Generally, we come across several advertisements related to pre-launch offers at prices that are almost half of the prevailing market rate. These offers attract many buyers, but the reason behind such pricing is often not questioned.
In many cases, the developer owns the land but does not yet have TG-RERA (Telangana Real Estate Regulatory Authority) approval to start the project. Without RERA approval, buyers are not eligible for bank loans.
To generate immediate cash flow, pre-launch offers are announced with a condition of one-time payment or a large upfront payment within a short period.
For example, if the market value in a gated community in the Neopolis region is around Rs 12,500 per sft, a pre-launch offer may be quoted at around Rs 6,500 per sft. Buyers are asked to pay 20 percent immediately and the remaining amount within 45 days. At this stage, the project exists only on paper and the RERA approval is still pending.
The primary risk begins with the uncertainty of RERA approval. There is no defined timeline for approval, and in some cases it may take years or may not be granted at all. During this period, the entire invested amount remains locked without legal project registration.
Buyers are often informed that the RERA approval is in process and will be received within a short time. However, if the approval is delayed, there is no construction progress, no access to bank funding, and no clarity on possession timelines.
Another major risk is the long lock-in period. Even if RERA approval is eventually granted, the construction and handover typically take several years. The invested money remains blocked throughout this period without any control over the project timeline.
There is also a risk related to project uncertainty. Since the project is not registered at the time of investment, there is no regulatory protection under RERA. The buyer’s money is exposed to delays, changes in project plans, or cancellation.
In several instances, investors have remained stuck for years waiting for approvals, construction commencement, or refunds. The lack of formal registration at the time of purchase limits legal safeguards and increases financial exposure.
Pre-launch offers with full or high upfront payment involve high uncertainty regarding approvals, timelines, project execution, and capital safety. Large amounts remain locked for long durations without statutory protection and without assured progress.
These risks have affected many buyers who entered projects at the pre-launch stage without RERA approval, leading to prolonged delays, financial stress, and loss of liquidity.
