When a Project's RERA Registration Lapses or Is Revoked: Sections 7 and 8 for Bangalore Buyers
Every registered housing project in Bangalore carries a RERA registration with an end date, and that registration can end in two ways. It can lapse when the date passes without completion, or the Karnataka Real Estate Regulatory Authority (K-RERA) can revoke it for the promoter's misconduct. This guide explains sections 7 and 8 of the Real Estate (Regulation and Development) Act, 2016, which govern both events, and what a flat buyer keeps when either happens.
How a Registration Ends
Section 5 of the Act ties the life of a registration to the completion period the promoter declared when applying. That date appears on the project's K-RERA record, and the registration runs until then. Section 6 allows more time in two cases: a force majeure event, or reasonable circumstances without default by the promoter, capped at one year in total.
A registration that reaches its end date without completion, and without an extension, has lapsed. Revocation is different in kind. It is a decision the Authority takes against a promoter, during the life of the registration, after a formal process.
The table below sets the three events side by side.
| Event | Section | What causes it | What follows |
|---|---|---|---|
| Extension | 6 | Force majeure, or reasonable circumstances without promoter default | More time; the project carries on under the same promoter |
| Lapse | 5 and 8 | The registered period ends and the project is incomplete | The Authority may arrange for the remaining work under section 8 |
| Revocation | 7 and 8 | Default, breach of approval terms, unfair practice or fraud | Promoter barred, project account frozen, remaining work arranged |
Grounds for Revocation Under Section 7
The Authority may start revocation in three ways: on a complaint, on its own motion, or on the recommendation of the competent authority that approved the plans. A buyer or an association of buyers is therefore able to set the process in motion. The Authority must then be satisfied that at least one ground in section 7(1) exists.
The four grounds are:
- The promoter defaults on something the Act, the rules or the regulations require.
- The promoter breaks a term or condition of the approval granted by the competent authority.
- The promoter is involved in an unfair practice or irregularity.
- The promoter indulges in a fraudulent practice.
The Act defines unfair practice with marketing in mind. It covers a false claim that the services meet a particular standard, a claim to an approval or affiliation the promoter lacks, and a misleading statement about what is on offer. It also covers an advertisement or prospectus for services the promoter does not intend to provide.
The 30-Day Notice and the Middle Path
Revocation is never instant. Section 7(2) requires the Authority to give the promoter at least thirty days' written notice that sets out the grounds. The Authority must then consider any reply the promoter files within that period before it decides.
Section 7(3) gives the Authority a middle path. In place of revoking, it may let the registration continue subject to further terms and conditions imposed in the interest of the allottees. Those conditions bind the promoter. In practice this route keeps the same builder on site while tightening the rules the builder works under.
What Revocation Triggers
Once a registration is revoked, section 7(4) sets out a fixed sequence, and most of it is mandatory.
- The promoter is barred from accessing the Authority's website for that project.
- The promoter's name goes on the list of defaulters, with a photograph displayed on the website.
- Regulatory authorities in other states and union territories are informed.
- The bank holding the project's separate account is directed to freeze it.
- The Authority facilitates the remaining development work under section 8.
The account freeze matters most to buyers. Seventy percent of the money collected from allottees must go into that separate account, to be used only for land and construction costs of the same project. Freezing it keeps the balance out of the promoter's reach, and the Authority may release it later to fund the remaining work. The Authority may also issue any further direction it considers necessary to protect allottees.
Who Finishes the Project Under Section 8
Section 8 applies to both a lapse and a revocation. The Authority may consult the state government and decide how the remaining development work is to be carried out. The Act names the competent authority and the association of allottees as possible routes, and leaves room for any other manner the Authority determines.
Two safeguards are built into the section. An order under section 8 takes effect only after the appeal period has run, so the promoter has time to approach the Appellate Tribunal. Where the registration was revoked, the association of allottees has the first right of refusal to carry out the remaining work.
That right is why an organised association matters. A group with a registered body, a list of members and their payment records is in a position to accept the work, appoint a contractor and deal with the Authority. Scattered buyers have the same right on paper and far less ability to use it.
What the Buyer Keeps
A lapse or revocation changes the promoter's standing with the regulator. It leaves the buyer's agreement for sale and the rights under the Act in place. Three of those rights matter most:
- Refund with interest and compensation under sections 18 and 19(4), where the promoter is unable to give possession because the registration was suspended or revoked.
- Interest for every month of delay, for a buyer who chooses to stay in the project until handover.
- The right to complain to K-RERA under section 31 about any breach of the Act by the promoter.
In Karnataka the interest rate for both refund and delay is the State Bank of India's highest marginal cost of lending rate plus 2%. The possession date that counts for these claims is the one in the buyer's own agreement for sale. A changed date on the project's registration leaves that agreed date as it was.
Steps for a Buyer in an Affected Project
A buyer who hears that a registration has lapsed, or that revocation proceedings have begun, should work from documents, in this order:
- Open the project's record on the K-RERA portal and read the status, the registered end date and any extension granted.
- Read the order or notice itself, to see whether it is an extension, conditions under section 7(3) or a revocation.
- Collect the agreement for sale, every receipt, the demand letters and the loan statement.
- Join the association of allottees, or help form one, and keep a record of members and amounts paid.
- Decide between staying for completion and withdrawing with a refund, and file the claim with K-RERA.
- Take advice from a property lawyer before signing any settlement or a new agreement with another developer.
The choice in step five depends on how much of the building is complete and how much money remains in the project account. A tower at finishing stage with an active association is often worth staying for. A project that has barely left the ground makes the refund route more realistic, though recovery from a promoter in default takes time.
Checks Before Booking
The same sections give a buyer three checks to run before paying a booking amount. Compare the registered completion date with the possession date the sales team quotes. Look at whether the project has already taken an extension, and how far construction has moved since.
The third check is the promoter's other projects on the portal. A history of lapsed registrations or pending complaints is a reason to ask harder questions. For help reading these records for a shortlisted project, reach us through the contact page.
