When the registration of a stalled real estate project lapses or is revoked, RERA moves the problem from the promoter's desk to the Authority's. Section 8 of the Real Estate (Regulation and Development) Act 2016 lets the Authority, after consulting the State Government, have the remaining development carried out by the competent authority, by the association of allottees or in any other manner it decides, and on revocation the association has the first right of refusal over that work. A lapse does none of this on its own. Somebody has to ask, and the buyers who ask have to be organised.
Part of the RERA and homebuyer disputes practice at S Jain & Attorneys, Bangalore.
This guide is for a buyer in a Bengaluru project where work stopped long ago, the registration has run out on the K-RERA portal and the promoter answers nothing. It does not cover projects that were never registered.
The registration has lapsed on the portal: what does that actually change?
A lapsed registration means the completion period declared under Section 4(2)(l)(C), plus any extension under Section 6, has run out without a completion certificate, and Section 5(3) makes the registration valid only for that declared period. The promoter can no longer lawfully advertise, book or sell in the project (Section 3(1)). The Authority's duty under Section 8 is triggered by the word "lapse" itself. And every buyer's refund right under Section 18 is already ripe, because the agreed possession date passed long before the registration did.
Section 6 allows an extension for force majeure or in reasonable circumstances without default by the promoter, never beyond one year in aggregate, and an extension is a regulatory event, not a contractual one: on 4 June 2026, in Complaint 00174/2024 (Bench 4), the Authority held that it "pertains to the regulatory status" of the project and "cannot automatically extinguish the statutory rights" of an allottee under Section 18. In September 2026 the K-RERA portal listed 2,991 lapsed projects, 2,858 with expired completion dates against 979 extensions approved, and 107 registrations withdrawn or revoked. Lapse is common. Revocation is rare. The two unlock different things.
| Status on the portal | What it means in law | What it unlocks for buyers |
|---|---|---|
| Valid | Inside the declared period or a Section 6 extension. | Refund or delay interest under Section 18 once the agreed date passes. Complaint under Section 31. |
| Lapsed | Period and extension expired, no completion certificate. Section 3(1) bars further sales. The Section 8 duty arises. | A Section 7 notice, a Section 35 inquiry into the account, interim restraint under Section 36, action under Section 8. |
| Revoked | Order under Section 7 after thirty days notice. Section 7(4): defaulter listing, account frozen, remaining works under Section 8. | The association's first right of refusal under the second proviso to Section 8. Refund trigger under Section 18(1)(b). Frozen account money for completion. |
Key takeaway. Lapse is a status and revocation is an order. The Section 8 duty arises on either, but the account freeze and the association's first right of refusal come only with a revocation under Section 7, after thirty days of written notice.
Three points carry the rest of this guide.
Lapse is a status
The portal records that the declared period and any extension have expired. That triggers the Authority's Section 8 duty but takes nothing from the promoter by itself.
Revocation is an order
Section 7 needs thirty days written notice and a hearing. Only then do the defaulter listing, the account freeze and the association's first right of refusal follow.
Refund never waited
The Section 18 refund became due the day the agreed possession date passed. Newtech calls it an unconditional absolute right that does not depend on lapse or revocation.
What can RERA do about a stalled real estate project under Section 7?
Under Section 7 the Authority can revoke the registration, on a complaint, on its own motion or on the competent authority's recommendation, once satisfied that the promoter has defaulted in anything the Act or the Rules require, breached the approval conditions, or engaged in unfair or fraudulent practice. Two years without work is a default on its face, because Section 11(1)(e) requires a quarterly status update and a stalled site cannot file a true one. Section 7(2) sets the floor: thirty days written notice stating the grounds, and consideration of the cause shown. Rule 8 has the outcome communicated in Form D.
Section 7(3) is the provision buyers forget. Instead of revoking, the Authority may keep the registration alive on further conditions "in the interest of the allottees", binding on the promoter, and for a project that is eighty per cent built that can be worth more than a revocation that stops everything. Section 7(4) then debars the promoter, lists him as a defaulter with his photograph, and freezes the separate account under Section 4(2)(l)(D) for later release towards the remaining works under Section 8.
Section 63 prices non-compliance with any order of the Authority at a daily penalty cumulatively up to five per cent of the estimated project cost, and Section 69 extends it to the persons in charge of a company. The Appellate Tribunal applied that pairing on 30 June 2026 in Appeal 33/2025 (Justice J M Khazi, Chairperson, and Santhosh Kumar Shetty N, Judicial Member): an unexecuted recovery certificate is no bar to a fresh penalty complaint against the promoter and its directors.
Can the buyers' association take over and complete the project?
Yes in law, and so far not in any published Karnataka order. Section 8 names the association of allottees as one of the hands through which the Authority may have the remaining development carried out, and its second proviso gives the association "the first right of refusal" over the remaining works where the registration has been revoked. The Authority "may" act, so it is a discretion. It consults the State Government first, and the first proviso to Section 8 holds every direction until the promoter's sixty-day appeal window under Section 44(2) has closed.
