No advertisement, no booking, no sale until the project is registered. That is the rule in Section 3 — and the exemptions are narrow and State-specific. AMLEGALS advises promoters on applicability, registration, exemption opinions and defence of non-registration penalties that reach ten per cent of project cost.
Section 3 makes registration the single gateway to the real estate market. Until a project is registered, a promoter cannot advertise, market, book or sell — and the consequences of getting this wrong are severe: a penalty up to ten per cent of estimated project cost under Section 59, and potential imprisonment for continued default. The registration also brings the seventy per cent escrow discipline that protects allottee money from diversion.
The judgement calls lie in the exemptions and the phasing. The central thresholds — five hundred square metres or eight apartments — can be lowered by a State, and phases cannot be sliced to manufacture exemption. For small, completed or renovation projects, a defensible exemption opinion saves cost and time; for larger developments, correct structuring and disclosure of phasing at registration prevents later allegations of circumvention. Both require precise reading of the specific State rules.
Assessing whether a project requires registration under Section 3, applying the correct State thresholds and phasing rules to avoid both over- and under-registration.
Preparation and filing of the Section 4 registration application: declarations, disclosures, approvals, and the mandatory escrow (seventy per cent) account structure.
Reasoned opinions on exemption under the proviso to Section 3(2) for small, completed or renovation projects, documented to withstand scrutiny.
Advising on registration of ongoing projects and the continuing disclosure and quarterly update obligations under the Act.
Defence against Section 59 non-registration penalties, including quantum, mitigation and regularisation strategy.
Structuring phased developments and joint developments to comply with registration while meeting commercial objectives.
Section 3(1) of the Real Estate (Regulation and Development) Act 2016 prohibits a promoter from advertising, marketing, booking, selling or offering for sale, or inviting persons to purchase, any plot, apartment or building in a real estate project without first registering the project with the State Real Estate Regulatory Authority. For ongoing projects that had not received a completion certificate on the date the Act came into force, registration was also required within the prescribed time.
Under the proviso to Section 3(2), registration is not required where: (a) the area of land proposed to be developed does not exceed five hundred square metres, or the number of apartments proposed to be developed does not exceed eight, inclusive of all phases (the State Government may lower these thresholds); (b) the promoter has received a completion certificate for the project prior to commencement of the Act; or (c) the work is limited to renovation, repair or re-development that does not involve marketing, advertising, selling or new allotment.
Yes. The proviso to Section 3(2) expressly empowers the State Government to reduce the thresholds for exemption. Several States have exercised this power, so the applicable area or apartment threshold must always be checked against the specific State RERA rules rather than assumed from the central figures of five hundred square metres or eight apartments. A project exempt in one State may require registration in another.
Section 59 provides that if a promoter contravenes Section 3 by not registering a project, the promoter is liable to a penalty which may extend up to ten per cent of the estimated cost of the real estate project. If the promoter continues to violate even after the penalty, further penalty up to ten per cent of the estimated cost, or imprisonment for a term up to three years, or both, may be imposed. The exposure is therefore substantial.
Yes. Each phase of a project is treated as a standalone real estate project for registration, and the thresholds are assessed inclusive of all phases to prevent artificial splitting to claim exemption. A promoter cannot sub-divide a larger development into sub-threshold phases to escape registration; the Authority examines the project holistically. Correct structuring and disclosure of phasing at the registration stage avoids later allegations of circumvention.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing.
Share the project location, size, phasing and status for a confidential preliminary assessment of registration or exemption.