Knowledge Hub
The Informed Consultant
Passing the exam gets you certified. Knowing the law makes you the agent clients actually trust. The sections that matter, in plain language — with real scenarios, penalty figures, and a checklist you can use before any transaction.
RERA Act 2016 Karnataka RERA Rules Agent Duties Buyer Rights Due Diligence Stamp Duty
Numbers every agent must know
70%
Designated account
Of all money collected must go into a separate bank account for that project only
10%
Max advance
Maximum a promoter can collect before signing a registered agreement for sale
5 yrs
Defect liability
Promoter must fix structural defects reported within 5 years of possession at no cost
2/3
Plan changes
Two-thirds of allottees must consent in writing before any plan alteration
60 days
Appeal window
Time to appeal a Karnataka RERA Authority order to the Appellate Tribunal (the Appellate Tribunal)
30 days
Auto-registration
If Authority doesn't act on a registration application in 30 days, project is deemed registered
₹10K/day
Agent penalty
Daily penalty for an unregistered agent, up to 5% of property cost
MCLR+2%
Delay interest
Rate at which promoter pays interest to buyer for every month of possession delay
1 month
Conveyance deed
Promoter must execute registered conveyance deed within 1 month of OC issuance
92
RERA sections
The RERA Act 2016 has 92 sections across 10 chapters. Full force from 1 May 2017
8 units
Exemption limit
Projects with =8 units AND ≤500 sq.m. plot area are exempt from RERA registration
6%
Stamp duty (MH)
Karnataka stamp duty on residential property. Women buyers get 1% concession (5%)
Know your sections
§ 3
Mandatory registration
Every real estate project above the exemption threshold must be registered with RERA before marketing or selling even a single unit.
The exemption applies only when BOTH conditions are met simultaneously: ≤8 apartments AND ≤500 sq.m. plot area. If either condition is not met, registration is mandatory. Ongoing projects (without OC before May 1, 2017) had to register by July 31, 2017. Selling in an unregistered project attracts Section 59 penalty — up to 10% of project cost.
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§ 4
The 70% rule
70% of all money collected from buyers must go into a separate designated bank account — ring-fenced for that project's land and construction costs only.
This is one of RERA's most important protections for buyers. The promoter cannot touch this money for any other purpose — not marketing, not salaries, not other projects. Withdrawals must be certified by an engineer, architect, and Chartered Accountant proportionate to construction completed. Using this account for any other purpose attracts Section 61 penalty.
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§ 9
Agent registration is mandatory
No real estate agent can facilitate a sale or purchase in any RERA-registered project without their own Karnataka RERA registration.
This applies to all agents — individual brokers, firms, online platforms. The registration requires passing the IBPS certification exam, which is why this product exists. An unregistered agent faces ₹10,000/day penalty (Section 62), accumulating to a maximum of 5% of the property value. A registered agent who facilitates transactions in an unregistered project also violates Section 9(2).
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§ 13
10% advance cap
A promoter cannot collect more than 10% of the property cost as advance before executing and registering a formal agreement for sale.
This protects buyers from paying large advances informally before signing anything. The registered agreement for sale must clearly state the carpet area, price, payment schedule, and possession date. Any amount collected above 10% before registration is a direct violation of Section 13(1). As an agent, you should flag this to buyers immediately if a promoter asks for more upfront.
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§ 14
What was promised must be delivered
The promoter must deliver exactly what was agreed in the registered agreement — same carpet area, same specifications, same amenities.
If carpet area delivered is less than agreed, the buyer gets a proportionate refund at the agreed per sq.ft. rate — even after accepting possession. Plan changes require two-thirds allottee written consent. Structural defects within 5 years of possession must be rectified free of cost (Section 14(3)). This section is the basis for most buyer complaints about builders not delivering what was promised.
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§ 18
Buyer's remedy for delay
If possession is delayed, the buyer can either stay in the project and earn monthly interest at SBI MCLR+2%, or withdraw and get their full money back with interest.
The same interest rate applies symmetrically — if the buyer delays payment to the promoter, they also pay MCLR+2%. Section 18(3) also gives compensation for defective title. This is one of the most commonly invoked sections in Karnataka RERA complaints. As an agent, help your buyer calculate what their delay interest should be — it can be significant on large payments.
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§ 79
Civil courts are barred
Any dispute covered by RERA cannot be filed in a civil court — it must go to the RERA Authority or Adjudicating Officer.
This is important for both buyers and agents to understand. A buyer trying to file a civil suit against a promoter for a RERA matter will have the suit returned — civil courts have no jurisdiction. The correct forum is Karnataka RERA (the official Karnataka RERA portal). Appeals from Karnataka RERA go to the Appellate Tribunal. Only after exhausting these remedies can High Court jurisdiction be invoked.