Who counts as the association is a question of registration. Rule 2(1)(b) defines it as a collective of the allottees, by whatever name called, "registered under any law for the time being in force", and Section 11(4)(e) obliges the promoter to enable its formation. Karnataka's local law for apartments is the Karnataka Apartment Ownership Act 1972, but it applies only to property whose owner submits it by a registered Declaration under Sections 2 and 13, with bye-laws under Section 16, and in a stalled project that owner is the silent promoter. Buyer groups therefore usually register a society under the Karnataka Societies Registration Act 1960 and rely on the words "under any law". The Explanation to Section 31 then lets the association complain in its own name. The answer on apartment owners association rights covers the built stage.
I looked for a published Karnataka order handing a lapsed or revoked project to its buyers under Section 8, across seventy-nine public K-RERA and K-REAT orders, and found none. What the record does show is the Authority directing associations into existence in delayed projects: the six clubbed complaints led by CMP/220207/0008974, decided on 14 July 2026 by the full bench (Chairman Rakesh Singh and Member Gurijala Ravindranadha Reddy), record that "the Association of Allottees has been constituted pursuant to directions issued by this Authority". Section 8 is a door that stands open in the statute and has not yet been walked through in this State. That is a reason to ask carefully, not a reason to stop asking.
Common mistake. Treating the word "lapsed" on the portal as if the project has already been handed to the buyers. Lapse triggers the Authority's duty to consider Section 8. It hands nothing to anyone until an order is passed, the State Government consulted and the promoter's sixty-day appeal period has run.
What I tell buyer groups is that the refund camp and the completion camp are not opponents, because the two positions can run at the same time. Refund under Section 18 is an individual right exercised on demand. A takeover under Section 8 is a collective outcome the Authority grants or refuses. A buyer who takes a refund stops being a contributor, so the completion camp must know how many contributors remain before it asks for the project. The four figures that decide these matters are the balance in the separate account, the unpaid instalments, the lender's dues and the cost to complete. A group that brings those numbers to the firm's RERA practice is a group the Authority can hand something to.
Where does the money to finish it come from?
From four places, in this order: whatever is left in the project's separate bank account, the instalments buyers still owe under their agreements, fresh contributions the buyers agree to make, and, only once the lender has been dealt with, the unsold inventory.
Section 4(2)(l)(D) requires seventy per cent of every rupee realised from allottees to sit in a separate scheduled bank account, used only for construction and land cost, withdrawn only in proportion to completion as certified by an engineer, an architect and a chartered accountant, and audited every year. On revocation, Section 7(4)(c) freezes that account and then releases it towards completion. The first thing a buyers' group should ask for under Section 35 is the statements and the certificates behind every withdrawal, because the gap between what went in and what the site shows is the case.
The lender is the practical problem. The promoter's declaration under Section 4(2)(l)(B) must disclose every encumbrance, and Rule 15(1)(F)(f) requires the project's portal page to carry "details of mortgage or charge, if any, created on the land and the project". An undisclosed mortgage is false information under Section 4, penalised under Section 60 at up to five per cent of the estimated cost. No provision of the Act lets the Authority extinguish a lender's registered charge. A takeover plan that has not spoken to the lender is not yet a plan.
Should we take a refund instead, and can we get it from a dead promoter?
A refund under Section 18 is the stronger legal right and the weaker practical one. Section 18(1)(a) makes the promoter liable on demand to return the amount received with interest at the prescribed rate where possession is not given by the agreed date, and Section 18(1)(b) adds a second trigger, discontinuance of his business "on account of suspension or revocation of the registration under this Act or for any other reason". The Supreme Court in Newtech Promoters and Developers v State of Uttar Pradesh (11 November 2021) called this an "unconditional absolute right". Nobody has to wait for a lapse: on 28 August 2026, in Complaint 00496/2026 (Bench 4, Chairman Rakesh Singh), the Authority ordered an ex parte refund with interest at the SBI MCLR plus two per cent in a project whose registration ran to 2028 but whose agreed completion date had passed.
The order is worth what the promoter's assets are worth. Section 40(1) makes the amount recoverable as arrears of land revenue, and the portal's recovery list in September 2026 showed 2,603 recovery certificates issued and 343 recovered. The guide on builder delay and recovering compensation walks through that machinery.
When the promoter's balance sheet is the problem, the insolvency route is collective by design. A joint petition under Section 7 of the Insolvency and Bankruptcy Code needs at least one hundred allottees of the project or ten per cent of them, whichever is less, as the guide on a homebuyers' NCLT plea explains. In the Devanahalli batch decided on 14 July 2026, the NCLT had admitted the promoter into insolvency on 10 June 2026, and the Authority disposed of all six complaints, including the association's, because the moratorium under Section 14 of the Code bars proceedings against the corporate debtor. Refund, penalty and the Section 8 request all stop at that door, money claims move to Form CA before the resolution professional, and the guide on homebuyer rights when the builder is in insolvency covers what follows. The consumer commission stays open in parallel (see what happens if the builder goes bankrupt) but adds nothing where the promoter has no money.
