Introduction
The Indian real estate sector has always been a vital part of the economy, but it has also faced many challenges like delays, unclear property titles, and unfair practices. To address these issues, the government introduced the Real Estate (Regulation and Development) Act, commonly known as RERA, in 2016. But many people still wonder, What Is RERA and why is it so important in 2025? This blog will help you understand everything about RERA, especially for developers and homebuyers.
What Is RERA?
It is a law introduced by the Indian government to regulate the real estate industry. The main goal of RERA is to protect homebuyers and bring transparency, accountability, and fairness to real estate transactions. Under this act, developers must register their projects with state-level RERA authorities before selling any property. This ensures that buyers get clear and accurate information about the project, receive their homes on time, and are protected from fraud.
What Are the Rules Under the RERA Act?
The Real Estate (Regulation and Development) Act, commonly known as RERA, was introduced to promote transparency, accountability, and efficiency in the real estate sector. Whether you’re a real estate developer or agent, complying with RERA is not just a legal requirement — it’s a strategic move to build trust and credibility with your clients.
The Real Estate (Regulation and Development) Act, commonly known as RERA, was introduced to promote transparency, accountability, and efficiency in the real estate sector. Whether you’re a real estate developer or agent, complying with RERA is not just a legal requirement — it’s a strategic move to build trust and credibility with your clients.
Here’s what you need to know:
1. Mandatory Project Registration
Before you advertise or sell any real estate project, you must register it with the respective state’s RERA authority. This applies to any development over 500 square meters or involving more than eight apartments. Registered projects assure buyers that all approvals are in place and that the project meets regulatory standards.
2. Full Disclosure of Project Details
RERA requires you to disclose critical information about your project — including the expected completion date, legal approvals, layout plans, and financial details. This level of openness builds transparency and prevents future disputes.
3. Separate Escrow Account for Project Funds
To prevent misuse of funds, RERA mandates that 70% of the money collected from buyers be deposited into a dedicated escrow account. This fund must only be used for construction and land-related costs of that particular project, ensuring financial discipline and project continuity.
4. Strict Penalties for Delays or Misinformation
If you delay project delivery or provide false information, RERA imposes heavy penalties. These penalties serve as a deterrent against unethical practices and assure buyers of timely possession and truthful communication.
5. Online Project Updates for Buyer Access
RERA requires developers to provide continuous updates on project progress, approvals, and timelines via the RERA portal. This access to real-time information builds transparency and boosts buyer confidence.
Key Objectives of RERA
The Real Estate (Regulation and Development) Act, 2016 (RERA), was enacted with a clear vision — to reform the real estate sector and protect the interests of homebuyers. It also aims to create a transparent and accountable environment for developers, agents, and stakeholders. Here are the core objectives of RERA:
1. Protecting Home Buyers' Interests
RERA ensures that homebuyers are not misled by false promises, delayed possession, or incomplete information. It guarantees timely delivery and legal transparency in every property transaction.
2. Promoting Transparency and Accountability
By mandating project registration and regular disclosures, RERA makes real estate dealings more transparent. Developers are required to provide complete details about project approvals, timelines, and financials.
3. Regulating Real Estate Developers and Agents
RERA brings structure to the real estate sector by setting clear rules for developers and agents. This ensures ethical business practices, fair pricing, and compliance with construction timelines.
4. Speedy Redressal of Disputes
The act establishes a dedicated authority and appellate tribunal to resolve disputes between buyers and developers efficiently, without lengthy legal battles.
5. Boosting Real Estate Investment
With trust and transparency built into the system, RERA makes the Indian real estate market more attractive for both domestic and international investors.
5 Key Features of the RERA Act
The RERA Act was created to make buying and selling property safer and more transparent for everyone. It sets clear rules for builders and protects homebuyers from fraud, delays, and poor construction. Here are five key features of the RERA Act that you should know:
1. Safe Use of Buyers’ Money
Under RERA, builders must keep 70% of the money they collect from buyers in a separate bank account. This money can only be used for the same project’s construction and land costs. This rule helps stop delays and makes sure the money is not used elsewhere, giving buyers peace of mind.
2. Clear and Honest Information
RERA requires builders to share all important project details clearly. This includes the layout plan, approvals, construction timeline, and updates. These details must be uploaded to the RERA website and kept updated. This helps buyers make informed decisions and avoids surprises later.
3. Same Way to Measure Space
Before RERA, different builders used different methods to calculate flat sizes. Now, RERA has set a standard way to measure carpet area (the actual usable floor space). This means buyers know exactly how much space they are paying for and are not overcharged.
