What is RERA? Know all about RERA Act 2016 | Registration, Benefits, Penalty

What is RERA? Know all about RERA Act 2016 | Registration, Benefits, Penalty

Rashi Sood

Last Updated on 22nd July 2025

The Indian real estate market underwent a significant transformation with the introduction of the Real Estate (Regulation and Development) Act, or RERA, in 2016. Before this, homebuyers often faced numerous challenges, including project delays, misleading advertisements, lack of transparency, and unfair practices by some developers. RERA came as a much-needed relief, aiming to address these issues and create a more trustworthy and efficient real estate sector.

If you’re keen to understand how the RERA Act works, its registration process, and the benefits it offers to homebuyers, you’ve come to the right place. In this blog, we’ll explore all the essential details about RERA, its implementation, and the penalties that developers or agents might face for non-compliance. By understanding these aspects, you can make more informed decisions and avoid common pitfalls in the real estate market. Read on to learn everything you need to know!

What is the RERA Act?

If you are wondering what RERA is in real estate, then here is your answer.

The RERA full form stands for Real Estate Regulatory Authority. It is powerful legislation that was introduced to regulate the real estate sector in India. It establishes state-level Real Estate Regulatory Authorities to oversee and resolve disputes. This thoughtful act applies to both residential and commercial real estate projects. It mandates that all real estate projects more than a certain size must register with the authority before they proceed with any kind of advertising, selling, or booking. The sole aim is to make way for fair practices in project sales and delivery in the real estate sector.

The RERA Act, 2016, was introduced by the Indian government to promote transparency, accountability, and efficiency in the real estate sector. Its primary purpose is to protect the interests of homebuyers, regulate the activities of developers and real estate agents, and ensure the timely delivery of projects.

Is RERA Mandatory? Yes, RERA mandates the registration of real estate projects and agents, establishes a regulatory authority to resolve disputes, and enforces strict timelines for project completion. The significance of RERA lies in its ability to instill trust among consumers, curb fraudulent practices, and create a more structured and professional real estate market, ultimately enhancing the overall growth and sustainability of the sector.

RERA Rules & Guidelines

Here are the key RERA guidelines under the RERA Act:

  1. Security: RERA mandates that at least 70% of the buyer’s or investor’s funds must be deposited into a special account. This money can only be used for construction and land-related expenses. Builders are also restricted from demanding more than 10% of the property’s cost as an advance before the sale contract is signed.
  2. Transparency: Developers are required to provide the original project plans to buyers. Any modifications to the plans can only be made with the buyer’s consent.
  3. Fairness: Under RERA, developers must sell properties based on carpet area, not super built-up area. If there are delays in project completion, buyers have the right to either get a full refund or receive monthly returns on their investment.
  4. Quality: Builders must address and fix any issues related to the property within 5 years of purchase. Any complaints must be resolved within 30 days.
  5. Authorization: No one can market, sell, construct, or book land plots without registering with RERA. All advertisements related to investments must display the unique project registration number provided by RERA.

Key Features of the RERA Act

Here are the key features of the RERA Act, 2016:

  1. Mandatory Registration of Real Estate Projects: All real estate projects must be registered with RERA to ensure adherence to regulations and guidelines.
  2. Transparency in Project Details: Developers must provide clear and accurate details of the project, including plans, timelines, and progress updates, ensuring transparency for buyers.
  3. Timely Delivery of Projects: Developers are required to deliver projects within the agreed timelines; penalties apply for delays.
  4. Protection of Buyer Interests: Buyers are protected from issues like defective land titles or construction defects, with developers liable to compensate for any losses.
  5. Dispute Resolution Mechanism: RERA establishes a fast-track system for resolving disputes between promoters, agents, and buyers.
  6. Accountability for Defaults: Both buyers and promoters are held accountable for defaults, with equal interest penalties for delayed payments.
  7. Appeal Process: If unsatisfied with RERA’s decision, the aggrieved party can file an appeal before the Appellate Tribunal.
  8. Penalties for Non-Compliance: Developers failing to follow RERA’s orders may face penalties, including fines or imprisonment.
  9. No Civil Court Jurisdiction: Matters under RERA’s jurisdiction cannot be appealed in civil courts; only the Appellate Tribunal can address disputes.

These features aim to create a more transparent, accountable, and buyer-friendly real estate market.