Deadline warning. Once the NCLT admits a petition against the promoter, the K-RERA complaint stops where it stands and your money claim has to reach the resolution professional within the window the public announcement opens. Watch the NCLT cause list as closely as the RERA one.
How do we organise the buyers so the Authority takes us seriously?
Form one body, give it one authorised signatory and file one complaint under Section 31 with numbered prayers. The Explanation to Section 31 lets the association complain in its own name, Rule 29 sets the form (Form N) and the fee (rupees one thousand).
- Take a census: every allottee, unit, agreement date, promised date, amount paid, home loan and unpaid instalment.
- Download the project's portal page: registration certificate, quarterly updates under Section 11(1)(e), the chartered accountant's certificates and the encumbrance disclosure, with a dated screenshot of the lapsed status.
- Register the association, as a society or under the 1972 Act where a Declaration exists, with a resolution authorising named office bearers.
- Commission an engineer's cost-to-complete report and an accountant's reconstruction of the separate account, and identify the lender from the encumbrance certificate.
- File Form N with numbered prayers: notice under Section 7(2), an inquiry under Section 35, interim restraint under Section 36, a freeze under Section 7(4)(c), action under Section 8 naming the association, and Section 63 penalties for any earlier order ignored.
- Let buyers who want out file their own Section 18 refund complaints at the same time. The tracks do not conflict.
- Diarise the sixty-day appeal window under Section 44(2) after every order and check the NCLT cause list weekly, moving to Form CA if a petition is admitted.
Three disciplines decide whether a buyer group gets anywhere.
Count heads and money
Before any filing, list every allottee, every rupee paid, every bank loan and every unpaid instalment. The Authority, the lender and the NCLT threshold all turn on those numbers.
One complaint, many prayers
File in Form N with the fee of rupees one thousand and ask for the Section 7 notice, a Section 35 inquiry, interim restraint and action under Section 8, in numbered prayers.
NCLT stops the clock
Once a Section 7 IBC petition is admitted, the moratorium halts every K-RERA complaint against the promoter. Money claims then go to the resolution professional in Form CA.
What will this cost and how long will it take?
The statutory fees are small, the technical work is not, and the timeline runs in months for orders and years for completion. A Form N complaint costs rupees one thousand under Rule 29 and an appeal five thousand rupees under Rule 33. The real costs are the engineer's report and the accountant's reconstruction, which run from tens of thousands to a few lakhs of rupees, and professional fees through the hearings, shared across the group. Treat every figure as indicative.
Section 7(2) fixes thirty days of notice before revocation. Section 29(4) asks the Authority to dispose of a matter within sixty days and to record reasons where it cannot, and in practice it usually cannot: the refund decided on 28 August 2026 took four hearings, and Complaint 00959/2024, decided on 11 July 2025, took eight over about eight months. A Section 8 handover, if granted, then starts a construction programme whose length depends entirely on money. Census first, account second, complaint third.
Frequently Asked Questions
Does a lapsed registration cancel my agreement for sale?
No. The agreement is a contract between you and the promoter, and the lapse is a regulatory status of the project. Your rights under the agreement and under Section 18 continue, and the lapse strengthens rather than weakens them.
Can the promoter keep selling flats after the registration has lapsed?
No. Section 3(1) bars advertising, marketing, booking or selling in a project without a registration, and Section 59 makes the breach punishable with a penalty of up to ten per cent of the estimated project cost. Report fresh sales to the Authority with the portal screenshot attached.
Can the promoter revive a lapsed registration?
Rule 7 requires the extension application within three months before expiry and Section 6 caps extensions at one year in aggregate, so a promoter who let the registration lapse years ago has a hard road. Even a granted extension does not extinguish your Section 18 rights, as the Authority held on 4 June 2026.
Do we need a hundred buyers to complain to K-RERA?
No. That threshold belongs to Section 7 of the Insolvency and Bankruptcy Code. A single allottee can file under Section 31 of the RERA Act, and a registered association can file in its own name under the Explanation to that section.
If the association takes over, do we still pay our instalments?
The money the project still needs comes from the separate account, from unpaid instalments and from fresh contributions, so yes in substance, but only into the account and under the arrangement the Authority sanctions under Section 8, never into the promoter's hands.
Does revocation give me an automatic refund?
No. Section 18(1)(b) makes revocation a trigger for the refund right, but you still have to demand it and, if it is not paid, file a complaint and then pursue recovery under Section 40.
What if the promoter is already before the NCLT?
Once the petition is admitted, the moratorium under Section 14 of the Code stops the K-RERA proceedings, as the Authority recorded in July 2026. File your claim with the resolution professional and pursue the project through the committee of creditors instead.
Can buyers of plots use Section 8 too?
Yes. Section 2(zk) treats a person who develops land into plots for sale as a promoter, and Section 8 speaks of remaining development works, which in a plotted layout means the roads, drains and civic amenities rather than towers.
This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.
