What Is Section 3 of RERA?
Section 3 of the Real Estate (Regulation and Development) Act, 2016 prohibits any promoter from advertising, marketing, booking, selling, or offering for sale any plot, apartment, or building in a real estate project without first registering it with the Real Estate Regulatory Authority (RERA). This is a mandatory requirement and not optional for builders.
The provision applies to all residential and commercial real estate projects where the land area exceeds 500 square metres or the number of apartments exceeds eight. Projects that are ongoing and for which a completion certificate has not been issued are also covered under this provision, meaning even older projects that began before RERA came into force were required to register.
Mandatory Disclosures Under Section 3 Registration
When a promoter registers a project under Section 3, they must submit a comprehensive set of documents and information to the RERA authority. These include the promoter's legal name, address, and photograph; the authenticated copy of the PAN card; the audited balance sheet of the promoter entity for the preceding financial year; and the income tax returns for the last three financial years.
The builder must also disclose details of all ongoing projects, including those that are litigated or delayed. A full list of projects launched by the promoter in the five years preceding registration must be submitted, along with details of any cases pending before courts, tribunals, or any consumer forum. This creates a transparent track record that buyers can examine before making a purchase decision.
Project-specific disclosures include the authenticated copy of the title documents proving clear ownership of land, the sanctioned plan, layout plan, and specification of the project as approved by the competent authority. The builder must provide the proposed plan of development works, proposed facilities such as fire fighting systems and sewage treatment plants, and the proposed timeline for completion of the project phase by phase.
Financial Disclosures Builders Cannot Hide
One of the strongest consumer protections under Section 3 relates to financial transparency. The promoter must disclose the total amount realised from buyers for the project and the total amount already spent on construction and land cost. Under Section 4 (which follows from Section 3 registration), builders must deposit 70% of the amount realised from allottees in a separate escrow account maintained in a scheduled bank.
This escrow arrangement ensures that money collected from you as a buyer cannot be diverted to other projects or used for non-project purposes. The promoter must furnish a certificate from an engineer, an architect, and a chartered accountant certifying that withdrawals from this account correspond to the stage of construction completed. This prevents the common builder fraud of collecting money and abandoning projects.
Consequences for Builders Who Violate Section 3
A promoter who advertises, markets, or sells a project without RERA registration can face a penalty of up to 10% of the estimated project cost as imposed by the RERA authority. If a builder continues to violate Section 3 despite a RERA order, imprisonment of up to three years or an additional fine of up to 10% of project cost, or both, may be imposed.
For Karnataka home buyers, you can verify a project's RERA registration status at rera.karnataka.gov.in. Never pay any advance or sign any agreement for a project that is not registered under RERA. Even a token amount paid for an unregistered project puts you at legal risk since the transaction is made outside the protection of the Act.
How Buyers Can Use RERA Disclosures Effectively
Once a project is registered, all disclosures made by the builder are publicly accessible on the RERA portal. As a buyer, you can review the sanctioned plan and compare it with what is actually being constructed or promised in advertisements. If the builder advertises amenities or specifications that are not part of the sanctioned plan disclosed to RERA, this is a red flag and also a violation you can report.
The RERA registration number must appear in all advertisements, brochures, and sale agreements. If you find a project being advertised without a RERA number, or if the number given doesn't match the Karnataka RERA database, do not proceed. File a complaint at the Karnataka RERA office or through the online portal immediately.
✅ Key Takeaways
🔗 Official Portal: rera.karnataka.gov.in
📅 Published: September 11, 2026 | This blog is a public awareness initiative. Verify all information with official sources before making financial decisions.
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