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What is RERA Act

RERA is a short form for Real Estate Regulatory Authority. It came into existence as a part of the Real Estate (Regulation and Development) Act, 2016. The Act was put into effect with the intention of protecting the interests of home buyers and facilitating a boost in investments in the real estate sector as well. This particular bill was passed by the Upper House (Rajya Sabha) on March 10, 2016. This article will take you through the various things that you need to know about the RERA Act. Read on to know more.

RERA Act and Rules

Under the RERA act, the officials that were in charge of putting the law into effect have laid down a set of rules that buyers, developers, promoters and builders alike must compulsorily abide by. They have been put into place in order to ensure transparency and promote accountability amongst the individuals that are party to any form of real estate transactions.


Those rules are as follows:

  • Security: Under the RERA Act, at least 70% of the money that has been given by the buyers and investors will be kept in a separate account. The funds that are available in the account will be allotted to the builders on one condition only; the resources must go towards covering construction and land-related costs. Additionally, developers and builders cannot ask for an amount exceeding 10% of the property’s cost as advance payment before the signing of the sale agreement.

  • Transparency: As a rule, builders are also supposed to submit the original documents for all the projects that they are about to commence work on. Builders are also not supposed to make any changes to the original layout without the buyer’s consent.

  • Fairness: RERA has also instructed developers to sell properties on the basis of the carpet area instead of the super built-up area. In the event of a delay in the completion of a project, buyers can get back the money that they have invested, or they can get the money invested and receive income on a periodical basis.

  • Quality: It is mandatory for the builder to rectify any issue related to the property that will be faced by the buyer within a time frame of 5 years from purchase. It must be taken care of within 30 days of the complaint.

  • Authorisation: A developer is not permitted to sell, bid, invest, or advertise or book a plot without getting themselves registered with the regulator. Post the said registration, all of the investment-related advertisements should have a unique project-wise registration number that is provided by RERA.

RERA Act: Regulatory Measures

  • Issuing approvals for commercial properties and residential flats

  • Registering real estate sales

  • Regulating the transactions of real estate properties

Benefits of RERA

RERA approval against real estate projects carries innumerable benefits for homebuyers. Read on to know some of the notable benefits:

  • Timely Possession of Property: The real estate sector is known to be flooded with fake completion timelines given by developers and promoters. This widespread menace has led to immense financial worries among homebuyers and has also caused a sense of mistrust among aspiring purchasers. When a real estate project is registered under RERA, the promoters have to provide the date of completion, failing which they are liable to incur a huge penalty.

  • Accurate Particulars of a Project: Developers have to provide complete and accurate project details as part of this Act. Particulars include the provided amenities, completion stage, area covered, number of units, and much more. All the relevant details based on the project are covered when the RERA registration takes place. The developers cannot alter or go back on the claims once the registration is done.

  • Assurance on Licences: When RERA was not set in place, a majority of developers would undertake projects without having the required licences. This ultimately led to the buyers bearing the cost of illegal developments. With RERA, the developers must sort all the licences before the units are offered for sale. This avoids fraudulent real estate claims.

  • Restrictions on Advertising: The promoter cannot advertise the project without sorting all the requirements under RERA. Whenever the project is advertised, the registered RERA number must be displayed on the advertisement.

How to Register Projects Under the RERA Act

The process of registering under RERA varies from state to state. The process can be completed online through the state’s dedicated RERA portal. The RERA registration process requires the developers to submit all their documents and complete the application form. Listed below are the documents promoters need to furnish for the RERA registration process:

Documents Required for Promoters:

  • Firstly, promoters must prepare a checklist, post which they must collect all of the documents that will be required for registration.

  • Then, they must obtain the number of the escrow bank account opened as dictated under Section 4(2)(I)(D) of the RERA Act.

  • The promoter must then duly fill and submit Form A, which is also known as the registration application form.

  • Post that, they must fill Form B, which is a mandatory declaration made by the promoter as per the rules laid out under the Act.

  • They must also fill and submit Form G, also known as the draft agreement of sale or allotment of a project.

