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What is RERA?

Real Estate Regulatory Authority (RERA), was established to introduce transparency to the real estate industry. The Government of India enacted RERA in May 2016. RERA enhance transparency of buying a home and address the concerns of home buyers, builders, brokers, and others. Since its introduction, RERA has implemented numerous reforms and continues to work on further improvements. As a home buyer familiarising yourself with the rules of RERA will facilitate your navigation of the real estate landscape.

RERA plays a crucial role in ensuring a secure and transparent real estate market for home buyers. It safeguards their interests by enacting regulations for real estate sales and enforcing specific standards that developers must adhere to. It also holds developers accountable for any delays or irregularities in their operations. Moreover, RERA mandates the developers to maintain proper records and ensure that buyers know their rights well.

Under RERA, every builder must inform home buyers about the construction progress and compilation date. Additionally, they must comply with all the rules laid out by RERA to ensure accountability.

Objective of Establishing RERA

RERA aims to achieve the following objectives:

  • Ensuring accountability towards allottees and protecting their interests.
  • Promoting transparency, fair play, and reducing frauds and delays.
  • Introducing professionalism and standardization across India.
  • Establishing symmetry of information between promoters and allottees.
  • Imposing responsibilities on both promoters and allottees.
  • Establishing a regulatory oversight mechanism to enforce contracts.
  • Implementing a fast-track dispute resolution mechanism.
  • Promoting good governance in the sector, thereby creating investor confidence.

Features of RERA

The following are the features of the RERA Act:

  • Serves the purpose of regulating and promoting the real estate sector. 
  • Ensuring the efficient and transparent sale of plots, apartments, or buildings, as well as real estate projects.
  • Safeguarding the interests of consumers in the real estate sector.
  • Creating an adjudicating mechanism for swift dispute resolution and establishing an Appellate Tribunal to hear appeals related to RERA decisions.
  • Regulating transactions between buyers and promoters of residential real estate projects.
  • Instituting state-level regulatory authorities known as Real Estate Regulatory Authorities (RERAs).
  • Mandating the registration of residential real estate projects with RERAs, with few exceptions.
  • Prohibiting promoters from booking or offering unsold projects for sale without proper registration. Real estate agents dealing with such projects also need to register with RERAs.
  • Requiring promoters to upload project details, including site and layout plans, on the RERA website, along with a schedule for project completion.
  • Amount collected from buyers to be kept in a separate bank account solely for the construction of that project. The state government may modify this requirement.
  • Granting the right to legal representation to clients, represented by professionals such as Company Secretaries, Chartered Accountants, Cost Accountants, or Legal Practitioners.
  • Imposing strict penalties, including imprisonment, on promoters and real estate agents for non-compliance with RERA regulations.

What is Real Estate Appellate Tribunal (REAT)?

Real Estate Appellate Tribunal (REAT) is established by the appropriate government to facilitate the swift resolution of disputes. In cases RERA’s order isn’t satisfactory, the parties have the option to appeal before REAT. REAT must adjudicate such cases within 60 days. Civil Courts cannot exercise jurisdiction over these matters. Furthermore, if the REAT’s order is not satisfactory, they can file an appeal against the REAT order to the High Court within 60 days.

Benefits of RERA

The following are the benefits of RERA:

RERA offers the following benefits to buyers, promoters, and real estate agents:

