Everything about RERA act


The government has proposed the Real Estate Regulatory Authority (RERA) Bill, which is likely to benefit buyers, as a means to control the real estate industry. RERA is designed to safeguard homebuyers' interests and guarantee projects are delivered on schedule. The Real Estate Regulatory Authority (RERA) Bill was initially proposed in 2013 and finally passed in March 2016.

Although RERA is a federal statute, state governments will be responsible for implementing it because real estate is a matter of their jurisdiction. The Real Estate (Regulation and Development) Act received approval from the Maharashtra government (RERA). 

Objectives of RERA

The following are its goals:

  • To assure the responsibility of the allottees and to safeguard their interests.
  • To uphold transparency and lower the likelihood of fraud.
  • To establish professionalism and Pan-India uniformity.
  • To improve the communication of accurate information between house buyers and sellers.
  • To ensure higher accountability requirements for both investors and builders.
  • To boost the industry's dependability and consequently boost investors' confidence.

Home buyers have long claimed that real estate deals are unfairly biased in favor of developers. A more equal and fair transaction between the seller and the buyer of properties, particularly in the primary market, is what RERA and the government's model code seek to achieve in India. If states do not weaken the rules and the spirit of the central act, it is envisaged that RERA would improve accountability and transparency, simplifying the real estate buying process.

The RERA will serve as the first regulator for the real estate sector in India. Each state and union territory is required by the Real Estate Act to establish its own regulatory body and set up the guidelines that will regulate how that body operates.

RERA Act and Rules

The Real Estate (Regulation and Development) Act of 2016's Section 84 mandates that state governments create the rules necessary to carry out the Act's provisions no later than six months after it becomes effective.

  • The center, through the HUPA (Housing & Urban Poverty Alleviation) Ministry, published the Real Estate (Regulation and Development) Act, 2016, general rules on October 31, 2016.
  • The Union Territories of Chandigarh, Lakshadweep, Daman & Diu, Dadra & Nagar Haveli, and the Andaman & Nicobar Islands are subject to all of these regulations.

A Few Points Regarding Real Estate Development and Regulation (RERA)


According to the RERA act, purchasers' and investors' funds must be maintained in separate accounts at least 70% of the time. Then, the builders will only be given access to this money for building and land-related expenses. Before the sale agreement is signed, developers and builders are not permitted to demand an advance payment of more than 10% of the cost of the property.


For every job a builder undertakes, the original paperwork must be submitted. Without the buyer's permission, builders are not permitted to alter the plans.


RERA has now told developers to price properties according to carpet area rather than heavily developed area. If the project is delayed, buyers have the option of receiving their whole investment back or opting to remain invested and receive monthly interest.


Within five years of the buyer's purchase, the builder must resolve any issues. Within 30 days of receiving the complaint, this issue must be resolved.


A regulator needs to register with the regulator before it can promote, sell, build, invest, or reserve a plot. Following registration, each investment-related advertisement must include a special RERA project-specific registration number.

Key Characteristics of RERA

RERA was created to increase transparency and accountability in real estate and housing transactions. The key characteristics of this Act are as follows:

  • Every Indian state should establish a real estate regulatory authority to oversee, judge, and mediate any issues involving real estate projects in that state.
  • The creation of a fast-track dispute resolution process. An appellate tribunal and specialized adjudicating personnel will be used to accomplish this.
  • For the RERA to have jurisdiction over the projects, all real estate projects must be registered. If regulations have not been followed, the authority may refuse the registration of a certain project.
  • In addition to the written RERA permission, two-thirds of the allottees must agree in writing if a promoter wants to transfer or assign the majority of their rights and obligations in a real estate project to a third party.
  • Both the buyer and the promoter will be required to pay an equal rate of interest if any party defaults in any way.
  • The promoter will be required to make up any losses suffered by the buyer as a result of third parties claiming ownership of property that is now under development or has already been built. There is currently no law that restricts the amount of compensation that can be received.
  • A person can file a complaint with RERA if they are concerned that a promoter, buyer, or agent has violated any of this Act's rules or provisions.
  • RERA has the power to prevent an agent, promoter, or buyer from carrying out any actions for which a complaint has been made while an inquiry is being conducted.
  • The person that has been wronged may appeal RERA's decision regarding a complaint to the Appellate Tribunal if it is unsatisfactory in any way.
  • The promoter will have to pay a fine if they disobey RERA's directives. This sum could equal up to 5% of the property's assessed value.
  • A fine must be paid if the Appellate Tribunal's orders are not followed. This may involve up to three years in prison, a fine equal to 10% of the project's estimated cost, or both.
  • Any person who was in charge of the firm at the time the offense was committed and the company itself shall be found liable and punished if a company violates this Act.
  • Regarding any subject that falls under RERA or the Appellate Tribunal's authority, no civil court will have any jurisdiction. As a result, no court has the authority to enjoin RERA or the Tribunal from taking any particular action. 