  • Then, they must submit an affidavit that states the details entered in the aforementioned Form G are in accordance with the rules set out by RERA.

  • Post that, one more affidavit will have to be submitted by the promoter. It should state that no booking amount has been secured from prospective/aspiring buyers in accordance with Section 3 of the RERA Act.

  • Then, the promoter will have to pay the applicable fees, which varies from state to state.

  • After the above step, the promoter must send a duly-signed hard copy of all of the aforementioned documents by registered post to the relevant RERA authority.

  • Finally, the promoter will be required to complete and submit Form C, which will let them obtain the registration certificate.

Documents Required for Real Estate Agents:

  • Agents must follow the steps that have been laid out above for promoters in order to achieve the same.

  • After that, a registration number will be given to them. This numerical figure will have to be mentioned with each property sale.

  • The agent will then be required to maintain accounts, relevant documents, and records that are related to all transactions quarterly.

  • All of the information and documents concerning a project must then be shared with the buyer as and when necessary.

  • It must be noted that the agent can be suspended if they misrepresent anything or indulge in fraudulent activities during the registration process.

List of Indian States that have Enforced RERA ACT

The following Indian states and Union Territories (UTs) have implemented the RERA Act:

State Name

Implementation Date

Official Site


August 04, 2017



July 28, 2017



June 08, 2017



July 10, 2017


Tamil Nadu

June 22, 2017



April 28, 2017



May 18, 2017



May 01, 2017



May 01, 2017


West Bengal

May 01, 2017



February 25, 2017


Andhra Pradesh

March 28, 2017



April 19, 2017



November 24, 2016


Madhya Pradesh

October 22, 2016


Uttar Pradesh

October 31, 2016



October 31, 2016


Himachal Pradesh

September 28, 2017



April 26, 2017



October 31, 2016


Daman & Diu

October 31, 2016



October 31, 2016


Andaman & Nicobar Islands

October 31, 2016


Dadra & Nagar Haveli

October 31, 2016


How to File a Complaint under RERA Act

As per the Section 31 of the RERA Act, buyers can file complaints against promoters or agents and vice versa. The steps to follow while lodging a complaint are as follows:

  • Step 1: Firstly, the aggrieved must find a RERA lawyer to file a complaint under the appropriate jurisdiction.
  • Step 2: The complaint form must be filled as per the rules prescribed by the government of the state that is home to the property.

  • Step 3: The complaint must include information such as:


    1. Details of the applicant and the relevant respondent
    2. Registration number and address of the project
    3. A short statement of the facts accompanied by the grounds of the claim
    4. If any form of relief is being sought by the aggrieved, the details of the desired relief and interim reliefs, if any, must be provided
  • Step 4: Then, you must pay the applicable fee. However, one must keep in mind that the amount will differ from state to state. For instance, the fee in Karnataka could be ₹5,000 while residents of Odisha may only have to pay ₹1,000.

  • Step 5: Alternatively, the disgruntled individual can file the complaint through the web by visiting the RERA website of their state.

  • Step 6: If the complainant is not satisfied with the verdict passed by RERA, they can file a complaint with the Appellate Tribunal of RERA within a timeframe of 60 days.

  • Step 7: The concerned person can also approach the High Court within 60 days of the Appellate Tribunal’s order, in case they are not happy with it.

RERA Registration Validity

The RERA registration is valid for the period within which the promoter aims to undertake or complete the project. The validity of the registration can be extended in case of a natural calamity such as war, pandemic, and more. Again, such extensions are only valid for a period of one year.

Impact of RERA on Homebuyers and Real Estate Agents

The RERA Act, 2016, affects homebuyers and real estate agents in the following ways:

A. Homebuyers

  • Since builders must disclose all information related to their projects on the official RERA portal regularly, prospective buyers can keep track of the property status.

  • As per the RERA Act, homebuyers only have to pay for the property on the basis of the carpet area. This means that the builders cannot charge the buyers based on the super built-up area.

  • Builders need to deposit 70% of the homebuyer’s money into a separate account. The money stored here must only be used for construction purposes. This ensures the right use of the money of the buyer.

