Meaning of Promotor under RERA

As per section 3 of The Real Estate (Regulation and Development) Act, 2016 (here-in-after referred as RERA), which has come into force from 1st May, 2016 and has been notified to be commenced w.e.f. from 1st May 2017, every promoter shall register the real estate project before its advertisement or marketing or booking or sell or offer for sale, or invite persons to purchase in any manner, of any plot or apartment or building as the case may be.

The first requirement to get registered under RERA is to qualify as a promotor. Clause (zk) of Section 2 of RERA defines the term “Promoter” as under:

“Promoter” Means

  • a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or
  • a person who develops the land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or
  • any development authority or any other public body in respect of allottees of—
  • buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or
  • plots owned by such authority or body or placed at their disposal by the Government.

For the purpose of selling all or some of the apartments or plots; or

  • An apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its Members or in respect of the allottees of such apartments or buildings; or
  • Any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or
  • Such other person who constructs any building or apartment for sale to the general public.

Explanation—For the purposes of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the persons who sell apartments or plots are different persons, both of them shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified, under this Act or the rules and regulations made thereunder;”

Kind of work

The definition of a promoter is very exclusive and elaborate. It includes various kind of development and construction be it new construction, conversion of existing building, plotting of land, commercial construction, colonizing, contractor development, estate development by any person acting as the holder of attorney from the owner of the land.

Entities Covered

It includes almost all kind of entities be it individual, firm, company, Trust, State Development Authority, State improvements Trusts, State level Co-operative housing finance society and other kinds of entities.

Exclusion 

  • Any simple sale of land or building by the owner of the same to another person shall not be covered under RERA.
  • Any landowner who sell his land or enter into an agreement for pure development of land with the purpose of selling the land without active development in the development shall be outside the definition of the promoter.

Comment

  1. your second para of Exclusion, Can you give any reference or case law to support your statement or is it just based on your interpretation :
    “landowner who enter into an agreement for pure development of land with the purpose of selling the land without active development in the development shall be outside the definition of the promoter”.
    Thank you

  2. I bought a plot in a project & the contractor did not build the house according to Govt approved plan…dose it come under RERA?

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