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The Real Estate (Regulation and Development) Act, 2016 (RERA)

By July 19, 2023No Comments

One of the most revolutionary changes in the Indian real estate sector was the introduction of the Real Estate (Regulation and Development) Act, 2016, commonly known as RERA. RERA aimed to bring transparency and accountability to the real estate market by regulating both residential and commercial projects.


Under RERA, all real estate projects with an area exceeding 500 square meters or more than eight apartments must be registered with the respective state’s Real Estate Regulatory Authority (RERA). This move ensures that developers cannot advertise or sell properties before obtaining the necessary approvals and permits, preventing fraud and project delays.


RERA also mandated developers to deposit 70% of the project’s funds in a separate bank account, exclusively used for that particular project’s construction, thus protecting buyers’ interests and minimizing diversion of funds. Additionally, the law mandates developers to provide timely updates on the progress of the project, ensuring transparency throughout the development phase.


Since its enactment, there have been several noteworthy developments and updates related to RERA that have further strengthened its implementation and impact. Let’s delve into some of the latest developments and news surrounding RERA:



Widening Scope of RERA Coverage: Initially, RERA was applicable to only residential real estate projects. However, several states have extended its ambit to include commercial projects as well. This extension aims to ensure that all real estate projects, whether residential or commercial, are brought under the regulatory framework, offering protection to both homebuyers and commercial property investors.


Stricter Enforcement and Penalties: State Real Estate Regulatory Authorities (RERAs) have been proactive in enforcing the provisions of RERA and ensuring that developers comply with the law. This includes strict scrutiny of project registrations, monitoring project progress, and taking necessary actions against developers for any deviations or violations.

Furthermore, RERAs have been empowered to impose penalties for non-compliance. Penalties for violating RERA provisions can range from a percentage of the project’s cost to imprisonment, depending on the severity of the offence. These penalties act as a strong deterrent and promote adherence to the law.


Digitisation and Online Platforms: To streamline the registration process and enhance transparency, many states have established online platforms for RERA registration. These digital platforms enable developers to submit project details, documents, and updates online, making the entire process more efficient and accessible.

Additionally, RERAs have made efforts to provide online access to information about registered projects for potential buyers. This allows buyers to verify project details and track the progress of registered projects from the comfort of their homes, promoting transparency and reducing the risk of fraudulent practices.


Standardisation of Sales Agreement and Disclosure Requirements: RERA mandates that developers provide detailed information about the project to buyers, including the layout plans, carpet area, amenities, and specifications. This ensures that buyers have access to accurate and comprehensive information before making a purchase decision.

Moreover, RERA has introduced a standardized format for the sales agreement, which developers must use in their transactions. This measure helps in preventing one-sided agreements and protecting the interests of homebuyers.


Formation of Appellate Tribunals: To address disputes and appeals related to RERA, each state has established Real Estate Appellate Tribunals. These tribunals serve as the second level of adjudication after the respective state’s RERA. Homebuyers and developers can approach these tribunals in case of any grievances or disagreements with RERA decisions, ensuring an efficient and independent dispute resolution mechanism.


Focus on Completion of Delayed Projects: One of the primary objectives of RERA is to address project delays and protect homebuyers from the uncertainty caused by such delays. Many RERAs have been actively engaging with developers to monitor and expedite the completion of stalled or delayed projects.


To achieve this, some states have set up dedicated cells or committees to assess and resolve issues faced by developers, ensuring that projects are completed on time and homebuyers receive their properties as per the agreed timelines.

Promoting Transparency in Advertising and Marketing: RERA strictly regulates the advertisements and marketing materials used by developers to promote their projects. Developers must provide accurate and transparent information in all advertising materials, ensuring that buyers are not misled by false claims.


To ensure compliance, RERAs conduct periodic audits of advertising materials used by developers and take necessary action against those found to be non-compliant.


Training and Capacity Building: RERA implementation involves various stakeholders, including developers, real estate agents, and homebuyers. Recognizing the importance of educating and empowering these stakeholders, some states have initiated training and capacity-building programs.

These programs aim to create awareness about RERA’s provisions, educate homebuyers about their rights and responsibilities, and enhance the understanding of real estate professionals regarding compliance and disclosure requirements.



The Real Estate (Regulation and Development) Act, 2016 (RERA), has ushered in a new era of transparency and accountability in the Indian real estate sector. The latest developments and news surrounding RERA highlight the commitment of the government and various state authorities to ensure its effective implementation. As RERA continues to evolve and adapt, it is poised to play a crucial role in shaping the future of real estate in India, fostering trust, and confidence among homebuyers and investors alike.



Author kjac

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