What is RERA ACT 2016 – Real Estate Regulatory Authority & RERA Rules

September 19th, 2023


The RERA bill was passed by the Rajya Sabha on 10th March, 2016 and by the Lok Sabha on 15th March 2016. It was effective from 1st May, 2016. This bill aims to protect buyers and boost real estate investment.

The Real Estate (Regulation and Development) Act of 2016, commonly known as the RERA Act, marks a watershed moment in India’s real estate sector. This comprehensive legislation was enacted to bring transparency, accountability, and fairness to an industry that used to leave homebuyers vulnerable to unscrupulous practices. By imposing strict regulations on property transactions, RERA Act seeks to create a level playing field for developers and consumers.

It has introduced a regulatory authority in each state and union territory to oversee property transactions, ensuring that developers adhere to project timelines and deliver what was promised. RERA also mandates that builders deposit a significant part of funds in an escrow account, preventing diversion of buyers’ hard-earned money.

Understanding the RERA Act 2016

This groundbreaking legislation was enacted with a dual purpose: to safeguard homebuyers’ interests and instil transparency, accountability, and discipline into the real estate industry. The scope of RERA encompasses residential real estate projects, and its objectives are multifold.

Firstly, the act aims to promote fair practices by developers, ensuring that property buyers receive what was promised within stipulated timelines. It requires builders to register their projects with the authority and disclose crucial information, making project details accessible to potential buyers.

Secondly, RERA addresses the longstanding issue of fund diversion, by mandating that developers deposit significant portion of project funds in an escrow account – thus preventing misuse.

Need of RERA Regulation

RERA provides a structured framework for property transactions, ultimately fostering trust and accountability. It has transformed the real estate sector into a buyer-centric, organised, and transparent domain, aligning with India’s goal of a developed and ethical real estate landscape.

Key Provisions of the RERA Act

RERA is a legislative shield designed to protect the interests of homebuyers and usher in transparency and fairness within the real estate industry. This brings to the forefront a comprehensive set of provisions and salient features that redefine the dynamics of property transactions.

Salient Features of the RERA Act

  • Establishment of RERA authority in every Indian state to monitor and arbitrate projects in the concerned form
  • Each real estate project needs to be registered with the RERA authority. If guidelines have been adhered to, the authority can accept the project’s registration.
  • Establishment of a fast-track mechanism to settle the disputes
  • To gain RERA approval for transferring rights & liabilities of a real estate project to a third party, the promoter must obtain written consent from at least 2/3rd of the project’s allottees
  • In cases where the promoter’s actions result in financial losses for a buyer due to third parties asserting claims on the under-construction property, the promoter is obligated to provide compensation to the affected buyer. If there is any default from the promoter or buyer side, they must pay an equal interest rate.
  • If a person has any problem regarding violation of the rules of this Act by an agent, buyer or promoter, they can file a complaint
  • If a promoter fails to follow RERA rules, they will have to pay the penalty amount, which could be up to 5% of the evaluated cost of the property
  • If any of RERA authority’s decisions for any complaint is unsatisfactory, one can submit their appeal to the Appellate Tribunal
  • A penalty must be paid if the Appellate Tribunal’s order is not complied with. This can be imprisonment for up to 3 years or 10% of the approximate cost of the project.

Properties of RERA Act

  1. Security:

    Under this Act, at least 70% of the buyers’ and investors’ money will be kept in an escrow account. This money will be allotted to the builder for land-related costs and construction. Builders can only request up to 10% of the property’s price as an advance payment.

  2. Quality:

    Developers must rectify any issues the homebuyers face within 5 years of purchase. This should be rectified within one month of the complaint.

  3. Transparency:

    Builders must submit original documents for all the projects they undertake. If they need to change the plans, they can do so only with the buyers’ consent.

  4. Authorisation:

    The regulator cannot advertise, build, invest, sell, or book a plot without making a registration with the regulator. Once registration is done, the project gets a unique RERA number, which needs to be mentioned in all advertisements & promotions.

