Joint Development Flats in Bengaluru: Why RERA Treats Landowner and Builder as Promoters

The land under a Bengaluru apartment project does not always belong to the company whose name is on the hoarding. In a joint development arrangement, a landowner may contribute the land while a developer builds, with the finished flats shared between them under a development agreement, and either of them may then sell flats to the public. When a buyer purchases a unit from the landowner's share, a practical question follows: who answers if the project is delayed or defective?

The Real Estate (Regulation and Development) Act, 2016 answers that question directly, and the Ministry of Housing and Urban Affairs restates the answer in its July 2025 FAQs on the Act. The short version is that both parties are promoters, and both are jointly liable.

The short answer. MoHUA's FAQ quotes the Explanation to Section 2(zk): "where the person who constructs or converts a building into apartments or develops a plot for sale and the persons who sells apartments or plots are different persons, 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 thereunder." For a buyer of a landowner's-share flat, the developer who builds and the landowner who sells are both answerable. The trade-off: joint liability gives the buyer two parties to hold to account, but it also means sorting out between them who does what, so the agreement and the registration record need careful reading.

Who is a promoter in a joint development?

Both the builder and the seller. In answer to whether the definition of promoter includes all promoters in a joint development, the FAQ quotes the Explanation to Section 2(zk) in full: where the person who constructs and the person who sells are different, "both of them shall be deemed to be the promoters."

The test is functional. One person constructs or develops; another sells. If those are different persons, the Act treats both as promoters. A landowner who sells flats from a share received under a development agreement is a seller in that sense.

What does joint liability mean for a buyer?

That both are answerable under the Act. The Explanation says both "shall be jointly liable as such for the functions and responsibilities specified, under this Act or the rules and regulations made thereunder." The responsibilities of a promoter under the Act are wide. The FAQ describes several of them: registering the project before marketing it, keeping seventy percent of buyer money in a separate account, disclosing information on the regulator's website, and handing over title and documents.

For delay, the FAQ says Section 18 gives the allottee "the right to withdraw from the project and claim a full refund along with interest and compensation," or, if the allottee stays, interest "for every month of delay until possession is handed over." For defects, it says that under Section 14(2) "the promoter shall be liable for 5 years form the date of handing over of possession." In a joint development, both deemed promoters share those responsibilities.

The complaint route is the same as for any project. The FAQ says "Section 31 of the Act provides for filing of complaint by an aggrieved with the Regulatory Authority or Adjudicating Officer, as the case may be," and that the Adjudicating Officer "is mandated to adjudicate on disputes arising under section 12, 14, 18 and section 19" and "shall be a person who is or has been a District Judge." The Authority should endeavour to dispose of complaints "not later than sixty days from the date of filing," recording reasons if it cannot.

Advertising is covered too. The FAQ says that under Section 12, "the promoter is responsible for the veracity of all information contained in the advertisement and the prospectus," and that the promoter "is liable to make good the loss sustained" due to false information. Where a landowner markets its share with its own brochure, that brochure is still an advertisement for a project in which it is a deemed promoter. Keep copies of everything you were given.

How should a joint development appear in the RERA registration?

Through the promoter's application. The FAQ says Section 4 sets out the "details / information and undertaking to be provided by the promoter to the Authority for registration of the project," with the forms and fees "determined by the Rules made by the appropriate Government." It adds that under Section 11 the promoter must keep project information on the Authority's website updated.

The FAQ does not list in its answer which joint development documents must be uploaded. A Bengaluru buyer can search the project on the Karnataka regulator's website and look at how the promoters are shown, whether the development agreement or a summary of the area-sharing arrangement is available, and whether the landowner's flats are part of the registered project. Our guide to verifying a RERA registration walks through the basic search.

Does the 70 percent account rule apply to a landowner's sales?

The rule applies to "the promoter". The FAQ says Section 4(2)(l)(D) requires that "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." Since both builder and seller are deemed promoters, a buyer of a landowner's-share flat can ask how money paid to the landowner is being handled under this requirement.

The FAQ adds that withdrawals must be "in proportion to the percentage of completion of the project," certified "by an engineer, an architect and a chartered accountant in practice," and that accounts must be audited "within six months after the end of every financial year." Asking which account receives your payment, and in whose name, is a reasonable step.

What if the developer or landowner wants to exit?

Consent is required for a transfer of majority rights. The FAQ says that under Section 15, "the promoter cannot transfer or assign his majority rights and liabilities in the project to a third party, without obtaining the prior written consent of two- third of allottees and the Regulatory Authority." It adds that for counting the two-thirds, "the number of apartments held by the promoter will be excluded," and each allottee has one vote.

Disputes between a landowner and a developer can affect buyers even when the buyers are not parties to them. Our report on a Karnataka High Court case involving a housing society and a developer in Kempapura shows how arrangements over land can end up in court.

What should a buyer ask before buying a landowner's-share flat?

Who signs, who builds, and who is registered. A buyer looking at a joint development project, for example in an area such as Sathanur where projects like Puravankara Sathanur are listed, should confirm the structure of any project directly with the promoters and the regulator's record rather than assume it.

The agreement for sale is the key document. The FAQ says it is specified under Section 13(2) through state Rules, "is binding on the parties," and "cannot be contrary to the provisions of Act and Rules thereto." It also says "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." Those rules apply whichever deemed promoter is selling.

What should a Bengaluru buyer check in a joint development?

1. Ask whether the flat is from the developer's share or the landowner's share under the development agreement.
2. Search the project on the Karnataka regulator's website and note how the promoters are shown.
3. Confirm the landowner's flats form part of the registered project.
4. Ask which bank account receives your payments and in whose name.
5. Check that the agreement for sale names the party selling, and that no more than 10% is taken before it is signed.
6. Keep copies of the development agreement summary or area-sharing details, if provided.
7. Note that both builder and seller are deemed promoters and jointly liable, so complaints can address both.

Frequently asked questions

Is a landowner a promoter under RERA in a joint development?

MoHUA's RERA FAQ quotes the Explanation to Section 2(zk): where the person who constructs or develops and the person who sells apartments or plots are different persons, both shall be deemed to be promoters. A landowner selling flats from a share in a joint development is treated as a promoter on that basis.

Who is liable if a joint development project is delayed?

According to MoHUA's FAQ, when the builder and the seller are different persons, both are deemed promoters and are jointly liable for the functions and responsibilities under the Act and its rules. Section 18 remedies, including refund with interest and compensation or monthly delay interest, are promoter responsibilities.

Does the 70 percent separate account apply in a joint development?

MoHUA's FAQ says Section 4(2)(l)(D) requires the promoter to keep seventy percent of money received from allottees in a separate account for each project, for construction and land cost. Since both builder and seller are deemed promoters in a joint development, buyers can ask how their payments are handled.

Can a developer hand over a joint development to another builder?

MoHUA's FAQ says Section 15 bars a promoter from transferring or assigning majority rights and liabilities to a third party without the prior written consent of two-thirds of allottees and the Regulatory Authority. Apartments held by the promoter are excluded from the count, and each allottee has one vote.

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.