Benefits of RERA 

For the buyer, the promoter, and the real estate agent, RERA offers several advantages. These consist of:

  • Standardization of carpet area: Before RERA, a builder's method for determining the cost of a project was not specified. With RERA, there is now a common formula for calculating carpet area, though. Promoters are prevented from offering inflated carpet areas to raise rates in this way.
  • Lowering the likelihood of the builder going bankrupt: Most promoters and developers tend to be working on several projects at once. Previously, project creators were permitted to transfer funds raised from one project to another. With RERA, this is not feasible because 70% of the funds raised must be placed in a different bank account. Only after certification by an engineer, chartered accountant, and architect are this money able to be withdrawn.
  • According to the regulations, a builder is not permitted to charge the customer an advance payment or application fee equal to more than 10% of the project's cost. This spares the customer from having to pay a significant sum of money and quickly find finances.
  • Rights of the purchaser in the event of any flaws: If there are any structural flaws or quality issues within five years of possession, the builder must fix them without charging the buyer within 30 days.
  • In case of default, interest is due: Before RERA, the interest paid to the buyer was substantially lower if the promoter delayed giving the buyer possession of the property than if the buyer delayed giving the promoter money. Since RERA, both parties are now required to pay the same amount of interest.
  • Rights of the purchaser in cases of misleading promises: The customer is entitled to a full return of the advance payment if there is a discrepancy between what the builder promised and what has been delivered. The builder may occasionally be required to pay interest on the amount as well.
  • If Title defect: The buyer may pursue reimbursement from the promoter if, upon taking possession, they learn that the property's title is flawed. This sum has no upper bound.
  • Freedom of information: The purchaser has a right to full disclosure of all project-related facts. Plans for layout, execution, and completion status are included in this.
  • Grievance Resolution: The buyer, the promoter, or the agent may submit a complaint with RERA if they have any grievances regarding the project. The Appellate Tribunal can also receive a complaint from someone dissatisfied with RERA's judgment.

Impact of RERA Act

Following the implementation of the Real Estate (Regulation and Development) Act, 2016, a project unit's selling deed cannot be registered in the office of the sub-registrar without first receiving occupancy or completion certificates. Unit registrations are now being done without verification. Without acquiring occupancy or completion certificates, it is taking place. The potential legal repercussions don't concern anyone. 

The RERA Act has ramifications, however, the Department of Stamps & Registrations hasn't taken the necessary action to prohibit the illegal sale deed registrations of these properties. The following are a few effects:

  • As developers and project promoters take the time to comprehend the Real Estate (Regulation and Development) Act, 2016, fewer projects will be introduced. However, since they will have less competition, sincere promoters, builders, and developers will profit from this situation.
  • After the RERA Act is put into effect, dishonest builders will vanish because they would be unable to survive in the market.
  • The Real Estate (Regulation and Development) Act, 2016, has 32 new sections that would promote financial restraint in this industry.
  • If developers want to make specific adjustments to the project once it has started, they will need to follow several formalities after the Act is implemented. In the short term, there may be pandemonium in the real estate market, but in the long run, it will increase consumer confidence and encourage more investment.

Carpet Area defined under RERA Act

Developers must offer their units based on the carpet area under the Real Estate (Regulation and Development) Act of 2016.

  • The whole area of the floor that can be used inside the apartment's walls is referred to as the carpet area under the Act. Areas like open terraces, shafts, balconies, etc. are excluded from this.
  • This normalization of the carpet area specification will prevent salespeople from misleading customers.

The developer may overestimate the saleable area because of the high loading factor. This will enable the developer to lower the charge per square foot on the inflated saleable area. This is very misleading since delighted house buyers assume they are obtaining fantastic rates. 

The loading factor, however, never varies regardless of the flat size.

By using the carpet area standard, the usable area will be known with confidence. Additionally, it facilitates the examination of cost per square foot. It also becomes simpler to compare the various initiatives.

