RERA Exemptions in Karnataka: Projects That Need No Registration

If a builder claims RERA "does not apply" to a project, that is a factual statement, and in Bangalore it is one worth testing. K-RERA registration is the norm for flats, villa communities and layouts. Yet the law leaves three doors open, and older projects were handled under special transition rules. Below is how each exception works and what paperwork shows whether it fits.

Registration comes before any selling

The central rule is section 3(1) of the 2016 Act. Until a project is on the register, its promoter cannot advertise it, take bookings, invite offers or sign sales. The provision has been in force since 1 May 2017.

A promoter who ignores it pays a penalty under section 59, capped at 10% of the estimated cost of the project. If the default persists, the promoter may also be jailed for as long as three years, fined again at the same 10% ceiling, or both. With stakes like these, an exemption has to be matched to the letter.

Three situations where registration is not required

Section 3(2) is short. It excuses the following:

• A development on up to 500 sq m of land, or one with a maximum of eight apartments when all phases are added up
• A project whose promoter already held the certificate of completion when section 3 began to apply
• Repair, renovation or redevelopment where nothing is marketed, advertised or sold and no new allotment is made

Any state is free to set smaller limits than these. Karnataka has simply adopted the Act's own numbers.

A feel for the size limit

Half a thousand square metres works out to roughly 5,382 sq ft, which is a bit more than two plots of 40 x 60 ft laid side by side. Six or eight flats built on a single 50 x 80 ft or 40 x 60 ft site usually fit under it. Old extensions of the city are full of such small builder-floor buildings.

Why phases are added together

Counting "all phases" is what stops a developer from carving a large scheme into slices that each look tiny. The eight-flat ceiling applies to the full plan for the land. Elsewhere in section 3, an explanation makes each phase within a bigger project a separate project for registration, so each phase ends up with a number of its own.

Anyone offered a lone small block does well to ask about the neighbouring plots. Three blocks marketed in turn on adjacent land could in law be a single project well past the limit.

Rebuilding only for the current owners

The redevelopment exception serves owners who are rebuilding for themselves. A housing society that pulls down its old building to give its members new flats offers nothing to the market, so no registration is needed. When it also puts spare flats up for outside buyers, the work turns into marketing and fresh allotment and the exception no longer applies.

Buildings that were half-built in 2017

The Act did not wait for new launches. Through the opening proviso of section 3(1), the Act also captured ongoing projects that lacked a certificate of completion. Their promoters had until 31 July 2017 to apply. The Supreme Court upheld that reach in the Newtech Promoters ruling of November 2021.

Karnataka's Rule 4 (2017) then narrowed the meaning of an ongoing project. Its explanation sets aside:

• Layouts in which the local authority had already taken over the roads, civic amenity sites and other services
• Apartment projects whose shared areas had passed to a registered association with most allottees as members
• Projects with all development done and registered sale or lease deeds covering 60% of the units
• Projects with all development done where the application for a completion or occupancy certificate had already gone in
• Whatever portion of a project a partial occupancy certificate already covers

The practical effect is felt in resale. A building completed around 2016 may carry no K-RERA number, lawfully. Ask for its OC and look at the issue date.

Safeguards that an exempt buyer does without

Exempt means legal, not protected by the registration regime. Typically missing are:

• A public K-RERA project page listing approvals, the promised handover date and quarterly progress
• The escrow-style account into which 70% of customer money is paid for land and building costs
• A 10% ceiling on money taken ahead of the registered sale agreement
• Interest or a refund for late possession, as section 18 provides
• Section 14 cover for structural defects, which runs for five years
• The right to file a complaint with K-RERA

Some options remain. A dispute can still be taken to the consumer commission set up under the Consumer Protection Act, 2019, or to a civil court for enforcement of the contract. Both depend on the contract's text, so read every clause on possession and delay.

Checking the claim yourself

"Too small for RERA" can be confirmed or refuted from documents. A reasonable sequence is as follows:

• Take the site area from the khata or approved plan and restate it in square metres
• Count the dwellings drawn on the approved plan, and enquire about other blocks or phases on that land or next to it
• If the builder points to an older building, request the OC or completion certificate and read the date
• Run a K-RERA portal search on the promoter's name and the project name, whatever the explanation offered
• Have the reason for exemption stated in the sale agreement

A scheme that is clearly larger than the limits yet absent from the portal should be left alone until it registers. Buyers may report an unregistered sale to K-RERA, which can direct registration and levy the penalty that section 59 prescribes.

Where the number must appear

Section 11(2) obliges registered promoters to show their registration number and the Authority's web address in each advertisement and prospectus. If a large launch advertises without one, take that as a warning. In an exempt scheme, keep brochures, emails and chat messages, because they and the agreement are the only evidence of what was promised.

Whether to buy anyway

Many small buildings across the city come from careful local builders, and a few make excellent homes. What changes is who does the vetting: the buyer, rather than the regulator. A title report from a lawyer, the approved plan, the khata, a firm handover date and a delay clause carry the load.

Stage-linked payments shrink the risk further. A bank loan helps too, since lenders carry out their own legal and technical scrutiny before releasing money. To get the RERA number or status of a project we list, write to us on the contact page.