Role of RERA

At the state level, the Regulatory Authority comprising experts from various fields, is responsible for the Act’s enforcement within the respective state’s jurisdiction. They are pivotal in ensuring compliance with RERA provisions, including project registrations, information disclosures, and adherence to project timelines. These authorities are the go-to resource for aggrieved homebuyers seeking redressal of grievances related to project delays, quality issues, or violations of RERA norms.

Additionally, RERA authorities are entrusted with maintaining a publicly accessible database of registered projects, promoting transparency. They act as the judges between developers & buyers, facilitating smoother transactions and dispute resolutions.

Enforcement of compliance

The RERA Authority can impose penalties, revoke project registrations, and even recommend criminal proceedings against non-compliant builders. This proactive approach is a powerful deterrent against fraudulent practices, ensuring that the interests of homebuyers are adequately protected.

RERA authorities, both at the state and union territory levels, serve as the watchdogs of India’s real estate sector. In essence, they empower homebuyers, foster transparency, and uphold the principles of fairness & accountability – as laid out in the Act.

Types of RERA Registration

Project Registration

Promoter Registration

Real Estate Agent Registration

It is mandatory for promoters to get their project registered under RERA for selling the units to the buyers The promoters have to make an application to get enlisted under RERA act It is compulsory to get themselves registered with RERA
Promoters will have to submit the application with required documents and pay the given amount of fees A promoter shows his own data with his project details

Registration of Real Estate Projects Under the RERA Estate Act 2016

The application process for real estate projects varies from one state to another. The RERA website of each state has the detailed procedure. The agents and promoters must apply on the website itself. The general steps to registration under RERA are as follows:

Step 1: Account Creation

The initial phase of RERA project registration commences with creating an account on the RERA website. Initiate the registration process by providing basic information such as name, email address, and mobile number.

Step 2: Application Form Completion

After successfully creating an account, one must complete the application form. This form solicits comprehensive details regarding the project, encompassing its location, dimensions, unit count, and anticipated completion date.

Step 3: Document Upload

Following the application form submission, the next step is uploading essential documents. These documents encompass the title deed, building plan, and land-use certificate. Additionally, the applicant must furnish details about the architect(s), engineer(s), and contractor(s) involved in the project.

Step 4: Fee Payment

Once all requisite documents have been uploaded, an applicant must remit the registration fees. It is essential to note that the registration fees may vary from one state to another, hence applicants should obtain precise fee details from the respective RERA website.

Step 5: Receipt of Registration Certificate

Upon successful payment of the fees, your application will be reviewed. The applicant will receive a registration certificate if all details align with the regulatory requirements. This certificate serves as official documentation containing vital project particulars such as the project’s name, location, and expected completion date.

Required Documents for RERA Registration

For Promoters For Agents
PAN card PAN
Available Parking Slots Permanent address proof
Legal title deeds reflect the title of the promoter Photograph
Encumbrance Certificate Details of real estate agent enterprise, including registered address, name of enterprise, partnership, and more
Commencement Certificate Particulars of registration of the enterprise
Sanction plan, layout plan, and project location
Development plan works to be executed in the project
Previous project experience details of the promoter, if any

State-wise RERA Registration

State / UT Registration Fees (INR)
Maharashtra 10,000
Delhi 25,000
Karnataka 10,000
Tamil Nadu 10,000
Telangana 10,000
Gujarat 5000
Uttar Pradesh 25,000
Haryana 25,000
Rajasthan 10,000
West Bengal 10,000
Kerala 1000
Punjab 5000
Madhya Pradesh 5000
Odisha 5000
Chhattisgarh 5000
Bihar 5000
Jharkhand 5000
Himachal Pradesh 1000
Uttarakhand 10,000
Goa 5000
Chandigarh 5000
Andhra Pradesh 10,000
Puducherry 5000
Tripura 5000
Andaman & Nicobar 5000
Dadra & Nagar Haveli 5000
Daman & Diu 5000
Lakshadweep 1000
Meghalaya 5000
Mizoram 5000
Nagaland 5000
Sikkim 5000
Arunachal Pradesh 5000
Manipur 5000
Ladakh (UT) 5000

