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Introduction: This article discusses about Promoters, their functions and duties under Real Estate (Regulation and Development), 2016.

As per section 2(zk), “Promoter”:- means,—

1) A person who:

a) constructs or

b) causes to be constructed an independent building or a building consisting of apartments, or

c) converts an existing building or a part thereof into apartments,

for the purpose of selling all or some of the apartments to other persons and includes his assignees; or

2) 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, whether with or without structures thereon; or

3) Any development authority or any other public body (Like DDA, NOIDA, GNDA etc.) in respect of allottees of—

(a) buildings or apartments constructed by such authority; or

(b) plots owned by such authority for the purpose of selling all or some of the plots; or

4) An apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its Members or its allottees of such apartments or buildings; or

5) Any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or

6) Such other person who constructs any building or apartment for sale to the general public.

7) Where the person who constructs or converts or develops a plot or building for sale and the persons who sells apartments or plots are different persons, then:

both of them shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified, under this Act or the rules and regulations made there under.

Function & Duties of Promoter

Every promoter shall:

1) Get all current projects without completion certificate registered within a period of 3 months from the date of commencement of this act.

2) Get every real estate project more than 500 square meters or more than 8 apartments to be registered with the Regulator.

3) Not advertise, book, sell, offer in any form any project prior to its registration and obtaining necessary construction approvals.

4) Ensure that each phase of the project is to be registered separately as a standalone project.

5) 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.

6) submit various documents alongwith application for registration in the interest of transparency and symmetry of information between builder and allottes.

7) deposit 70% of the amount realized from the allottees of a project in a separate scheduled bank account and use the same only for the purpose of meeting construction cost and land.

8) Withdraw from this account shall be in proportion to the completion of the project after certification from an engineer, an architect and CA in practice to that effect.

9) get his project accounts audited by CA with in 6 months from the end of FY to verify that:

i. Project funds so withdrawn have been utilised for the same project and

ii. The withdrawal of funds has been in proportion to the %age of completion of the project.

10) The registration of the project may revoked, if the promoter:

i. Fails to comply with Act, Rules & Regulation; or

ii. Violates any terms or conditions of approval of competent authority; or

iii. Involves in any kind of unfair trade practice or irregularities.

iv. Indulges in any fraudulent practices. “Unfair trade Practice means a practice of:

A. Making any written or visible statement which:

i. Falsely represents that services are of particular standard or grade;

ii. Represents that promoter has approval or affiliation which he does not have;

iii. Makes false or misleading representation concerning services.

B. Allowing publication of any advertisement or prospectus in newspaper or otherwise of services that are not intended to be offered.

The authority shall, upon revocation of the registration:

i. debar the promoter from accessing its website in relation to the project

ii. specify his name in the list of defaulters along with his photograph on the its websites

iii. inform the RERA authority of other states/UTs about such revocation of registration;

iv. facilitate the remaining development work to be carried out as per sec 8;

v. direct the bank to freeze the project bank account;

vi. direct defreezing of project bank account to facilitate the remaining development work to be carried out as per sec 8;

vii. issue such necessary directions as it may deem fit, to protect the interest of the allottees.

11) Create webpage on the website of RERA after receiving the login ID and password wherein he shall:

i. share the details of the proposed project for public viewing;

ii. quarterly updates of list of bookings of apartments, plot, garages;

iii. quarterly up to date status of the project;

iv. quarterly up to date list of approvals taken and pending approvals.

12) Advertisement or prospectus published by promoters shall prominently display the website address of RERA authority where all details of the project are entered and the Project Registration Number.

13) At the time of booking and issue of allotment letter, every promoter shall make available the following information to the allottee:

i. Sanction plans, Layout Plans alonwith specifications as approved by the competent authority;

ii. Stage wise time schedule of completion of the project;

iii. Provision of civic infrastructure like water, sanitation and electricity.

14) Be responsible for all obligations, responsibilities and functions as per the Act, rules, regulations, agreement for sale to allottees or association of allottees;

15) Obtain completion certificate and occupancy certificate from the competent authority and make it available to allottees or association of allottees.

16) Obtain lease certificate to the association of allottees where the project is developed on leasehold land.

17) Provide essential services on reasonable charges till taking over the maintenance of the project by the association of allottees.

18) Enable formation of association or society of allottees under the applicable laws witin 3 months of booking of majority of flats or plots.

19) Execute the registration conveyance deed in favour of the allottee along with the undivided proportionate title in the common areas to the association of allotees.

20) Pay all outgoings for which collection was made from the allottees until transfer of physical possession to allottees or association of allottees.

21) Not mortgage or create charge on flat or plot or building after executing agreement for sale.

Such mortgage or charge shall affect the right or interest of the allottee.

22) Not to cancel allotment arbitrarily. Cancellation of allotment has to be strictly in accordance with agreement for sale.

23) Prepare and maintain all scud details as required by RERA.

24) Be liable to compensate any person making advance or deposit for any loss sustained by reason of any false statement in any advertisement or prospectus.

25) Not to accept deposit or advance or application fee more than 10% of cost of apartment before entering into agreement for sale.

26) Agreement for sale shall be in standard form and must contain the specified particulars.

27) Proposed project to be developed & completed strictly in accordance with sanctioned plans approved by competent authorities.

28) Not to make any alteration or additions to sanctioned plans, layout plans and specification other than minor additions or alteration without the written consent of at least 2/3rd of allottees(in person) other than promoters.

29) Liability to rectify the structural defects or defect in workmenship within 30 days if brought in notice of promoter within 5 years from the date of handing over of possession.

On failure to do so, promoter shall be liable to compensate the allottee.

30) No transfer of real estate project to a third party without:

i. the written consent of at least 2/3rd of allottees(in person) other than promoters; and

ii. the prior written approval of RERA.

31) Obtain all insurance notified by the Govt. including:

i. insurance in respect of title of land and building, and

ii. construction of the real estate project.

32) Return amount and pay compensation if promoter fails to complete or give possession in accordance with the agreement for sale and the allottee wishes to withdraw.

33) If the allottee does not wish to withdraw, then the promoter shall pay interest at the prescribed rate for every month of delay continues till the handing over of the possession (Rate of interest is MCLR + 2%).

34) Liable to compensate allottees for loss caused by defect in title of the land.

Such claim shall not be barred by any law of limitation.

35) Liable to compensate allottees for failure to discharge any obligation imposed by this Act, rules, regulations or agreement for sale.

The author is a practising CA and is registered Insolvency Professional. He can be reached at , Mob. +91 9953587496.


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  1. LG PATIL says:

    I have issued cheque for booking flat (5% amt.)in the name of, ” Godrej Green Clove ” But i have issued Receipt different name i. e. ” Mahalunge Township Developers LLP. … When I have asked pay remaining 5% amt for registration agreement. … I raised queries 1) why the payment Receipt different name 2) whom I should have to pay remaining 5% either “Godrej Green Clove” Or “Mahalunge township developers LLP”. Reply for the same received as, ” Godrej Green clove ” at Mahalunge is being
    developed by the entity Mahalunge township Developers LLP (promotor) where in Godrej Properties Ltd is one of the partners in the said entity. …… Is this legal Or tax chori. …. I have requested refund my booking amount, they are saying cancellation of the booking amount Will not refunded. . … Kindly advice.

  2. suryabhan singh says:

    i am owning a plot and some builder want to make JV so i will be promoter ?? if he delays in project then i am liable to pay fine ??

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June 2024