The enforcement of RERA (Real Estate & Development Act 2016, India), is an integral part of the real estate market both as a means of establishing transparency, protecting buyers and assuring accountability from sellers. One of the most crucial regulatory requirements imposed by RERA is to maintain a current registration certificate in order to validate that the property has been duly registered according to RERA regulations however, there can be a variety of challenges that could potentially prevent the issuance of a valid RERA registration before the project is completed and therefore, may lead to a situation where a developer has a lapsed RERA registration after the sale of the home takes place without a valid RERA registration certificate. In addition, there may be other legal/interests of the proponents of the sale or their buyers that create problems related to the legality of a sale deed that was executed after the expiration of the RERA registration certificate. This article will provide an overview of this issue, examine the risks associated with this type of transaction and provide suggestions for how interested parties can protect themselves, while reinforcing the importance of utilizing a professional platform for RERA registration in India to avoid these unfortunate situations.
Understanding RERA Registration and Its Legal Importance
Understanding the reasons behind the existence of RERA registration is essential to understanding what happens if a registration is allowed to expire.
Every real estate developing project (real estate projects) with more than a prescribed number of units or over a prescribed area must be registered with the corresponding State RERA Authority, as stated in Section 3 of the RERA Act. A RERA registration certificate with a registration number indicates that a RERA registration has been granted and that its validity has been confirmed by the RERA Authority.
The RERA registration period is predefined by the following:
• Project dimensions and description.
• The anticipated duration of the construction process.
• The agreed upon completion date of the construction.
The promoter (developer) must complete the construction of the real estate project as per the above conditions and timeframe laid out in the RERA Act.
Validity of RERA Registration: A Time-Bound Approval
RERA registrations are not permanent and only last until the declared completion date of the project. If there are legitimate delays, such as because of "force majeure," other regulatory or legal restrictions, or any other reason that was unexpected, the promoter must apply for an extension based on those reasons, prior to the expiration of the registration, otherwise, there are serious negative legal consequences.
Once the RERA registration has expired:
• The project is technically out of compliance.
• The promoter will have lost their legal authority to market, sell or transfer units within the project.
• Any transactions that occurred during this time may be investigated.
This is where the question regarding the execution of a sale deed that occurred during the period that the registration was "expired, but not extended," has arisen.
What Is a Sale Deed and Why Its Timing Matters Under RERA?
The deed of sale is a contract that is enforceable by law between buyer and seller for the transfer of ownership of real property from seller to buyer once the deed has been registered with a Sub-Registrar, which also provides a buyer with legal title to the real property.
Under RERA law:
• A deed can only be executed for a project that has been registered with RERA
• A project must have a valid RERA registration certificate in order for a deed to be executed
If a deed is executed for a project that no longer has a valid RERA registration at the time the deed is executed, it represents a direct violation of the statute.
Extension of RERA Registration: Legal Framework
When May a Promoter Request an Extension?
According to the RERA Act, a promoter may request an extension of their registration based on the following circumstances:
• An event of Force Majeure (such as a natural disaster, war, pandemic, etc.)
• Other reasonable circumstances approved by the authority (subject to state rules)
However, most states require an application to be submitted prior to the expiration of a registration. Therefore, late-filed applications significantly weaken the promoter's legal position.
Does Submitting an Extension Application Automatically Extend the Registration?
Submitting an extension application does not automatically extend or revive the registration for a project. As long as the authority has not approved the request for extension and has not updated the status of the project on the RERA portal, the project will remain unregistered.
Sale Deed Executed After RERA Registration Expiry: Is It Valid?
Legal Implications
Prior to the approval of an extension or renewal of RERA registration, the execution of a Sale Deed for an Unregistered Real Estate Project may be legally defensible on the grounds of non-compliance with RERA legislation. In addition, registration under the Indian Registration Act may still be permitted by the Sub-Registrar, but registration of a Sale Deed does not supersede any violations of RERA.
From a legal perspective:
• Illegal Sale Deed
• Illegalities associated with the sale can be contested within RERA via the RERA Authority or the RERA Adjudicating Officer.
