The Real Estate (Regulation and Development) Act, 2016 (RERA), aims to create transparency, protect consumers, and ensure accountability in the real estate sector. While RERA primarily applies to residential and commercial developments, its impact extends to other real estate transactions, such as land and plots. This raises a common question: Is RERA approval mandatory for plots?
Understanding RERA and Its Applicability
RERA regulates real estate developers, agents, and projects. It protects buyers from unscrupulous practices such as delayed possession, poor quality of construction, and unfair project alterations. RERA requires all real estate projects involving residential or commercial construction to be registered before marketing or selling.
Although RERA is often associated with large projects, it also applies to land and plot transactions. Understanding when RERA applies to plots requires an in-depth look at the nature of the real estate development involved.
When Is RERA Approval Necessary for Plots?
1. Sale of Developed Plots
RERA approval is mandatory for developers offering plots as part of a development project. If the project involves promises of future construction or development, such as in gated communities or townships, RERA registration is required. This includes infrastructure, amenities, or residential development.
2. Land Subdivision Projects
When a developer divides a large plot into smaller residential units, RERA registration is essential. If the project involves roads, drainage, or other infrastructure, it is classified as a “residential project.” The developer must obtain RERA approval.
3. Projects With Common Amenities and Infrastructure
In some cases, developers sell plots within gated communities where they promise to provide common amenities like parks, security systems, and community centers. These types of developments are also subject to RERA regulations. Even when land is sold as a plot, the promise of amenities means the developer must register the project with RERA.
When Is RERA Not Required for Plots?
1. Unapproved Land Deals
In the case of individuals or developers selling land that is not part of a larger development plan (i.e., land that is being sold as-is without any promises of infrastructure or construction), RERA registration is typically not necessary. If the sale involves simply transferring the ownership of a plot without any future development guarantees, it does not come under the purview of RERA.
2. Sale of Agricultural Land
Agricultural land generally does not fall under RERA. If an agricultural plot is sold without any plans to transform it into a residential or commercial project, RERA approval is unnecessary. However, once the land is intended for development into a residential or commercial project, RERA regulations apply.
Key Provisions of RERA for Plots and Land Development
1. Developer’s Obligation for Registration
Under RERA, developers are required to register their projects before marketing or selling properties. The registration process involves submitting detailed project plans, timelines, financial disclosures, and other documents to ensure that the project complies with legal and regulatory standards. This requirement extends to residential plot developments where there are promises of infrastructure or construction.
For land subdivision projects, developers must:
- Submit details of the infrastructure development plans
- Provide timelines for project completion
- Offer a warranty on the quality of the infrastructure
- Be transparent about the possession date
2. RERA’s Role in Consumer Protection
RERA aims to safeguard buyers from fraudulent practices. This is especially relevant when buying plots within large-scale developments. Without RERA registration, buyers may invest in plots where the developer has not started infrastructure development or may fail to meet delivery schedules.
When Is RERA Applicable to Plots?
RERA approval is generally not mandatory for the sale of individual plots of land, provided there are no promises of future development, construction, or infrastructure provision. If developers sell plots with plans to develop the area, provide amenities, or build homes, they must register the project with RERA. This is because such projects fall under the definition of “real estate projects” as per the Act.