Let's Know More About RERA
Aastha Mishra 13 May 2020

Let's Know More About RERA



The Indian Government passed The Real Estate (Regulation and Development) Act (RERA) in May 2016 which aimed at protecting the interest of buyers in the real estate sector. The Act establishes a Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and for establishing an arbitrating mechanism for speedy dispute redressal. It was brought to action to eradicate the existing discrepancies and problems like project delivery delays, property pricing, quality of construction, title within the real estate sector and to facilitate transparency in the home buying process. With RERA in place, every builder or developer is required to inform home buyers regarding the progress of the construction, to hand over the physical possession of the property to home buyers by the mentioned date and to abide every rule outlined under the Act, to ensure accountability.



·    The Act has brought about more accountability and transparency within the real estate industry by covering both the residential and commercial properties its ambit. It aims to reduce project delays and mis-selling. Each real estate developer needs to give a delivery date for the handover of the possession of the said projects.


·        Before the enactment of The Real Estate Act, 2016, builders had their own formulas to calculate the carpet area of a property. But RERA has a standardized version on how to calculate the carpet area. The Real Estate (Regulation and Development) Act,2016 defines carpet area under Section-2(k) as mentioned below:

             “the net usable floor area of an apartment ,excluding the area covered by the external walls ,areas  under services shafts ,exclusive balcony or verandah area and exclusive  open terrace area, but include the area covered by the  internal partition walls of the apartment.”

                With the insertion of this definition, the builders need to clarify how much carpet area they are offering as the price of a property in real estate in India is dependent on the carpet area.


·        Under this Real Estate Act, if a buyer discovers any defect or fault in the construction, quality or provisions of the flat within 5 years after the physical possession of the flat, such defect will be rectified by builder within 30 days at no extra cost and on failing to do              so; the buyers will be entitled to get the compensation.


·        The standardization brought about by Real Estate Act aims to protect the interest of buyers and developers alike. It has provided the common ground to the buyers, developers and authorities to discuss the issues of real estate.


·        Grievances regarding project delivery delays, property pricing, quality of construction and title of your commercial or residential property will be addressed and solved quickly. As per RERA registration builders-buyers disputes can be solved within 120 days  under the regulatory bodies and appellate tribunals.  

3.The Real Estate Act & the Home buyers-It’s Impact:

                                            The Act, 2016 benefits home buyers in a number of ways.

·    With the implementation of RERA’s rules , the promoters are bound to disclose every detail of the proposed project under Section-11 for public viewing , including-


(a)  Details of the registration granted by the Authority.

(b)  Quarterly up –to date the list of number and types of apartments or plots, as the case may be.

(c)   Quarterly up-to date the list of number of garages booked.

(d)  Quarterly up-to date list of approvals taken and the approvals which are pending subsequent to commencement on regular basis.

(e)   Quarterly up-to date status of the project.

(f) Such other information and document as may be specified by the regulations made by the Authority.


·     As per RERA rules, the buyers have to pay for the property on the basis of carpet area or the area enclosed by walls. Builders cannot charge you for the super built area that includes lifts, balconies, stairs and lobbies.


·   Builders have to put 70% of the money they collect from home buyers into a separate bank account, which is known as Escrow Account, which they can only use for construction purposes. They cannot rotate that money anywhere else and the money can be withdrawn as per the stages of the construction approved by engineers and chartered accountants of builders.


·     RERA lays emphasis on timely completion of projects. Any delay means that the developer has to pay an interest of 2% above State bank of India’s lending rate to the home buyers. The Act also prescribes imprisonment of up to three years for errant developers.


·    The developer or builder cannot make alterations or additions to the building plan without informing two-thirds of the owners about such a change. It can only proceed if a majority of home buyers consent.


·  The Act prohibits developers from taking more than 10% as advance before an agreement for sale from home buyers.



·     If at the time of possession the buyer discovers a discrepancy in the title deed, he/she can claim compensation from the developer. This is not even” barred by limitation, which would ideally mean no capping of the time frame within which such claim has to be made.



   RERA impacts the real estate in ways which makes it more transparent.


·       The RERA makes it compulsory for all the real estate projects, where the land is over 500 square meters or more than 8 apartments for sale must be registered with the respective state RERA. For this, the developer has to disclose the names of promoters, project layout, and land status, the status of statutory approvals, plan of development work, the draft of builder–buyer agreements, names and addresses of real estate agents, contractors, structural engineers and architects to the authority. All of this information has to be given on the website and has to be regularly updated by the RERA developer himself.


