A Handy Guide to the RERA Act in India


RERA, full form of which is the Real Estate Regulatory Authority, seeks to ensure transparency in the real estate sector. The RERA Act came into effect in May 2016 and is designed to eradicate malpractice and address the concerns of home buyers, builders and brokers alike. Since being passed, the RERA Act has been implemented across the country, with states and union territories being allowed to frame rules for themselves. Since RERA imposes certain rules on builders and brokers, as a homebuyer, you need to thoroughly understand the RERA Act in India to ensure that your home-buying process is a smooth one.  

Read on to know more about the RERA Act.


What are the benefits of RERA?

  1. Thanks to RERA, you have a standard formula to calculate the carpet area of a property and this keeps real estate agents from charging baseless prices
  2. Developers must deposit 70% of funds taken for a project in a separate bank account and this prevents the funds of one project being used for the development of another
  3. If the work done does not match the builder’s promise, the buyer can ask for a refund of the advance amount
  4. The buyer can claim for compensation, with interest, if there is any defect to the property’s title at the time of possession
  5. The buyer is in complete know-how of the project status
  6. Both, the buyer and developer can approach the local RERA body to file a complaint
  7. RERA ensures that there are no project delays
  8. State-wise implementation of RERA helps in better execution of the Act
  9. The Act covers both residential and commercial properties

How does RERA impact homebuyers?

  1. You can seek details about the project’s status
  2. You no longer have to pay charges for the super built-up area, and can pay for the carpet area only
  3. The advance builders can ask for is restricted to 10% of the property’s cost
  4. Of the amount you pay, 70% is to be deposited in a separate bank account and these funds are to be used for construction of that project only
  5. In case of project delays, the developer is liable to pay you interest at a rate 2% higher than SBI’s MCLR
  6. In case of any disputes, the developer has to resolve the same within a time frame of 120 days starting from the date of the dispute being filed
  7. You can report construction defects, within the first 5 years of possession, and the builder must rectify these within 30 days, at no extra cost
  8. You can claim compensation for any discrepancies in the title deed
  9. The developer cannot make any alterations to the building without your knowledge and consent

How does RERA impact real estate agents and developers?

  1. Developers are required to deposit 70% of the project amount in a separate bank account to ensure accountability of any amount spent
  2. All projects having more than 8 apartments or exceeding 500 sq. mt. are to be registered with the state RERA
  3. There is to be a single model sale agreement between all developers and homebuyers

 What are the penalties under RERA?

  1. Promoters who fail to undertake RERA registration must pay 10% of the project’s cost as a penalty
  2. In case a promoter is found guilty of giving false information, the penalty to be paid is 5% of the project’s estimated cost
  3. For a promoter, violation of law can lead to imprisonment of up to 3 years, a fine amounting to 10% of the project’s cost, or both
  4. Agents are penalized Rs.10,000 daily, up to 5% of the estimated cost of the project, in case of failure to undertake RERA registration
  5. In case of non-compliance with RERA, the penalty for agents and buyers is a daily fee amounting to 5% of the property’s approximate cost
  6. For those who do not comply with the Appellate Tribunal, the penalty involves a fee amounting to 10% of the estimated project cost, imprisonment up to 1 year, or both

How can homebuyers register a complaint under RERA?

To file a complaint under RERA, you can either get in touch with a RERA lawyer in your state or file a complaint online by visiting your state’s official RERA website. You can approach the Appellate Tribunal within 60 days if your state RERA’s decision is unsatisfactory. Further, you can also approach the High Court within 60 days if the Appellate Tribunal deals with the matter unsatisfactorily.
While making a complaint you must give details pertaining to the applicant, respondent, address of the project, and its registration number. You must also provide a statement containing facts, the grounds of the complaint, as well as details of any relief sought. Lastly, you will have to pay a fee when filing a complaint.

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