RERA: What Real Estate Buyers Should Understand Before Buying a Property
Buying a property is one of the biggest financial decisions for most people. However, concerns about delayed possession, misleading advertisements, hidden charges and incomplete projects can make the process challenging. To address these issues and improve transparency in the real estate sector, Parliament enacted the Real Estate (Regulation and Development) Act, 2016, commonly known as RERA. The Act came fully into force on 1 May 2017.
The law established a regulatory framework for real estate projects and agents, with the objective of protecting homebuyers and promoting accountability among developers. It also provides mechanisms through which buyers can raise complaints against violations of the law.
For anyone planning to purchase an apartment, plot or commercial property, understanding RERA in India is an important step towards making an informed decision. Here is what property buyers should know about the Act, its key provisions and how it can help protect their interests.
What Is RERA in Real Estate?
RERA stands for the Real Estate (Regulation and Development) Act, 2016. It was introduced to regulate the real estate sector, improve transparency in property transactions and establish mechanisms for resolving disputes between buyers and developers.
Under the Act, a Real Estate Regulatory Authority and a Real Estate Appellate Tribunal are set up for each state and union territory. State governments establish them for their states, and the central government does so for union territories. The Act also allows two or more states or union territories to share a single authority. These authorities oversee applicable project registrations, monitor compliance and provide a platform for addressing complaints.
The Act applies to residential and commercial real estate projects that fall within its scope. It also lays down obligations for developers, real estate agents and property buyers.
One of its key objectives is to ensure that buyers have access to relevant project information before making a financial commitment. This includes details such as approved plans, carpet area, completion timelines and the developer’s obligations.
Why Is RERA Important for Property Buyers?
Before RERA, buyers often faced difficulties obtaining reliable information about projects, tracking construction progress and seeking remedies when developers failed to meet their commitments.
RERA introduced a more structured framework for property transactions. Its provisions help buyers assess projects using disclosed information and hold developers accountable for applicable legal obligations.
Here are some of the major ways RERA can benefit property buyers.
1. Greater Transparency in Property Transactions
One of the main benefits of RERA is improved transparency. Developers of registered projects must disclose specified information to the relevant authority, including sanctioned plans, project details, completion timelines and other prescribed particulars.
Much of this information is available through state RERA websites, allowing prospective buyers to conduct preliminary checks before booking a property.
These disclosures can help buyers compare projects and identify discrepancies between advertised claims and officially submitted information.
2. Mandatory Registration of Applicable Projects
Under Section 3 of the RERA Act, developers must register projects covered by the law with the relevant state or union territory authority before advertising, marketing, booking or selling them.
The central Act generally exempts projects where the land proposed to be developed does not exceed 500 square metres or the number of apartments does not exceed eight, inclusive of all phases. State governments may reduce these thresholds. Other exemptions include:
- Projects that received a completion certificate before the Act came into force
- Certain renovation, repair or redevelopment projects that do not involve marketing, advertising, selling or new allotment
Ongoing projects that had not received a completion certificate when the Act came into force were required to register.
Buyers should therefore verify whether a project is legally required to be registered instead of assuming that every property must have a RERA registration number.
For applicable registered projects, the registration number and official project record provide an important starting point for due diligence.
3. Better Accountability for Project Delays
Delayed possession can create financial pressure for homebuyers, particularly those paying both rent and home loan instalments.
RERA requires developers to disclose the proposed completion timeline and fulfil their obligations under the applicable law and agreement for sale.
If a promoter fails to complete or deliver possession in accordance with the agreement or applicable legal requirements, buyers may have statutory remedies. Depending on the circumstances, these can include withdrawing from the project and seeking a refund with applicable interest and compensation, or remaining in the project and claiming interest for the delay.
The availability and scope of relief depend on the facts, the agreement and the relevant legal provisions.
4. Protection Against Misleading Advertisements
Property advertisements frequently highlight amenities, facilities, location advantages and expected possession dates. Buyers need to ensure that these claims correspond with the project’s approved plans and official disclosures.
RERA requires promoters to provide accurate information and prohibits certain misleading representations. Under Section 12, a person may be entitled to compensation from the promoter if they made an advance or deposit relying on a notice, advertisement, prospectus or model apartment and suffered a loss because of an incorrect or false statement in it. If that person chooses to withdraw from the project, they are entitled to the return of their entire investment with interest, along with compensation, as provided under the Act.