·   It is mandatory for builders to deposit 70% of the project money collected  from home buyers in separate bank accounts earmarked for each project and any change the developer proposes in the lay out plans must be approved  by two-thirds of the  buyers in that project. . This means builders can no longer engage in fraudulent transactions or money laundering   and every rupee spent and gained has to be accounted for.


·  There will be one model sale agreement between all builders and home buyers.



Complaints can be filed under section 31 of the Real Estate (Regulation and Development) Act,2016 either with the Real Estate regulatory authority act  or with the adjudicating officer .Such complaints may be filed against the promoters,  allottees and and/or real estate agents. By launching the official RERA websites, the various State governments have made the process of filing a complaint under RERA more simple and hassle free. Any home buyers can file RERA complaints online on the website by filing up a form and paying the registration fees.


Step-1- To file a complaint with the Authority, the complainant needs to visit the States’ Official Website on the portal search for Complaint registration. For instance, on the Uttar Pradesh RERA website, home buyers can file their complaints by clicking on the link “Register Complaint” placed under ‘Complaint Section”.

Step-2- Click on the complaint registration link. You will be taken to the complaint form where you are required to fill the details of the complaint.

Step-3- While filing the complaint, home buyers would be asked to submit their personal details including name, address, contact details and project details. Complainants can also attach supporting documents like agreement, complete details of the payment etc.

Step-4- Once the form is fully filled, the Complainant/ home buyers  would need to pay a sum of Rs.1,000 for filing or Rs.5,000 in case of filing complaints before Adjudicating Officer. Online mode payment mode is available for completing the transaction.

Note* All complaints filed under RERA must be in the form prescribed  under RERA norms as laid down by the government in the respective States.



                          Based on the offence the home buyers mentioned in their Complaint, the developer or promoter is charged a penalty in case they are found guilty.

·         The Promoters are required to get their projects registered under Section 3 of the RERA which prohibits them from advertising, marketing, booking, selling, offering for sale or inviting people in any other manner for purchasing the buildings, apartments or plots in the project without getting the project registered. In case the promoter/builder contravenes the provision, he is liable to pay 10% of the project’s estimated cost.

                In case the promoter continues to default even after the order imposing penalty mentioned above is passed, he can be punished either with imprisonment up to three years or with fine up to 10% of the project’s estimated cost or with imprisonment as well as fine.


·        If the promoter does not register their project as per the provisions of the RERA or submits information  or, makes declaration which is false, he/she can be made liable to penalty up to the maximum  amount equal  to 5% of the estimated cost of the project as  may be determined by the RERA.


·         A promoter who   fails to comply with or contravenes any of the orders or directions of the RERA is made punishable by penalty calculated at the determined amount per day for the period during which the default continues subject to the maximum imposable penalty of amount equal to 5% of the estimated cost of the project which may be determined by the authority.


·        Failure to comply with the orders, decisions or directions of Appellate Tribunal by the promoter, is made punishable with imprisonment for a term up to 3 Years or with fine for every day of default or with both. The fine to be imposed can be an amount up to 10% of the project’s estimated cost or both.


·        Moreover, buyers too have to abide by RERA, if found guilty of non compliance, they have to pay a daily penalty of up to 5% of the approximate cost of the project. On the other hand, non compliance with the Appellate Tribunal can lead to imprisonment for up to 1 year, or 10% of the project’s probable cost or both.


As the RERA Act is fairly new legislation, it is important that you understand the wide variety of rights that you can specifically assert. Buyers or owners who are aggrieved by any action of the promoters or agents can easily approach the real estate authorities for easy and effective redressal of their dispute. It is also imperative that you connect with the best lawyers in the field to assist you in asserting your rights under the RERA.

Did you find this write up useful? YES 4 NO 1

C2RMTo Know More

Something Awesome Is In The Work









Sign-up and we will notify you of our launch.
We’ll also give some discount for your effort :)

* We won’t use your email for spam, just to notify you of our launch.

SAARTHTo Know More

Launching Soon : SAARTH, your complete client, case, practise & document management SAAS application with direct client chat feature.

If you want to know more give us a Call at :+91 98109 29455 or Mail info@soolegal.com