When is RERA Applicable?

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.