Buying a home is one of the biggest financial decisions for most people. From selecting the right property and builder to checking approvals, payment schedules and possession dates, homebuyers need to make several important decisions before signing a property agreement. The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, was introduced to make India’s real estate sector more transparent, accountable and buyer friendly.
For homebuyers, understanding RERA can help reduce risks and provide legal protection when dealing with registered real estate projects and developers.
What Is RERA in India?
RERA stands for the Real Estate (Regulation and Development) Act, 2016. The legislation was enacted to regulate the real estate sector, protect the interests of homebuyers, improve transparency and establish mechanisms for resolving disputes. The Act was notified in 2016, with different provisions coming into force in 2016 and 2017.
RERA requires states and Union Territories to establish their own Real Estate Regulatory Authorities and frame rules for implementing the legislation. Real estate projects covered by the Act generally need to be registered with the respective state or UT authority before being advertised or offered for sale.
In simple terms, RERA gives homebuyers greater access to project information and creates accountability for developers and real estate agents.
Why Was RERA Introduced?
Before RERA, homebuyers often faced issues such as delayed possession, incomplete disclosures, changes in project plans and disputes over agreements. RERA was designed to address these concerns by promoting transparency, accountability, standardisation and faster dispute resolution.
The legislation aims to:
- Protect the interests of homebuyers
- Improve transparency in real estate transactions
- Reduce project delays and unfair practices
- Create regulatory oversight
- Make important project information publicly accessible
- Provide mechanisms for addressing complaints
- Promote greater accountability among developers and agents
How Does RERA Protect Homebuyers?
One of the most important advantages of RERA is that it places specific responsibilities on promoters and gives allottees important statutory protections.
1. RERA Registration of Eligible Projects
Before purchasing a property, a buyer should check whether the project is registered with the relevant state RERA authority where registration is applicable.
A registered project generally has important information available through the regulatory authority’s portal, allowing prospective buyers to conduct basic due diligence before making a financial commitment.
2. Disclosure of Project Information
RERA promotes disclosure of relevant project information, helping buyers make more informed decisions. Depending on the applicable state rules and project status, information may include project details, approvals, timelines, promoter information and other documents.
This greater visibility can help a buyer compare the developer’s claims with information recorded with the regulatory authority.
3. Protection Against Unauthorised Changes
RERA places restrictions on changes to sanctioned plans, layout plans and specifications. The Ministry of Housing and Urban Affairs notes that alterations or additions to sanctioned plans generally require the previous written consent of at least two-thirds of the allottees, subject to the Act and applicable provisions.
This is important because buyers should receive the property substantially in accordance with the approved plans and contractual commitments.
4. Protection in Case of Project Delays
Delayed possession can create significant financial and practical difficulties for a homebuyer. RERA provides remedies where a promoter fails to complete or give possession in accordance with the agreement for sale.
Depending on the circumstances, the allottee may have the right to seek a refund with applicable interest and compensation or continue with the project and claim applicable interest for the delay. The exact remedy depends on the facts, agreement and applicable state rules.
5. 70% of Collections for the Project
A significant RERA provision requires 70% of amounts realised from allottees for a real estate project to be deposited in a separate bank account and used for the relevant project, with withdrawals subject to the statutory certification process.
This provision is intended to reduce diversion of funds and promote financial discipline in project development.
What Should Homebuyers Check Before Buying a RERA-Registered Property?
RERA registration should not be treated as the only property due-diligence step. A buyer should conduct a broader legal and financial review before making a purchase.
Check the RERA Registration Number
Obtain the project’s RERA registration number and verify it on the relevant state or UT RERA portal. Do not rely solely on information provided in advertisements or sales brochures.
Verify the Promoter Details
Check the developer’s name and project details against the information available on the RERA portal. Compare the information with the booking documents and sale agreement.
Check the Possession Timeline
Review the registered project information and agreement for sale carefully to understand the committed timeline. Avoid relying only on verbal assurances from sales representatives.
Review Carpet Area
RERA promotes the disclosure and use of carpet area in property transactions, helping buyers understand what area they are actually purchasing rather than relying only on broader terms such as super built-up area.
