Unregistered Projects in Bengaluru: What RERA Sections 3 and 59 Mean Before You Book
Section 3 of the RERA Act bars promoters from advertising, booking or selling units in an unregistered project in a planning area, with limited exemptions, and section 59 sets a penalty of up to ten percent of the estimated project cost.
The brochure looks polished and the price looks right. A Bengaluru buyer visiting a new tower on the city's edge is told that bookings are open at an early bird rate, that the RERA number will "come in a few weeks", and that a token amount today will lock the flat. The sales executive is friendly and the site office is busy. What the buyer is not told is that, under the law, the project should not be offered for sale at all until it is registered.
The Real Estate (Regulation and Development) Act, 2016 makes registration the gate that every covered project must pass before it can be marketed. Section 3 sets out the rule and its exemptions, and section 59 sets out what happens to a promoter who breaks it. This guide reads both sections as published in the Gazette of India and explains how a Bengaluru buyer can spot an unregistered offer and respond to it.
The short answer. Section 3(1) of the RERA Act says no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner, any plot, apartment or building in a real estate project in a planning area without first registering the project with the Real Estate Regulatory Authority. Section 3(2) exempts projects where the land does not exceed five hundred square meters or the apartments do not exceed eight, inclusive of all phases, along with a few other cases, and lets the appropriate Government lower those thresholds. Under section 59, a promoter who contravenes section 3 is liable to a penalty of up to ten percent of the estimated cost of the project. The trade-off: an early booking in an unregistered project may come with a lower price, but it gives up the disclosures and protections that registration brings, so the saving can cost a buyer far more later.
What does section 3 actually prohibit?
The Gazette of India copy of the RERA Act sets out section 3(1) in one sentence. No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under the Act.
The list of verbs is wide on purpose. It is not only a completed sale that is barred. Advertising, marketing, booking and inviting people to buy "in any manner" are all covered. A hoarding, a social media post, a WhatsApp brochure or a booking form for an unregistered project in a planning area all fall within the words of the section.
The Act defines "planning area" in section 2(zh) as a planning area, a development area, a local planning area or a regional development plan area, by whatever name called, or any other area specified as such by the appropriate Government or any competent authority, including any area designated for future planned development under the law relating to town and country planning.
Which projects do not need registration?
Section 3(2) lists three exemptions. Registration is not required where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight, inclusive of all phases. It is not required where the promoter received a completion certificate for the project before the Act commenced. And it is not required for renovation, repair or re-development which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building in the project.
The first exemption has an important proviso. If the appropriate Government considers it necessary, it may reduce the threshold below five hundred square meters or eight apartments, inclusive of all phases, for exemption from registration. So the figures in the Act are a ceiling for the exemption, and a state can set a lower one. A buyer should check the current position under the state's rules rather than assume the Act's numbers apply unchanged.
The explanation to section 3 closes a common gap. Where a project is to be developed in phases, every phase shall be considered a stand alone real estate project, and the promoter shall obtain registration for each phase separately. A registration number for phase one does not cover a new tower launched as phase two.
The table below sets out the exemptions and what each means for a buyer.
| Exemption in section 3(2) | What the Act says | What a buyer should check |
|---|---|---|
| Small land area | Land not exceeding five hundred square meters, inclusive of all phases | Whether the state has lowered the threshold |
| Few apartments | Not more than eight apartments, inclusive of all phases | The total count across every phase, not one block |
| Completed before the Act | Completion certificate received before commencement | A copy of that completion certificate |
| Renovation or repair | Only where there is no marketing, sale or new allotment | Whether any new units are being sold |
| Phased projects | Each phase is a stand alone project needing its own registration | A separate registration number for your phase |
How does registration show up in a genuine offer?
A registered project leaves a trail that a buyer can check. Section 5(1) says that on receipt of an application, the Authority shall within thirty days either grant registration and provide a registration number, including a login id and password for the promoter to create a web page for the project, or reject the application for reasons recorded in writing after giving the applicant a hearing. Section 5(2) says that if the Authority does neither within that period, the project shall be deemed to have been registered, and the Authority shall provide a registration number and login within seven days.
