In a significant ruling clarifying the scope of the Real Estate (Regulation and Development) Act, 2016, the Telangana RERA Appellate Tribunal has held that construction projects undertaken on land measuring less than 500 square yards do not require mandatory RERA registration, even if disputes arise over the number of flats.
The Tribunal emphasized that under Section 3(2)(a) of the RERA Act, projects are exempt from registration if they meet either of the following conditions:
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The land area is less than 500 square yards, or
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The project comprises fewer than eight flats
The bench clarified that satisfaction of any one condition is sufficient to claim exemption.
Dispute Over Sri Vajra Residency in Nallakunta
The ruling was delivered while hearing cross-appeals in a dispute concerning Sri Vajra Residency in Nallakunta, Hyderabad.
Earlier, the Telangana RERA Authority had directed the developer, RR Construction, to:
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Rectify deficiencies in the apartment complex
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Hand over the Occupancy Certificate (OC) to the association
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Pay a penalty of ₹2,82,276
The order followed a complaint filed by flat owner Veenadhari, who alleged that the developer failed to address agreed issues and did not provide the promised occupancy certificate.
Developer’s Argument Before the Tribunal
Challenging the RERA order, the developer’s counsel argued that:
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The project was built on 459 square yards of land
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The sanctioned plan allowed stilt plus four floors
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The project originally comprised eight flats
The developer maintained that construction was completed as per approved plans. It was further submitted that subsequent internal alterations by the landowner resulted in the division of two floors into additional units, thereby increasing the total number of flats to ten.
According to the developer, such modifications were not part of the original sanctioned project and should not attract RERA compliance.
Complainant’s Stand
The complainant’s counsel contended that:
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Even if the land area was below 500 square yards,
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The existence of ten flats made the project liable for RERA registration.
The argument was that the number of units should determine applicability in such cases.
Tribunal’s Findings and Verdict
The Appellate Tribunal bench — comprising Chairperson A Santosh Reddy, Judicial Member P Pradeep Kumar Reddy, and Administrative Member Chitra Ramachandran — ruled in favour of the developer.
The Tribunal held that:
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Since the project was constructed on land measuring less than 500 square yards,
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The exemption under Section 3(2)(a) applied,
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RERA provisions would therefore not be applicable.
Accordingly, the Tribunal set aside the earlier RERA order, including directions to rectify deficiencies and pay penalty.
Alternative Remedies for Buyers
Importantly, the bench clarified that buyers in projects exempted from RERA are not left without remedy.
It observed that aggrieved purchasers may:
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Approach civil courts, or
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Seek relief before the consumer commission
for dispute resolution.
Legal Significance of the Ruling
This decision provides crucial clarity on the interpretation of Section 3(2)(a) of the RERA Act, confirming that:
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The conditions relating to land area and number of flats are independent and alternative, not cumulative.
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Meeting either threshold is sufficient for exemption.
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RERA jurisdiction cannot be invoked merely because disputes exist, if the statutory exemption applies.
The ruling is expected to impact numerous small-scale residential projects in Telangana, particularly independent apartment developments constructed on limited land parcels.