TG-RERA Warns Against Illegal ‘Pre-Launch’ and ‘OTP’ Real Estate Schemes

HYDERABAD – The Telangana Real Estate Regulatory Authority (TG-RERA) has issued a high-level warning to developers and homebuyers regarding the surge in unauthorized project marketing. D. Srinivas Reddy, Secretary of TG-RERA, recently clarified that any form of solicitation for a project not yet registered with the authority is strictly illegal and subject to heavy penalties.

The Crackdown on ‘Pre-Launch’ and ‘Soft-Launch’ Tactics

In an effort to protect consumer interests, TG-RERA is targeting developers who market projects under labels such as “pre-launch,” “soft launch,” or “expression of interest.” These schemes often bypass mandatory regulatory checks, leaving buyers vulnerable to financial loss.

“The nomenclature does not change the legal character of the act,” stated Reddy. He emphasized that regardless of whether a developer is an established brand or a new player, Section 3 of the RERA Act mandates registration before a single advertisement is released.

One-Time Payment (OTP) Schemes Under Scrutiny

A growing concern for the regulator is the “One-Time Payment” (OTP) model. In these schemes, builders often lure investors with deep discounts in exchange for 100% upfront payment before the project is registered.

TG-RERA warns that these funds are often used for land acquisition or to clear existing debts, rather than project construction. The authority has already begun issuing show-cause notices to developers resorting to these high-risk financial models.

Penalties for RERA Non-Compliance

To deter fraudulent activities, the authority is leveraging strict enforcement measures:

• Heavy Fines: Under Section 59 of the Real Estate Act, violators can be fined up to 10% of the total estimated project cost.
• Active Monitoring: TG-RERA has partnered with the Advertisig Standards Council of India (ASCI) to scan digital platforms, WhatsApp groups, and social media for illegal project promotions.
• Suo Motu Action: The authority is no longer waiting for complaints; it is proactively initiating legal proceedings based on digital footprints of unauthorized ads.

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How Homebuyers Can Protect Themselves

Homebuyers in Hyderabad and across Telangana are urged to perform due diligence before making any financial commitments.

1. Verify Registration: Always check the TG-RERA official portal rera.telangana.gov.in to ensure the project has a valid registration number. Click on the ‘Services’ tab and select ‘Project Search’. You can search by the Project Name, Promoter (Builder) Name, or the Registration Number found on the advertisement. Check the ‘Proposed Date of Completion’ and ‘Project Status’. Ensure the status is marked as ‘Active’.
2. Avoid Cash Deals: Be wary of developers asking for large “advance” payments without a registered Agreement for Sale.
3. Check the ‘Cause List’: The RERA website provides a “Cause List” where buyers can see ongoing cases and complaints against specific builders.

By adhering to these guidelines, investors can ensure their dream home doesn’t turn into a legal nightmare.