The real estate sector in any economy is of supreme significance. Not only does it serve the economy by enhancing its infrastructure, but also reflects its well-being.
Earlier every state had its own law which governed the real estate market. Yet still, Real Estate Regulation and Development Act, 2016 centralised the regulation of the real estate industry. This Act brought in some much-needed transparency in the real estate sector. For this purpose, the Act empowered the Central Government to establish the Real Estate Regulatory Authority (RERA).
It required the compulsory registration of real estate projects. Mandatory filing of certain data and display of information on the RERA website is also necessary. This has equipped the homebuyers to make informed choices. It has also provided for remedies in the case of delay and other default.
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What Does RERA Do?
- The Act fully came into force on 1 May, 2017.
- The Act establishes a RERA in each State for regulation of the real estate sector.
- RERA also acts as an adjudicating body for speedy dispute resolution.
Understanding RERA’s role in dispute resolution helps, but preventing issues before they arise is crucial. Learn how to protect yourself from real estate fraud with our blog, ‘How Can You Avoid Real Estate Fraud?,’ which outlines common scams in the real estate sector and offers practical tips to avoid them. Being proactive about fraud prevention can save you from potential losses and complications.
Objectives of RERA Registration

RERA provides that real estate projects must be registered. These projects include residential and commercial real estate projects. Registration is done by the promoter, i.e., the builder. The objectives of registration are:
- More transparency and accountability towards consumers in order to protect their interests
- Resolve grievances by establishing the dispute resolution mechanism
- Reduce fraud by increased compliance
In case of non-registration of the real estate project, Section 59 stipulates a penalty of up to 10% of the estimated project cost and in case of continued default, an additional fine of up to 10% of the estimated project cost or imprisonment up to 3 years or both.
Special Directions in RERA
RERA provides that a person can be a promoter who:
- constructs the building for the purpose of selling to other persons
- develops the land into a project
- any development authority or any other public body in respect of allottees
- an apex State-level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings
- any other person who acts himself as a builder, coloniser, contractor, developer, estate developer.
Responsibilities of a Promoter
Section 11 of the Act provides that a promoter is responsible for:
- all obligations, responsibilities and functions under the provisions of the Act as per the agreement for sale,
- making available to allottees sanctioned plans, layout plans, along with specifications, approved by the competent authority,
- stage-wise time schedule of completion of the project including water, sanitation and electricity,
- obtaining the completion certificate or the occupancy certificate and to make it available to the allottees individually or to the association of allottee,
- obtaining the lease certificate, where the real estate project is developed on a leasehold land, specifying the period of lease, and certifying that all dues and charges in regard to the leasehold land has been paid, and to make the lease certificate available to the association of allottees,
- providing and maintaining the essential services, on reasonable charges, till the taking over of the maintenance of the project by the association of the allottees,
- enabling the formation of an association or society or co-operative society for allottees.
Provision for Taking Advance for Purchase of Property
RERA provides that a promoter shall not accept a sum more than 10% of the cost of the apartment, plot, or building as an advance payment or an application fee from a person. To ask for an advance, the promoter has to first enter into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.
The agreement for sale shall specify:
- particulars of development of the project including the construction of building and apartments,
- specifications and internal development work and external development work,
- the dates and the manner by which payments towards the cost of the apartment, plot, or building, are to be made by the allottees,
- the date on which the possession of the apartment, plot or building is to be handed over, and
- the rates of interest payable by the promoter to the allottee and the allottee to the promoter in case of default.
Before you finalize your property purchase, ensure you check all necessary documents. Our blog, ‘Don’t Purchase Property Before Checking 10 Documents,’ provides a checklist of crucial documents you must review. This step is vital to avoid future legal issues and ensure your investment is secure.
Right of Buyers
Under RERA, the buyers are entitled to the following:

- obtain the information relating to sanctioned plans, layout plans along with the specifications,
- know the stage-wise time schedule of completion of the project, including the provisions for water, sanitation, electricity and other amenities and services as agreed,
- claim the possession of the apartment, plot or building,
- claim the refund of the amount paid along with interest from the promoter, if the promoter fails to comply or is unable to give possession of the apartment, plot or building,
- have the necessary documents and plans, including that of common areas, after handing over the physical possession of the apartment or plot or building by the promoter.
As you learn about your rights under RERA, understanding the complete process of purchasing a property is equally important. Our blog, ‘Flat on Sale: A Step-by-Step Guide for Purchase,’ provides a detailed overview of each step involved in buying a flat, from initial considerations to closing the deal. This guide will ensure you are well-prepared and informed throughout the buying process.
In Conclusion
Before the enactment of the Act, the real estate sector in India was majorly unregulated. Except for the erstwhile Consumer Protection Act, 1986, no recourse under the law was available to the real estate buyers. RERA envisages effective consumer protection, uniformity and standardization of business practices and transaction in the real estate sector. It aims at providing transparency and protecting the interests of consumers in the real estate sector. Further, it intends to ensure greater accountability towards consumers and significantly reduce frauds, delays and high transaction costs.
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FAQs:-
The Real Estate (Regulation and Development) Act, 2016 (RERA) is a central law in India that regulates the real estate sector. It aims to bring transparency, accountability, and efficiency by requiring mandatory registration of real estate projects, establishing the Real Estate Regulatory Authority in each state, and ensuring that homebuyers have access to important information to make informed decisions.
Before RERA, the real estate sector in India was largely unregulated, with different states having their own laws. The enactment of RERA in 2016 centralized the regulation of the real estate industry, providing a uniform framework for transparency and accountability across the country. This act was fully implemented on May 1, 2017.
RERA 2016 aims to bring accountability to the real estate sector by requiring developers to register their projects, adhere to approved plans, provide timely project updates, and ensure that the interests of homebuyers are protected. It also seeks to reduce fraud and delays in real estate transactions.
RERA was introduced on March 10, 2016, and fully came into force on May 1, 2017.
Rule 25 of RERA generally refers to the administrative powers of the Chairperson of the Real Estate Regulatory Authority (RERA). It outlines the specific responsibilities and authorities that the Chairperson holds in administering the regulatory body. However, specific details of Rule 25 might vary slightly depending on the state’s rules under RERA. It’s advisable to consult the official RERA guidelines of the specific state for exact provisions.
Section 40 of the Real Estate (Regulation and Development) Act, 2016, deals with the recovery of interest, penalty, or compensation. If a promoter, allottee, or real estate agent fails to pay any imposed interest, penalty, or compensation, it can be recovered as arrears of land revenue. This section ensures that the orders passed by the RERA authority or the adjudicating officer are enforceable, providing a legal mechanism for recovery.