Applicability of RERA

The RERA Act applies to a wide range of real estate projects and transactions in India. The Act is designed to regulate both residential and commercial real estate developments, and it establishes clear guidelines for developers, buyers, and agents to ensure transparency and accountability.

Types of Projects and Transactions Covered Under RERA:

  1. Residential Projects: Any residential project that involves the construction of more than eight apartments or units, including both ready-to-move-in and under-construction properties, is covered under RERA.
  2. Commercial Projects: RERA also covers commercial real estate projects that involve the sale or lease of office spaces, retail outlets, and other commercial properties.
  3. Real Estate Agents: The Act applies to real estate agents and brokers who must register with RERA to carry out transactions related to buying, selling, or leasing properties.
  4. Development of Land: Developers must register land development projects involving the construction of new buildings or the redevelopment of existing structures.
  5. Ongoing Projects: All ongoing projects that have not received a completion certificate before the enactment of the Act are also covered under RERA.

Clarification on RERA Applicability:

  1. Applicability to New Projects: RERA applies to all new projects that begin after the Act’s implementation on May 1, 2017.
  2. Ongoing Projects: Projects that were ongoing at the time of the Act’s enforcement must also be registered under RERA if they have not received a completion certificate.
  3. Transactions Involving Sale or Purchase: Any sale, purchase, or lease of real estate covered under the Act requires the registration of the project with RERA and must comply with its rules.
  4. Real Estate Agents: All real estate agents conducting transactions related to registered projects must be registered with RERA, and they must ensure that all dealings are in line with RERA’s guidelines.

RERA Approval for Plots

Under the RERA Act 2016, RERA approval is mandatory for all real estate projects, including plot developments. This includes both the sale and development of land, and it applies to projects involving the creation of residential, commercial, or mixed-use plots. The RERA-approved plots mean that it is legally clear and that development plans comply with local regulations. It also means that buyers are fully informed about the project’s status and legitimacy.

  1. Land Title Verification: Developers must provide proof of clear and legal ownership of the land. This ensures that the land being sold is free from disputes or encumbrances.
  2. Project Registration: Any plot development project involving the sale of land, be it individual plots or large-scale developments, must be registered with RERA. This helps establish accountability and provides transparency for buyers.
  3. Regulatory Compliance: The developer must ensure that the project complies with zoning laws, environmental regulations, and other local building codes before receiving RERA approval. This includes obtaining necessary permissions for land conversion and building infrastructure.

Implications for Buyers and Developers:

For Buyers:

  1. Transparency and Trust: Buyers can verify the authenticity of the project through RERA registration, ensuring that the plot development is legally sound and adheres to established standards.
  2. Protection Against Fraud: RERA approval helps protect buyers from fraudulent developers who might sell plots without proper authorization or title clearance. It also safeguards against changes in project plans without the buyer’s consent.
  3. Timely Delivery: Buyers are assured that developers are bound to deliver the plots as promised within the agreed timeline, with penalties for delays.
  4. Legal Recourse: In case of disputes, buyers can seek redress through RERA’s dispute resolution mechanism, providing an additional layer of security.

For Developers:

  • Regulatory Compliance: Developers must meet the legal requirements for land title and development plans before initiating any sales or construction, ensuring smoother operations and reduced risk of legal challenges.
  • Market Credibility: RERA approval enhances a developer’s reputation, as it assures potential buyers that the project is legitimate and regulated.
  • Financial Security: Developers can access funds more easily as buyers are more likely to invest in projects with RERA approval, knowing their investments are secure and protected.
  • Penalties for Non-Compliance: Developers who fail to obtain RERA approval for plot developments face penalties, including fines and legal action, which could damage their business reputation and financial standing.

State-Wise RERA Guidelines

The Real Estate (Regulation and Development) Act applies across India, but each state has its own set of specific regulations and implementation guidelines based on local requirements and conditions. Each state government is responsible for establishing its own Real Estate Regulatory Authority (RERA) to oversee the enforcement of the Act in their respective regions. These guidelines address aspects such as registration of real estate projects, dispute resolution, and transparency in transactions.

Overview of RERA Implementations in Different States:

RERA Delhi:

  • Delhi RERA also emphasizes project registration and the protection of buyers’ rights.
  • Developers must provide project updates regularly, ensuring timely delivery and clear communication.
  • Key Features: Requirement for developers to disclose project details such as timelines, approvals, and land titles.

