The Indian real estate sector has long been plagued with issues such as project delays, lack of transparency, and legal ambiguities. In response to these challenges, the Government of India introduced the Real Estate (Regulation and Development) Act, 2016, commonly known as the RERA Act. This landmark legislation has brought significant reforms to the real estate industry, aiming to protect homebuyers and promote fair practices among developers. If you’re planning to invest in property or purchase a new home in India, understanding RERA is crucial. In this blog, we will explore everything you need to know about the RERA Act.

What is the RERA Act?

The RERA Act came into force on May 1, 2017, with the primary objective of regulating the real estate sector and ensuring transparency, accountability, and efficiency in project execution. It applies to both residential and commercial real estate projects.

RERA mandates that all real estate projects above a certain size must be registered with the respective State RERA Authority before they can be marketed or sold. Builders and developers are required to provide detailed project information on the RERA portal, making it easier for buyers to make informed decisions.

Key Objectives of the RERA Act

1. Protect Homebuyers’ Interests
2. Promote Transparency in the Real Estate Sector
3. Ensure Timely Delivery of Projects
4. Standardize Real Estate Practices
5. Establish a Dispute Resolution Mechanism

Key Features of the RERA Act

1. Mandatory Registration

All real estate projects with a land area exceeding 500 sq. meters or more than eight apartments must be registered under RERA. Without registration, developers cannot advertise, sell, or book units in these projects.

2. Transparency in Project Details

Developers are required to upload key project details including layout plans, approvals, land title status, and timelines on the RERA website. This information must be regularly updated.

3. Timely Project Completion

RERA imposes strict deadlines for project delivery. If a builder fails to deliver on time, they are liable to pay interest to the buyer for the delay.

4. Advance Payment Limit

Promoters cannot demand more than 10% of the property cost as an advance before signing a sale agreement.

5. Separate Escrow Account

Developers must deposit 70% of the project funds collected from buyers into a separate escrow account. This amount can only be used for construction and land-related costs, minimizing the risk of fund diversion.

6. Penalties for Non-Compliance

Developers and agents who fail to comply with RERA regulations face heavy penalties, including imprisonment in severe cases.

7. Grievance Redressal

Buyers can file complaints against developers with the RERA Authority. The authority is required to address grievances within a stipulated timeframe.

Benefits of RERA for Homebuyers

1. Enhanced Transparency: Buyers can access authentic project information through state RERA websites.
2. Timely Delivery: Promoters are bound by law to deliver projects on time or face penalties.
3. Financial Security: The escrow account requirement ensures funds are used properly.
4. Legal Protection: Buyers have the right to approach RERA and Appellate Tribunal for dispute resolution.
5. Reduced Risk of Fraud: Mandatory registration and disclosure limit the chances of real estate scams.

Impact of RERA on Developers

While RERA has empowered buyers, it has also brought developers under a strict regulatory framework:

• Encouraged developers to maintain project schedules and financial discipline.
• Reduced the number of fly-by-night operators.
• Improved industry credibility and investor confidence.

However, developers also face challenges such as increased compliance costs, longer project planning phases, and stringent penalties for delays.

How to Check Project Details on the RERA Website

1. Visit your state’s RERA portal (e.g., maharera.mahaonline.gov.in for Maharashtra).
2. Use the “Search Project” option.
3. Enter the project name, promoter name, or RERA registration number.
4. Access key information such as approval status, completion timeline, and progress reports.

This transparency allows buyers to verify a project before investing.

Common Misconceptions About RERA

1. RERA Applies Only to New Projects: False. It also applies to ongoing projects that haven’t received a completion certificate.
2. Only Residential Projects Are Covered: False. RERA covers both residential and commercial real estate.
3. RERA Guarantees No Delays: Not always. While it reduces delays significantly, external factors like legal issues or natural calamities can still cause disruptions.

Tips for Buyers Under RERA

• Always buy from RERA-registered developers.
• Verify the project details on the RERA portal before making a decision.
• Read the sale agreement carefully.
• Keep track of payment receipts and documents.
• Report any violations to the RERA Authority promptly.

Conclusion

The RERA Act is a game-changer for the Indian real estate sector. By making the system more transparent, accountable, and buyer-friendly, it has instilled greater confidence among property buyers. Whether you’re a first-time homebuyer or a seasoned investor, understanding the provisions of RERA can help you make smarter, safer, and more informed real estate decisions.

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