RERA and Farmland: Section 3 Exemption Explained

What RERA Actually Regulates

RERA was enacted to fix a specific, well-documented problem: buyers paying for under-construction apartments with no enforceable delivery timeline, no escrow protection for their money, and no single regulator to complain to. Its core mechanism is registration — a promoter cannot advertise, market, book, sell or offer for sale any plot, apartment or building forming part of a "real estate project" without first registering that project with the state's Real Estate Regulatory Authority (Section 3(1)), and must then deposit a defined share of buyer receivables (Section 4 requires at least seventy per cent, unless the state authority permits a lower figure for a specific project) into a separate escrow account earmarked for construction costs and land costs, file quarterly project updates, and disclose the sanctioned layout, timeline and promoter details on the public registration record. None of that machinery exists to regulate a farmer selling their own field to a neighbour, and RERA was never drafted with that transaction in mind — which is exactly why the statute's own definitions, not a general sense of "is this a big real-estate thing," decide whether it applies to any given farmland transaction.

That distinction matters commercially as much as legally. A genuinely RERA-registered project gives a buyer real, enforceable protections — the escrow discipline above, a defined possession date with penalty interest for delay, and a regulator to approach if either is breached. A scheme that should be registered but isn't gives the buyer none of that, regardless of how the marketing describes it. Conversely, a raw parcel correctly outside RERA's scope was never meant to carry those protections in the first place, because there is no construction timeline or phased delivery for the escrow mechanism to attach to. Neither situation is inherently a red flag — but describing the second as though it were the first, or the first as though a formal exemption had been claimed and granted, both misstate what actually happened.

"Real Estate Project" and "Promoter": The Definitions That Decide Everything

Two definitions in Section 2 of RERA do all the real work, and both are broader than most people assume — broad enough to reach a plotted land scheme with no built structure at all. Section 2(zn) defines "real estate project" to include "the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartments... for the purpose of selling all or some of the said apartments or plots or building," and expressly includes "the common areas, the development works, all improvements and structures thereon." Note what that wording does not require: it does not require a building at all. Land developed into plots, for the purpose of selling those plots, is a "real estate project" on its own terms, whether or not a single structure is ever built on it.

Section 2(zk) defines "promoter" to include, among several categories, "a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon." Read together, these two definitions are the reason a land-only, no-construction plotting scheme cannot assume it's outside RERA simply because nothing is being built — the "project" and "promoter" definitions are triggered by subdivision-for-sale, not by construction. This is the opposite of the intuition most sellers carry into a farmland scheme, and it's the single most important thing to get right before assuming any exemption applies.

Section 3(2)(a): The Exemption Itself

Section 3(1) states the general rule: no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase, any plot, apartment or building in any real estate project without first registering it with the Authority, in whichever state the project is located (ongoing projects at the Act's commencement were given a three-month window to register). Section 3(2) then carves out specific exemptions from that requirement. Sub-clause 3(2)(a) — the one that matters here — exempts a project "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," with a proviso allowing the appropriate government, "if it considers necessary," to reduce either threshold by notification (never raise it). A separate explanation makes clear that where a project is developed in phases, every phase is treated as a standalone real estate project requiring its own registration assessment. Sub-clauses 3(2)(b) and (c) separately exempt projects that already had a completion certificate before RERA commenced, and work that is purely renovation, repair or re-development without new marketing, advertising, selling or allotment.

The area figure (500 m²) works out to roughly 0.124 acres — genuinely small by farmland or even farmhouse-plot standards, which is exactly why the second limb, the apartment/unit count, matters as much or more for a plotted scheme; a scheme with, say, twelve half-acre farm plots would fail the area limb by a wide margin regardless of unit count, while a scheme with six large plots on many acres could still satisfy the apartment-count limb even though its land area is large. This is precisely where the ambiguity in the statute's own drafting starts to bite: the sub-clause uses the word "or" to join the two conditions, and whether that "or" should be read literally (either condition alone is enough to exempt the project) or effectively as "and" (both conditions must be satisfied together) has produced genuinely opposite rulings from different state authorities and tribunals — covered in full below, because it is not a settled, uniform national answer, whatever a given state's own developers may tell a buyer.

