When is RERA Applicable?
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June 12, 2025
The Indian real estate sector, once notorious for lack of transparency, frequent
delays, and lack of protection for homebuyers, has witnessed significant reform with
the advent of the Real Estate (Regulation and Development) Act, 2016, commonly
known as RERA. The central objective of RERA is to bring discipline, accountability,
and fairness to property dealings in India.
But when does RERA actually apply to a real estate project or transaction? This
article answers that question by breaking down the key criteria, exceptions, and legal
nuances surrounding the applicability of RERA.
What is RERA?
RERA is a regulatory law introduced by the Indian government to protect the
interests of homebuyers and regulate the real estate industry. The Act mandates
compulsory registration of specific real estate projects and agents, enforces
transparency in project advertising and sales, and establishes state-level Real Estate
Regulatory Authorities (RERAs) to resolve disputes and monitor compliance.
Applicability of RERA: An Overview
RERA applies to a broad spectrum of real estate projects and entities involved in the
buying, selling, and developing of properties in India. However, its applicability is not
universal. There are well-defined thresholds, exclusions, and timelines that
determine whether a project or agent falls under the purview of RERA.
Let’s explore the critical conditions in detail.
Type of Projects Covered
A. Residential and Commercial Projects
RERA applies equally to both residential and commercial real estate developments.
This includes:
Apartment buildings, group housing societies, and row houses
Office complexes, shopping malls, and commercial buildings
Plotted developments where plots are developed and sold for residential or
commercial use
B. Ongoing and New Projects
All new real estate projects launched after the enforcement of RERA (1st May
2017) are covered.
Ongoing projects (those which have not received a Completion Certificate (CC)
or Occupancy Certificate (OC) before 1st May 2017) are also required to
register under RERA.
Project Size and Unit Thresholds
RERA does not regulate every small construction or individual home sale. The law
prescribes minimum size and unit-based thresholds to focus on medium and large
projects.
A. Land Area
Any real estate project that exceeds 500 square metres of land must be registered
under RERA.
B. Number of Units
If a project involves the development of more than eight apartments (residential
units), it is mandatory to register, regardless of the land area.
C. Either-Or Condition
A project needs RERA registration if it exceeds 500 sq. m or has more than eight
units. Meeting either condition is sufficient.
Example:
If a developer is constructing a building with nine flats on a 400 sq. m plot,
registration is mandatory as the number of units exceeds eight.
If a builder is developing six villas on 600 sq. m land, registration is required as
the land exceeds the 500 sq. m threshold.
Who Must Register?
A. Promoters/Developers
Any individual or organisation involved in the construction or sale of buildings,
apartments, or plots for sale must register their project if it falls within RERA’s
purview.
B. Real Estate Agents
RERA is not limited to developers alone. Agents and brokers who facilitate the sale
or purchase of units in RERA-registered projects must also register themselves with
the regulatory authority of the respective state.
Applicability to Ongoing Projects
RERA has retrospective effect on ongoing projects. Projects that started before 1st
May 2017 but were not completed and had not received a Completion Certificate
before this date, also need to register under RERA. The law thus covers a wide base
of under-construction properties to protect the interests of existing homebuyers.
Geographical Applicability
RERA is a central law but is implemented at the state level. Each state and union
territory has established its own Real Estate Regulatory Authority. The Act is
applicable across all states and UTs in India, except for Jammu and Kashmir (where
a separate RERA applies).
However, the specific processes, forms, and rules may vary slightly from state to
state, although the central framework and core thresholds remain uniform.
Exemptions from RERA Registration
Not all projects are required to register under RERA. Certain projects are specifically
exempted, including:
Small-Scale Projects: Projects where the total land area does not exceed 500
sq. m or the number of apartments is not more than eight are exempt from
RERA registration. Both these conditions must be satisfied for the exemption to
apply.
Completed Projects: If a project has received a valid Completion Certificate
before 1st May 2017, it does not require RERA registration, even if units remain
unsold.
Renovation/Repair Projects: Projects where no new allotment, marketing, or
sale of apartments, plots, or buildings is involved (such as renovations, repairs,
or redevelopment without fresh sales) are outside RERA’s ambit.
Certain Charitable or Non-Profit Developments: Some projects developed
for non-profit or charitable purposes, such as religious or community housing,
may also be exempt as per the state RERA’s notification.
Applicability to Real Estate Agents
Any person or entity who acts as a real estate agent or broker in a RERA-registered
project must also register as an agent with the relevant state RERA authority. Without
this registration, an agent cannot legally facilitate the sale or purchase of properties
within such projects. This helps ensure that buyers and sellers deal only with
authorised and regulated intermediaries.
Consequences of Non-Compliance
Failure to register a project or act as an unregistered agent in a RERA-mandated
transaction can result in serious penalties.
Heavy monetary fines (up to 10% of the project cost)
Imprisonment for developers in some cases
Orders to stop further marketing, booking, or selling of units
Loss of reputation and legal recourse for aggrieved buyers
State-Specific Requirements
While the central guidelines are clear, every state RERA may have additional rules
about documents, processes, and timelines for registration. Promoters and agents
should always consult their respective state RERA websites for the latest checklists
and fee structures.
Conclusion
RERA’s applicability is determined by the type, size, and status of a real estate
project, as well as the parties involved in selling or marketing the project. Any
medium to large residential or commercial development started after 1st May 2017—
or ongoing projects without a CC before this date—must register under RERA if they
exceed 500 sq. m or eight units.
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