Section 3 of the RERA Act: Registration, Exemptions, and Penalties

Last updated: Oct 2026

Section 3 of the RERA Act, the Real Estate (Regulation and Development) Act, 2016, is the registration rule. No promoter may advertise, market, book or sell in a project until the state authority registers it.

• Applies to: projects above 500 square metres of land or with more than 8 apartments, as most state authorities read it
• Exempt: small projects, projects completed before 1 May 2017, and repair or redevelopment with no new sales
• Phases: each phase registers as its own project
• Penalty: up to 10% of the estimated project cost under Section 59

• Continued default: up to 3 years in prison, or a further fine of up to 10%

  
  

Ask for the registration number before you pay a booking amount. Then search it on the state portal and match the promoter, the dates and the phase to your agreement.

Section 3(1) requires a promoter to register a real estate project with the state's Real Estate Regulatory Authority before doing any of 5 things: advertise, market, book, sell or offer for sale, or invite buyers.

The rule covers any plot, apartment or building in the project. Ongoing projects that had no completion certificate when the Act began on 1 May 2017 had to apply within 3 months. A project that is built in phases needs a separate registration for each phase.

Three kinds of projects are exempt under Section 3(2). The first exemption is the one that causes confusion.

The appropriate government may lower the 500 square metre and 8 apartment limits. Each state therefore sets its own threshold in its rules.

The Act's text joins the two limits with the word or. A project that meets either limit can claim the small-project exemption on a literal reading.

MahaRERA and the Delhi authority apply the limits so that crossing either one requires registration. A project on 450 square metres with 12 apartments is exempt on the text and needs registration under that reading. Check your state authority's rule and its FAQs. If a promoter claims an exemption, ask for the basis in writing.

The penalty under Section 59 is up to 10% of the estimated cost of the project, fixed by the authority.

On a project with an estimated cost of Rs. 50 crore, the first penalty can reach Rs. 5 crore.

It gives you a test to run before you pay: is the project registered? A registered project must disclose its plans, dates and finances to the authority.

Three habits follow. Ask for the registration number. Search it on the state portal, as the guide to the Karnataka RERA project list shows for one state. Pay a booking amount only after you see it. Section 13 of the Act also limits the advance that a promoter can take before a registered agreement for sale, to 10% of the cost.

Consider Rohit Kulkarni, a 36-year-old manager in Pune with a household income of Rs. 1.8 lakh a month and a CIBIL Score of 762, offered a flat in a project with no RERA number.

The promoter relies on the text, but the state authority requires registration. Rohit declines the booking until the project is registered. He avoids paying Rs. 3 lakh for a flat that the authority could stop selling.

Bajaj Finance runs a legal and technical check, and a project's registration is part of it. Read how the checks work in the guide to legal and technical verification.

Approval timelines can extend where the project's registration or approvals need clarification, and minimum income thresholds can differ by city. Check your home loan eligibility.