Obligations of Developers

RERA places stringent obligations on real estate developers, redefining their role in the industry. These obligations are designed to safeguard the interests of homebuyers and promote transparency in real estate transactions. Under RERA, developers need to provide complete details of their projects to prospective buyers – including project layouts, plans, approvals, financial aspects, and timelines.

Consequences of Non-Compliance

Developers who have not registered their projects with RERA or who provide incorrect information can face penalties, imprisonment, or even the revocation of their project registration.

Obligations of Real Estate Agents

Real estate agents must register themselves with the respective state’s RERA authority. This registration serves as an acknowledgment of their accountability in property transactions. They must furnish correct information about themselves, their business, and any real estate transactions they engage in. Moreover, registered real estate agents are mandated to maintain & preserve records of their transactions, which should be updated regularly on the RERA website.

Consequences of Non-Compliance for Agent

Failure to register or provide incorrect information can lead to penalties, revocation of registration, or even imprisonment. This stringent regulatory framework emphasises RERA’s commitment to fostering responsible & ethical conduct among real estate agents, ultimately safeguarding the interests of property buyers.

RERA Rules and Their Importance

RERA rules delve into many essential aspects, each contributing to the act’s overarching objectives. They stipulate project registration fees and lay down the financial framework for developers. Moreover, these rules outline the penalties & consequences for non-compliance, acting as a deterrent against fraudulent practices.

  1. On 31st October, 2016, the HUPA (Housing and Urban Poverty Alleviation) Ministry released the rules of the RERA Act 2016.
  2. All these rules are applied in the 5 Union Territories without legislature, i.e., Daman & Diu, Lakshadweep, Chandigarh, Dadra & Nagar Haveli, and Andaman & Nicobar.

This not only safeguards the interests of homebuyers but also promotes trust within the industry. The act encompasses various elements that collectively promote a more organised, transparent, and ethical real estate sector, aligning with the goal of safeguarding homebuyers and elevating industry standards.

RERA Compliance and the Importance of Transparency

One of the pivotal ways in which RERA achieves transparency is through the establishment of online portals. These portals serve as a digital repository of comprehensive project information, accessible to developers & prospective buyers. Developers must register their projects, disclosing critical details such as timelines, layouts, approvals, and financial particulars. This information is readily available to the public, enabling potential buyers to take informed decisions.

Consumer Protection under RERA

RERA’s commitment to consumer protection is exemplified through its grievance redressal mechanism, which empowers consumers to voice concerns and seek resolution in case of dissatisfaction with the project. The mechanism offers a structured and efficient path for addressing grievances, providing an avenue for fair & timely resolutions.

Furthermore, RERA mandates stringent penalties for developers who fail to meet their obligations or indulge in fraudulent practices, reinforcing its commitment to consumer protection. Developers must adhere to project delivery timelines & quality standards, and provide accurate information to homebuyers.

Challenges and Criticisms

One notable challenge lies in the inconsistent adoption & implementation of RERA across states & union territories. Differences in interpretation and varying rules have resulted in non-uniformity, making it essential to streamline and harmonise the application of RERA nationwide.

The delayed establishment of regulatory authorities and the absence of permanent appellate tribunals have hindered resolution of disputes, impacting developers & homebuyers. Addressing these delays by expediting the setting up of these bodies is crucial.

Latest Changes on RERA ACT since its implementation

Since its implementation, the Real Estate (Regulation and Development) Act, 2016 has undergone several changes & announcements to enhance its efficacy and address emerging issues in India’s real estate sector.