Once registered, the promoter has to say so in its marketing. Section 11(2) says the advertisement or prospectus issued or published by the promoter shall mention prominently the website address of the Authority, wherein all details of the registered project have been entered, and include the registration number obtained from the Authority.
So the simplest test is this: a genuine advertisement for a registered project should carry the registration number and the Authority's website address. If it does not, ask why. Our guide on verifying a Karnataka RERA project registration explains how to look the number up and what to read on the project page.
What penalty does the Act set for an unregistered project?
Section 59 deals with this directly. Section 59(1) says that if any promoter contravenes the provisions of section 3, he shall be liable to a penalty which may extend up to ten per cent of the estimated cost of the real estate project as determined by the Authority.
Section 59(2) goes further for repeat or continuing breaches. It says that if any promoter does not comply with the orders, decisions or directions issued under section 59(1), or continues to violate the provisions of section 3, he shall be punishable with imprisonment for a term which may extend up to three years, or with fine which may extend up to a further ten per cent of the estimated cost of the real estate project, or with both.
These penalties are paid by the promoter. They do not by themselves return a buyer's money, which is why the better course is to avoid paying into an unregistered project in the first place.
What does a buyer lose by booking an unregistered project?
Registration is the doorway to most of the buyer protections in the Act. A registered promoter must file declarations on title, encumbrances, the completion timeline and the separate project account under section 4(2)(l), and keep the project's web page updated under section 11(1). A promoter selling without registration has filed none of this, so a buyer has nothing official to check the sales pitch against.
The money side matters too. Section 13 says a promoter shall not accept more than ten per cent of the cost of the apartment, plot or building as an advance or application fee without first entering into a written agreement for sale and registering it. Our explainer on the ten percent advance rule under section 13 covers that limit. In an unregistered project, a token payment may be taken on a booking form with no agreement behind it at all.
None of this means every unregistered offer is dishonest. A project may genuinely be exempt under section 3(2), or registration may be pending. But a pending registration is not a registration, and section 3(1) bars booking and selling until it is granted.
What should a Bengaluru buyer do before paying a token amount?
The checks are quick and can head off a long dispute. Use this checklist:
- Ask for the project's RERA registration number before any site visit payment.
- Look the number up on the Karnataka RERA portal and match the project name and promoter.
- Confirm the registration covers your phase, not only an earlier one.
- Check that advertisements carry the registration number and the Authority's website.
- If the promoter claims an exemption, ask which clause of section 3(2) applies and why.
- Do not pay a token amount on a booking form for a project awaiting registration.
- Keep copies of any advertisement or message offering an unregistered project.
If you have already paid, section 31 allows any aggrieved person to file a complaint with the Authority or the adjudicating officer for any violation or contravention of the Act. Keep the receipt, the brochure and any messages, and take advice on the best route for your facts.
What do Bengaluru buyers ask about unregistered projects?
Can a builder take bookings before RERA registration?
No, for a project covered by the Act. Section 3(1) says no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner, any plot, apartment or building in a real estate project in a planning area without first registering it with the Authority.
Which projects are exempt from RERA registration?
Section 3(2) exempts projects where land does not exceed five hundred square meters or apartments do not exceed eight, inclusive of all phases, projects with a completion certificate before the Act, and renovation or repair without new sales. The appropriate Government may lower the five hundred square meter or eight apartment threshold.
What is the penalty for selling an unregistered project?
Section 59(1) says a promoter who contravenes section 3 is liable to a penalty of up to ten percent of the estimated cost of the project. Under section 59(2), continued violation or non-compliance with orders can mean imprisonment of up to three years, a further fine of up to ten percent, or both.
Does each phase of a project need its own RERA registration?
Yes. The explanation to section 3 says that where a project is developed in phases, every phase shall be considered a stand alone real estate project, and the promoter shall obtain registration for each phase separately. A registration number for an earlier phase does not cover a later one.
Last updated 2026-10-18. PropNewz Team.
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