers bag this opportunity to receive a discount during such a pre-launch period. But in certain circumstances where the promoter vanishes overnight after indulging in such pre-launch practice thus putting the customer at risk. Hence, it is mandatory to register any such project under the act before it is start or launch for sale. Basic requirement for the promoter includes all the requisite approvals before selling off such projects.

Advantages Of Registration Of Real Estate Projects

Compulsory Registration Of Real Estate Projects

●On-time possession of the property

The deception in the real estate sector has been bogus commitments by promoters of completion and delivery of projects, thereby causing huge financial worries and mistrust among the buyers. When promoters enroll under the RERA, they must provide the estimated date for the project completion, failing which huge penalties would be imposed on the promoter.

●Accurate details of the project

The promoter must present the complete and accurate details of the project like the stage of completion, the amenities provide, and other relevant details or projects being execute, which cannot be alter later.

●Assured license clearances

The promoters would never receive the mandatory licenses and clearance from the government and delay the projects on the pretense of the same. However, registered promoters must own the licenses in place before selling even a single unit. Hence the buyers cannot be now lure into fraudulent schemes.

●Repair of defects

Post the purchase by the buyer it is the responsibility of the promoter to set right any defect, and deficiencies.

●Restricted advertisement

The registration number must be disclose in the advertisement. The promoter can advertise their projects only after getting the required registration under the act. 

●Payment of the booking amount

After the registration of the sale agreement, the booking amount of 10% has to be paid thereafter.

Controversies regarding compulsory registration 

Compulsory Registration Of Real Estate Projects

The Confederation of Real Estate Developers Associations of India (CREDAI) say that Real Estate Regulatory Authority (RERA). Registration should not made mandatory for housing projects that have received completion. Or occupancy certificate before the implementation of the RERA Act.

The RERA registration was not obligatory for the housing projects that had procured. A completion certificate or occupancy certificate before the implementation of the Act.

Revenue and Forest Department

Compulsory Registration Of Real Estate Projects

On the other hand, the Revenue and Forest Department issued a circular wherein it has made compulsory and notified. That no agreement for sale for any property would be registered without RERA registration. In a statement, CREDAI said the new notification is causing confusion and hardship to the home-buyers. As the Sub Registrars Offices are refusing to register the documents. 

With regards to small projects, CREDAI has asked to exempt the projects that have received completion certificate/occupancy certificate. Before the law coming into force and also exempt RERA registration of projects with a land area. Less than 500 sq meters and less than 8 units.

It also desires the projects that have receive completion certificate/occupancy certificate and have now execute agreement. To sale to exempt and also relieve the plotting development projects where final N/A certificate. Or final approval to the layout by Authority before the implementation of the law.


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