  • Standardisation of carpet area:
    RERA establishes a uniform formula for calculating the carpet area, preventing promoters from inflating prices by providing inaccurate measurements.
  • Mitigating the risk of builder insolvency:
    RERA mandates that 70% of the funds raised for a project must be deposited in a separate bank account. Withdrawal of these funds requires certification from professionals such as engineers, chartered accountants, and architects.
  • Controlled advance payments:
    Under RERA, a builder can only accept a maximum of 10% of the project cost as advance or application fees, relieving buyers from the burden of arranging large sums of money quickly.
  • Buyer’s rights for rectification of defects:
    If structural or quality defects are identified within 5 years of possession, the builder must rectify them within 30 days at no cost to the buyer.
  • Uniform interest payment in case of default:
    RERA ensures that both the buyer and the promoter are subject to the same rate of interest in case of project delays or payment defaults.
  • Protection against false promises:
    In case of a discrepancy between promised and delivered features, the buyer can ask for a full refund of the advance payment. Sometimes with additional interest.
  • Compensation for title defects:
    If the buyer discovers title defects during possession, they have the right to claim compensation from the promoter without any limitation on the amount.
  • Right to information:
    Buyers have the right to access all project-related information, including layout plans, execution details, and completion status.
  • Grievance redressal:
    RERA provides a mechanism for filing complaints with the authority. If dissatisfied with RERA’s decision, the aggrieved party can further appeal to the Appellate Tribunal.

What Projects are Exempt from RERA?

The following projects are exempt from RERA:

  • The area of land proposed for development does not exceed 500 square meters.
  • The number of apartments proposed for development does not exceed 8, including all phases.
  • Promoter has already received a completion certificate for a real estate project prior to the commencement of this Act.
  • The project for the purpose of renovation, repair, or re-development that does not involve marketing, advertising, selling, or new allotment of any apartment, plot, or building under the real estate project.

Penalties Under RERA

The following are the penalties for promoters, agents and buyers under RERA:


  • Non-registration: 10% of the estimated cost of the project
  • Providing false information: 5% of the estimated cost of the project
  • Violation of laws: Up to 3Y imprisonment or 10% of the estimated cost of the property as fine, or both.


  • Non-registration of projects: Rs.10,000 per day, up to 5% of the approximate cost of the project
  • Non-compliance with RERA: Daily penalty up to 5% of the estimated value of the project
  • Non-compliance with the Appellate Tribunal: Imprisonment up to 1Y or 10% of the estimated cost of the project, or both


  • Non-compliance with RERA: Daily penalty up to 5% of the approximate cost of the project
  • Non-compliance with the Appellate Tribunal: Imprisonment up to 1 year or 10% of the approximate cost of the project, or both.

How to File a Complaint under RERA?

Following are the steps to file a complaint:

  • Find a RERA lawyer and file a complaint in the appropriate jurisdiction.
  • Complete the complaint form according to the rules specified by the state where the project is located.
  • Include the following details:
    • Information about the complainant and the respondent.
    • Address and registration number of the project.
    • A brief statement of the facts and grounds of the claim.
    • Specify the relief sought and any interim reliefs, if applicable.
  • Pay the required fee, which varies from state to state.
  • Alternatively, you can file a complaint online through your state’s RERA website.
  • If RERA’s decision is not satisfactory, you have the option to file an appeal with the RERA Appellate Tribunal.
  • If the Appellate Tribunal’s decision is not satisfactory, you can approach the High Court within 60 days to seek further resolution.

Impact of RERA on Home Buyers

RERA brings several benefits to home buyers, ensuring transparency and protecting their interests. The following are some key ways it impacts home buyers:

  • Enhanced Transparency: Builders must disclose project details on RERA’s official website and keep it updated regularly, providing transparency regarding project timelines.
  • Fair Pricing: Buyers are charged based on the carpet area or the area enclosed by walls, excluding non-usable spaces like lifts, balconies, and lobbies. Builders cannot charge for super built-up areas.
  • Fund Protection: Builders must deposit 70% of the collected funds in a separate bank account, dedicated solely to construction purposes, ensuring the money is utilized appropriately.
  • Timely Completion: RERA emphasises timely project completion. In case of delays, the developer is liable to pay interest at 2% over SBI’s MCLR to the buyers.
  • Defect Rectification: Buyers can report construction defects within 5 years of possession, and developers must rectify them.
  • Dispute Resolution: Developers must resolve buyer disputes within 120 days of filing a complaint.
  • Consent for Changes: Developers cannot make alterations or additions to the building plan without the consent of at least two-thirds of the owners.
  • Limited Advance Payments: Developers cannot take more than 10% of the property’s cost as an advance payment.
  • Title Deed Protection: In case of any discrepancies in the title deed at the time of possession, buyers can seek compensation from the developer.

