Authorities & RERA
What is TDR (Transferable Development Rights)?
Development rights, detached from land and traded like a commodity. Which is how the tower next door got taller than the rules said it could.
The short answer
TDR lets a landowner who gives up land for a public purpose — a road, a park, a school — build MORE somewhere else. Or SELL that right to someone who will.
The right is issued as a certificate, and it is tradeable.
Which is how a project can lawfully exceed the base FSI: the builder bought development rights from somewhere else and loaded them onto your plot.
How TDR works
- The authority needs land for a public purpose — widening a road, a park, a school.
- The landowner surrenders it.
- Instead of cash compensation, they receive a TDR certificate — an entitlement to build additional area, expressed in square metres.
- They may use it themselves on another plot they own — or SELL it to a developer who needs it.
- The developer loads it onto their project, building more than the base FSI would otherwise permit.
Why TDR exists
A city needs to widen a road. It must acquire strips of land from a hundred owners.
Paying cash compensation for all of it would be ruinous. And Indian land acquisition is slow, litigious and politically painful.
TDR solves it without cash: the owner surrenders the land and receives, instead of money, the right to build more elsewhere — a right they can monetise by selling to a developer.
The city gets its road. The owner gets value. The developer gets FSI. Nobody paid cash, and no land was compulsorily acquired.
It is, in principle, an elegant piece of policy. In practice it has been prone to the problems that attend any traded entitlement whose value is set by an administrative decision.
What it means for you, as a buyer
1. The project may be denser than the zone suggests
You look up the base FSI for the zone and calculate what can be built. Then TDR is loaded on, and more is built. Legally.
So the "low density" you were promised is a function of what the developer chose, not what the zone permitted.
2. TDR is what makes a tall tower possible on a small plot
Particularly in Mumbai, where base FSI is low and TDR is the mechanism by which almost everything gets built.
3. It can be loaded LATER
A builder who has not consumed all the permitted FSI can add more later — and TDR lets them go beyond the base FSI entirely.
So the calculation is not just 'has the base FSI been used up?' It is:
'Can the builder buy TDR and build more here — and do they still own the land?'
If conveyance has not been done, the answer to the second part is yes.
Which brings you back, once again, to conveyance. A society that owns its land controls what more can be built on it. A society that doesn't, doesn't.
What to check
- Has TDR been loaded onto this project? The sanctioned plan will show the base FSI and any additional FSI from TDR or premium.
- What is the TOTAL permitted FSI, including TDR — and how much has been consumed?
- Is there room for more? If yes, and conveyance hasn't happened, your open space is not secure.
- Has conveyance been done? This is the question that keeps recurring, because it is the one that matters.
- What does the density actually feel like? Go and stand in it. TDR-loaded projects can be considerably denser than the brochure's renders suggest.
The four planning numbers
| What it controls | Why it matters to YOU | |
|---|---|---|
| FSI / FAR | How much total floor area may be built, as a multiple of the plot area | Unused FSI can be built later. By the builder. In your open space. |
| Ground Coverage | How much of the PLOT the building may sit on, as a percentage | The rest is open space — which is what you're paying for when you buy 'green area' |
| Setback | The open distance that must be left between the building and each boundary | Light, air, fire access. And the thing builders most often encroach on. |
| Height limit | How tall the building may be — often driven by road width, and by airport proximity | Whether the tower blocking your view can lawfully exist |
These four numbers, set by the local authority in the building bye-laws, decide what a plot can hold. Together they are why one project has a tower and open lawns, and the one next door has three towers and a car park.
The Real Estate (Regulation and Development) Act, 2016 is a central law. But it is administered by a separate authority in each state, each with its own portal, its own rules, its own forms, and its own fee schedule.
Which means: the principles below apply everywhere. The procedure does not.
Always check YOUR state's RERA portal for the current rules, forms and fees. Search for it by name — MahaRERA, K-RERA, TS-RERA, TNRERA, UP RERA, HARERA — rather than following a link a builder or a broker sends you.
Frequently asked questions
What is TDR in real estate?
Transferable Development Rights — a certificate given to a landowner who surrenders land for a public purpose, entitling them to build additional area on another plot, or to sell that entitlement to a developer who will. It is how a project can lawfully exceed the base FSI.
Why does TDR exist?
Because a city needing land for a road or a park has no money to pay cash compensation, and compulsory acquisition is slow and litigious. TDR lets the owner surrender the land and receive, instead of money, a tradeable right to build more elsewhere. The city gets its road, the owner gets value, the developer gets FSI, and no cash changes hands.
Does TDR make a project denser?
It can. You look up the base FSI for the zone and calculate what can be built — then TDR is loaded on and more is built, entirely legally. Particularly in Mumbai, where base FSI is low and TDR is the mechanism by which almost everything gets built.
Can a builder add TDR to my project after I move in?
If they still own the land, yes — and TDR lets them go beyond the base FSI entirely. So the question is not just whether the base FSI has been consumed; it is whether the builder can buy TDR and build more, and whether they still own the land. If conveyance has not been done, the answer to the second part is yes. Which brings you back, once again, to conveyance.