- If you’re about to embark on your home-buying journey, the biggest lesson you will learn is that only ‘buying a fancy property or dreaming to design a luxurious house’ is not everything.
- There’s a massive legal procedure that goes behind it!
- There are many clauses and acts that you will need to understand before you can sign a deal. RERA is one of them!
If you’re about to embark on your home-buying journey, the biggest lesson you will learn is that only ‘buying a fancy property or dreaming to design a luxurious house’ is not everything.
There’s a massive legal procedure that goes behind it!
There are many clauses and acts that you will need to understand before you can sign a deal. RERA is one of them!
So, What Exactly is RERA?
In 2016, Parliament introduced this act for Real Estate area. The full form of RERA is - Real Estate (Regulation and Development) Act.
It’s basically a regulatory framework designed to protect property buyers and bring accountability to builders.
RERA is not run through a single national authority. One thing many buyers don't know yet is that there isn't just one RERA office for the entire country. The law itself is national!
Each state and Union Territory has its own RERA authority responsible for registrations, project monitoring, and dispute resolution. For example, Maharashtra has MahaRERA, Uttar Pradesh has UP RERA, and Haryana has HRERA.
How much RERA has been Useful so far?
RERA replaced vague builder promises with concrete legal mandates.
Before RERA was introduced, if a builder or architect took your money for construction but doesn’t complete their work, you could do nothing but just to keep appealing in civil or consumer courts for years.
Now, when RERA has been implied, the Real Estate department has its own dedicated authority and legal framework to fast-track any such cases.
Bigger relief for buyers!
How Does RERA Work? 5 Rules to Protecting Your Hard-Earned Money
There are many misconceptions around property-buying. People actually don’t know how much they have to do and for what?
Here we have cleared the confusion surrounding the 5 most-important areas.
1. You should only pay for the ‘Carpet Area’
Earlier, the builders used to sell apartments using terms like ‘Super Built-Up Area’. So, when you buy a flat/apartment, you assume to pay for just the flat you will be living it.
But what if the builder also charge you for staircases, lobbies, and lift shafts as per-square-foot prices.
Under RERA, now builders can only quote the per-square-foot charges based on the Carpet Area i.e. the exact usable floor space inside the apartment's interior walls. Even the Balconies, utility ducts, and common lobbies are excluded in the Carpet Area.
2. The 70% Fund Protection Rule
Before RERA, some developers would collect money from the buyers and invest their money to fund another project.
This resulted in delayed construction and uncertainty for possession guarantees. Hence, their money was just moving around not getting the actual property they invested in.
To prevent this, RERA regulates builders to use the 70% of the money collected from homebuyers only for the construction and development of that particular project they invested in.
In simple terms, the money you pay for a project is supposed to be used for your property, not somewhere else.
3. Capped Advance Payments
A developer or agent cannot legally accept more than 10% of the unit’s total cost as an application or booking token without first executing and registering a formal Builder-Buyer Agreement.
4. 5-Year Structural Defect Guarantee
If you discover any structural defects or poor workmanship within 5 years of receiving possession, the promoter must fix it at no cost to you within 30 days.
5. Equal Penalty for Delays
If you delay an instalment payment, the builder charges you interest. If the builder delays handing over the keys beyond the committed RERA deadline, they must pay you interest at the exact same rate.
You also hold the right to exit the project entirely and demand a full refund with accrued interest.
The Pre-RERA Era vs Today
| Features | Pre-RERA (Before 2016) | Today Under RERA |
|---|---|---|
| Pricing Basis | Ambiguous Super Built-up Area | Certified Net Carpet Area |
| Use of Buyer Capital | Frequently diverted into new land purchases | 70% locked in escrow for current project. |
| Delivery Date | Vague ("36 months + grace periods") | Legally committed, hard RERA possession date. |
| Structural Warranty | None; buyers bore repair expenses | 5 years mandatory free builder remediation. |
| Dispute Resolution | Years spent in slow civil courts | Dedicated tribunal with target 60-day disposals. |
3 Critical Misconceptions Around RERA
The biggest misconception is that all the RERA-registered projects are immune to failure.
Well, you should know -
1. Registration Does Not Mean Project is Risk-Free
A RERA registration means the developer has registered the project and submitted the required information to the authority.
It surely improves transparency, but it does not guarantee that the project will never face delays, financial problems, or legal disputes.
Think of RERA as a verification tool, not a guarantee certificate.
2. Project Timelines Can Still Change
Under RERA, builders are required to declare a completion date, but that doesn't mean delays are impossible.
In certain situations, developers can apply for official extensions. That's why, instead of relying only on sales promises, buyers should always keep checking latest project status on the official RERA portal of their respective state.
The completion date listed on the RERA website will be more reliable than what's mentioned in marketing material.
3. RERA Can Help You Fight But Resolution May Be Delayed
If a builder fails to meet their commitments, buyers can file a complaint with RERA and seek relief.
However, even after winning the legal battle, the actual process of recovering money or enforcing the order may take time in some cases.
6 Quick Steps to Verify A Project Before Investing Into It
Before buying a property or investing in any on-going project, spend a few mins to verify the project through these 6 quick steps.
1. Find the Project on the RERA Portal
Visit the state's official RERA website and search using the project's RERA registration number or project name.
2. Check the Project Details
Make sure the information shared by the sales team is accurate. Verify developer's name, project name, phase, and location.
3. Verify the Approved Plans
Review the approved layout and all other project details available on the portal to know what’s official and what not.
4. Look at Construction Progress
Most RERA portals provide regular project updates. Check whether your project is consistent for possession timeline as promised or not.
5. Review Available Documents
Check whether the developer has submitted all important documents on RERA platform such as approvals, land-related records, and other disclosures uploaded by the developer.
6. Compare Everything With the Sales Pitch
Compare both the information provided on the RERA portal with the brochure, advertisements, and verbal promises made by the sales team.
If something doesn't match, there may be flaws.
Saloni Jain
Content WriterSaloni Jain contributes practical rental and real estate guidance for RentalGini.
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