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Real conversations — what to say when clients ask
Buyer asks The builder is asking for 15% advance before signing anything. Is that okay? —
What to tell them
No. Under Section 13(1) of the RERA Act, a promoter cannot collect more than 10% of the property cost as advance before executing and registering a formal agreement for sale. Anything above 10% before the registered agreement is a direct violation of the law. You should ask the builder to reduce the advance to 10%, sign the agreement, and only then collect further payments as per the registered payment schedule. If the builder refuses, that is a red flag about how this project will be managed.
Buyer asks The builder is 8 months late on possession. What are my options? —
What to tell them
You have two clear options under Section 18. First — stay in the project and claim monthly interest at SBI's highest MCLR rate plus 2% for every month of delay, starting from the agreed possession date. This interest is payable by the promoter until actual possession is given. Second — withdraw completely and claim the entire amount paid plus the same interest rate calculated from the date of each payment you made. To claim either, file a complaint on the official Karnataka RERA portal. The Conciliation Forum is a good first step — it's faster and free.
Seller asks My buyer wants to transfer their booking to someone else. Can they do that? —
What to tell them
Yes — under Section 15, an allottee can assign their booking to a third party, but only with your prior written consent as the promoter. You cannot unreasonably withhold this consent. The assignment also needs to be properly documented and, in practice, the buyer and the new assignee both need to execute a tripartite agreement. As the agent facilitating this, make sure all three parties sign, the original agreement for sale is noted, and stamp duty on the assignment is paid as applicable.
Buyer asks The builder showed me 1,200 sq.ft. but I'm seeing carpet area is only 780. What's the difference? —
What to tell them
The 1,200 sq.ft. is the super built-up area — it includes your carpet area plus your share of common areas like lobbies, staircases, lifts, and the building structure. The 780 sq.ft. carpet area is what you actually use exclusively — net usable floor area plus internal partition walls, but excluding balconies, external walls, and common areas. Under RERA, all pricing and agreements must be on carpet area basis only. So work out the per sq.ft. carpet area rate: total price divided by 780. Compare that to other projects using the same carpet area basis — it is the only honest comparison.
Both ask The project's Karnataka RERA registration shows "Expired." Should we proceed? —
What to tell them
No. Do not proceed. A project with an expired RERA registration cannot be legally marketed or sold — and as a registered agent, facilitating a transaction in an expired-registration project is a violation of Section 9(2), which could put your own registration at risk. Tell your client to wait until the promoter successfully renews or extends the registration on the Karnataka RERA portal. If the promoter says it is "just a procedural issue," ask them to show you the active registration before any booking amount is paid. Until that registration shows as current and valid, the transaction should not proceed.
Penalties at a glance
Offence
Section
Penalty
Promoter fails to register project
Section 59(1)
Up to 10% of project cost
Promoter continues non-registration
Section 59(2)
Up to 3 yrs imprisonment
False information at registration
Section 60
Up to 5% of project cost
Other promoter contraventions
Section 61
Up to 5% of project cost
Unregistered agent
Section 62
₹10K/day — max 5%
Non-compliance with Authority order
Section 63
₹10K/day — max 10%
Non-compliance with Tribunal order
Section 64
Up to 3 yrs + 10% fine
Agent violates Authority order
Section 65
₹10K/day — max 5%
Due diligence checklist — before any transaction
Verify project Karnataka RERA registration is current and valid at the official Karnataka RERA portal
Check project's quarterly updates — is construction progress matching reported status?
Search Karnataka RERA complaint database for any active complaints against this project or promoter
Verify land title — obtain Property Card (urban) or 7/12 extract (rural) from City Survey Office
Check Encumbrance Certificate from Sub-Registrar — any mortgages, charges, or court attachments?
Confirm Commencement Certificate and all statutory approvals are in place
Verify advance payment does not exceed 10% before registered agreement for sale is executed
Confirm all pricing is on carpet area basis — calculate and compare per sq.ft. carpet area rate
Check promoter's track record — any past project delays, incomplete projects, or RERA violations?
Calculate stamp duty and registration charges — buyer should be prepared for this cost at possession
Quick tools
Stamp duty calculator
Karnataka residential property. Calculates on higher of transaction value or ready reckoner.
Estimated total cost
Loading % calculator
See how much of what you're paying for is actually yours to use exclusively.
Loading percentage
Delay interest calculator
How much interest is a buyer owed for delayed possession? (MCLR+2% = approx 10% p.a.)
Interest claimable (approx.)
Max built-up area (FSI)
Calculate maximum permissible construction on a plot.
Max built-up area
Exam Preparation Resources
Karnataka RERA Question Papers RERA Mock Test Exam Pattern Practice Test