RERA Karnataka:

  • Karnataka’s RERA guidelines were implemented to address concerns regarding rapid urbanization and a high volume of real estate transactions.
  • The state emphasizes dispute resolution and quick handling of project delays.
  • Key Features: Transparent project registration process and mandatory disclosures regarding land titles.

RERA Tamil Nadu:

  • Tamil Nadu RERA implementation focuses on providing a safe and transparent environment for both buyers and developers.
  • Developers must register their projects, provide buyer protection policies, and adhere to project timelines.
  • Key Features: Special provisions for affordable housing and project quality assurance.

RERA Uttar Pradesh:

  • Uttar Pradesh’s RERA guidelines include a strong emphasis on real estate agent registration and timely project completion.
  • Buyers can file complaints and seek dispute resolution through the state’s RERA system.
  • Key Features: Strict timelines for project completion and penalties for developers who fail to meet deadlines.

RERA Gujarat:

  • Gujarat RERA or GUJRERA guidelines are designed to improve transparency and protect the rights of homebuyers.
  • Developers must register projects before advertising or selling properties.
  • Key Features: Emphasis on project registration, clear project timelines, and quality assurance.

RERA Haryana:

  • Haryana RERA implementation focuses on project registration, transparent dealings, and consumer protection.
  • Projects that delay delivery or violate terms are subject to penalties.
  • Key Features: Strong emphasis on protecting homebuyers from fraudulent practices and ensuring developers meet their obligations.

RERA West Bengal:

  • West Bengal’s RERA guidelines focus on enforcing transparency in real estate transactions and protecting the rights of property buyers.
  • The state has its own set of unique regulations to address local concerns while adhering to RERA’s national framework.
  • Key Features: Development of a dedicated grievance redressal mechanism and specific guidelines for property developers.

RERA Telangana:

  • Telangana has a user-friendly portal that makes it easier for developers and buyers to register and access project details.
  • Emphasis is placed on the timely delivery of projects and resolving disputes efficiently.
  • Key Features: User-friendly registration process and online grievance redressal.

RERA Madhya Pradesh:

  • Madhya Pradesh’s RERA guidelines focus on registering real estate projects to ensure greater transparency and protection for homebuyers.
  • Developers must provide full project details and meet deadlines to avoid penalties.
  • Key Features: Consumer protection laws and strong penalties for non-compliance.

RERA Bihar:

  • RERA Bihar has introduced unprecedented transparency, accountability, and efficiency to property dealings across the state
  • The state’s RERA guidelines require developers to register projects and agents before starting sales.
  • Key Features: Strong focus on transparency, stringent timelines for project delivery, and high penalties for non-compliance.

RERA Punjab:

  • Punjab’s RERA system aims to foster transparency, accountability, and fairness in the real estate sector.
  • The state ensures that developers comply with timelines and project commitments, protecting homebuyers from fraudulent practices.
  • Key Features: Developers are required to register their projects and provide clear details on timelines, approvals, and land titles.

RERA Rajasthan

  • Rajasthan has implemented RERA to enhance transparency and ensure buyer protection in the real estate sector.
  • The state focuses on the registration of real estate projects and strict adherence to delivery timelines, with penalties for delays.
  • Key Features: Mandatory registration of projects with RERA, and developers must disclose important project details like timelines, approvals, and land titles.

Benefits of RERA for Stakeholders

The RERA Act 2016 offers multiple benefits to people dealing in the real estate industry, be it buyers, sellers, or developers:

  1. Makes Real Estate Projects 100% Transparent: Since the RERA Act makes it mandatory for all real estate projects to be registered with the regulatory authority, it ensures 100% transparency and prevents fraud.
  2. Enhances Trust in the Market: Likewise, by promoting transparency and accountability, as we just mentioned above, the RERA Act builds trust among homebuyers and investors. Since the developers must adhere to the regulatory guidelines, individuals and investors feel more confident while investing in a property.
  3. Ensures Timely Project Completion: On the other hand, the RERA imposes strict deadlines for project completion just to ensure that developers deliver homes without delays. In case there are delays, developers are made to compensate buyers, which helps protect consumer interests.
  4. Promotes Affordable Housing: At the same time, the RERA Act simplifies the approval processes to encourage the development of affordable housing. This approach helps deal with the problem of property shortage in urban areas and makes homeownership accessible to more and more people.
  5. Boosts Housing Sector: By establishing a structured regulatory framework, the RERA Act boosts investor confidence and encourages investment in the housing sector. This increase in investment ultimately leads to increased housing supply, making it a win-win situation for both buyers and developers, and stimulates overall economic growth.

