When Should Land Be Registered Under RERA? | Legal Insights
We all know that RERA registration is mandatory if you want to sell your project having commercial or residential units. But if there is no construction on the project, do we need to take RERA registration in that case too?
Or if you are just selling land parcels and there is no construction on the site, does it come within RERA’s rules and regulations or are we exempt from this? Today, in this blog, we will understand RERA’s rules and regulations regarding land or plots.
Why is RERA Approval Required?
Primarily, the RERA registration is required when you want to sell your project to earn profits. You generally don’t need RERA if you are not buying, selling, or promoting real estate projects and just using it for personal use. You don’t need RERA just to construct the project. You need RERA to sell it.
RERA’s main objective is to protect buyers from fraud and ensure transparency in the real estate sector. So, if a developer or promoter is advertising, marketing, or selling units within a project, RERA registration becomes necessary. It gives buyers the confidence that the project is approved and regulated by the authority.
When RERA Registration is Not Required?
As per RERA Section 3(2), if the land area where the construction will take place is less than 500 sq. meters and the number of apartments you are building is less than 8, then you don’t need RERA to sell or advertise the project.
Remember, even if the land area exceeds 500 sq. meters and the number of apartments are more than 8, but you are using it for your own self, you don’t need RERA registration.
Also, you don’t need RERA if you don’t have any further development plans and are just acquiring the plots for future development. Only when you use the plots to generate revenue by selling units, you need to obtain RERA. If you are acquiring land for self-use and not for resale or commercial purposes, RERA is not required.
When RERA Registration is Required for Your Land?
If your plot comes within a real estate project that meets specific criteria requiring RERA registration, or the plot area exceeds 500 sq. meters and is surrounded by other developments like a club, park, sports facilities within the same project, then the project is entitled to get registered under RERA.
RERA registration is also required to sell plots within plotted developments where developers sell plots within a township. In such cases, even if there is no actual construction of houses or apartments, the act of selling individual plots within a larger planned development makes it mandatory to register under RERA.
For example, if you are developing a gated community and selling developed plots (with amenities like roads, parks, and lights), then it qualifies as a “real estate project” under RERA, and registration is mandatory.
If a developer fails to comply with the rules, there could be a penalty of up to 10 percent of the estimated project cost, as per Section 59 of the Act.
To summarize:
If you are just selling land parcels without any development or marketing of it as part of a real estate project, RERA is not applicable.
If your project is under 500 sq. meters and has less than 8 units, and it’s for personal use, you don’t need RERA.
If your land or plotted development is being marketed as part of a larger project or township, or you’re selling plots with infrastructure and amenities, RERA registration is a must.
Disclaimer: It is always advisable to consult a legal expert or a RERA consultant to be sure of the compliance requirements in your specific case. The rules can slightly vary from state to state, so a proper understanding will help you stay on the right side of the law.
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