Raw Agricultural Land: Usually Outside RERA Entirely

Before the Section 3(2)(a) exemption even becomes relevant, a raw agricultural parcel — undivided, unconverted, with no layout plan and no marketing to multiple buyers — generally fails to meet the "real estate project" definition in the first place, for the reason covered above: there's no development of land into plots for sale, so Section 2(zn) is never triggered. This isn't just an inference from the definition text; it has been tested. In Mohammed Zain Khan v. Emnoy Properties India, the Maharashtra Real Estate Appellate Tribunal (MREAT) held that a "real estate project" as defined under Section 2(zn) contemplates the development of land into plots or apartments, and that undeveloped agricultural land that had never obtained Non-Agricultural (NA) permission from the competent authority — and had no layout or development works — did not meet that definition. The Tribunal found the complainant had "utterly failed to establish that the said land had all necessary N.A. or other permissions," and on that basis the land fell outside RERA's jurisdiction.

The practical reading of that ruling for a marketplace like Farmland India: a single raw agricultural parcel, sold as one undivided unit by its owner with no plotting, no marketed layout, and no promised infrastructure, is very likely to sit entirely outside RERA's scope — not because of the Section 3(2)(a) size exemption, but because it never becomes a "real estate project" to which that exemption, or the registration requirement it's an exemption from, would even apply. That distinction matters for how a listing is described: calling such a parcel "RERA-exempt" implies RERA applied and an exemption was claimed, when the more accurate statement is that RERA's registration requirement was never triggered in the first place. The two are legally different claims, and conflating them is a compliance risk worth avoiding in any listing copy or Trust Score explanation.

Plotted and "Managed" Farmland: Where the Line Actually Sits

The moment agricultural land is subdivided into plots and marketed for sale to more than a handful of buyers, the analysis changes, and this is precisely the category most commercially relevant to Farmland India's own developer listings — plotted farm-estate schemes and "managed farmland" or "agri-estate" projects that sell parcels typically between roughly half an acre and two acres, sometimes bundled with optional managed farming services. Two separate factors push such a scheme toward RERA-registrable territory, and either one alone can be enough:

• Infrastructure and common-amenity commitments. Where a developer promises internal roads, boundary walls, drainage, electricity or water connections, a clubhouse, a shared orchard, security, or any other common facility as part of the sale, that is a development commitment layered on top of the land itself — and Section 2(zn)'s inclusion of "common areas, the development works, all improvements and structures thereon" in the definition of "real estate project" is drafted specifically to catch this. A scheme marketed as "farmland" with a gated boundary wall and a shared clubhouse is, functionally, no different from a plotted residential layout for this purpose.
• Marketing and sale to multiple buyers as a single scheme. The Section 2(zk) "promoter" definition is triggered by developing land into a project "for the purpose of selling to other persons all or some of the plots" — it does not require construction, only subdivision plus a sale intent aimed at multiple purchasers under one scheme.

Where a scheme falls on the more permissive side of this line, the clearest authoritative guidance comes from Maharashtra rather than a pan-India source: MahaRERA's own circular (October 2019) on plotted developments distinguishes a pure plotting scheme — where the developer obtains the necessary layout approvals, demarcates a plotting scheme, and then sells open, undeveloped plots with no structure and, on MahaRERA's reading, no infrastructure commitment of its own — from a project where the developer takes on development-works obligations. MahaRERA's circular treats the former as materially different from a full real estate project, though this is a state authority's own circular rather than a binding, pan-India rule, and we could not confirm that every state RERA authority in Farmland India's corridor (Rajasthan, Haryana, Uttar Pradesh, Uttarakhand, Himachal Pradesh, Punjab) has issued an equivalent clarification — flagged plainly rather than assumed.

