Public Housing Schemes in Bengaluru: Why RERA Treats Development Authorities as Promoters

When a development authority or a state housing board announces a housing scheme, a Bengaluru buyer may wonder whether a government seller follows the same rules that bind private builders. The Real Estate (Regulation and Development) Act, 2016 does not draw that line. A public body that develops flats or plots for sale to the public is a promoter under the Act, with the same core obligations as a private company.

The Ministry of Housing and Urban Affairs says so plainly in its July 2025 FAQs on the Act. Its answers also explain the few places where public bodies are treated differently, such as issuing their own certificates and, in limited cases, the separate bank account. For a Bengaluru buyer weighing a government housing scheme, those answers are a useful checklist.

The short answer. MoHUA's FAQ says "The Act covers all bodies (private and public) which develop real estate projects for sale to the general public," so "both Development Authorities and the Housing Boards, when involved in sale are covered under the Act." Where a public body is both promoter and competent authority, it "can issue the required certificates to their own projects as per the provisions of local laws." A project built from the authority's own funds without taking money from buyers may be exempted from the separate account rule "on a case-to-case basis." The trade-off: a public seller is bound by RERA like any other, but buyers should still confirm registration and read what the scheme document promises, rather than relying on the seller's public status.

Is a development authority a promoter under RERA?

Yes, when it sells. The FAQ answers the question "Does the definition of promoter include public bodies such as Development Authorities and Housing Boards?" by stating: "The Act covers all bodies (private and public) which develop real estate projects for sale to the general public. Section 2(zk) defines the term promoter which includes both private and public real estate promoters. Thus, both Development Authorities and the Housing Boards, when involved in sale are covered under the Act."

The words "when involved in sale" are the test. A public body developing flats or plots for sale to the general public is a promoter for that project.

Does a public project need RERA registration?

The same registration rules apply. The FAQ says that "As per Section 3(1), the promoter is required to register its project with the respective Real Estate Regulatory Authority before any advertising, marketing, booking, selling, offering for sale, or inviting persons to purchase in the project." The exemptions in Section 3(2), such as projects on land up to 500 square metres or with up to eight apartments, apply on their terms.

The FAQ adds one clarification for public bodies. It says the "entire planning area which comes under the jurisdiction of Development Authorities/ Local Bodies cannot be treated as a real estate project for the purpose of RERA," and that "There may be multiple real estate projects in the entire planning area." So a buyer should look for the registration of the specific project being sold, not the authority as a whole. Our guide to verifying a RERA registration explains how to search.

Older schemes are covered too. The FAQ says that under the first proviso to Section 3(1), "promoters of all ongoing projects which have not received completion certificate will need to register their project with the Regulator Authority, within 3 months of its commencement." Projects that received a completion certificate before RERA commenced are exempt under Section 3(2)(b). A buyer looking at an unfinished public scheme launched years ago can therefore ask whether it was registered as an ongoing project.

Can a public body issue its own occupancy certificate?

Yes, under local law. The FAQ says completion and occupancy certificates "are required to be issued by the competent Authority as defined under Section 2 (q) and 2 (zf) of RERA respectively." It adds that "In some cases, Development Authorities / Urban Local Bodies may be the Promoter and Competent Authority both. In such cases, the Development Authorities / Urban Local Bodies can issue the required certificates to their own projects as per the provisions of local laws."

For a buyer, the practical step is the same as for a private project: ask for the certificate, and read what it certifies. Our explainer on the difference between an OC and a CC covers what to look for.

Does the 70 percent separate account apply to public projects?

Generally yes, with one narrow exception. The FAQ says Section 4(2)(l)(D) requires "the promoter shall maintain a separate bank account for every project undertaken by him wherein seventy percent of the money received from the allottees shall be deposited for the purposes of construction and land cost."

