What is RERA and How Does It Regulate?
In today’s rapidly growing real estate market, transparency, accountability, and timely delivery have become essential for both homebuyers and developers. To bring order and fairness to the sector, the Indian government introduced the Real Estate (Regulation and Development) Act, 2016, commonly known as RERA. This act has revolutionized the way real estate operates, ensuring a safer environment for buyers and a more disciplined approach for builders.
Understanding RERA: A Brief Overview
RERA is a central legislation designed to regulate the real estate sector, promote transparency, and protect consumer interests. It came into force on May 1, 2017, and has been implemented across all Indian state and union territories through individual state-level RERA authorities.
At its core, RERA aims to build trust between developers and buyers by setting clear guidelines and making information accessible and enforceable.
Objectives of RERA
- Protect Homebuyers from fraud, delay, and misrepresentation.
- Promote Transparency in real estate transactions and project details.
- Ensure Accountability of builders and agents.
- Speedy Dispute Resolution through RERA authorities and tribunals.
How RERA Regulates Real Estate
1. Mandatory Project Registration
Developers must register projects with RERA before marketing or selling, especially if the project:
- Exceeds 500 sq. meters of land, or
- Has more than 8 apartments
Unregistered projects are illegal to advertise or sell under RERA regulations.
2. Disclosure of Project Details
Builders must upload complete and accurate information on the state RERA portal, including:
- Project layout and plans
- Timeline for completion
- Number of units
- Land title details
- Status of government approvals
Buyers can verify these details easily online.
3. Use of Escrow Account
To prevent fund diversion, builders must deposit 70% of collected money into a separate escrow account, used only for that particular project’s construction and land costs.
4. On-Time Delivery
Builders are now legally bound to deliver on schedule. Failure to do so can result in:
- Full refund with interest, or
- Monthly compensation until possession is handed over
5. 5-Year Defect Liability
Any construction defects or poor workmanship reported within five years of possession must be rectified by the builder at no cost to the buyer.
6. Fast-Track Complaint Resolution
RERA provides a streamlined platform for buyers to file complaints. Disputes are resolved via the RERA authority or the Real Estate Appellate Tribunal, often much faster than traditional courts.
Why RERA Benefits Homebuyers
Buying a property is a significant financial and emotional decision. RERA gives buyers:
- Legal protection
- Reliable project timelines
- Transparency in project execution
- Access to verified developer credentials
RERA’s Positive Impact
Since its implementation, RERA has:
- Reduced project delays and fraud
- Made developers more accountable
- Increased buyer awareness and confidence
- Improved credibility in the Indian real estate market
Major states like Maharashtra, Karnataka, Gujarat, and Uttar Pradesh have shown strong compliance and enforcement, bringing long-term benefits to both developers and consumers.
Final Thoughts
RERA has brought much-needed discipline and transparency to Indian real estate. Whether you’re a first-time buyer or a seasoned investor, understanding RERA is crucial to making a smart and secure decision.
At Om Real Estate, we are committed to helping you find RERA-approved properties that match your budget, lifestyle, and investment goals. We believe in complete transparency, client trust, and professional guidance every step of the way.
