Short answer
Does RERA apply when I build a house for myself? RERA is the Real Estate (Regulation and Development) Act, 2016. Its registration rule applies to a promoter who advertises, books, sells or offers for sale a plot or apartment in a real estate project. The Act defines a promoter in six limbs, all tied to building or developing for sale. A house built to live in, and not sold, is generally outside that definition on the face of the text. If you plan to sell, ask a lawyer whether RERA applies.
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Many people building a house wonder whether RERA, the real estate law, applies to them. The answer depends on what the building is for and whether anyone is buying into it. This guide explains what the Act says about a promoter, a project and the registration rule. It is general information, not legal advice. Your lawyer or your local RERA office decides how the Act applies to your case.
What is RERA?
The Real Estate (Regulation and Development) Act, 2016 is a central law. It regulates the sale of plots and apartments in real estate projects, and it asks promoters to register projects with a state Real Estate Regulatory Authority.
Who is a promoter?
The Act defines a promoter in section 2(zk), in six limbs. The first limb covers “a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or apart thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees.” The second limb covers a person who develops land into a project, “for the purpose of selling to other persons all or some of the plots in the said project”. The other limbs cover development authorities, co-operative societies, and persons who build or develop for sale to the general public.
The key words are “for the purpose of selling … to other persons”. A person who builds a house to live in, and does not sell any part of it, does not fit the definition on the face of the text.
What is a real estate project?
Section 2(zn) defines a real estate project as “the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartment, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon”. The purpose of sale is again part of the definition.
The Act does not define “plot” in section 2. Section 2(zr) says that words not defined in the Act take their meaning from other laws.
When must a project be registered?
Section 3(1) says that “No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act.” The rule is about selling, advertising and booking.
What exemptions does the Act give?
Section 3(2) lists three cases where registration is not needed:
- where the land to be developed “does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases”. The proviso lets the appropriate Government lower that threshold;
- where the promoter has received a completion certificate before the Act began;
- for “renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project”.
The first case is a threshold on land area or the number of apartments. The text does not refer to houses. The proviso lets the appropriate Government lower the threshold, so check the current notification for your state.
What does this mean for my own house?
This section is practice, not a legal rule.
- If you build a house only to live in, and you do not sell or advertise it, the Act’s definition of promoter is not met on the text.
- If you build more than one house and plan to sell, the sale is what can bring the project within RERA. Ask a lawyer before you advertise or book a buyer.
- If you hire a builder to build for you, the contract sets who carries the risk. Ask a lawyer how the Act’s definitions apply to the builder’s role.
- Check the state’s threshold for projects, because the proviso lets the government lower it.
What should I check before I sell?
This section is practice.
- Whether the plan is to sell any part of the building or plot. If yes, get a legal opinion first.
- Whether an advertisement or a booking has already been made. The Act’s rule covers advertising and booking, not only the sale.
- The state’s notification on the registration threshold, and the local RERA office’s guidance.
- The approved plan and the completion certificate, which are needed in any case. See the building plan approval process and completion certificate vs occupancy certificate.
Frequently asked questions
Do I need to register my house with RERA?
On the face of the text, no, if you build a house only for yourself and do not sell, advertise or book any part of it. The Act’s definitions and registration rule are about selling to other persons. If you have doubts, ask a lawyer.
What if I sell the house after I finish it?
A one-time sale of a house you built for yourself may not bring it within the Act. A plan to build and sell several units is different. Ask a lawyer before you advertise.
Does this apply everywhere in India?
The Act is central, and states issue their own rules and notifications. The threshold and the procedures may differ by state, so check the state’s notification.
Related guides
This guide is general information, not legal advice. Read the disclaimer. Your lawyer and your local RERA office decide how the Act applies to your case.
Sources
General information only. It is not a structural design or professional advice. Ask a licensed structural engineer or architect to check your plans and site.