What is the RERA Act?
The Real Estate Regulatory Authority (RERA) was introduced under the Real Estate (Regulation and Development) Act, 2016 to bring discipline, fairness, and transparency to India’s real estate market.
The RERA Act was passed by the Indian Parliament on March 10, 2016, and came into effect on May 1, 2016. Initially, only 52 out of 92 sections were notified, and the remaining provisions became effective from May 1, 2017.
The main purpose of RERA is to protect homebuyers, promote honest practices, and ensure timely delivery of housing projects. It has transformed the real estate sector by holding developers, agents, and builders accountable to the buyers.
Important Points Under RERA
The RERA Act lays down strict rules for developers and builders to ensure that the interests of property buyers are protected. Here are the key aspects every buyer should know:
1. Security
Under RERA, developers must deposit 70% of the total funds collected from buyers into a dedicated escrow account.
This money can only be used for land and construction costs of that specific project.
Additionally, developers cannot collect more than 10% of the property cost as advance before signing the sale agreement.
This rule prevents misuse of buyer funds and ensures financial transparency.
2. Transparency
Builders are now required to submit all genuine project documents, including approvals, layouts, and completion timelines.
They are prohibited from making design or plan changes without the buyer’s written consent.
This ensures that what’s promised on paper matches what’s delivered in reality — making property transactions more trustworthy.
3. Fairness
Earlier, developers often calculated property prices based on super built-up area, which caused confusion for buyers.
Now, RERA mandates that properties must be sold based on carpet area, offering a clear and standardized pricing model.
If a project is delayed, the buyer can cancel the booking and receive a full refund, or continue and receive compensation with interest for the delay.
4. Quality
RERA holds developers responsible for construction quality.
If a buyer identifies a structural defect or poor workmanship within five years of possession, the builder must repair the issue within 30 days, free of charge.
This provision ensures high construction standards and long-term buyer satisfaction.
5. Authorisation
No builder, developer, or agent can advertise, market, sell, or book any property without registering under RERA.
Once registered, all marketing materials must display the RERA registration number.
This system guarantees that only verified and approved projects reach potential buyers.
Benefits of RERA
The RERA Act offers several advantages to homebuyers, real estate agents, and developers, creating a fair and transparent marketplace.
1. Standardisation of Carpet Area
Before RERA, property prices were often inflated through unclear calculations.
Now, RERA ensures a standard formula for carpet area, preventing developers from overstating the usable space and charging unfairly.
2. Reduced Builder Insolvency Risks
Since developers can no longer divert project funds, buyers are protected from financial risks.
The mandatory 70% escrow deposit ensures that funds are used only for the project they were collected for, verified by an engineer, architect, and chartered accountant.
3. Limited Advance Payment
Builders can now collect only up to 10% of the property value as advance, ensuring that buyers aren’t forced to make large payments before the agreement is finalized.
4. Quality and Defect Liability
If a buyer experiences structural or construction defects within five years, the builder must fix them within 30 days at no extra cost.
This gives buyers confidence in the durability and quality of their homes.
5. Equal Interest Rate on Defaults
Earlier, buyers were charged higher interest rates for payment delays compared to developers.
Under RERA, both buyers and builders pay the same interest rate if either party defaults.
6. Protection from False Promises
If a developer fails to deliver what was promised in advertisements or agreements, the buyer can demand a full refund, along with interest or compensation.
7. Right to Compensation
Buyers have the right to claim compensation if the property title is defective or if the builder fails to deliver as promised.
There is no limit to the compensation amount in such cases.
8. Buyer’s Right to Information
RERA gives buyers complete access to project details — from layout plans and approvals to construction progress and possession timelines.
This builds trust and transparency between developers and buyers.
9. Grievance Redressal Mechanism
If a buyer, promoter, or agent faces any dispute, they can file a complaint with the RERA authority.
If not satisfied with the outcome, they can appeal to the RERA Appellate Tribunal for further resolution.
How Do I Ensure That a Property is RERA Compliant?
Before investing in a property, make sure it is RERA registered and compliant by checking the following:
- The project’s area exceeds 500 sq. meters or includes more than 8 apartments.
The developer has registered the project under RERA before advertising or selling.
70% of collected funds are deposited into a separate bank account.
All necessary permissions and approvals have been granted before launch.
Avoid “pre-launch offers” that are not RERA registered — they are no longer legal under the Act.
How Do I Find RERA-Approved Projects?
If you are looking for RERA-approved projects, here’s how you can verify them (for example, in Maharashtra):
- Visit https://maharera.mahaonline.gov.in
- Click on “Registration” → “Registered Projects.”
- Enter the project name or builder’s name and click on Search.
- Check the project status, approval details, location, and expected completion date.
You can also explore verified RERA-approved projects on Reparv.in — India’s trusted platform that connects you with authentic, transparent, and RERA-registered properties.
Conclusion
The RERA Act has played a major role in reshaping the Indian real estate industry, giving buyers the confidence and security they long deserved.
It promotes honesty, accountability, and transparency, ensuring that every transaction benefits both buyers and developers.
If you’re planning to buy a property, always choose a RERA-approved project for a safe and reliable investment.
Visit Reparv.in — your trusted real estate partner — where every property is verified, transparent, and backed by truth and trust.
