Short answer: under Section 3 of the Real Estate (Regulation and Development) Act 2016, a promoter cannot advertise, market, book, sell or offer any unit in a project without registering it with K-RERA first. The only exemptions are for small projects, of 500 square metres of land or eight apartments, counted across all phases; projects that had a completion certificate before the Act commenced; and renovation or redevelopment with no new sale. Plotted layouts are covered, every phase is registered separately, and a Karnataka landowner with an area or revenue share is a co-promoter. Selling or advertising without registration can cost up to 10% of the estimated project cost under Section 59.
The question comes up at the worst time. The hoarding is printed, a portal listing is live, and someone asks whether the project was ever registered. The test catches marketing, not just sales.
Section 3(1) prohibits a promoter from advertising, marketing, booking, selling, offering for sale or inviting purchase of any plot, apartment or building in a real estate project in any planning area without prior registration. Outside a planning area, where the local authority has given permission, the Authority may direct registration, and the Act applies from then on.
"Promoter" is defined widely in Section 2(zk). It covers anyone who builds or converts a building into apartments for sale, anyone who develops land into plots for sale, development authorities, housing societies building for members, anyone acting as builder, coloniser or developer or holding the landowner's power of attorney, and anyone building for sale to the public. Where the person who builds and the person who sells are different, both are promoters and jointly liable.
| Exemption (s.3(2)) | What it covers | Where it breaks |
|---|
| (a) Small project | Land not exceeding 500 sq m, or apartments not exceeding eight, inclusive of all phases | Phases are added together. See the "or" problem below |
| (b) Completed before the Act | Projects with a completion certificate received before the Act commenced | A partial or occupancy certificate for part of the project covers that part only |
| (c) Renovation, repair, redevelopment | Works that involve no marketing, advertising, selling or new allotment | Any new unit for sale, including the builder's free-sale units in a society redevelopment, takes the project out of the exemption |
The "or" in clause (a). The text says "does not exceed five hundred square meters or the number of apartments ... does not exceed eight". Read literally, meeting either limit is enough for exemption. Regulators and appellate tribunals in several states have split on this. Some treat either limit as sufficient; others hold that a project is exempt only if it is within both, so crossing either one requires registration. We have not found a Karnataka ruling on the point. With a Section 59 penalty on one side and a registration fee on the other, the defensible course is to register where either limit is crossed.
The Act lets a state government lower these thresholds. The Karnataka Rules as notified in 2017 and amended since do not appear to have done so.
Redevelopment deserves its own line. A society redevelopment where the builder sells free-sale units is marketing new apartments, and the exemption is gone. The tax side of those projects is in society redevelopment taxation.
Plotted layouts. Section 2(zk)(ii) makes a person who develops land into plots for sale a promoter, with or without structures. The Karnataka Rules have a separate registration fee category for plotted development, and K-RERA has a separate engineer's completion certificate for plots. A layout above the threshold cannot be advertised plot by plot before registration.
Phases. The Explanation to Section 3 makes each phase a stand-alone project needing its own registration. Regulation 29 of the K-RERA (General) Regulations 2022 allows one RERA bank account per registered project. In practice each phase therefore runs its own designated account, quarterly updates and Form-7. The size threshold is still tested across all phases, so phasing a project small does not bring it under the exemption.
Ongoing projects. The Act required projects without a completion certificate on commencement to apply within three months. Rule 4 of the Karnataka Rules defines "ongoing project" and excludes five cases as of the date the Rules were notified:
| Excluded from "ongoing" (Rule 4) | Condition |
|---|
| Layouts | Streets, civic amenity sites and services handed over to the local and planning authority |
| Apartments | Common areas handed over to a registered association with a majority of allottees |
| Works done, 60% conveyed | All development certified complete and sale deeds for 60% of units registered |
| Works done, CC applied for | All development certified complete and completion or occupancy certificate applied for |
| Partial occupancy certificate | To the extent of the portion it covers |
Ongoing projects had to put 70% of amounts already collected but not yet spent on land or construction into the designated account within three months of applying. The figure rose to 100% where remaining receivables were less than the cost of balance construction (Rule 4(5)). In 2026 this matters mainly for a project that was never registered and is now being regularised.
