When a Project's RERA Registration Is Revoked: Refund or Finish It Yourselves, for Bengaluru Buyers
Section 7 of the RERA Act sets the grounds and notice for revoking a registration and requires the Authority to freeze the project account and facilitate completion. Section 8 gives the buyers' association the first right of refusal, and Section 18(1)(b) a refund route. What Bengaluru buyers should do.
Imagine opening the K-RERA portal and finding your project's registration marked as revoked. The builder's site office is quiet, the demand letters have stopped, and the question every buyer in the tower is asking is the same: what now? The RERA Act was written for exactly this moment. It gives the Authority specific steps to take, gives buyers a choice between leaving with their money and staying to see the building finished, and gives the buyers' association a first claim on completing the work.
The short answer. Under Section 7 of the Real Estate (Regulation and Development) Act, 2016, the Authority may revoke a registration for defaults, violations of approvals, unfair practices or fraud, but only after at least thirty days' written notice to the promoter. On revocation, Section 7(4) requires the Authority to list the promoter as a defaulter, freeze the project bank account and facilitate the remaining development works under Section 8, where the association of allottees has the first right of refusal to carry out the remaining work. Section 18(1)(b) separately makes the promoter liable to refund an allottee who wishes to withdraw, with interest and compensation. The trade-off: withdrawing gives you a claim to money from a promoter that may be struggling, while staying puts you in a collective effort to finish the building that may take time and cooperation.
When can RERA revoke a project's registration?
Section 7(1) lists four grounds. The Authority may, on a complaint, suo motu or on the recommendation of the competent authority, revoke a registration if satisfied that the promoter makes default in doing anything required under the Act, rules or regulations; violates any of the terms or conditions of the approval given by the competent authority; is involved in any kind of unfair practice or irregularities; or indulges in any fraudulent practices.
The explanation to Section 7(1)(c) gives examples of unfair practice. They include falsely representing that services are of a particular standard, representing that the promoter has an approval or affiliation it does not have, making a false or misleading representation about the services, and permitting advertisements of services that are not intended to be offered.
Revocation is not instant. Section 7(2) says the registration shall not be revoked unless the Authority has given the promoter not less than thirty days' notice in writing, stating the grounds, and has considered any cause shown. Section 7(3) lets the Authority, instead of revoking, permit the registration to remain in force with further terms and conditions it imposes in the interest of the allottees.
What must the Authority do after revocation?
Section 7(4) sets out four steps. The Authority shall debar the promoter from accessing its website in relation to that project, specify its name in the list of defaulters, display its photograph on the website and inform the other RERAs. It shall facilitate the remaining development works in accordance with Section 8. It shall direct the bank holding the project account under Section 4(2)(l)(D) to freeze the account, and then take further action, including de-freezing, towards facilitating the remaining development works. And it may issue such directions as it deems necessary to protect the interest of allottees or in the public interest.
The account freeze is the step buyers most often overlook. Money collected from allottees and held in the separate project account is not simply released to a promoter whose registration has been revoked; the Act directs that it be frozen and then used towards completing the project as the Authority facilitates.
We covered the wider mechanics of lapse and revocation in our explainer on extension, revocation and lapse of registration. This piece focuses on what a buyer can do.
| Provision | What it says | What it means for a Bengaluru buyer |
|---|---|---|
| Section 7(1) | Revocation for default, approval violation, unfair practice or fraud | Watch for complaints and orders against the project |
| Section 7(2) | At least thirty days' written notice before revocation | A notice period during which you can prepare |
| Section 7(4) | Defaulter listing, account freeze, facilitation of remaining works | Project money is frozen, not handed back to the promoter |
| Section 8 second proviso | Association of allottees has first right of refusal on remaining works | Buyers collectively can choose to complete the project |
| Section 18(1)(b) | Refund with interest and compensation if you withdraw | An individual exit route with a claim on the promoter |
Who finishes the building if the builder cannot?
Section 8 says that upon lapse or revocation of a registration, the Authority may consult the appropriate Government to take such action as it deems fit, including the carrying out of the remaining development works by the competent authority or by the association of allottees or in any other manner the Authority determines.
Its second proviso gives buyers a priority. In case of revocation, the association of allottees shall have the first right of refusal for carrying out the remaining development works. That means the buyers, acting together, are offered the chance to complete the project before others are considered.