• Promoter liable for penalties
Why Such a Sale Deed Is Considered Non-Compliant
1.Violation of Section 3 of RERA
Under RERA, it is illegal for promoters to sell or transfer units within the unregistered project. If a registration has expired, until an extension has been approved by appropriate authority, the project will be viewed as unregistered.
2. Failure to Have a Valid RERA Registration Certificate
At the time of executing a sale deed, a valid registration certificate with RERA must be in place. An expired certificate does not provide any legal recourse for buyers.
3. False Statements Made to Buyers
Buyers will believe that a project is in accordance with the law when in fact it is not. Such an act could be considered deceptive advertising or an unfair trade practice.
Consequences for Promoters and Developers
As a promoter, the act of executing a Sale Deed without a valid registered document is a very high-risk undertaking to take.
1.Financial Penalty:
RERA Act - Section 59 allows for a fine of up to 10% of the estimated cost of construction as a consequence of continuing to be non-compliant under this act may also result in imprisonment.
2. Loss of Reputation:
Non-compliance records are available on the RERA state portal for the public, therefore damaging the credibility of the project and may affect the future approvals of new projects and cause a loss of confidence in potential buyers.
3. Regulatory Scrutiny:
When regulatory authorities grant extensions of time to comply with the act, they may impose additional conditions such as increased reporting requirements and/or escrow restrictions.
When using a qualified professional RERA Registration Service, promoters will have an easier time addressing an extension request than if they were to go about it alone.
Impact on Homebuyers
From a buyer’s perspective, purchasing a property during this interim period can have serious legal and financial implications.
1. Loss of RERA Protection
RERA offers buyers robust protections, including timely possession, transparency in disclosures, and grievance redressal mechanisms. When a sale deed is executed for an unregistered project, buyers may temporarily lose the direct benefit of these statutory safeguards.
2. Difficulty in Legal Enforcement
Although buyers can still approach RERA authorities, promoters may argue procedural lapses due to expired registration. This can complicate disputes related to possession delays, quality issues, or refund claims.
3. Financing and Resale Challenges
Banks and financial institutions are often reluctant to approve home loans for units sold during a period of non-compliance. Additionally, future resale of such property may attract enhanced due diligence, delaying or even jeopardizing transactions.
Can the Sale Deed Be Regularized After RERA Extension?
In certain situations where RERA has provided a promoter with an extension, the following would apply:
• The promoter might suggest that the defect was procedural.
• Buyers might desire to have post-facto validated.
On answering, there is no automatic confirmation or validation of past illegal transactions by RERA. In any case, RERA may:
• Impose penalties/financial punishment,
• Require the developer to take corrective action(s),
• Allow for "conditional regularization."
Each case depends on facts, intent, and compliance history.
Judicial and RERA Authority Interpretations
Across many of the state RERA authorities, RERA has held that:
• Any transaction(s) made between the time RERA's registration has expired is/are deemed illegal.
• Extension approvals will only apply to those transactions moving forward, not for those transactions already completed.
Thus, it is essential for a promoter to comply strictly with RERA's registration process.
Importance of Applying for RERA Extension on Time
Engagements between the promoter and RERA require that for any extension, the promoter needs to:
• Submit their application before the end of the original registration period,
• Provide evidence that is valid by way of documentation,
• Follow the regulatory authority(s) prescribed electronic portal.
The most commonly accepted rationale for a promoter having been delayed in making their request for an extension include administrative neglect/ignorance.
Why Compliance Builds Long-Term Trust
Compliance with RERA is an important legal requirement, but also an opportunity for a promoter to create a trust relationship with buyers. Builders who adhere to timelines, transparency, and other legal processes create:
• Improved buyer confidence,
• Easier (or less complicated) access to funding/financing,
• Stronger brand image/reputation.
What Should Promoters Do in This Situation?
1.Apply for Immediate Extension
All promoters need to:
• Submit an extension request ASAP
• Provide documented reason for request
• Report all transactions that occurred during the lapsed time frame.
2. No Additional Transactions
Until the extension has been approved:
• Do not market
• Do not complete sale deed(s)
• Be upfront with buyers.
3. Use a Professional for Compliance Assistance
By using an experienced RERA Registration Services, you can:
• Minimize penalties
• Increase your chances of getting approved
• Guarantee that your legal documents are accurate.
