BACK TO RERA Act 2016
RERA Act 2016

Section 3

Prior Registration of Real Estate Project with RERA Authority

THE STATUTE

Original Text

No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act: Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act: Provided further that if the Authority thinks necessary, in the interest of allottees, on an application made by the promoter or otherwise, it may extend the period for another period of not more than three months. (2) Notwithstanding anything contained in sub-section (1), no registration of the real estate project shall be required— (a) where 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; or (b) where the promoter has received completion certificate for a real estate project prior to commencement of this Act; or (c) for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.

Legal Commentary

Section 3 is the cornerstone provision of RERA — the mandatory registration requirement that makes everything else work. Before RERA, a builder could begin selling apartments from a brochure on day one, collect bookings and advances, and only then apply for construction permits. Section 3 reverses this: registration comes first, and registration requires the promoter to commit to a timeline, upload all approvals, and disclose all information before a single rupee can be collected. **The prohibition is comprehensive:** Section 3 bars advertising, marketing, booking, selling, offering for sale, and inviting purchase — all pre-sale and sale activities. A promoter who runs a newspaper advertisement for an unregistered project, sets up a 'site office' to take enquiries, or collects even a 'token amount' without registration violates Section 3. **Ongoing projects — three-month registration window:** Projects that were ongoing (construction underway, completion certificate not issued) when RERA commenced on May 1, 2017 were given three months (until August 1, 2017) to register. The Supreme Court in Newtech Promoters (2021) confirmed that ongoing projects had no exemption from RERA's substantive obligations after registration — they just had a grace period to register, not to comply differently. **Three exemptions (Section 3(2)):** 1. *Small projects* — land area ≤ 500 sq metres OR number of apartments ≤ 8 (inclusive of all phases). This exempts small builders/owner-developers from the full regulatory burden. 2. *Projects with completion certificate* — if the project already has a CC before RERA's commencement, it is complete and exempted. 3. *Pure renovation* — renovation, repair, or redevelopment that does not involve new allotments or marketing. A landlord who renovates an existing building without selling new units is exempted. **What registration achieves (Section 4 provisions):** Once registered, the RERA website publishes the project's approved plans, timeline, completion date, structural specifications, approvals obtained, escrow account details, and quarterly updates. Homebuyers can verify all commitments before purchasing. **State variation — Threshold differences:** Maharashtra extended the Section 3(2)(a) threshold to 500 sq metres or 8 apartments (aligned with centre). Some states have imposed stricter registration requirements — UP RERA requires registration for plots above 100 sq metres in some cases. Buyers should check state-specific rules. **Penalty for non-registration (Section 59):** A promoter who violates Section 3 faces a penalty of up to 10% of the estimated project cost from the RERA Authority. If the promoter continues the contravention despite the Authority's order, it becomes a criminal offence — up to 3 years imprisonment and/or further penalty. These are among the highest real estate penalties in Indian law.

Questions & Answers

No. Section 3 prohibits booking, selling, or inviting purchase before RERA registration. Collecting a booking amount from a buyer is a 'booking' — if done before registration, the promoter violates Section 3 and faces a penalty of up to 10% of the project cost under Section 59.
No — Section 3(2)(a) exempts projects with ≤ 8 apartments or land area ≤ 500 sq metres from registration. A promoter building 5 apartments on a small plot does not need RERA registration. Some states have different thresholds — check state-specific rules.
No. Section 3(2)(b) specifically exempts projects that received a completion certificate before RERA's commencement. If a project is complete and the builder is only selling remaining units, Section 3 does not require registration (though the builder remains bound by any agreements made before completion).
Section 59 imposes a penalty of up to 10% of the estimated project cost for violating Section 3. If the promoter continues the violation after the RERA Authority's order, it becomes a criminal offence — up to 3 years imprisonment and/or a further 10% penalty. State RERA authorities have imposed significant penalties for pre-registration sales.