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RERA Act 2016

Section 4

Application for Registration of Real Estate Projects

THE STATUTE

Original Text

Every promoter shall make an application to the Authority for registration of the real estate project in such form, manner, within such time and accompanied by such fee as may be specified by the regulations made by the Authority. (2) The promoter shall enclose the following documents along with the application referred to in sub-section (1), namely:— (a) a brief details of his enterprise including its name, registered address, type of enterprise, particulars of registration, and the names and photographs of the promoter; (b) a brief detail of the projects launched by him, in the past five years, whether already completed or being developed; (c) an authenticated copy of the approvals and commencement certificate from the competent authority obtained in accordance with the laws as may be applicable for the real estate project; (d) the sanctioned plan, layout plan and specifications of the proposed project or the phase thereof, and the whole project as sanctioned by the competent authority; (e) the plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy; (f) the location details of the project, with clear demarcation of land dedicated for the project along with its boundaries including the latitude and longitude of the end points of the project; (g) proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be signed with the allottees; (h) the number, type and the carpet area of apartments for sale in the project along with the area of the exclusive balcony or verandah areas and the exclusive open terrace areas apartment with the apartment, if any; (i) the number and areas of garage for sale in the project; (j) the names and addresses of his real estate agents, if any, for the proposed project; (k) the names and addresses of the contractors, architect, structural engineer, if any and other persons concerned with the development of the proposed project; (l) a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorised by the promoter, stating:— (A) that he has a legal title to the land on which the development is proposed along with legally valid documents with authentication of such title, if such land is owned by another person; (B) that the land is free from all encumbrances, or as the case may be, details of encumbrances on such land including any rights, title, interest or name of any party in or over such land along with details; (C) the time period within which he undertakes to complete the project or phase thereof, as the case may be; (D) that seventy per cent. of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.

Legal Commentary

Section 4 converts the Section 3 registration requirement into a detailed information-gathering exercise — by the time a project is registered, the RERA website should contain everything a homebuyer needs to make an informed decision. **The 70% escrow requirement (Section 4(2)(l)(D)) — the financial backbone of RERA:** This is RERA's single most important consumer protection mechanism. Before RERA, builders would collect buyer advances from one project to fund land acquisition, construction, or debt repayment for another project — creating a Ponzi-like structure where early buyers subsidised later projects. Section 4(2)(l)(D) requires the promoter to declare, under affidavit, that 70% of all amounts collected from allottees will be deposited in a designated escrow account and used only for that specific project's land cost and construction cost. *How the 70% works:* If a builder collects ₹100 crore from buyers of Project A, ₹70 crore must be deposited in the Project A escrow account. This ₹70 crore can only be withdrawn for Project A's construction and land costs — not to pay off loans, fund Project B, or pay management fees. The remaining ₹30 crore is available for other project costs (marketing, professional fees, etc.). *Withdrawal mechanism:* Withdrawals from the 70% account require certification from an engineer, architect, and chartered accountant — verifying that the construction work claimed has actually been completed. This certification requirement prevents fraudulent withdrawals. **Land title declaration (Section 4(2)(l)(A) and (B)):** The promoter must declare, on affidavit, that they have legal title to the land. If the land is owned by another person, the promoter must provide authenticated documents of that owner's authorisation. All encumbrances must be disclosed — mortgages, tenancy rights, co-ownership claims. This eliminates the pre-RERA problem of builders selling on disputed or mortgaged land. **Carpet area and unit-wise disclosure (Section 4(2)(h)):** The promoter must disclose the carpet area of each apartment type at registration. This disclosure must be reflected in all subsequent agreements (Section 13). The era of 'we'll give you the exact size at possession' is over. **Timeline commitment (Section 4(2)(l)(C)):** The promoter declares the time within which the project will be completed. This commitment, made at registration, is the basis for compensation claims under Section 18 if the promoter fails to deliver. **State variation — escrow thresholds:** Some states have modified the 70% requirement. UP RERA allows withdrawal from the escrow account based on percentage of construction completed rather than amount collected — creating a different flow mechanism. Maharashtra strictly enforces 70% deposit with quarterly CA certification.

Questions & Answers

Section 4(2)(l)(D) requires the promoter to declare, on affidavit, that 70% of all amounts collected from homebuyers for a project will be deposited in a designated escrow account and used only for that project's land and construction costs. This prevents promoters from diverting homebuyer money to other projects. Withdrawals require certification by an engineer, architect, and CA.
The carpet area disclosed at registration (Section 4(2)(h)) becomes the basis for the agreement for sale. Minor variations up to 3% may be permissible under some state rules, but material changes require re-disclosure and allottee consent. Section 18 entitles the allottee to compensation if there is a shortfall in carpet area.
The Section 4(2)(l) declarations are made under affidavit — false declarations amount to perjury as well as a RERA violation. Section 60 of RERA provides a penalty of up to 5% of the project cost for providing false information at registration. Section 7 allows revocation of registration for fraudulent documentation.