  • One noteworthy development is the increasing coverage of real estate projects under RERA’s purview
  • Many states have moved to include ongoing projects previously excluded, ensuring that a more comprehensive range of properties falls within the regulatory framework
  • Developers are now required to provide details about the status of the land title, updates on project progress, and quarterly updates on the project’s financials
  • Several states have established permanent appellate tribunals to expedite the resolution of disputes, providing a dedicated platform for aggrieved parties to seek redressal
  • Certain states have introduced digital initiatives, such as online project registration and grievance redressal portals, simplifying processes for developers & homebuyers

Impact of RERA on the Real Estate Sector

This government initiative has had several far-reaching impacts on the sector:

  1. Mandatory Project Registration:

    Under RERA, all residential and commercial real estate projects exceeding 500 sq m or 8 apartments must register with the Real Estate Regulatory Authority (RERA). Builders must provide comprehensive project details – including layouts, sanctioned plans, exact project locations, garage space specifications, and carpet area.

  2. Construction Progress Updates:

    This includes quarterly updates on the number & types of flats sold, completion schedules, and litigation details if any

  3. Standardised Sale Agreement:

    This includes details like possession dates, internal & external development work specifications, and construction specifics – thus reducing the risk of hidden charges or penalties for buyers

  4. Accurate Carpet Area:

    To eliminate confusion, RERA requires builders to disclose the apartment area based on the carpet area rather than the super-built area. This ensures that buyers pay for what they receive.

  5. Defect Liability Period:

    Builders must rectify structural defects and issues arising from poor construction quality for 5 years. If they fail, homebuyers can file a complaint with the authority.

  6. Timely Possession Guarantee:

    In cases of delayed possession, builders are liable to refund the entire amount or pay interest to the homebuyer for the delay period. This incentivises timely project completion.

  7. Approval for Alterations:

    Builders require approval from homebuyers for any alterations in flats or the project’s layout and common areas. In the latter case, support from two-thirds of total buyers is mandatory.

  8. Grievance Redressal:

    RERA introduces a streamlined grievance redressal mechanism. Buyers, developers, or promoters can file complaints. The state real estate regulatory department aims to resolve issues within 60 days. If parties are dissatisfied, they can appeal to the Appellate Tribunal and, ultimately the High Court or Supreme Court if necessary.

Final Thoughts

In summary, RERA and its rules represent a watershed moment for India’s real estate sector. This progressive regulatory framework has ushered in an era of transparency, accountability, and fairness that benefits all stakeholders. RERA’s insistence on project registration, regular updates, standardised agreements, and accurate area calculations has empowered homebuyers – shielding them from hidden costs and ensuring they receive fair value.

With provisions like the defect liability period and stringent penalties for non-compliance, RERA enforces quality standards & timely project completion. This not only boosts investor and consumer confidence but also attracts more investments, propelling the growth of the real estate sector.


1. What is the RERA Act 2016?

The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, is a landmark legislation in India that regulates the real estate sector. It was enacted to bring transparency, accountability, & efficiency to the industry, protect the interests of homebuyers, and promote fair practices.

2. What are the critical points of the RERA Act 2016?

The critical points of the RERA Act 2016 are as follows: • Mandatory project registration • Regular construction updates • Standardised sale agreements • Accurate carpet area disclosure • Defect liability period • Penalties for non-compliance • Grievance redressal mechanism

3. Why is the RERA Act important?

The RERA Act is important because it brings accountability and transparency to the real estate sector. It protects homebuyers from unfair practices, hidden costs, and project delays, while holding builders accountable for quality and timely delivery.

4. What is RERA and its benefits?

RERA is a regulatory framework that benefits the real estate sector in India. The benefits of RERA include: • Enhanced transparency & accountability • Empowerment of homebuyers • Fair project registration and disclosure • Quality assurance through defect liability provisions • Efficient dispute resolution • Attracting investments and boosting sector growth

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