  • If the property delivery is delayed, the developer has to pay interest on the money given by the buyer for the duration of the delay. The interest payable to the buyer is calculated as 2% over SBI’s prevailing MCLR rate at the time.

  • The buyer can report defects in construction to the developer for up to 5 years after taking possession of the property.

  • If the developer wants to make any alterations to the property, they will need the consent of two-thirds of its owners.

  • As per the Act, the developer can only take up to 10% of the property value as advance payment.

  • If the buyer spots a discrepancy in the title deed of the property, he or she can immediately ask for the compensation from the developer.

B. Real Estate Agents and Developers

  • Agents and developers have to register every project exceeding 500 square metres or houses 8 apartments or more under the RERA Act.

  • It is compulsory for the developers/agents to deposit the money taken from homebuyers for the project in a separate account. This means that the money deposited by the buyer cannot be used for purposes other than the construction of property. Additionally, the developers will also have to account for every single rupee spent or gained.

  • There shall be one model sale agreement between agents/developers and buyers.

Read More

Carpet Area as per the RERA Act, 2016

As per the definition laid out under the RERA Act, the carpet area is a sum of the area of the floor that can be used within the four walls of the property. It does not include the areas of other spaces that come with the property such as an open terrace or a balcony. The carpet area has been defined and turned into a basis of a sale of a property so that the buyers can be protected from misleading advertisements. The reason why RERA officials have made carpet area the basis for a property sale is so that the buyer can be certain of the usable area within the house.

How to Ensure that a Property is RERA-Compliant

In order to make sure that a property is RERA-compliant, a prospective buyer must be on a lookout for three things. They are as follows:

  • The buyer must ensure that the builder/developer has put 70% of the money that is supposed to be used for expenses related to construction in a separate escrow account. The builder is legally obligated to provide proof of the same to the buyer.

  • If the carpet area of a property is higher than 500 square metres, its advertisements must include the unique RERA-issued registration number that has been assigned to the property.

  • The property must also have all of the necessary documents and clearances. The builder or an individual representing the builder must provide the proof of the same to the buyer.

Penalties Under RERA Act

If any of the entities involved in the sale or purchase of a property fail to complete the due diligence, they will be subjected to a penalty. The penalties that are attracted by a promoter, a builder, an agent have been tabulated for the reader. The various kinds of penalties RERA can levy on the concerned individuals are as follows:

For Buyers



Non-compliance with the RERA Act

Daily penalty of up to 5% of the approximated project cost

Non-compliance with the orders of the Appellate Tribunal

10% of the approximate cost of the project as fine; Imprisonment of up to 1 year or both

For Promoters



Non-registration of the property

10% of the estimated cost of the project

Divulging incorrect information

5% of the estimated cost of the project

Violation of any of the RERA laws

A fine of 10% of the estimated cost of the property;
Up to 3 years imprisonment, or both

For Agents




₹10,000 per day; maximum capping at 5% of the approximate project cost

Non-compliance with the RERA Act

Daily penalty with the maximum capping at 5% of the estimated value of the project

Non-compliance with the Appellate Tribunal

Imprisonment up to 1 year or 10% of the project’s estimated cost, or both

Additional Penalties Applicable Under RERA

Additionally, concerned parties may also attract other types of penalties if they commit certain offences. They are as follows:



Applicable Penalties

  • Breach of terms for which registration is obtained

  • Securing registration through fraud or misrepresentation

Section 9 (7)

Cancellation of registration number of the agent

Violation of the Appellate tribunal’s orders

Section 66

Prison term of up to 1 year or/along with a fine of up to 10% of the property cost

Violation of Section 9 and 10 of the RERA Act

Section 62

Fine of ₹10,000 for each day the amendment is not made. At the most, only 5% of the property value can be charged as fine

Violation of the orders passed by the RERA authorities

Section 65

Fine up to 5% of the property cost

The introduction of RERA is incredibly beneficial to homebuyers. It reduces the risk of fraudulent sales and discrepancies in developers’ claims. Follow Bajaj Markets to stay updated on all the aspects related to RERA as well as to get the best deals on Housing Loan Online.

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