The Haryana Real Estate Regulatory Authority (RERA) has issued a cautionary warning to homebuyers against investing in unregistered real estate projects, particularly targeting buyers considering pre-launch offers. According to reports from Business Standard, the warning comes as buyers are often drawn to perceived financial benefits of entering projects at pre-launch stages, where developers typically offer lower rates. The regulatory body has advised buyers to verify essential project details on its portal before making any investment decisions.
Unregistered projects carry significant financial and legal risks that buyers should carefully consider. As reported by Business Standard, Santhosh Kumar, vice chairman of ANAROCK Group, explains that projects may fail to obtain necessary approvals or face construction delays due to lack of mandatory escrow arrangements. Pradeep Mishra, chairman and managing director of ORAM Developments, notes that initial investors' money could get stuck if developers cannot raise sufficient funds from bookings. The absence of proper oversight mechanisms leaves buyers vulnerable to project abandonment and fund misappropriation.
While unregistered projects are not automatically illegal, they may fall under specific regulatory exemptions. According to Business Standard reports, Anupam Rastogi, co-founder and chief business officer of Square Yards, explains that certain small projects below statutory thresholds may be exempt from mandatory registration. Projects that received completion certificates before RERA implementation and specific repair or redevelopment projects without new marketing activities may also qualify for exemptions. Buyers should verify that developers provide clear documentation supporting their registration exemption claims.
RERA registration provides substantial protections for homebuyers through mandatory disclosure requirements and financial safeguards. As reported by Business Standard, Adnan Siddiqui, partner at King Stubb & Kasiva, explains that registered projects require promoters to upload sanctioned layouts, approved plans, land titles, government approvals, and construction timelines on the RERA portal. RERA requires 70% of collected amounts to be maintained in separate bank accounts for land and construction costs, preventing diversion of buyer funds to other projects. The regulatory framework also mandates that promoters cannot alter sanctioned plans without written consent from at least two-thirds of allottees.
Buyers have multiple avenues for redress when registered projects fail to meet obligations. According to Business Standard reports, buyers can claim full refunds with interest if promoters fail to deliver possession by committed dates. For structural defects within five years of possession, buyers can require promoters to rectify issues without additional costs. Section 59(2) of the Act makes marketing unregistered projects a punishable offense, while buyers can approach consumer forums for deficiency-in-service claims. In serious cases involving project abandonment or fraud, RERA authorities can investigate and issue directions under the Act.