Buyers should retain copies of brochures, booking forms, payment receipts and written promises made during the sales process. These records may prove useful if a dispute arises.
5. Greater Financial Discipline Among Developers
Another important provision of RERA concerns the use of funds collected from homebuyers.
For registered projects, 70% of the amounts realised from allottees must be deposited in a separate account with a scheduled bank and used only for the land cost and construction cost of that project. Withdrawals must be in proportion to the percentage of project completion and must be certified by an engineer, an architect and a practising chartered accountant. The promoter must also have the project accounts audited by a chartered accountant within six months of the end of every financial year.
This provision is designed to reduce the diversion of funds between projects and improve financial accountability.
However, it does not eliminate every financial risk associated with property development. Buyers should still assess the developer’s track record, project status and other available information.
What Is a RERA Registration Number?
A RERA registration number is the identifier assigned to a project registered with the relevant state or union territory regulatory authority.
It allows buyers to locate the official project record and review information disclosed by the promoter.
The registration number is useful, but it should not be treated as a guarantee that the property is free from all legal, construction or financial risks.
Buyers should verify the registration details on the official authority website and ensure that the record corresponds to the exact project, phase, location and developer being considered.
How to Check RERA Registration Before Buying a Property
Checking RERA registration is a practical step that buyers can complete before making a booking or paying an advance.
Follow these steps:
Step 1: Identify the relevant state authority. Visit the official RERA website for the state or union territory where the property is located.
Step 2: Search for the project. Use the project name, developer’s name or registration number in the authority’s project search facility.
Step 3: Verify the project details. Check the registered promoter, project address, phase, registration validity and declared completion date.
Step 4: Review the disclosures. Examine the approved plans, carpet area, construction status and other documents available on the portal.
Step 5: Check for updates and complaints where available. Review extension orders, regulatory notices and relevant orders or proceedings published by the authority.
Step 6: Match the information with the sale documents. Ensure that the unit, phase, specifications and possession commitments offered to you are consistent with the available records and agreement.
For projects in Gurugram, buyers can consult the official Haryana RERA Gurugram authority website. For projects in other locations, the relevant state or union territory portal should be used.
What Rights Do Homebuyers Have Under RERA?
The RERA Act establishes several rights for allottees, subject to the applicable provisions and circumstances.
Right to Project Information
Buyers are entitled to access information that promoters are legally required to disclose, including relevant sanctioned plans, specifications, carpet area and completion schedules.
Right to Timely Possession or Applicable Relief
If the developer fails to fulfil possession obligations, buyers may seek the remedies available under the Act and their agreement. These can include a refund, interest or other relief, depending on the circumstances.
Right to Compensation for Certain Losses
RERA provides compensation mechanisms for specified violations. For example, Section 18 addresses certain consequences of failure to complete a project or give possession in accordance with the agreement, while Section 12 deals with losses suffered by a person who made an advance or deposit relying on false or incorrect statements in advertisements, prospectuses or model apartments.
Right to Raise Complaints
Under Section 31, an aggrieved person may file a complaint with the relevant RERA authority or adjudicating officer, as applicable, against a promoter, allottee or real estate agent for violations of the Act, rules or regulations.
Right to Protection Against Unauthorised Changes
Section 14 restricts changes to sanctioned plans, layout plans and project specifications once they have been disclosed. Changes to a buyer’s own apartment, plot or building generally require that buyer’s prior written consent, except for certain minor alterations permitted by the Act. Other alterations, such as those affecting the building or common areas, require the prior written consent of at least two-thirds of the allottees in that building, excluding the promoter.
These rights help establish accountability, but buyers should understand the specific legal conditions governing each remedy.
What Should Buyers Check Beyond RERA Registration?
RERA registration is an important safeguard, but it should not be the only factor influencing a property purchase.
Before making a decision, buyers should also consider the following:
- Land title and ownership: Verify ownership records and the legal right to develop or sell the property.
- Approvals and permissions: Check applicable building approvals, land-use permissions and other statutory clearances.
- Occupancy and completion certificates: For completed projects, verify the relevant certificates and whether the property is legally fit for occupation.
- Total property cost: Understand the base price, taxes, maintenance charges, parking charges and other applicable payments.