A second, separate line of tribunal reasoning matters just as much commercially: promoters cannot escape the Section 3(2)(a) exemption thresholds by splitting one commercially unified project across multiple, separately-owned adjoining land parcels, each individually kept under the 500 m² / eight-unit line. The Rajasthan Real Estate Appellate Tribunal addressed this directly in Kundan Lal v. Harish Jasuja & Ors. (Appeal No. 66/2022 and connected appeals, decided 2026), rejecting a promoter's argument that a commercial complex marketed and sold as one project — "City Trade Center" — was exempt because it sat across separately-owned adjoining parcels. The Tribunal reasoned that allowing such exemption "would... frustrate the very purpose" of RERA, since "two or more... persons... may... claim... exemption" through artificial subdivision of ownership, and held that a project must be assessed by how it is marketed to purchasers as a single scheme, not by its underlying land-ownership structure. Although this was a commercial-complex case rather than a farmland one, the reasoning applies with equal force to a farmland or agri-estate scheme marketed as a single development across parcels that happen to be held under separate title — the marketing unity, not the ownership paperwork, is what a tribunal will look at.

State RERA Authorities and the "Or" Split

Because Section 3(2)(a)'s two conditions are joined by "or," and RERA is implemented state-by-state through each state's own Real Estate Regulatory Authority, different authorities and appellate tribunals have read that single word in opposite ways — and this is a genuinely unsettled, actively litigated question, not a technicality. On one side, a disjunctive reading treats either condition alone as sufficient for exemption: Maharashtra (following the Geetanjali Aman Constructions tribunal order and MahaRERA's own Order 62/2024), Goa (a 2023 circular and the Deepti Agarwal v. Isprava Vesta ruling), Odisha (a 2021 order), and the Madras High Court for Tamil Nadu (a September 2023 ruling that overturned an earlier conjunctive reading) have all taken this position — meaning, for example, a project under 500 m² but with more than eight units can still qualify for exemption in these states. On the other side, a conjunctive reading requires both conditions to be satisfied together, so exceeding either one alone triggers mandatory registration: this is the position taken in West Bengal (a September 2024 government circular), Bihar (Birendra Kumar Singh v. M/s Arya Building Construction Pvt Ltd, August 2021), Delhi (an April 2022 public notice, illustrated with the example that six flats on a 501 m² plot would require registration), Telangana, and — directly relevant to this corridor — Rajasthan, via both a March 2022 office order and the same Kundan Lal v. Harish Jasuja tribunal reasoning discussed above, which treated "or" as functioning like "and" in this restrictive statutory context.

For Farmland India's own six-state corridor, this leaves a genuinely mixed and partly unconfirmed picture, laid out plainly rather than filled in with a guess:

This gap is the single most important research flag in this article. Five of the corridor's six states have no confirmed published position located during this research — which does not mean no position exists, only that it was not found in the sources available. Given that a conjunctive reading (Rajasthan's confirmed position) is meaningfully stricter than a disjunctive one, and that Rajasthan is itself a core corridor state, the safe working assumption for any Farmland India listing anywhere in the corridor should be the stricter, conjunctive reading until a state-specific circular or ruling says otherwise for that state — treat a project as needing registration if it fails either threshold, not only if it fails both. Confirm the current position with the relevant state RERA authority or a locally licensed real estate lawyer before relying on an exemption claim for an actual listing.