How to ensure that the property is RERA Compliant?

The following are some factors to take into account to determine whether a property is RERA compliant:

  • Before starting or marketing a project on a specific property whose area exceeds 500 square meters, the builders must register it under the RERA Act.
  • Builders are required to show evidence that they have put 70% of the entire amount into a separate escrow account rather than using it for another investment.
  • Before promoting a new project, builders must secure the essential approvals. Early bird specials and pre-launch deals will no longer be available.

How to register projects under RERA For Promoters

  1. Make a list of all the documents needed for registration and compile them.
  2. Obtain the account number of the bank opened under the Act's Section 4 (2) (I) (D).
  3. Complete Form A and send it in. This is the registration application form.
  4. Complete Form B and send it in. It ensures that According to RERA's Section 4, the promoter has made the declaration.
  5. Fill out and send Form G. This is the project's proposed allocation or selling agreement.
  6. Submit an affidavit attesting that the information supplied in Form G complies with RERA regulations.
  7. Submit an affidavit indicating that all booking amounts were paid under Section 3 of the Act and that no money was obtained from potential customers.
  8. Pay the registration fees, which vary from state to state.
  9. Send a hard copy of each of these documents to the appropriate RERA authority by registered mail that has been properly signed.
  10. Form C must be completed and submitted before the registration certificate is obtained.

For Real Estate Agents

  1. Fill up the application form, and send it to RERA with the necessary paperwork and payment.
  2. You'll get a registration number. Each property sale requires mentioning this number.
  3. Books of accounts, papers, and records about every transaction must be kept up to date every quarter.
  4. The buyer must have access to all project-related information and papers.
  5. If you lie about yourself or engage in any fraud during the registration process, your account may be suspended.

How to file a Complaint

Complaints against promoters, purchasers, or agents may be made under Section 31 of RERA. The actions to take while registering a complaint are as follows:

  • Locate a RERA attorney, then submit a complaint to the proper authority.
  • Fill out the complaint under the guidelines established by the relevant state where the project is located.
  • Add the following information:
    1. Information about the respondent and the applicant.
    2. Address and project registration number.
    3. A succinct description of the relevant circumstances and supporting evidence.
    4. Details of any requested relief and any temporary reliefs must be provided (if any).
  • Pay the fee. Remember that each state has a different threshold. The charge, for instance, is Rs. 5,000 in Maharashtra and Rs. 1,000 in Karnataka.
  • Alternatively, you can submit a complaint online by going to the RERA website for your state.
  • If you disagree with the RERA's judgment, you have 60 days to file a complaint with the RERA Appellate Tribunal.
  • If you disagree with the Appellate Tribunal's ruling, you may also file a case with the High Court within 60 days.


What is RERA Act?

The Indian Parliament passed the Real Estate (Regulation and Development) Act, 2016 (RERA) to safeguard the rights of homebuyers and encourage investment in the real estate industry.

How to file a complaint in RERA?

A RERA complaint must be filed in the format specified by the laws of the relevant state. Within the allotted time frame, a complaint can be made over a project that has been registered under RERA for violating or contravening the requirements of the act or the RERA-created rules or regulations.

How to check the RERA Registration number?

From the state portals, buyers can check the RERA registration number. Every website has a list of projects that have been registered, together with their RERA registration number, approvals, and other documents.

What is RERA Approval?

RERA approved typically refers to RERA registration. Every builder must go by a few rules to register their project with the appropriate authorities. This covers things like permits, land titles, insurance, etc.

How to calculate RERA Carpet Area?

The RERA defines carpet area as the net useable floor area of an apartment, excluding areas covered by exterior walls, areas under services shafts, exclusive balcony or verandah area, and exclusive open terrace areas, but including areas covered by internal partition walls of the apartment. 

How RERA will help buyers?

The real estate market is made orderly and transparent by RERA, protecting the interests of investors and homebuyers. The RERA has jurisdiction over 70% of all national real estate projects.

How to apply for RERA registration?

On the RERA portals for their respective states, real estate brokers and builders can apply for registration under the names of either an individual or an organization. To register, you must provide the authority with all necessary documentation.

What happens if the builder does not follow the RERA order?

The homeowner has the right to apply for the order execution against the developer with the same RERA Body if the developer violates the RERA order and refuses to enforce the order passed by the regulatory authority in favor of the homebuyer.