Registering a project and complying with RERA in Tamil Nadu

Section 3(1) bars a promoter from advertising, marketing, booking, selling or offering for sale any plot, apartment or building in a real estate project without registering the project with the Authority. The bar applies to a project or any part of it in a planning area.

Section 3(2)(a) exempts a project where the land proposed to be developed does not exceed five hundred square metres or the number of apartments does not exceed eight, inclusive of all phases. The appropriate Government may reduce either threshold. Section 3(2)(b) exempts a project that had a completion certificate before the Act commenced, and Section 3(2)(c) exempts renovation or repair work that does not involve marketing, advertising, selling or a new allotment.

The Explanation to Section 3 treats every phase of a phased project as a stand-alone project. A promoter who registers the first phase cannot rely on that registration for a later phase. Each phase needs its own application, its own declaration and its own completion timeline.

Section 4(1) requires every promoter to apply in the form, manner and time, and with the fee, specified by the Authority's regulations. Section 4(3) requires the Authority to run a web-based system for applications, and TNRERA's portal is the route for filing.

Section 4(2) lists the documents. They include the promoter's enterprise details, the projects launched in the past five years and their status, the approvals and commencement certificate, the sanctioned plan and layout, the development plan and facilities, the land location and boundaries, the proforma allotment letter and agreement for sale, the carpet area and garage details, the agents and contractors, and a declaration supported by an affidavit. The declaration covers legal title, encumbrances, the completion period and the seventy per cent escrow.

Section 5(1) gives the Authority thirty days to grant registration with a registration number, login id and password, or to reject the application for reasons recorded in writing. No application can be rejected without giving the applicant an opportunity to be heard. If the Authority does neither within thirty days, Section 5(2) deems the project registered and requires the registration number and login details to be issued within seven days after that period.

Section 5(3) makes the registration valid for the period the promoter declared for completion of the project or phase under Section 4(2)(l)(C). That declared period is the reference for delay, extension and the buyer's remedies.

Section 4(2)(l)(D) requires the promoter to declare, on affidavit, that seventy per cent of the amounts realised from allottees will be deposited in a separate account in a scheduled bank. The money may be used only for the cost of construction and the land cost of that project.

The promoter may withdraw from the account in proportion to the percentage of completion. The first proviso to the clause sets that proportion. The second proviso requires a certificate from an engineer, an architect and a chartered accountant in practice that the withdrawal matches the completion level. The third proviso requires the promoter to have the accounts audited within six months after the end of every financial year and to produce a certified statement showing that the collections were used for the project and that withdrawals stayed within the permitted proportion.

The rule exists because project money is not the promoter's general revenue. In Bikram Chatterji v. Union of India, the Supreme Court froze the bank accounts of forty Amrapali group companies and directed an escrow account after a forensic audit showed diversion of more than rupees two thousand seven hundred crore from six projects. The Court recorded that money paid by buyers for a particular project could not have been diverted to other uses.

The first proviso to Section 3(1) required promoters of projects that were ongoing when the Act commenced, and for which no completion certificate had been issued, to apply for registration within three months. The same logic applies to a phase that is still under construction: it needs registration even if an earlier phase was completed.

In Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh, the Supreme Court upheld the application of the Act to ongoing projects. The Court described the Act as retroactive in operation and held that promoters of incomplete projects had to register and declare fresh timelines for the remaining work. The decision removed the argument that projects launched before 2016 fell outside the Act.

A promoter registering an ongoing project should reconcile the original approvals, the work completed, the amounts collected and the balance work. The completion period declared in the application should reflect the remaining work, not the original brochure date. The project page and the quarterly updates should then be brought up to date.

Section 11(1) requires the promoter to create a web page on the Authority's website and enter the project details for public view. The page must be updated quarterly with the number and types of apartments or plots booked, the garages booked, the approvals taken and pending, and the status of the project. Section 11(2) requires every advertisement or prospectus to mention the Authority's website address and the registration number.

Section 11(3) requires the promoter to make the sanctioned plans, layout plans and specifications available at the site, and to give the allottee the stage-wise time schedule for completion, including water, sanitation and electricity. Section 11(4) keeps the promoter responsible for the project until conveyance, including obtaining the completion or occupancy certificate and maintaining essential services until the association takes over.

Section 13(1) bars the promoter from accepting more than ten per cent of the cost of an apartment, plot or building as an advance or application fee without first entering into a written agreement for sale and registering it. Section 13(2) requires the agreement to state the payment schedule, the possession date and the interest rates for default by either side.

Section 14(1) requires the project to be developed in accordance with the sanctioned plans. Section 14(2) bars alterations to the apartment without the buyer's consent, and alterations to common areas or the building without the written consent of at least two-thirds of the allottees. Section 14(3) requires the promoter to rectify a structural or other defect brought to notice within five years of possession, without charge, within thirty days.

Section 6 allows the Authority to extend a registration on the promoter's application for force majeure, which the Explanation limits to war, flood, drought, fire, cyclone, earthquake or another natural calamity affecting the project. The Authority may also extend in reasonable circumstances without default by the promoter, for reasons recorded in writing, but the aggregate extension cannot exceed one year. An application for extension cannot be rejected without a hearing.

Section 7 allows the Authority to revoke a registration on a complaint, on its own motion or on the recommendation of the competent authority. The grounds are default in doing anything required by the Act, violation of the terms of the approval, unfair practice, or fraudulent practice. Section 7(2) requires at least thirty days' written notice stating the grounds, and consideration of the promoter's reply. Section 7(3) allows the Authority to impose conditions instead of revoking.

Section 8 deals with what happens after a registration lapses or is revoked. The Authority may consult the appropriate Government and arrange for the remaining development work to be carried out by the competent authority, by the association of allottees or in another manner. The association of allottees has the first right of refusal to carry out the remaining work after revocation. An order under Section 8 does not take effect until the appeal period has expired.

Section 59(1) makes a promoter who contravenes Section 3 liable to a penalty of up to ten per cent of the estimated cost of the project, as determined by the Authority. Section 59(2) makes continued violation punishable with imprisonment of up to three years, a further fine of up to ten per cent of the estimated cost, or both.

A buyer can check the registration number on the TNRERA website before paying a booking amount. The project page should show the promoter's details, the sanctioned plans, the approvals, the declared completion date and the quarterly booking updates. A page that has not been updated for several quarters is a warning sign.

The agreement for sale should be registered, and the payment schedule should match the stage-wise completion schedule. A demand for more than ten per cent before the agreement is signed is a statutory violation. The buyer should also ask for the escrow account details and the chartered accountant's annual certificate, because those records show whether the collections are being used for the project.