What Should Buyers Do If They’ve Signed Such a Sale Deed?
1.Verify the Project's Status
To verify a project's status, buyers must:
• Check RERA Portal for project validity
• Review the RERA Registration Certificate
• Confirm Extension Approval Date
2. Enter a RERA Complaint (if necessary)
In the case of a risk, buyers can enter a RERA complaint, which may include:
• Seeking compensation
• Demanding completion of the project
• Requesting refund plus interest
3. Obtain Legal Advice
Clients should obtain an independent legal evaluation from a qualified attorney. A qualified attorney will help buyers:
• Understand their rights
• Avoid a future dispute
• Protect their financial investment from loss.
What Happens If RERA Registration Is Extended Later?
Many promoters believe that once a RERA extension is granted, all previous actions are considered valid. This belief is not true.
Key Clarification
• RERA Extensions are not applicable to events that happened before issuing the Extension.
• RERA Extensions do not make any sale deed executed within the previous expired period lawful.
• Despite RERA Extensions, authorities may impose separate penalties for conduct that occurred during the unlawful period.
As a result, it is always legally risky to rely on a RERA Extension for past unlawful conduct.
What Happens Once the Extension Is Granted?
A common misunderstanding is that the approval of an extension cures all previous noncompliance. Correctly, registration extensions are typically prospective rather than retrospective.
This means:
• Sale deeds executed during an expired period continue as non-compliances.
• Authorities may still act on transactions that occurred prior to the extension being approved.
• Buyers may continue to seek compensation for, or to resolve, non-compliances that arose during the period of expiration.
Remedies Available to Homebuyers
As a buyer who has purchased during this period, there are multiple legal remedies available to you.
1.Filing a complaint with RERA.
Buyers may file complaints against the promoter for selling units without valid registrations. RERA has authority to impose penalties on promoters and to order refunds of the amounts paid with interest.
2. Civil Remedies.
In addition to filing with RERA, buyers also have options to file civil lawsuits against promoters in civil courts for misrepresentation, breach of contract, or unfair trade practices.
3. Settlements.
In some instances, promoters may be able to offer some form of settlement to resolve disputes. Examples of possible settlements may include compensation, revisions to the agreement, and assurances made by the promoter.
Why Timely Compliance Matters
The situation discussed above underscores the importance of proactive compliance. The RERA registration process is not merely a procedural step it is a continuous obligation that must be monitored until project completion.
By opting for a specialized RERA registration service in India, promoters can ensure:
Similarly, buyers should always verify the validity of the RERA registration certificate on the official portal before executing any sale deed.
Conclusion
If the sale deed is executed after the expiration of RERA registration but before the extension of RERA registration, both promoters/buyers are legally vulnerable. Although such sale deeds would not be automatically null and void, they contravene the provisions of the RERA Act and are subject to regulatory penalties, potential financial penalties, and likely lead to long-term disputes between promoters and purchasers. To minimize these risks, the most effective strategy is to comply with the RERA Framework by maintaining an up-to-date registration continuously, maintaining complete transparency in information provided to purchasers, and giving purchasers the ability to make informed decisions about the RERA-status of the property being purchased/from whom it is being purchased. Therefore, whether you are a promoter who is attempting to remain compliant with the RERA framework or a buyer who wants to protect your investment by ensuring that your purchase is made with good RERA-registration status, using a reputable RERA registration service and understanding the RERA registration process will be a critical component of successfully completing secure and legally-compliant real estate transactions.
(FAQs)
1. Is a sale deed valid if RERA registration expired?
A sale deed executed after RERA registration expiry is legally questionable and may be challenged under RERA laws.
2. Can RERA extension validate past sale deeds?
Generally, RERA extensions apply prospectively and do not automatically legalize past non-compliant transactions.
3. Can buyers file a complaint in such cases?
Yes, buyers can approach the RERA Authority or consumer courts for relief.
4. What penalty can a promoter face?
Penalties may go up to 10% of the project cost along with other legal consequences.
5. How can promoters avoid such legal risks?
By following the RERA registration process strictly and using a professional RERA registration service.
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