On public projects, it says: "If the project is being constructed by Development Authority from its own fund and not taking any fund from the buyer, in such case the Real Estate Regulatory Authority may grant the exemption to open the separate bank account as required under Section 4(2)(l)(D) of RERA on a case-to-case basis." The condition is specific: the project is built from the authority's own funds and no money is taken from buyers. Where buyers pay instalments during construction, the exemption described does not fit.

Are there concessions for slum rehabilitation projects?

Possibly, on registration fees. The FAQ says that under Section 4, the appropriate Government or Authority "is empowered to prescribe the project registration fees in its rules / regulations," and that it "may also either waive or prescribe nominal project registration fees" for slum rehabilitation projects or those where most units go to slum or Jhuggi Jhopri dwellers. This concerns fees paid by the promoter, not the buyer's protections.

What protections does a buyer of a public scheme flat have?

The same RERA protections, since the body is a promoter. The FAQ says Section 18 gives an allottee facing delayed possession "the right to withdraw from the project and claim a full refund along with interest and compensation," or interest "for every month of delay until possession is handed over" if staying. It says under Section 14(2) the promoter is liable for structural defects "for 5 years form the date of handing over of possession." And it says complaints can be filed with the Regulatory Authority or Adjudicating Officer under Section 31.

Bengaluru buyers of sites and flats from public bodies have also gone to court over allotments. Our reports on a BDA site double allotment in RMV 2nd Stage and alternate sites after a BDA relinquishment deed at Nagavara show how such disputes can unfold.

Advertising rules apply to public schemes too. The FAQ says Section 2(b) treats "any medium adopted in soliciting for sale, including SMS and emails" as advertisement, and that under Section 12 "the promoter is responsible for the veracity of all information contained in the advertisement and the prospectus." A scheme brochure is a prospectus for this purpose.

The rules on booking money apply as well. The FAQ says Section 13 provides that "the promoter cannot accept more than 10% of the apartment / plot cost as an advance payment / application fees without first executing an Agreement for Sale with the allottee," and that the agreement specified in the Rules "is binding on the parties" and "cannot be contrary to the provisions of Act and Rules thereto." Buyers applying for a scheme should check how the application money compares with that limit and when the agreement will be signed.

What should a Bengaluru buyer check before applying for a public housing scheme?

1. Find the specific project's RERA registration on the Karnataka regulator's website, not just the authority's name.
2. Read the scheme brochure carefully and keep a copy, since the promoter answers for its contents.
3. Check the declared completion date in the registration record.
4. Ask whether instalments are collected during construction and how they are held under Section 4(2)(l)(D).
5. Confirm who will issue the occupancy and completion certificates, and under which local law.
6. Keep all allotment letters, receipts and correspondence in one file.
7. Note that delay and defect remedies under Sections 18 and 14(2) apply to public promoters as well.

Frequently asked questions

Does RERA apply to flats sold by a development authority?

Yes. MoHUA's RERA FAQ says the Act covers all bodies, private and public, which develop real estate projects for sale to the general public. It says Section 2(zk) includes both private and public promoters, so development authorities and housing boards are covered under the Act when they are involved in sale.

Can a development authority certify its own project?

According to MoHUA's FAQ, completion and occupancy certificates are issued by the competent authority. Where a development authority or urban local body is both the promoter and the competent authority, it can issue the required certificates to its own projects as per the provisions of local laws, the FAQ says.

Must a public project keep a separate 70 percent account?

MoHUA's FAQ says the Section 4(2)(l)(D) separate account rule applies to promoters. If a development authority builds a project from its own funds and takes no money from buyers, the Regulatory Authority may exempt it from opening the separate account on a case-to-case basis.

Is a whole planning area one RERA project?

No. MoHUA's FAQ says the entire planning area under a development authority or local body cannot be treated as a real estate project for RERA purposes, and that there may be multiple real estate projects within it. Buyers should look for the registration of the specific project being sold.

This article explains the Ministry of Housing and Urban Affairs' general FAQs for information only and is not legal advice. The FAQ itself notes it is not a final interpretation of the Act.

Last updated 2026-11-09. PropNewz Team.