RERA Disclosures May Not Cover Key Commercial Terms in Serviced Apartment Investments, Says Asha Kiran Sharma

The growing popularity of serviced apartments as an investment product is drawing attention to the information available to buyers before they commit to a purchase, particularly where projected returns are linked to separate arrangements with property operators.

Commenting on the issue, Asha Kiran Sharma highlighted a potential gap between the disclosures required under the Real Estate (Regulation and Development) Act, 2016 (“RERA”) and the private commercial arrangements that govern the operation and economics of serviced apartments.

“RERA requires extensive disclosures about the project, including title, encumbrances, sanctioned plans, layouts, timelines and unit details. But the operator agreement—the private commercial contract that may determine how the property is managed, what fees are deducted, and how owner income is calculated, is not a document that buyers routinely see.”

According to Asha, the absence of a specific RERA disclosure requirement does not necessarily mean that representations made outside the final agreement have no legal relevance. Depending on the circumstances, such conduct may be examined under multiple legal frameworks.

“Indian law may address such conduct through several routes, including misrepresentation under contract law, unfair trade practice, or misleading advertising under consumer law, and provisions under RERA relating to false statements in advertisements or prospectuses,” Asha said.

The issue is particularly relevant where buyers are attracted to serviced apartments on the basis of headline return projections but do not have access to the underlying operator agreement governing how those returns are calculated, including deductions, management fees and other commercial terms.

Asha also referred to the Supreme Court’s decision in Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan (2019), where the Court held that one-sided clauses in apartment buyer agreements could constitute an unfair trade practice. “The judgment is important because a developer cannot necessarily rely on the fact that a buyer signed a contract when the terms were heavily one-sided,” She observed.

For prospective buyers, the distinction between statutory project disclosures and private contractual arrangements therefore assumes significance. While RERA provides an important disclosure and regulatory framework, material commercial terms governing the operation and financial returns from a serviced apartment may fall outside the documents that buyers routinely review before making an investment.

“In the absence of a specific RERA disclosure requirement, buyers largely have to rely on broader contract and consumer-protection laws if a material fact was withheld or misrepresented,” Asha added.

Read the full article in Outlook Money.

Last Updated on 9 September, 2026