The application goes through the portal's project registration module. The Act's Section 4(2) list and Rule 3 of the Karnataka Rules together require:
| Item | Source |
|---|
| Promoter details, photographs, PAN, and audited financial statements with auditor's report for the three preceding years | s.4(2)(a); Rule 3(1)(a), (b), (g) |
| Past five years' projects, with status, delays, litigation and pending payments | s.4(2)(b) |
| Approvals and commencement certificate, sanctioned plan, layout, specifications, and the plan of development works | s.4(2)(c)–(e) |
| Location with boundaries and coordinates; number, type and carpet area of units; garages; parking slots | s.4(2)(f), (h), (i); Rule 3(1)(c) |
| Title deed with chain of title; encumbrance details, including permissions under s.109 of the Karnataka Land Reforms Act, the conversion order under s.95 of the Karnataka Land Revenue Act and change of land use under s.14 of the Karnataka Town and Country Planning Act | Rule 3(1)(d), (e) |
| The joint development agreement and the landowner's title, where the promoter does not own the land | Rule 3(1)(f) |
| Proforma allotment letter, agreement for sale and conveyance deed (K-RERA publishes a proforma agreement) | s.4(2)(g) |
| Names of agents, contractors, architect and structural engineer | s.4(2)(j), (k) |
| Declaration supported by an affidavit (Form-B) on title, encumbrances, completion date and the 70% account | s.4(2)(l); Rule 3(4) |
| RERA designated account opened before applying, with the bank affidavit | Reg 29(2) |
| Form-1 (CA), Form-2 (architect), Form-3 (engineer) | Reg 3(1)(i) |
| Registration fee per square metre of land by project type, with caps | Rule 3(3) |
The three certificates carry the numbers. The CA's Form-1 certifies the promoter's details and the designated account. It certifies the estimated project cost, with land at the higher of acquisition cost and guidance value on the application date, plus approvals and construction cost as estimated by the engineer. It also confirms that no agreements or bookings were taken before registration. That estimated cost is the base for every later withdrawal and for every percentage penalty, so it is worth getting right. The completion date you declare under Section 4(2)(l)(C) becomes the registration period.
| Step | Timeline |
|---|
| Grant or reject | 30 days from the application (s.5(1)) |
| Rejection | Only with reasons and after a hearing; K-RERA issues Form-D and may allow the defects to be rectified |
| No decision in 30 days | Deemed registered; number and login due within 7 days after the 30 days (s.5(2)) |
| Registration certificate | Form-C |
| Validity | The completion period the promoter declared |
| Withdrawing the application within 30 days | K-RERA keeps 10% of the fee or ₹50,000, whichever is more (Rule 3(5)) |
Section 59(1) allows a penalty of up to 10% of the estimated project cost as determined by the Authority. If the promoter ignores the Authority's directions or keeps violating Section 3, Section 59(2) allows imprisonment of up to three years, or a fine of up to a further 10%, or both.
Advertising alone is enough, and K-RERA has said what advertising looks like. Its circular of 14 November 2019 requires the registration number on every print, outdoor, radio, SMS and electronic advertisement. Its circular of 13 December 2019 extends this to property portals, which must not carry unregistered projects. The portal lets anyone report an unregistered project and publishes a list of those under investigation. Its registration downloads include a notarised affidavit for Section 3(1) violation, which is where a project that has already taken bookings ends up.
There is also a sales-side rule. Section 13 and Rule 8A of the Karnataka Rules (inserted in 2020) bar taking more than 10% of the price before a registered agreement for sale. Form-7 later asks the auditor to list every unit where that happened.
A joint development agreement (JDA) is how much of Bengaluru is built: the landowner contributes land, the developer builds, and the landowner is paid in units or in a share of revenue.
The Explanation to Section 2(zk) makes the builder and the seller joint promoters where they are different persons. K-RERA's circular 03/2019 of 31 October 2019 applies that to landowners directly. A landowner entitled to an area or revenue share is a "Landowner/Promoter", identified as such at registration and jointly liable with the "Developer/Promoter". The circular then sets out how it works:
- the developer registers the whole project including the landowner's share;
- the JDA is uploaded to the portal for public viewing, and both sign a joint affidavit (K-RERA's "JD affidavit cum declaration");
- for withdrawals from the designated account, the obligations of all promoters are at par;
- if the landowner sells units from its share before the completion or occupancy certificate, 70% of those proceeds must be deposited in the project's designated account, and the developer must report those sales;
- the agreement between them must contain an express clause covering all of this.
So the JDA has to cover the landowner's RERA obligations: who deposits, who reports, and who bears a penalty caused by the other. See reviewing a JDA: twelve clauses. Area sharing and revenue sharing lead to different RERA mechanics as well as different tax, as set out in area-sharing vs revenue-sharing JDAs.
- Measure land and units across all phases against both limits, and register if either is crossed.
- Decide the phasing, since each phase is a separate registration, account and set of filings.
- Settle who the promoters are, including the landowner in a JDA, and put the RERA clauses into the agreement.
- Open the designated account before applying, named as K-RERA requires.
- Appoint the designated CA, architect and engineer. They cannot be changed later without the Authority's concurrence, and the CA must be a different firm from your statutory auditor.
- Build the estimated cost properly, with land at the higher of cost or guidance value.
- Hold all advertising, including portal listings, until the registration number is issued.
After registration, the recurring obligations begin: quarterly updates, withdrawal certificates and the annual Form-7. They are set out in RERA compliance for promoters in Karnataka, and the withdrawal mechanics in the withdrawal certificate and the designated account.
This note summarises Section 3 and related provisions of the Real Estate (Regulation and Development) Act 2016, the Karnataka Rules 2017 as amended, the K-RERA (General) Regulations 2022 and K-RERA circulars read on 29 September 2026. It is not a legal opinion on whether a particular project is exempt. The exemption in Section 3(2)(a) is read differently by different regulators, and fees and forms change on the portal, so a borderline project should be confirmed against the current position on rera.karnataka.gov.in before any advertising or booking.