Overall, RERA ensures transparency, accountability, and protection of home buyers’ rights throughout the real estate transaction process.

Frequently Asked Questions

What is the validity of RERA registration?

5 years is the validity of RERA registration.

What is Carpet Area as per the RERA Act?

RERA mandates developers to sell apartments based on the carpet area. Carpet area refers to the total usable floor area within the apartment’s walls, excluding areas like balconies, open terraces, and shafts. Thus, the definition ensures that buyers are not misled by unlawful promoters who may inflate the saleable area by incorporating non-usable spaces. Using the standard carpet area gives certainty regarding the usable area and facilitates analysis of cost per square foot, making it easier to compare different projects.

How to check RERA registration number?

You can check the RERA registration number from the respective states’ portal. Each state’s web portal has a list of registered projects along with their RERA registration number, approvals and other documents.

What is Escrow Account under RERA?

As per the RERA Act, an escrow account is a bank account where around 70% of the total funds collected from homebuyers by the real estate developer are kept. Thus, the escrow account aims to prevent developers from misusing the entire amount collected from homebuyers for construction purposes.

Does the Act cover both residential and commercial real estate?

The Act encompasses both residential and commercial real estate. It defines ‘apartment’ in Section 2(e) and ‘building’ in Section 2(j), which include both residential and commercial properties.

Does the Act cover ongoing / incomplete projects?

The Act applies to both ongoing and future projects without any distinction. Both incomplete projects and projects yet to begin come under the purview of the Act. According to the first proviso of Section 3(1), promoters of ongoing projects that have not received a completion certificate must register their projects with the Regulatory Authority within three months of the Act’s commencement.

Does the Act cover all projects in urban areas and in rural areas?

Section 3(1) of the Act stipulates that all projects within a designated “planning area” must be registered with the Authority. The term “planning area” is defined in Section 2(zh). However, the second proviso of Section 3(1) empowers the Authority to order or direct the promoter to register projects beyond the planning area, provided that they have obtained the necessary permission from the local authority. This provision allows the Authority to act in the best interest of the allottees.

Does the Act also cover real estate agents? What are the duties and responsibilities of the real estate agents?

According to Section 9 of the Act, real estate agents are required to register themselves with the Authority before engaging in the sale of projects registered under the Act. The specific procedures for registration, fees, registration period, renewal, and other related matters will be outlined in the Rules. Section 10 of the Act further specifies real estate agents’ comprehensive functions and duties.

Can the promoter collect any amount of money towards the booking of the apartment / plot?

Under Section 13 of the Act, the promoter is prohibited from accepting an amount exceeding 10% of the total cost of the apartment or plot as an advance payment or application fee. Furthermore, the promoter can only collect the subsequent payments towards the cost of the apartment or plot after entering into an “Agreement for Sale” with the allottee.

What is the ‘Agreement for Sale’, and is it binding on the ‘promoter’ and the ‘allottee’?

According to Section 13(2) of the Act, the relevant government is responsible for specifying the content and details of the “Agreement for Sale” to be entered into between the promoter and the allottee through the use of rules. This agreement holds legal validity and establishes obligations between the parties. However, the agreement may also allow for internal flexibility to accommodate additional provisions as mutually agreed upon by the promoter and the allottee.

What is the period for which the promoter is liable for any structural defects etc. in the project/apartment etc.?

According to Section 14(2) of the Act, the promoter holds liability for a period of 5 years from the date of handing over possession to the allottee for any structural defects or other specified defects.

What happens if the builder delays possession, as per RERA?

Under Section 18 of the RERA Act, if the builder fails to deliver possession on time, the consumer has two options. They can either terminate the agreement and request a full refund with interest, or they can choose to continue with the project and claim compensation from the developer for each month of delay until possession is provided.
Furthermore, RERA specifies the rate of interest payable by the developer and the complaint format in its Rules, which may vary across different states.