What Is Section 3 of RERA and Why Does It Matter?
Section 3 of the RERA Act 2016 prohibits any promoter from marketing or selling real estate projects unless those projects are registered with the relevant State RERA Authority — in Karnataka, that is the Karnataka Real Estate Regulatory Authority (K-RERA). This registration requirement applies to all projects where the land area exceeds 500 square metres or where more than 8 apartments are proposed to be developed. Projects that are already completed (having received a Completion Certificate) before the Act came into force are exempt. Ongoing projects that had not received a Completion Certificate by May 1, 2017 were required to register within three months.
The significance of this provision cannot be overstated. Before RERA, builders would collect crores in advance bookings from buyers without any government oversight. Section 3 changed that by making registration — and the public disclosure that comes with it — a precondition for any sale. A builder who sells without RERA registration faces imprisonment of up to three years and/or a fine up to 10% of the estimated project cost.
Mandatory Disclosures Builders Must Submit for Registration
Under Section 4 of RERA (which governs what must be submitted along with the registration application under Section 3), promoters must disclose a comprehensive set of documents and information. Once registered, all these details become publicly available on the RERA portal. Here is what builders are legally required to disclose:
- Promoter details: Name, address, photographs, and details of the enterprise (including proprietors, partners, or directors of the company). Builders must also disclose their track record — all projects completed and delivered in the preceding five years, along with any delays or pending complaints.
- Land and title details: Brief details of the land on which the project is proposed, including current ownership, encumbrances, mortgages, and litigation status. A copy of the title deed and encumbrance certificate must be submitted.
- Sanctioned plans and layout: Copies of all approvals, layout plans, building plans, and specifications as approved by the competent authority (BDA, BBMP, BMRDA, etc.). Any proposed amendments to sanctioned plans must also be disclosed.
- Project timeline and completion date: The promoter must commit to a specific date of completion for the project and each phase thereof. This becomes a legally binding commitment under RERA.
- Number and type of units: Total number of plots, apartments, or buildings proposed; number of floors; number of parking spaces; and the number of units proposed to be sold.
- Amenities and common areas: Details of proposed amenities such as lifts, water supply, sewerage, landscaping, power backup, clubhouse, and other facilities. These cannot be reduced after the project is sold.
- Financial details: The promoter must declare the total cost of the project and commit to depositing 70% of all amounts received from buyers into a separate dedicated bank account to be used only for construction of that specific project. This protects buyers against fund diversion.
Ongoing Disclosure Obligations After Registration
Registration under Section 3 is not a one-time disclosure exercise. Section 11 of RERA imposes continuing obligations on promoters throughout the life of the project:
- Quarterly updates: The builder must update the RERA portal every three months with the current status of construction — including photographs, percentage of work completed per floor/block, and number of units sold versus unsold.
- Annual audited accounts: Within six months of each financial year ending, the builder must submit audited financial statements showing how buyer funds were utilized, including withdrawals from the designated 70% escrow account.
- Change disclosures: Any material structural change, addition or alteration to the sanctioned plan requires prior RERA approval and cannot be done without the written consent of at least two-thirds of the allottees.
- Complaint and litigation updates: If any consumer complaint or litigation is filed against the project, this must be reflected in the RERA project profile.
How to Use RERA Disclosures as a Karnataka Buyer
Every piece of information a builder submits under Section 3 and Section 4 is publicly accessible on the Karnataka RERA portal at rera.karnataka.gov.in. Before paying even a token advance, every buyer should verify the following:
- Search for the project by name or the promoter's name. Confirm the RERA registration number is valid and the registration has not expired or been revoked.
- Check the disclosed completion date. If the project is already past its RERA-committed date and has not delivered possession, the builder is in default and you may be entitled to compensation or a refund with interest.
- Review the builder's five-year track record section. If they have prior projects with pending complaints, significant delays, or incomplete handovers, treat this as a major red flag.
- Verify the quarterly progress updates. If no updates have been filed in recent quarters, the builder may be non-compliant with RERA — another warning sign.
- Cross-check the sanctioned plan against the brochure or floor plan shown to you by the builder. If promises in the brochure do not appear in the RERA-approved plan, those promises are not legally enforceable.
What Happens When a Builder Fails to Disclose or Misrepresents?
If a promoter provides false information at the time of registration, or makes wilful misrepresentation to a buyer, Section 60 of RERA provides for a penalty of up to 5% of the estimated cost of the project per instance. Section 65 provides that if a builder is found guilty of wilful default or contravention, they may face imprisonment up to one year and/or a fine. Buyers who were induced to purchase based on false RERA disclosures have the right to cancel their allotment and claim a full refund with interest at the prescribed rate. In Karnataka, the prescribed rate for refunds is typically the State Bank of India's Marginal Cost of Lending Rate (MCLR) plus 2%, compounded monthly. Buyers can file a complaint with K-RERA using Form H through the online portal without requiring a lawyer, and the authority is mandated to adjudicate the complaint within 60 days.
✅ Key Takeaways
🔗 Official Portal: rera.karnataka.gov.in
📅 Published: 2 August 2026 | This blog is a public awareness initiative. Verify all information with official sources before making financial decisions.
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