Dated on: Fri 03 Oct 2025
Withdrawal vs Deregistration of a Project under RERA: Key Differences Every Stakeholder Must Know

The Real Estate (Regulation and Development) Act, 2016 (RERA) provides a strong regulatory framework to ensure transparency, accountability, and protection of homebuyers. Among its many provisions, two concepts often create confusion for promoters and professionals alike: Withdrawal of a Project and Deregistration of a Project.

Although the terms may sound similar, they are distinct in intent, process, and consequence.

 

Let us understand the differences.

 

1. Withdrawal of a Project

Withdrawal refers to the voluntary act of a promoter to withdraw the application for registration of a real estate project. This is usually done before the registration is granted or before the project progresses significantly under RERA oversight.

Common Scenarios:

• When promoters apply for registration but later realize they do not wish to continue with the project.
• Where legal, technical, or financial issues prevent further development.

 

Key Points:

• It is initiated by the promoter.
• Typically exercised before project registration is finalized, though in some states it may also apply after registration but before commencement of sales.
• The Authority generally allows withdrawal upon submission of an application, along with relevant undertakings and supporting documents.
• Consequences are limited—since the project does not move ahead under RERA, the compliance burden is minimal.

 

2. Deregistration of a Project

Deregistration is a much more serious process. It refers to the cancellation of an already registered project by the Authority. This is not voluntary, but rather a regulatory action.

Common Scenarios:

• If the promoter defaults in complying with the Act, Rules, or conditions of registration.
• Failure to complete the project within the stipulated timeline and not seeking an extension.
• Misrepresentation, fraud, or other violations detected by the Authority.

 

Key Points:

• It is initiated by the RERA Authority, sometimes based on complaints from homebuyers or suo motu.
• It applies after the project is already registered and has compliance obligations.
• Deregistration has severe consequences:
• The Authority may freeze the project bank account.
• The Authority may take steps to ensure completion of the project through association of allottees or another developer.
• The promoter’s credibility and ability to register future projects may be impacted.

 

3. Caution on Terminology

In practice, some State Authorities use the terms Withdrawal and Deregistration interchangeably, which adds to the confusion. For instance, in Uttar Pradesh RERA (UP RERA), both terms are found in use in different contexts. However, their substance remains distinct: withdrawal is promoter-led and voluntary, while deregistration is regulator-led and punitive.

 

4. Why the Distinction Matters

For promoters, professionals, and homebuyers, understanding the difference is critical:

• Promoters can plan their applications and project strategy better.
• Homebuyers know what happens if a project fails or is abandoned.
• Professionals (CAs, Advocates, Engineers) advising promoters must carefully guide them on compliance to avoid the harsh step of deregistration.

 

While both withdrawal and deregistration result in a project not continuing under RERA, the cause, process, and implications are very different. Withdrawal is voluntary and relatively benign, while deregistration is regulatory and carries serious consequences.

 

CA Akash Jaiswal

Chief Advisor

 

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