Responsibilities and Duties of Promoter under RERA Act 2016

Responsibilities and Duties of Promoter under RERA
Shivani Jain
| Updated: Jul 08, 2020 | Category: Government, Rera

The RERA 2016 aims at protecting the home buyers from the unlawful activities of the builders. It also provides a complaint redressal system if the promoters or agents fail to comply with the Real Estate Laws. Both Promoters and Builders are tasked with several responsibilities under the RERA Act. In this blog, we will thoroughly discuss the Duties of Promoter under RERA Act.

Concept of Promoter under RERA 2016

Section 2 (zk) of the Real Estate (Regulation and Development) Act, 2016[1], defines Promoter. The persons that can be considered as Promoter are as follows:

  • Any person constructing an independent building or a building with apartments or is converting an existing building into apartments. Such construction or conversion is done to sell some of the apartments to other people. The term other people also includes assignees of the promoter.
  • Land Project Developers. In this case, the construction of structures or plot is not necessary for Sale.
  • Development Authority or any other Public Body engaged in:
  1. Apartments or Buildings constructed on the land either owned by them or placed by the government for the disposal;
  2. Plots owned by them or placed for disposal by the government for the purpose of selling.
  • Any State-level Cooperative Housing Finance Society that constructs building or apartments for its members or allottees;
  • Any primary Cooperative Housing Society that constructs building or apartments for its members or allottees;
  • Any individual who acts as a Contractor, Builder, Developer, or claims to hold the power of Attorney from the Landowner;
  • Any individual who constructs an apartment or building for sale to the general public.

Also, Read: What is RERA Registration Fees in India?

Concept of Real Estate Agents under RERA 2016

Section 2 (zm) of the RERA 2016 [2], defines Real Estate Agent. The persons that can be considered as Real Estate Agents are:

  • Any person who acts on behalf of one person in a deal of transfer with another person. Such a deal or transaction must relate to the sale of plot, building or apartment in a real estate project;
  • Any person who charges fees for his services whether in the form of commission or otherwise;
  • Any Person who introduces the seller and prospective buyer to each other. Such an introduction must be for negotiation for sale, purchase of building, plot, or apartments through any medium;
  • Brokers, property dealers, or middlemen are also known as Real Estate Agents.

Role and Duties of Promoter under RERA 2016

The Functions and Duties of Promoter under RERA are provided under section 11, 12, and 13, which are as follows:

Role and Duties of Promoter under RERA 2016
  • Needs to register all the Real Estate Projects with the RERA Authority;
  • Create a Website and display details and particulars of the project for public access. The details required are as follows:
  1. Details of the Project Registration granted by the Authority;
  2. Quarterly up to date list of the types and number of plots or apartments booked;
  3. Quarterly up to date list of the number of garages booked;
  4. Quarterly up to date list of the number of approvals granted;
  5. Quarterly up to date list of the permissions pending with authority;
  6. Quarterly up to date status of the real estate project;
  7. Any other information as may be prescribed by the rules or regulations.
  • Any advertisement or prospectus issued must be informative. It should have the website of the authority along with the details of the registered project;
  • A promoter needs to make certain documents during the booking and issue of allotment letter. These documents include sanctioned plans, layout plans, together with the specifications approved by the competent authority.  A Promoter needs to display these details on the website.
  • A Promoter needs to provide a stage-wise time schedule of completion of the project. It must also include provisions like sanitation, water, and electricity;
  • All the duties of the promoter under RERA Act or the rule and regulations shall remain till the conveyance of the project;
  • All the duties of a promoter under the Agreement of Sale with the allottee shall remain till the conveyance of the project. Further, the term duties include the case of a structural defect as well;
  • A promoter needs to acquire a completion certificate and an occupancy certificate from the authority. It also needs to provide the same to the homebuyers;
  • The promoter needs to provide a lease certificate to all the allottees. The certificate must include the lease period and a declaration stating there are no outstanding dues and charges regarding the property;
  • A Promoter should provide essential services at a reasonable rate;
  • A Promoter needs to execute a registered deed in favour of the allottee. This deed must include the undivided proportionate title in the common areas to the allottees, who have booked their property in the project;
  • In case of delay in flat possession, the promoter needs to refund the amount paid by the homebuyer;
  • A promoter needs to pay all the outgoings charges until he/she conveys the physical possession of the property. Outgoing Charges include ground rent, maintenance charge, land cost, etc.
  • A Promoter needs to compensate the buyer for the loss incurred because of the defective title of the land;
  • A Promoter cannot accept more than 10% of the apartment or plot cost as earnest money or application fee. That means he needs to first enter into a buyer-builder agreement with the buyer.

Role and Duties of the Real Estate Agent under RERA 2016

The Functions and Duties of promoter or Real Estate Agent under RERA are provided under section 10, which are as follows:

  • An Agent cannot facilitate the sale or purchase of any apartment, building, or plot which is not registered with the RERA Authority;
  • A Real Estate Agent needs to maintain books of account, documents, and records concerning the project;
  • A Real Estate Agent cannot engage himself in any Unfair Trade Practice;
  • A Real Estate Agent must facilitate all the information and documents to the buyer at the time of booking;
  • Or discharge any other function as may be specified.

Meaning of Unfair Trade Practice

The term unfair trade practice includes the following:

  • Making any oral, written, or visible statement as follows:
  1. Falsely represents that services and material are of a particular grade or standard;
  2. Falsely represents that the promoter has approval which he does not have;
  3. Falsely represents the services offered.
  • Allowing publication of any prospectus or advertisement in a newspaper regarding the services that are not meant to be provided.

Penalties for Promoters

Offences Penalties
No-registration of a Real Estate Project 10% of the estimated cost of the Real Estate Project.
Not obeying any Order or Direction for the offence mentioned above. Imprisonment up to 3 years or 10% of the estimated cost of the Real Estate Project.
Providing False or Misleading Information 5% of the estimated cost of the Real Estate Project.

Penalties for Real Estate Agent

In case the agent fails to abide by or violates the provision of section 9 or 12, he will be liable to pay Rs 10000 as a penalty. He/she needs to pay this amount per day till the time such default continues to exist. The penalty may also extend to 5% of the property’s cost, which has been facilitated by him.


In India, the Real Estate Sector acts as one of the leading sectors that can attract investments. This sector is expected to reach $1 Trillion by the end of 2030. It will also contribute around 13% of the country’s GDP (Gross Domestic Product) by 2025. Therefore, this sector is receiving due attention from our legislators.

One of the significant steps in this direction is the enforcement of the RERA Act, 2016. This Act regulates both organised and unorganised sector and aims to safeguard the interest of homebuyers. It also imparts accountability and transparency in the industry. Further, the function and duties of the promoter under RERA 2016 are mandatory to comply with. Any type of Non-compliance will lead to imposition hefty penalties on the Promoters and Agents. Hence, RERA 2016 is a positive step in spiralling the confidence and viability of this sector.  

To start up your business at the earliest, RERA Advisory and RERA Registration, reach out to Swarit Advisors as our experts rank high in delivering on-time registration.

Also, Read: Duties and Functions of RERA Authority: A Complete Guide


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