Section 3 of RERA — What Builders Are Legally Required to Disclose

Real estate Karnataka
🏠 KARNATAKA REAL ESTATE GUIDE — OCTOBER 2026

Section 3 of RERA — What Builders Are Legally Required to Disclose

Consumer protection information for Karnataka home buyers

📌 Section 3 of the Real Estate (Regulation and Development) Act, 2016 is the gateway provision: a builder cannot advertise, market, book or sell units in a covered project until it is registered with the Real Estate Regulatory Authority. The detailed disclosures that come with registration sit in Sections 4 and 11. This guide explains how these provisions work together and what you can demand before paying any advance.

What Section 3 Actually Says

Section 3(1) says that no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase any plot, apartment or building in a real estate project without first registering the project with the Real Estate Regulatory Authority. In practice, that means a legitimate project should already carry a RERA registration number before the first brochure, hoarding or online listing goes out.

Section 3(2) lists projects that do not need registration, such as projects where the land area is up to 500 square metres or the number of apartments is up to eight (counting all phases), projects that had already received a completion certificate before the Act commenced, and renovation or repair work that does not involve marketing or sale of new units. If a builder claims an exemption, ask for the basis in writing and check it against the project size.

Ongoing projects that had not received a completion certificate when the Act came into force were also required to register. A builder saying that a project is "too old" for RERA is not a safe assumption.

What a Promoter Must Disclose at Registration (Section 4)

When applying for registration, the promoter must submit details including the promoter’s own information and past project record, a description of the project, the layout plan and the stage-wise schedule of completion, the names and addresses of the architect, structural engineer and contractors, and proof of the legal title to the land along with details of any encumbrances.

The promoter must also give a declaration, supported by an affidavit, covering the legal title, the date by which possession will be handed over, and a commitment to deposit 70 per cent of the amounts realised from buyers in a separate designated bank account, to be used only to cover land and construction costs of that project. This is one of the most important buyer protections in the Act.

Ongoing Disclosures and Information You Can Demand (Section 11)

Registration is not a one-time event. Under Section 11, the promoter must upload and update project information on the RERA website, including the sanctioned plan, layout plan, specifications, the stage-wise schedule and the status of the project. The rules framed by each state set the frequency and format of these updates.

At the time of booking and issue of the allotment letter, the promoter must make available to the buyer the sanctioned plans, layout plans and specifications approved by the competent authority, the stage-wise time schedule of completion, and the details of the registration. Section 13 adds that a promoter cannot take more than 10 per cent of the cost as an advance or application fee without first entering into a registered agreement for sale.

Section 12 makes the promoter liable if a buyer suffers loss because of a false statement in an advertisement or prospectus, which gives you a remedy if the brochure promises differ from what is delivered.

Consequences for Builders Who Do Not Comply

A promoter who sells without registering can face a penalty that may extend to 10 per cent of the estimated cost of the project under Section 59, and continued violation can lead to further penalty and imprisonment as provided in that section. Providing false information to the Authority attracts separate penalties under the Act.

As a buyer, treat a missing or unverifiable registration number as a serious warning sign. Check the number on the official Karnataka RERA portal, compare the project name, promoter and address, confirm the validity dates, and keep a printout with your booking papers.

✅ Key Takeaways

Register First
Section 3 bars advertising, booking or selling in a covered project before RERA registration.
Know the Exemptions
Small projects and those with a completion certificate before the Act may be exempt. Ask for proof.
70% Escrow Rule
Promoters must park 70% of buyer money in a separate account for that project.
Cap on Advance
No more than 10% can be taken before a registered agreement for sale is signed.
BUILDER DUE DILIGENCE
Four checks before you book
3/4
CHECKS CLEARED
✓
01
VERIFIED
RERA Approval
Project and promoter registration confirmed against the state RERA registry, including validity dates and any suspension orders.
Reg. no.  ·  validity  ·  promoter record
✓
02
VERIFIED
OC / CC Approval
Occupancy and Commencement Certificates checked with the local planning authority, tower by tower, against the sanctioned plan.
OC  ·  CC  ·  sanctioned plan match
✕
03
FLAGGED
Legal Issues
Title chain, encumbrance certificate, and pending litigation traced across court and consumer forum records.
Title  ·  EC  ·  litigation search
✓
04
VERIFIED
Reputation
Google reviews, resident forums, and delivery history across the builder’s past projects, weighted for volume and recency.
4.2 ★  ·  1,840 reviews  ·  9 past projects
📊 Want the Full Picture?
RERA & Builder's Complete Report
Full history, legal status, complaint records & risk analysis for any builder or project in India
📄 Get RERA & Builder's Complete Report
🏛️ Information Source: Real Estate Regulatory Authority (RERA), Karnataka & Real Estate (Regulation & Development) Act, 2016 — Government of India
🔗 Official Portal: rera.karnataka.gov.in
📅 Published: 1 October 2026 | This blog is a public awareness initiative. Verify all information with official sources before making financial decisions.
🔔 Subscribe/Bookmark this blog for daily real estate consumer guidance for Karnataka home buyers.

No comments:

Post a Comment