BACK TO RERA Act 2016
RERA Act 2016

Section 11

Functions and Duties of Promoter

THE STATUTE

Original Text

The promoter shall,— (a) be responsible to obtain in a timely manner and maintain validity of all such permissions, approvals, no objection certificates, fire NOCs and other certificates, as the case may be; (b) make available at the time of the booking and issue of allotment letter, the sanctioned plans, layout plans, along with specifications, approved by the competent authority and disclose at the time of booking the carpet area of the apartment with the exclusive balcony or verandah areas and the exclusive open terrace area with the apartment, if any; (c) not accept a sum more than ten percent of the cost of the plot, apartment or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person in such form and including such particulars as may be prescribed; (e) responsible for any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale for a period of five years from the date of handing over possession to the allottee; (f) obtain the occupancy certificate or the completion certificate, as the case may be, from the relevant competent authority as per local laws or other laws for the time being in force and make it available to the allottees individually or through the association of allottees; (g) obtain the lease certificate, where the real estate project is developed on a leasehold land, specifying the period of lease, and certify this to the allottees; (h) enable the formation of an association or society or co-operative society, as the case may be, of the allottees, or a federation of the same, under the laws applicable; (i) execute a registered deed of conveyance of the apartment, plot or building, as the case may be, in favour of the allottee along with the undivided proportionate title in the common areas to the association of allottees or the competent authority, as the case may be, as provided under section 17 of this Act; (j) pay all outgoings until he transfers the physical possession of the real estate project to the allottee or the associations of allottees, including land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities payable to competent authorities, banks and financial institutions, which are related to the project.

Legal Commentary

Section 11 contains the comprehensive code of conduct for promoters — it transforms the one-time registration obligation into an ongoing compliance regime. Most of RERA's consumer protection measures are operationalised through Section 11. **Key obligations:** *10% booking cap (Section 11(c)):* A promoter cannot collect more than 10% of the unit cost as booking amount or application fee without first signing a formal agreement for sale. This prevents the pre-RERA practice of collecting large 'token amounts' without any binding commitment — and then claiming the amount was 'non-refundable' if the buyer tried to exit. *5-year structural defect liability (Section 11(e)):* If structural defects or workmanship defects appear within 5 years of possession, the promoter must rectify them at no cost to the allottee within 30 days of receiving written notice. This is a mandatory warranty — the promoter cannot disclaim it through the agreement. *Occupancy certificate obligation (Section 11(f)):* The promoter must obtain the OC from the competent authority and make it available to allottees. This was a major gap before RERA — buildings were handed over without OCs, making them technically illegal structures that could not be legitimately occupied. *Association formation (Section 11(h)):* The promoter must facilitate formation of the allottees' association — the body that will eventually manage the common areas. Many builders had historically resisted forming societies to retain control over maintenance charges. *Conveyance deed obligation (Section 11(i)):* The promoter must execute a registered conveyance deed transferring the unit (and proportionate share of common areas) to the allottee. Section 17 mandates this within 3 months of OC issuance. *Outgoings until handover (Section 11(j)):* The promoter must pay all taxes, maintenance, utility bills, and loan EMIs on the project until physical possession is handed over. Common pre-RERA complaint — builders would hand over keys 'unofficially' and then demand that buyers pay maintenance from the date of 'soft possession' without OC.

Questions & Answers

No. Section 11(c) prohibits collecting more than 10% of the unit cost as booking or application fee without first entering into a formal written agreement for sale. Any collection above 10% before a signed agreement is a RERA violation, and the excess is refundable.
Yes — Section 11(e) imposes a mandatory 5-year structural defect liability from the date of possession. If structural defects, workmanship defects, or quality of service failures appear within 5 years, the promoter must rectify them free of cost within 30 days of written notice. This obligation cannot be excluded by contract.
Yes — Section 11(h) requires the promoter to enable formation of an allottees' association, society, or cooperative. The promoter cannot indefinitely retain control of common areas. Many states have specific timelines for society formation — MahaRERA requires formation within 3 months of majority possession.