Short answer: Under the Madras High Court’s reading of Section 3(2)(a) of the RERA Act, a project is exempt from registration if either the land does not exceed 500 square metres or the project has no more than eight apartments across all phases. Exceeding 500 sq. m. does not by itself trigger registration.
Developers of small residential projects often assume that a plot above 500 sq. m. must be registered under the Real Estate (Regulation and Development) Act, 2016. The Madras High Court has held otherwise.
What Section 3(1) of the RERA Act Requires
Section 3(1) bars a promoter from advertising, marketing, booking, selling or offering for sale any plot, apartment or building in a real estate project without first registering it with the Real Estate Regulatory Authority.
What Section 3(2)(a) Exempts
Registration is not required:
where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases.
The appropriate Government may lower these thresholds if it considers it necessary.
Does “Or” Mean Either Condition Is Enough?
The provision contains two conditions:
- Land area not exceeding 500 square metres; or
- Not more than eight apartments, inclusive of all phases.
If “or” is read conjunctively, a project on 510 sq. m. needs registration even with six apartments. If it is read disjunctively, meeting either condition is enough.
Madras High Court: Devinarayan Housing v. Manu Karan
In M/s. Devinarayan Housing and Property Developments Private Limited v. Manu Karan & Others (C.M.S.A. Nos. 23 and 24 of 2020, decided 20.09.2023), the developers’ project had eight apartments on land exceeding 500 sq. m. The Tamil Nadu Real Estate Appellate Tribunal ruled against them. The High Court set that decision aside and held that:
- The two conditions in Section 3(2)(a) are independent and disjunctive.
- Satisfying either one is sufficient for exemption.
- Allottees of an exempt project cannot seek redress before the Real Estate Regulatory Authority or the Adjudicating Officer under the Act.
Supreme Court Proceedings
The judgment was challenged in SLP (Civil) Nos. 25976–25977 of 2024. The Supreme Court dismissed the petitions on 04.11.2024, and a review petition was dismissed on 06.05.2025.
A dismissal of an SLP without reasons is not a declaration of law by the Supreme Court. The Madras High Court’s interpretation stands undisturbed and is highly persuasive in Tamil Nadu, but other High Courts may view the question differently.
Example
A promoter owns a plot slightly above 500 sq. m. and plans a building with six apartments.
| Condition | Status |
|---|---|
| Land not exceeding 500 sq. m. | Not met |
| Apartments not exceeding eight | Met |
On the Madras High Court’s reasoning, meeting the second condition is enough for exemption.
Practical Points for Developers
- “Inclusive of all phases”: the eight-apartment limit covers the whole development. Phasing to stay under the cap does not work.
- No RERA forum for buyers: disputes on exempt projects go to civil courts or consumer commissions, not the RERA Authority.
- Check state rules: the proviso allows governments to lower thresholds, so verify current notifications.
- Keep records consistent: the sanctioned plan, marketing material and sale documents should all reflect the same apartment count.
Frequently Asked Questions
Is RERA registration mandatory for projects above 500 sq. m.?
Not necessarily. Under the Madras High Court’s interpretation, a project with no more than eight apartments is exempt even if the land exceeds 500 sq. m.
What is the RERA exemption limit for apartments?
Section 3(2)(a) exempts projects where the number of apartments does not exceed eight, inclusive of all phases.
Can buyers complain to RERA about an exempt project?
According to the Madras High Court, no. Allottees of exempt projects cannot approach the Authority or Adjudicating Officer under the Act.
Does the Supreme Court ruling settle the issue?
The Supreme Court dismissed the SLPs and the review, but dismissal without reasons is not a law-declaring judgment. The High Court’s ruling stands, and its weight is strongest in Tamil Nadu.
Can the State change the thresholds?
Yes. The proviso to Section 3(2)(a) lets the appropriate Government reduce them.
Conclusion
Section 3(2)(a) gives two separate routes to exemption, and meeting either one is enough. Before deciding not to register, confirm current state rules and the latest case law, and take project-specific advice.
This post is for general information only and is not legal advice.