The first proviso adds a timing safeguard. No direction, decision or order of the Authority under Section 8 takes effect until the expiry of the period of appeal provided under the Act. So there is a gap between the Authority's decision and its effect, which buyers can use to organise.
Can you take your money back instead?
Yes, as a separate right. Section 18(1)(b) says that if the promoter fails to complete or is unable to give possession due to discontinuance of business as a developer on account of suspension or revocation of the registration, or for any other reason, the promoter shall be liable on demand to an allottee who wishes to withdraw to return the amount received, with interest at the prescribed rate, including compensation, without prejudice to any other remedy.
Section 19(4) gives the allottee the matching right to claim a refund with interest and compensation where the promoter fails to give possession due to discontinuance of business on account of suspension or revocation of registration. Section 2(za) explains that interest payable by the promoter runs from the date it received the amount till the date of refund.
The practical difference between the two routes is who you depend on. A refund claim depends on the promoter's ability to pay, with recovery provisions in the Act if it does not. Staying depends on your fellow buyers and the Authority's facilitation. Our guide to refund or interest for a delayed flat sets out that choice in more detail.
How is a lapse different from a revocation?
A lapse happens by time; a revocation happens by decision. Section 5(3) says a registration is valid for the period the promoter declared under Section 4(2)(l)(C) for completing the project or phase. If that period ends without an extension, the registration lapses. Revocation, by contrast, follows the grounds, notice and hearing set out in Section 7.
Section 8 applies to both. Upon lapse or revocation, the Authority may consult the appropriate Government and decide how the remaining development works are carried out, including by the association of allottees. The first right of refusal in the second proviso, however, is written for revocation. If your project's registration is nearing the end of its declared period, check the portal for any extension application and ask the promoter what it plans to do, well before the date arrives.
What should buyers do as a group?
Organise early. If an association of allottees does not yet exist, form one; Section 19(9) says every allottee shall participate towards the formation of an association. A first right of refusal under Section 8 is only useful if there is an organised body ready to exercise it.
Gather information the Authority and any future contractor will need: the sanctioned plans, the stage of construction, the list of allottees and amounts paid, and the status of the project account. Section 31(1) lets any aggrieved person, including an association of allottees, file a complaint with the Authority, which is also a channel for asking for directions under Section 7(4)(d).
Keep individual records too. Whether you stay or leave, your payment receipts, agreement for sale and correspondence are the basis of any claim you make later.
What should Bengaluru buyers do if revocation proceedings start?
Use this checklist as soon as you hear of a notice or an order:
- Check the K-RERA portal for the project's registration status and any orders.
- Collect your agreement for sale, receipts and all builder correspondence.
- Join or help form the association of allottees under Section 19(9).
- Ask the Authority, through the association, about the project account freeze and facilitation steps.
- Decide individually whether to seek a refund under Section 18(1)(b) or stay.
- If staying, discuss the association's first right of refusal under Section 8.
- Track the appeal period, since Section 8 orders take effect only after it expires.
Revocation is a serious step, and the Act surrounds it with notice, appeal periods and buyer rights for that reason. Knowing the sequence lets you act at each stage instead of waiting for news.
Bengaluru buyer FAQs on RERA registration revocation
On what grounds can RERA revoke a project registration?
Section 7(1) of the RERA Act allows revocation if the promoter defaults on anything required under the Act, rules or regulations, violates terms of the competent authority's approval, is involved in unfair practices or irregularities, or indulges in fraudulent practices. Section 7(2) requires at least thirty days' written notice first.
What happens to the project bank account after revocation?
Section 7(4)(c) of the RERA Act says the Authority shall direct the bank holding the project account to freeze it, and then take further necessary actions, including de-freezing, towards facilitating the remaining development works in accordance with Section 8 of the Act.
Can buyers complete a project whose registration is revoked?
Section 8 of the RERA Act lets the Authority decide how remaining works are carried out, including by the association of allottees. Its second proviso says that in case of revocation, the association of allottees shall have the first right of refusal for carrying out the remaining development works.
Can I get a refund if the builder's registration is revoked?
Section 18(1)(b) of the RERA Act says that if the promoter cannot give possession due to discontinuance of business on account of suspension or revocation of registration, it shall be liable on demand to refund an allottee who wishes to withdraw, with interest at the prescribed rate and compensation.
Last updated 2026-10-23. PropNewz Team.
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