Examining The Distinction Between Liability Of Landowners And Project Developers Under RERA

The Real Estate (Regulation and Development) Act, 2016 (RERA Act) has ushered in greater accountability and discipline across India's real estate sector, addressing long-standing issues such as project delays, lack of transparency, and developer fraud and malpractice.

The Act seeks to regulate all major stakeholders in the country's real estate ecosystem (builders, promoters, real estate agents, and brokers) through specified disclosures and other requirements, as well as imposition of sanctions in the event of default, etc. One of the persistent issues under the RERA framework is the uncertainty around liability of landowners arising from failure of project developers in honoring their commitments and claims. This note seeks to analyse the legal basis and practical consequences of such liability, with a focus on whether and when landowners may be treated as 'promoters', as defined under Section 2(zk) of the RERA Act.