Read the Agreement for Sale
Never sign a property agreement without understanding its important terms. Pay particular attention to:
- Property description
- Carpet area
- Total consideration
- Payment schedule
- Possession date
- Interest provisions
- Cancellation terms
- Maintenance obligations
- Common areas and amenities
- Default provisions
- Registration and other applicable charges
For a substantial property transaction, obtaining independent legal advice before signing is advisable.
What Rights Do Homebuyers Have Under RERA?
RERA gives homebuyers several important rights, subject to the Act, applicable state rules and the facts of the transaction.
A buyer can generally expect greater transparency regarding registered project information, contractual commitments and project progress. The Act also provides mechanisms through the Real Estate Regulatory Authority and Real Estate Appellate Tribunal for addressing eligible disputes.
The framework also seeks to establish greater fairness between promoters and buyers, including provisions relating to interest payable in cases of default or delay.
How Can a Homebuyer File a RERA Complaint?
If a buyer has a dispute covered by RERA, a complaint may generally be filed before the relevant State or UT Real Estate Regulatory Authority, following the applicable procedure and rules.
The complaint process can involve issues such as delayed possession, contractual violations, non-compliance with RERA requirements or other matters falling within the authority’s jurisdiction.
If a party is dissatisfied with an order of the regulatory authority or adjudicating mechanism, the applicable appeal process may be available before the Real Estate Appellate Tribunal.
Because procedures, forms, fees and jurisdictional requirements can vary by state, buyers should check the applicable state RERA rules and portal before filing a complaint.
Is RERA Applicable to Every Property?
No. RERA has specific applicability provisions, exemptions and thresholds. Not every real estate transaction automatically falls within the same registration requirements.
The Act is implemented through state and UT authorities, and the applicable rules can differ between jurisdictions. Therefore, buyers should verify the specific project’s status and applicability under the relevant state RERA framework rather than assuming that every property is covered in exactly the same way.
RERA Checklist for Homebuyers
Before booking a property, a homebuyer should:
- Verify the project’s RERA registration.
- Check the developer and promoter details.
- Review project approvals and disclosures available on the RERA portal.
- Verify the proposed possession timeline.
- Check the carpet area and property specifications.
- Read the agreement for sale carefully.
- Understand the payment schedule and additional charges.
- Keep copies of advertisements, brochures, receipts and correspondence.
- Avoid relying only on verbal promises.
- Consult a qualified property lawyer when significant legal or financial issues are involved.
Frequently Asked Questions About RERA
What is RERA in simple terms?
RERA is India’s real estate regulatory framework designed to increase transparency, regulate covered real estate projects and protect homebuyers’ interests.
Is RERA registration mandatory for all real estate projects?
No. The Act contains specific provisions, thresholds and exemptions. Whether registration is required depends on the project and applicable rules.
How can I check a property's RERA registration?
Visit the official RERA portal of the relevant state or Union Territory and search using the project name, promoter details or registration number, as applicable.
What happens if a builder delays possession?
Depending on the circumstances and terms of the agreement, a buyer may have statutory remedies including interest, refund and/or compensation. The appropriate remedy depends on the facts and applicable legal provisions.
Can a builder change the approved project plan?
RERA restricts certain changes to sanctioned plans and specifications. Material changes generally require the consent prescribed under the Act, subject to applicable exceptions and provisions.
Can homebuyers approach RERA for a dispute?
Where the dispute falls within RERA’s jurisdiction, an affected allottee may approach the relevant Real Estate Regulatory Authority or other appropriate mechanism under the Act.
How Semwal & Co Can Help With RERA-Related Matters
RERA has significantly changed the relationship between homebuyers, promoters and real estate agents by introducing greater transparency and regulatory accountability. However, understanding your rights is only the first step. Property documents, agreements, project records and the specific state RERA rules must be examined carefully before taking legal action or entering into a transaction.
Semwal & Co can assist clients with legal guidance relating to real estate transactions, property documentation and RERA-related matters. Professional legal review can help homebuyers understand contractual obligations, identify potential concerns and determine appropriate legal remedies based on the circumstances of their case.
Disclaimer: This article is intended for general informational purposes and should not be treated as legal advice. RERA provisions, state rules, regulations and judicial interpretations may change. Homebuyers should obtain professional legal advice based on the facts and location of their property.