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A Comprehensive Guide to the Real Estate (Regulation and Development) Act, 2016


The Real Estate (Regulation and Development) Act, commonly known as RERA, was enacted by the Government of India in 2016. This landmark legislation aims to bring transparency, accountability, and efficiency to the real estate sector, protecting the interests of homebuyers and ensuring fair practices by real estate developers. RERA has significantly transformed the landscape of real estate transactions in India, providing much-needed confidence and security to investors and buyers.

What is RERA?

RERA stands for the Real Estate (Regulation and Development) Act, 2016. The primary objective of RERA is to regulate and promote the real estate sector, ensuring the sale of real estate properties in an efficient and transparent manner. The act establishes a regulatory authority in each state to oversee real estate transactions and resolve disputes between buyers and developers.

Key Objectives of RERA

  1. Protection of Homebuyers: RERA aims to protect the rights of homebuyers by ensuring timely delivery of properties and safeguarding them from fraudulent practices by developers.
  2. Transparency and Accountability: The act mandates full disclosure of project details, ensuring that buyers have complete information about the property they are investing in.
  3. Regulation of the Real Estate Sector: RERA sets guidelines for the development, sale, and transfer of real estate properties, standardizing practices across the sector.
  4. Dispute Resolution: It establishes a mechanism for the resolution of disputes between developers and buyers, providing a quick and efficient resolution process.

Key Provisions of RERA

1. Project Registration

  • Mandatory Registration: All residential and commercial projects exceeding 500 square meters or involving more than eight apartments must be registered with RERA before advertising or selling.
  • Disclosure Requirements: Developers must disclose project details, including layout plans, land status, financial statements, and completion schedule.

2. Escrow Account

  • Funds Management: Developers are required to deposit 70% of the project funds in a separate escrow account. This ensures that the funds are used solely for the project for which they were collected, preventing diversion of funds.

3. Timely Project Delivery

  • Project Deadlines: Developers must complete projects within the stipulated timeframe. Failure to do so can result in penalties and compensation to buyers for any delays.
  • Interest on Delays: If there is a delay in project delivery, the developer must pay interest to the buyer on the amount paid by the buyer.

4. Regulation of Promoters

  • Advertising Regulations: Promoters must advertise only after registering the project with RERA and obtaining necessary approvals. Misleading advertisements are subject to penalties.
  • Title of Property: Promoters must have a clear title to the land and the legal right to sell the property.

5. Rights and Obligations of Buyers

  • Information Rights: Buyers have the right to access detailed information about the project, including approvals, completion status, and any changes in the project plans.
  • Possession Rights: Buyers are entitled to the possession of the property as per the terms of the agreement.

6. RERA Authority and Appellate Tribunal

  • State Authority: Each state establishes a Real Estate Regulatory Authority (RERA) to oversee the implementation of the act and address grievances.
  • Appellate Tribunal: An appellate tribunal is established to hear appeals against the decisions of the RERA authority, ensuring a fair and transparent resolution process.

Benefits of RERA for Homebuyers

  1. Enhanced Transparency: RERA mandates full disclosure of project details, providing buyers with clear and accurate information about their investment.
  2. Timely Delivery: The act enforces strict deadlines for project completion, ensuring that buyers receive their properties on time.
  3. Financial Security: The escrow account provision safeguards buyers’ money, ensuring that funds are used only for the intended project.
  4. Grievance Redressal: RERA provides a robust mechanism for addressing complaints and disputes, offering a platform for quick and fair resolution.
  5. Fair Practices: The act promotes ethical practices in the real estate sector, protecting buyers from fraudulent activities and ensuring transparency in transactions.

Impact of RERA on the Real Estate Sector

1. Increased Trust and Confidence

RERA has significantly increased trust and confidence among homebuyers by ensuring transparency and accountability in real estate transactions. Buyers now have access to reliable information and can make informed decisions, reducing the risk of fraud and delays.

2. Standardization and Regulation

The act has standardized real estate practices, bringing uniformity to the sector. Developers are now required to follow strict guidelines, ensuring that projects are completed on time and to the agreed-upon specifications.

3. Dispute Resolution and Redressal

RERA has provided a structured platform for resolving disputes between buyers and developers. The establishment of state regulatory authorities and appellate tribunals has streamlined the grievance redressal process, providing timely and effective solutions.

4. Professionalism in the Sector

With the introduction of RERA, the real estate sector has seen a shift towards greater professionalism. Developers are now more accountable for their actions, leading to improved project management and customer satisfaction.

5. Improved Market Stability

RERA has contributed to market stability by reducing speculative activities and ensuring that only credible developers operate in the market. This has led to a more stable and secure real estate environment, benefiting both buyers and investors.


RERA has brought a transformative change to the real estate sector in India, providing much-needed transparency, accountability, and protection for homebuyers. By regulating the sector and standardizing practices, RERA has created a more secure and trustworthy environment for real estate transactions. As the act continues to be implemented and enforced across the country, it is expected to further enhance the credibility and efficiency of the real estate sector, benefiting both buyers and developers alike.