4. Fixing Problems After Possession
If any structural or quality-related problem comes up within 5 years of the buyer moving in, the builder must fix it at no extra cost. This rule makes sure the builder delivers good quality work and stays responsible even after selling the property.
5. Mandatory Project Registration
All big real estate projects must be registered under RERA before they are advertised or sold. Builders must provide complete details about the project during registration. This protects buyers from fake or unauthorized projects and ensures only trusted developers are in the market.
Key Functions of RERA
To truly understand what RERA is in the real estate sector, it’s important to know its main functions. These functions are designed to bring transparency, accountability, and fairness to the property market. Here’s how RERA works to protect the interests of homebuyers, developers, and agents alike:
1. Registration of Projects and Agents
RERA requires all real estate projects over 500 square meters or with more than eight apartments to be registered with the respective state RERA authority. Real estate agents who want to operate legally also need to register. This process helps ensure that buyers deal only with approved projects and genuine agents, reducing the risk of fraud.
2. Maintaining a Public Record System
RERA maintains an online database of all registered projects and agents. This record includes details like project approvals, layout plans, timelines, and the developer’s track record. Buyers and investors can access this information easily to verify facts and make informed decisions based on reliable data.
3. Monitoring Advertising and Promotions
Developers must follow strict rules when advertising their projects. All advertisements and marketing materials must include the RERA registration number and accurate project details such as possession dates, approval status, and progress. This helps prevent false claims and protects buyers from being misled.
4. Handling Consumer Complaints
RERA provides a fast and fair system for resolving disputes. If a buyer faces problems like delayed possession, poor construction quality, or miscommunication, they can file a complaint directly with RERA. The authority looks into these matters and ensures proper action is taken to resolve the issue.
5. Ensuring Project Delivery and Compliance
One of RERA’s key functions is to monitor whether developers are sticking to approved plans and timelines. If a builder fails to complete the project on time or violates any terms, RERA can impose penalties and even cancel their registration. This creates discipline in the real estate sector and protects the buyer’s interest.
Penalties and Non-Compliance Under RERA
RERA was created to bring discipline to the real estate sector. To ensure that developers and agents follow the rules, RERA has introduced strict penalties for those who do not comply. Here’s what happens when someone breaks the law under RERA:
1. Penalty for Not Registering a Project
If a developer starts advertising, selling, or booking properties without registering the project with RERA, they can face a fine of up to 10% of the total project cost. In some cases, they may also face imprisonment for up to 3 years, or both.
2. False Information or Misleading Advertisements
If a developer gives wrong details or hides important facts while registering the project or promoting it, RERA can charge a fine of up to 5% of the project cost. This helps protect buyers from being misled by false promises.
3. Delay in Project Completion
If a project is not completed on time, the developer must pay interest to the buyer for the delay. This ensures that buyers are compensated fairly for late possession and encourages builders to stick to timelines.
4. Violation of RERA Orders
If a developer, agent, or promoter does not follow RERA’s rules or disobeys an order given by the authority, they can be fined daily until the issue is resolved. The total fine can go up to 5% of the project cost.
5. Penalty for Real Estate Agents
If a real estate agent is not registered with RERA but still helps sell or advertise a project, they can be fined ₹10,000 per day or up to 5% of the property cost involved in the deal.
Common Myths About RERA
Myth 1: RERA is Only for Big Builders
Fact: RERA applies to all developers, big or small, as long as the project size meets the minimum criteria (500 sq.m. or 8 apartments). Even small housing projects must follow RERA rules.
Myth 2: RERA Delays Projects
Fact: RERA actually prevents delays by holding developers accountable. With clear timelines and penalties for delays, projects are more likely to be completed on time.
Myth 3: RERA Only Helps Buyers
Fact: While RERA does protect buyers, it also helps honest developers and agents by creating a transparent system. It builds trust with customers and improves the real estate industry overall.
How RERA360 Helps Developers in Pune
RERA360 helps developers in Pune by making it easy to follow all the RERA rules. They help with project registration, legal checks, and regular updates required by the law. This way, developers don’t have to worry about paperwork and can focus on building homes. RERA360 also gives advice and training so developers understand the rules well. With their help, developers can complete projects on time, follow the law, and build trust with buyers.
Conclusion
In conclusion, RERA has revolutionized the Indian real estate sector by bringing transparency, accountability, and protection for buyers and developers alike. Whether you’re investing in a new home or a commercial property, understanding RERA’s rules and benefits can help you make confident decisions. For developers and agents, compliance with RERA is essential to build trust and ensure project success.