Penalties for Non-compliance

You now know what is RERA Act 2016 is, its registration, and its benefits; so, it is time we enlighten you with the penalties under the RERA Act:

For Real Estate Agents

The real estate agents must get a single registration number for every state or union territory. This registration number must be included in all their transactions. Failure to register may result in a daily penalty of Rs. 10,000, which could increase to 5% of the total project cost.

For Promoters:

  • Promoters who fail to register their real estate projects are liable to face penalties of up to 10% of the project’s estimated cost. Additionally, those not complying with the state RERA orders may face imprisonment for up to three years or an additional fine of up to 10% of the total project cost.
  • Promoters who violate the Appellate Tribunal orders severely may face imprisonment of up to 1 year, or a fine of 10% of the total project cost, or both.
  • Promoters who do not comply with the RERA Act at all may incur a daily fine of up to 5% of the estimated cost of the project until they initiate the corrective measures.

For Buyers

Buyers who fail to comply with the RERA orders are liable to face penalties of up to 5% of the cost per day of the project. Additionally, those not complying with the Appellate Tribunal may face imprisonment for up to 1 year, or a 10% project cost penalty, or both.

How is the RERA Registration Done?

The RERA Registration procedure may vary for different states, but the general steps are mentioned below for your quick understanding:

Step 1: Visit the state RERA official website

Step 2: Fill up the RERA registration form for the specific state authority

Step 3: Submit all the essential documents along with the registration form

Step 4: Make the applicable fee payment as specified by RERA

Step 5: The authority will review the application and if accepted, it will issue a RERA registration certificate to the real estate agent or the promoter

How to Find RERA-Approved Projects?

Understanding what RERA-approved means is also crucial for making the right decisions whenever one is searching for a property investment opportunity. RERA-approved projects mean that they comply with the regulations set forth by the Real Estate. Enlisted below are the steps to guide you in finding RERA-approved projects:

Step 1: Go to the official RERA website of your specific state.

Step 2: Using the search option, search for the RERA-approved projects. For this, you can enter the builder, project, or location name.

Step 3: Up next in the third step, check the valid RERA registration number, which will ensure whether it is approved or not.

Step 4: Make sure to verify the RERA details, including the approval status, project timeline, and builder information that are listed on the RERA official website.

Step 5: Last of all, ensure you contact local RERA offices or the real estate agents to get additional information and the confirmation status of the project approvals.

The RERA Act, 2016, has indeed taken India one step ahead in its journey towards a transparent and regulated real estate sector. Whether you are a first-time homebuyer or a regular investor, understanding RERA is crucial for making decisions in the real estate world. In a nutshell, RERA ensures a win-win scenario, driving growth and trust across the sector.

 

FAQs about the RERA Act

What is RERA in real estate?

Introduced in the year 2016, the RERA ACT applies to both residential as well as commercial projects. According to this act, all such properties now need to be registered with the Real Estate Regulatory Authority (RERA).

What is RERA registration?

RERA registration is a mandatory need for registration of real estate projects at the Real Estate Regulatory Authority. It was introduced mainly to address the already existing issues in the real estate industry and to prevent issues in the future.

What is RERA and its benefits?

Listed below are the main benefits of the RERA Act 2016:
Makes the real estate industry transparent
Paves the way for affordable housing for all
Ensures timely project completion
Standardizes carpet area calculation
Eliminates instances of false advertising

What is the main objective of RERA?

The main objective of RERA is to ensure complete transparency, accountability, and trust in the real estate industry. The purpose is to save the interests of sellers, buyers, and developers, who deal with real estate.

What is the RERA Act summary?

The RERA Act encourages accountability and openness in India’s real estate industry by requiring project registration, guaranteeing on-time completion, and offering a grievance redressal process.

What is the power of RERA?

RERA is a strong framework for real estate transactions that guarantees accountability and trust in the industry. Because it mandates that all projects be registered under the RERA Act, it fosters transparency and gives developers, buyers, and sellers greater trust when transacting in real estate.

Published on 9th December 2024

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