Pre-Launch Offer, No RERA Number: What Section 3 and Section 59 Mean for Bengaluru Buyers
Section 3 of the RERA Act bars a promoter from advertising, booking or selling flats in a planning area before registration, and Section 59 sets penalties of up to ten per cent of project cost, with more for continued violation. What a pre-launch offer without a registration number means for Bengaluru buyers.
A WhatsApp forward offers "pre-launch prices" on flats in a new tower on the edge of Bengaluru. There is a brochure, a site visit, a token amount to "block" a unit. What there is not, when you ask, is a RERA registration number. The salesperson says it is "under process". Under the Real Estate (Regulation and Development) Act, 2016, that answer matters, because Section 3 says the selling should not have started at all, and Section 59 sets out what a promoter faces for starting anyway.
This guide explains what the Act says about unregistered projects, the penalties it sets, and the steps a buyer can take before and after paying.
The short answer. Section 3(1) bars a promoter from advertising, marketing, booking, selling or inviting buyers for any apartment, plot or building in a real estate project in a planning area without first registering the project with the Real Estate Regulatory Authority, subject to narrow exemptions in Section 3(2). Section 59(1) makes a promoter who contravenes Section 3 liable to a penalty of up to ten per cent of the estimated cost of the project. Under Section 59(2), continuing to violate Section 3 or not complying with orders can bring imprisonment of up to three years, a fine of up to a further ten per cent of the estimated cost, or both. The trade-off: a pre-launch price may look lower, but a buyer who pays before registration does so without the disclosures and quarterly reporting that registration brings.
What does the Act say about selling before registration?
It forbids it, with limited exceptions. In the text of the Act published by the Telangana regulator, 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 any real estate project or part of it, in any planning area, without registering the project with the Authority established under the Act.
The words cover more than a sale deed. Advertising, marketing, booking and inviting persons to purchase in any manner are all listed. A pre-launch campaign that takes bookings for flats in a project that has not been registered is the kind of activity the section names.
Section 3(1) has two provisos. The first required ongoing projects without a completion certificate on the date the Act commenced to apply for registration within three months. The second lets the Authority, if it thinks necessary in the interest of allottees, direct a promoter of a project developed beyond the planning area, but with the requisite permission of the local authority, to register.
Which projects do not need registration?
Three narrow categories. Section 3(2) says no registration is required where the land proposed to be developed does not exceed five hundred square metres, or the apartments proposed do not exceed eight, inclusive of all phases; where the promoter received a completion certificate before the Act commenced; or for renovation, repair or re-development that does not involve marketing, advertising, selling or new allotment. A proviso allows the appropriate Government to reduce the 500 square metre and eight apartment thresholds.
An Explanation adds that where a project is developed in phases, every phase is a stand alone real estate project and needs its own registration. So a registration number for Phase 1 does not cover a newly launched Phase 3. Our explainer on how the redevelopment exemption in Section 3(2)(c) works looks at one of these exemptions in detail.
| Situation | What the Act says | Section |
|---|---|---|
| Booking or advertising flats in an unregistered project in a planning area | Not permitted without registration | Section 3(1) |
| Small project, up to 500 square metres or eight apartments across all phases | Registration not required, unless the government lowers the threshold | Section 3(2)(a) |
| New phase of an existing project | Each phase is a stand alone project needing registration | Explanation to Section 3 |
| Promoter contravenes Section 3 | Penalty up to ten per cent of estimated project cost | Section 59(1) |
| Continued violation or non-compliance with orders | Imprisonment up to three years, fine up to a further ten per cent, or both | Section 59(2) |
What penalty does an unregistered promoter face?
Up to ten per cent of the project cost, and more for persisting. Section 59(1) says that if any promoter contravenes Section 3, it 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) says that if the promoter does not comply with the orders, decisions or directions issued under sub-section (1), or continues to violate Section 3, it shall be punishable with imprisonment for a term which may extend up to three years, or with a fine which may extend up to a further ten per cent of the estimated cost of the project, or with both.
