Ravi Geela

07 Mar, 2025

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 What Is RERA, and How Does It Impact Homebuyers in India?

Introduction

Buying a home is one of the biggest financial decisions for most Indians. However, the real estate sector in India has long been plagued by delays in project completion, a lack of transparency, and unfair practices by developers. To address these issues and protect homebuyers, the government introduced the Real Estate (Regulation and Development) Act, 2016 (RERA).

Each state and union territory in India has its own Real Estate Regulatory Authority (RERA) to oversee real estate transactions and ensure that developers adhere to the legal framework.

RERA was designed to bring accountability, transparency, and efficiency to the real estate industry. It ensures that developers complete projects on time, adhere to promised specifications, and protect buyers from fraud. But how exactly does RERA benefit homebuyers? In this article, we will break down what RERA is, its key provisions, and how it impacts homebuyers in India.

Key Features of RERA

RERA incorporates several provisions that make real estate transactions more structured, transparent, and buyer-friendly. Some of its key features include:

1. Mandatory Registration of Projects

  • Developers cannot advertise, sell, or market any real estate project without registering it under RERA.
  • Registration applies to all residential and commercial projects exceeding 500 square meters or having more than eight apartments.
  • Homebuyers can verify project registration on the state RERA website before making a purchase.

2. Transparency in Project Details

  • Developers must disclose complete project details, including:
    • Layout plans and design approvals.
    • Carpet area specifications.
    • Construction timelines and expected completion dates.
    • Financial and legal status of the project.
  • This information is accessible on the official RERA website, ensuring that buyers make informed decisions.

3. Standardization of Carpet Area Calculation

  • Before RERA, builders often charged buyers based on the super built-up area, including common spaces like lobbies and corridors.
  • Under RERA, developers can only charge based on the carpet area, i.e., the actual usable space within the walls of the property.
  • This eliminates misleading calculations and inflated pricing.

4. Financial Discipline for Developers

  • To prevent fund diversion to other projects, RERA mandates that developers:
    • Deposit 70% of buyer payments into a dedicated escrow account.
    • Use these funds exclusively for construction and land-related expenses.
  • This ensures that the project progresses as per schedule, reducing delays and financial mismanagement.

5. Timely Project Completion & Compensation for Delays

  • Delayed possession has been one of the biggest concerns for homebuyers in India.
  • RERA ensures that developers adhere to the promised delivery timelines.
  • If a project is delayed, the developer must:
    • Pay compensation with interest to the homebuyer.
    • Offer the option to withdraw from the project and receive a full refund with interest.

6. Buyer’s Right to Withdrawal and Refund

  • If a developer fails to deliver on commitments or violates RERA provisions, homebuyers have the right to:
    • Withdraw from the project and claim a full refund.
    • Seek compensation for financial losses.
  • This protects homebuyers from fraudulent schemes and incomplete projects.

7. Five-Year Defect Liability Period

  • If a homebuyer notices structural defects, poor-quality construction, or design flaws within five years of possession, the builder is legally required to fix them at no extra cost.
  • Repairs must be completed within 30 days of the complaint.

8. Grievance Redressal & Faster Dispute Resolution

  • RERA has established Real Estate Regulatory Authorities (RERAs) and Appellate Tribunals in every state to handle disputes.
  • Homebuyers can file complaints online if a developer violates RERA rules.
  • All disputes must be resolved within 60 days, ensuring faster legal action.

9. Stricter Penalties for Non-Compliance

  • If a developer or real estate agent violates RERA regulations, they face strict penalties, including:
    • Fines up to 10% of project cost.
    • Imprisonment of up to 3 years for severe violations.
    • Project de-registration, preventing further sales.
  • This ensures greater accountability in the real estate sector.

How RERA Impacts Homebuyers in India

1. Increased Trust in the Real Estate Sector

RERA has significantly improved transparency and accountability in property transactions. Buyers now have access to verified project details, reducing the risk of fraud.

2. Protection Against Project Delays

With strict deadlines and penalties for delays, homebuyers can expect timely possession or compensation for any delays.

3. Standardized Pricing

Since developers can only charge based on carpet area, buyers no longer pay for unusable spaces like balconies or shared corridors.

4. Easier Dispute Resolution

  • Before RERA, homebuyers had to go through lengthy court battles to settle disputes.
  • Now, disputes are resolved within 60 days through the state RERA authorities.

5. More Reliable Real Estate Agents

Since brokers and real estate agents must also be RERA-registered, homebuyers can trust certified professionals when purchasing property.

Challenges & Limitations of RERA

Despite its benefits, RERA faces certain challenges:

 Varied Implementation Across States – Each state has its own RERA rules, leading to inconsistencies.

 Lack of Awareness Among Homebuyers – Many buyers do not know how to check RERA registration or file complaints.

 Enforcement Issues – While RERA provides strict penalties, some states have been slow to act against non-compliant developers.

 Delays in Dispute Resolution – Although RERA mandates resolution within 60 days, some cases take longer due to backlogs.

To fully realize RERA’s potential, better enforcement, increased buyer awareness, and stricter penalties for violations are needed.

Conclusion

RERA has transformed the Indian real estate market, making it more transparent, accountable, and buyer-friendly. With clear regulations for developers, strict project deadlines, and financial safeguards, homebuyers now have greater confidence in property investments.

Before purchasing any property, buyers should always check the project’s RERA registration on their state’s RERA website. With stronger consumer rights, standardized pricing, and faster dispute resolution, RERA ensures that buying a home in India is safer, more transparent, and legally protected.

FAQs

1. How can I check if a project is RERA-registered?

You can visit your state’s official RERA website and search for the project using the developer’s name or project ID.

2. Does RERA apply to ongoing projects?

Yes, RERA applies to all ongoing projects that did not receive a completion certificate before May 2017.

3. Can homebuyers file complaints under RERA?

Yes, homebuyers can file complaints online through the respective state RERA authority’s website.

4. What happens if a developer violates RERA rules?

Developers face heavy fines, project cancellation, and even imprisonment for serious violations.

5. Does RERA apply to all real estate projects?

RERA applies to projects covering more than 500 square meters of land or having 8+ apartments. Smaller projects may be exempt.