The Indian real estate sector has long attracted buyers and investors, but it has also faced challenges like project delays, lack of transparency, and misleading promises. To address these issues, the Government of India introduced the Real Estate (Regulation and Development) Act, 2016 (RERA), which came into full effect in May 2017. RERA created state-level regulatory authorities to enforce fair practices, protect homebuyers, and bring accountability to developers. For anyone planning to buy or invest in property, understanding RERA compliance is essential.
What is RERA and Why Was It Introduced?
RERA was designed to regulate the property market, making it more transparent and accountable. Before its introduction, buyers had limited protection if developers delayed projects or changed terms midway. RERA ensures that builders, agents, and promoters follow a strict compliance framework that prioritizes buyer rights and investor confidence. It has transformed real estate into a more structured and trustworthy market.
What Are the Key Features of RERA Compliance?
Mandatory Registration
All real estate projects above a defined size must be registered with the state RERA authority before advertising or selling. Buyers can confirm registration details directly on official RERA websites.
Transparency of Information
Builders must disclose all project details such as layout, approvals, carpet area, and delivery timelines. This allows buyers to make informed decisions with verified information.
Escrow of Buyer Payments
Developers must deposit at least 70% of buyer payments in a dedicated escrow account, used only for that project’s land and construction costs. This reduces diversion of funds and ensures timely progress.
Timely Possession
If a project is delayed, the developer is liable to compensate the buyer or provide a refund with interest. This is one of the most powerful buyer protections under RERA.
Standardized Carpet Area
Properties can only be sold on the basis of carpet area the actual usable space removing confusion from terms like “super built-up area.”
Limits on Advance Payments
Builders cannot demand more than 10% of the property’s cost as advance without a registered agreement for sale.
Real Estate Agent Registration
Even agents must register with RERA before facilitating sales in registered projects, making transactions more reliable.
How Does RERA Protect Buyers?
RERA empowers homebuyers with safeguards at every step. Buyers can verify project details, track progress, and hold developers accountable for delays. They are protected from hidden costs through standardized carpet area pricing. They also gain legal rights to refunds or compensation if developers default on commitments. Most importantly, the act has made property investment safer by enforcing fair contracts and transparent disclosures.
How Does RERA Benefit Investors?
Investors see improved confidence and reduced risks when projects are RERA-compliant. Since only verified projects can be marketed, due diligence becomes simpler. RERA’s financial safeguards improve the chances of timely delivery, which strengthens resale value and liquidity. Ethical competition among developers also improves overall market credibility, helping investors secure better returns.
What Are the Penalties for Non-Compliance with RERA?
RERA imposes strict penalties to discourage violations. Developers who fail to register projects can face fines of up to 10% of the total project cost. Persistent violations may even result in imprisonment. Real estate agents operating without registration can also be fined or banned. For buyers and investors, this makes it crucial to check RERA compliance before committing funds.
How Can You Verify RERA Compliance?
Checking compliance is simple and can be done online:
- Visit your state’s RERA portal.
- Search using the project name, developer name, or RERA registration number.
- Review details like approvals, timelines, progress updates, and litigation history.
- Confirm that both the developer and the agent are registered.
Many RERA portals also allow buyers to file complaints online against developers or agents, providing faster resolution.
What Are the Latest Updates in RERA?
RERA continues to evolve with new rules and stronger enforcement. In Gurgaon, developers must publish a public notice in newspapers after applying for RERA registration, reducing the risk of illegal pre-launch sales. Maharashtra has become the first state to cross 50,000 RERA-registered projects, representing nearly 35% of India’s total. Karnataka has introduced a special recovery cell to enforce compensation orders against builders, treating unpaid dues as recoverable arrears. A unified national RERA portal is also being developed, which will allow buyers and investors to track projects across states on a single platform.
What Are the Most Common FAQs About RERA?
Is RERA applicable to ongoing projects?
Yes, ongoing projects that meet the criteria must also be registered.
Can I file a complaint under RERA?
Yes, buyers can file complaints online through the state RERA website or approach the appellate tribunal.
What happens if possession is delayed?
Buyers are entitled to either a refund with interest or compensation for the delay.
Do real estate agents need RERA registration?
Yes, all real estate agents must register under RERA to facilitate property sales.
Does RERA apply uniformly across India?
Yes, but each state has its own regulatory authority and specific rules.
Why Should RERA Compliance Influence Your Buying Decision?
For buyers, RERA compliance ensures legal protection, transparency in pricing, and timely possession. For investors, it reduces risks, enhances project credibility, and improves resale opportunities. With its strict rules, penalties, and ongoing reforms, RERA compliance should be a primary filter before making any real estate decision.