What This Means for a Marketplace Like Farmland India

This isn't an abstract legal question for Farmland India specifically, because the platform's own Trust Score model scores a developer project against a weighted "RERA status" pillar as one of its criteria alongside legal documentation, track record, financial standing, site quality and buyer feedback. Getting the RERA analysis above right, listing by listing, has direct implications for how that pillar — and any related claim in listing copy — should be worded:

• A raw, single agricultural parcel should not be scored or described as though a RERA exemption was affirmatively claimed and granted; the accurate description is that RERA's registration trigger was never engaged, per the MREAT reasoning above, and the listing copy should reflect that distinction rather than imply an exemption was actively sought.
• A plotted or managed-farmland scheme with any infrastructure or common-amenity commitment should be evaluated against the "real estate project" and "promoter" definitions directly, not waved through as farmland by default — and where it should be RERA-registered in its state, the Trust Score RERA pillar should reflect an unregistered status honestly rather than treating "it's farmland" as a substitute for an actual registration check.
• A scheme spanning multiple, separately-titled parcels marketed as one development should be assessed as a single project for RERA purposes, consistent with the Rajasthan tribunal's reasoning on project-splitting, regardless of how the underlying land titles are structured.
• Never describe any project's RERA status using "Verified" — Farmland India's own certification language is "Farmland India Reviewed," and RERA status specifically should be stated as what was actually confirmed (a registration number checked against the state RERA portal, or a documented basis for exemption), not as a platform-level guarantee that a project is legally compliant.

None of this article constitutes legal advice, and the RERA-applicability judgment call on any specific listing — especially anything structured across multiple parcels, or bundling any shared infrastructure — is exactly the kind of determination that should get sign-off from Farmland India's own legal reviewer before a Trust Score or listing description makes a claim either way.

A Practical Checklist Before Listing or Buying

1. Is the land a single, undivided agricultural parcel, or subdivided into plots? Subdivision-for-sale is what triggers the "real estate project" analysis at all.
2. Has NA (Non-Agricultural) permission or an equivalent conversion order been obtained? Its absence supported the MREAT finding that a scheme fell outside RERA in the case discussed above — but its presence, combined with subdivision, moves a scheme toward the project definition, not away from it.
3. Does the seller or developer promise any infrastructure or shared amenity — roads, boundary wall, drainage, clubhouse, shared orchard, security — however modest?
4. Is the scheme marketed as a single development, even if it sits across separately-titled parcels? Marketing unity, not title structure, is what a tribunal will look at.
5. If the analysis above suggests a real estate project: does it exceed 500 m² of developed land, or 8 units across all phases? If either is exceeded, treat registration as required under the safer, conjunctive reading discussed above, particularly for a Rajasthan-based project.
6. If RERA registration applies, has it actually been obtained? Check the registration number directly against the relevant state RERA authority's public portal rather than relying on a developer's own claim.

Common Mistakes

• Assuming "farmland" is a RERA-exempt category by name. RERA doesn't exempt land by label — it exempts (or fails to reach) transactions based on the "real estate project" definition and the Section 3(2)(a) size test, neither of which mentions agricultural land specifically.
• Assuming the 500 m² / 8-unit exemption works the same way in every state. The disjunctive/conjunctive split is real, documented, and — for this corridor — confirmed only for Rajasthan (conjunctive). Applying a disjunctive assumption borrowed from a Maharashtra example to a Rajasthan project is a genuine compliance risk.
• Treating a no-construction plotting scheme as automatically outside RERA. Section 2(zn)'s definition of "real estate project" explicitly includes "development of land into plots... for the purpose of selling," with no requirement that a structure be built.
• Splitting one marketed scheme across separately-owned parcels to stay under the threshold. Tribunals look at how a project is marketed to buyers, not how its underlying land titles are divided — see the Rajasthan project-splitting ruling above.
• Calling a project "Verified" for RERA purposes. Farmland India's own certification term is "Farmland India Reviewed" — "Verified" is never used as if it were the platform's own compliance guarantee.

How Farmland India Helps

Farmland India's Trust Score model weights RERA status as one of six scored pillars for developer projects, alongside legal documentation, track record, financial standing, site quality and buyer feedback — and, per the distinctions worked through in this article, that pillar reflects an actual registration check where RERA applies, rather than a blanket assumption that a farmland-labelled scheme is exempt by default. Every project listing carries a Farmland India Reviewed status built on that documented check, not a generic "Verified" claim.

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