These penalties are aimed at the promoter, not the buyer. But they show how seriously the Act treats selling before registration, and they explain why a promoter who is genuinely about to register has a clear reason under the Act to wait for the number before taking money.
How large could the penalty be on a real project?
Large enough to matter to any promoter. Take a hypothetical project whose estimated cost, as determined by the Authority, is Rs 200 crore. Under Section 59(1), the penalty for contravening Section 3 may extend up to ten per cent of that figure, or Rs 20 crore. If the promoter then ignores the Authority's orders or keeps violating Section 3, Section 59(2) allows a fine of up to a further ten per cent, another Rs 20 crore in this example, or imprisonment of up to three years, or both.
The words "may extend up to" matter: these are ceilings, not fixed amounts, and the Authority determines the estimated cost. For a buyer, the point is not the size of any fine. It is that the Act treats selling before registration as a serious breach, so a promoter offering bookings without a number is asking you to share a risk the law tells it not to take.
What does a buyer lose by paying before registration?
The disclosures that registration brings. A registered project must, under Section 11(1), keep a web page on the Authority's website with quarterly updates on bookings, approvals and construction status. Under Section 4(2)(l)(D), the promoter must deposit seventy per cent of amounts realised from allottees in a separate account and withdraw in proportion to completion. Under Section 11(2), advertisements must show the registration number and the Authority's website address.
A buyer who pays into a project that is not registered has none of that visibility at the time of payment. That is the real cost of a pre-launch price. Our earlier report on buying into an unregistered project covers the same question from another angle.
What should a Bengaluru buyer check before paying a token?
Start and end with the registration. Each step below follows from Sections 3, 4 and 11 of the Act.
- Ask for the RERA registration number of the specific phase you are being offered, not just the developer's earlier projects.
- Search the number on the state regulator's website and confirm the project name, phase and promoter match the brochure.
- If you are told the project is exempt, ask which clause of Section 3(2) applies and see the land area and apartment count.
- Check that advertisements and the brochure show the registration number and the Authority's website, as Section 11(2) requires.
- Do not accept "registration under process" as a reason to pay a booking amount.
- Keep copies of every advertisement, message and receipt, in case you need to file a complaint.
- Once the project is registered, read its web page for approvals and the declared completion date before you pay more.
What can a buyer do if they have already paid?
Put the facts on record and use the complaint route. Section 31 allows any aggrieved person, including an association of allottees or a voluntary consumer association registered under any law, to file a complaint with the Authority or the adjudicating officer for any violation or contravention of the Act. A complaint about selling before registration is supported by exactly the documents the checklist asks you to keep: advertisements, booking forms, receipts and messages.
Section 34(c) also makes it a function of the Authority to maintain a public database of promoters who have been penalised under the Act, with reasons. Checking that database is a useful step before dealing with any promoter again. The underlying lesson is simple: in a planning area, the registration number comes first, and the money comes after.
Frequently asked questions
Can a builder take bookings before RERA registration?
Section 3(1) of the RERA Act says no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase any apartment, plot or building in a project in a planning area without first registering the project with the Real Estate Regulatory Authority, subject to the exemptions in Section 3(2).
What is the penalty for selling flats in an unregistered project?
Section 59(1) makes a promoter who contravenes Section 3 liable to a penalty of up to ten per cent of the estimated project cost. Under Section 59(2), continued violation or non-compliance with orders can bring imprisonment of up to three years, a fine of up to a further ten per cent, or both.
Which projects are exempt from RERA registration?
Section 3(2) exempts projects on land up to 500 square metres or with up to eight apartments across all phases, projects with a completion certificate before the Act began, and renovation or re-development without marketing, selling or new allotment. The government can lower the 500 square metre and eight apartment limits.
What can I do if I paid a token for an unregistered project?
Section 31 lets any aggrieved person, including an association of allottees or a registered voluntary consumer association, file a complaint with the Authority or adjudicating officer for a violation of the Act. Keep the advertisements, booking form, receipts and messages to support the complaint.
Last updated 2026-10-25. PropNewz Team.
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