- Developer track record: Research previous projects, delivery history, construction quality and publicly available regulatory orders.
- Agreement for sale: Read the payment schedule, possession date, specifications, cancellation conditions and default clauses carefully.
- Construction progress: Compare actual progress with the project’s declared timeline and available updates.
Where necessary, consult a qualified property lawyer before signing documents or transferring a substantial amount.
What Happens If a Developer Violates RERA Rules?
If a developer fails to comply with applicable RERA provisions, a buyer may be able to approach the relevant regulatory authority.
The process generally involves identifying the alleged violation, collecting supporting documents and submitting a complaint through the prescribed procedure. Documents may include the agreement for sale, payment receipts, correspondence, advertisements and relevant project disclosures.
The appropriate forum and remedy depend on the nature of the dispute. Some matters fall before the RERA authority, while certain claims for adjudication of compensation may be handled by an adjudicating officer. Appeals may be filed before the relevant Real Estate Appellate Tribunal in accordance with the law. If a promoter files an appeal, it must generally deposit at least 30% of the penalty, or the full amount payable to the allottee, before the appeal can be heard.
Although the Act provides for time-bound disposal of matters, actual timelines can vary depending on the case and authority. Buyers should check the applicable state rules, filing fees and procedural requirements before submitting a complaint.
Common Myths About RERA
Despite its importance, some misconceptions about RERA continue to influence property-buying decisions.
Myth 1: Every property must be RERA registered.
Fact: Registration requirements depend on the Act, applicable state rules and exemptions. Not every property transaction falls within the mandatory registration framework.
Myth 2: A RERA-registered property is completely risk-free.
Fact: Registration improves transparency and accountability but does not replace checks on land title, approvals, construction quality and financial risks.
Myth 3: RERA guarantees possession on the promised date.
Fact: RERA establishes obligations and remedies for specified delays, but it cannot ensure that every project will be completed on schedule.
Myth 4: Buyers cannot complain once they have signed an agreement.
Fact: Signing an agreement does not automatically remove statutory rights. The available remedies depend on the alleged violation, the agreement and the applicable law.
Conclusion
RERA has strengthened the regulatory framework for India’s real estate sector by introducing project registration requirements, disclosure obligations, financial safeguards and mechanisms for dispute resolution. For property buyers, understanding these provisions can make the purchase process more transparent and help them identify potential risks before committing their savings.
However, RERA registration should be one part of a wider property due-diligence process. Buyers should verify project records, examine approvals, review the agreement for sale and assess the developer’s delivery history before making a final decision.
An informed approach can help homebuyers make more confident property decisions while better understanding their rights and available legal remedies.
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Frequently Asked Questions (FAQs)
1. What is RERA in India?
RERA is the Real Estate (Regulation and Development) Act, 2016, which came fully into force on 1 May 2017. It regulates applicable real estate projects and agents, promotes transparency and provides mechanisms to protect homebuyers’ interests.
2. How can I check whether a property is RERA registered?
Visit the official RERA website for the state or union territory where the property is located. Search using the project name, developer’s name or registration number and verify the details against the property being offered.
3. Is RERA registration mandatory for every real estate project?
No. The Act provides exemptions and thresholds for certain projects, and state governments may prescribe lower thresholds. Buyers should check the applicable state rules and the project’s circumstances.
4. Can I file a complaint against a builder under RERA?
An aggrieved person may file a complaint for a violation of the Act, applicable rules or regulations. The appropriate authority, procedure and remedy depend on the nature of the grievance.
5. Does RERA protect buyers against delayed possession?
RERA provides remedies for specified possession delays and failures to meet contractual obligations. Depending on the circumstances, these may include a refund with applicable interest or interest for the period of delay.
6. Does RERA registration guarantee that a project will be completed?
No. Registration and regulatory oversight improve accountability but do not guarantee completion or eliminate all property-related risks.
7. What is the 70% rule under RERA?
For registered projects, 70% of the amounts realised from allottees must be deposited in a separate account with a scheduled bank and used only for the project’s land and construction costs. Withdrawals must match the percentage of project completion and be certified by an engineer, an architect and a chartered accountant.
8. What should I verify before buying a RERA-registered property?
Check the registration details, project phase, approved plans, carpet area, possession timeline, applicable approvals, land title, agreement for sale and developer’s track record.
