Understanding RERA: What Every Buyer Should Know

Published on: June 10, 2025

The Indian real estate sector, once largely unregulated and often plagued by delays, lack of transparency, and misleading practices, underwent a significant transformation with the enactment of the Real Estate (Regulation and Development) Act, 2016, commonly known as RERA. This landmark legislation was introduced with the primary objective of protecting the interests of homebuyers, promoting transparency, accountability, and efficiency in real estate transactions, and establishing a robust grievance redressal mechanism.


For any prospective homebuyer in India, understanding RERA is no longer just beneficial; it's absolutely crucial. It acts as a shield, empowering buyers with rights and providing them with a legal framework to navigate the complexities of property purchase. This article aims to provide a comprehensive overview of RERA, outlining its key provisions, the benefits it offers to buyers, and what every buyer should know before making one of the most significant investments of their lives.


The Genesis of RERA: Why it was Needed
Before RERA, homebuyers were often at the mercy of developers. Project delays were rampant, often stretching for years, leaving buyers in financial distress, paying both rent and EMIs without possession of their promised homes. Developers frequently diverted funds from one project to another, leading to stalled construction. There was no standardized method for calculating property areas, with "super built-up area" often being inflated, leading to buyers paying for space they didn't actually use. Furthermore, redressal mechanisms were slow and ineffective, leaving buyers with limited legal recourse.




RERA was designed to address these systemic issues, bringing much-needed order and consumer protection to the real estate landscape.

Key Provisions of RERA and Their Impact on Buyers
1. Mandatory Project Registration:
One of the most fundamental provisions of RERA is the mandatory registration of all real estate projects (residential and commercial) with the respective state's Real Estate Regulatory Authority. This applies to projects exceeding 500 square meters or involving more than eight apartments. Without this registration, developers cannot advertise, market, or sell any units.



Buyer Benefit: This ensures that projects undergo scrutiny by the regulatory authority, providing a layer of legitimacy and preventing fly-by-night operators. Buyers can easily verify a project's registration status on the state RERA website.

2. Transparency and Disclosure:
RERA mandates comprehensive disclosure of project details by developers on the RERA website. This includes:
* Approved layout plans, floor plans, and specifications.
* Land title status, approvals, and clearances from various authorities.
* Project completion timelines and phase-wise development plans.
* Details of the promoter (developer) and real estate agents involved.




Buyer Benefit: This provision empowers buyers with complete information, allowing them to make informed decisions and preventing misleading advertisements or hidden clauses. Buyers can access real-time status updates of projects.

3. Standardized Carpet Area:
RERA has standardized the definition of "carpet area," which is the net usable floor area of an apartment, excluding the area covered by external walls, service shafts, exclusive balconies, and open terraces. Developers are now legally bound to sell properties based on this carpet area.


Buyer Benefit: This eliminates ambiguity in area calculations and ensures buyers pay only for the actual usable space, preventing developers from inflating prices based on "super built-up area" which often included common amenities.
4. Escrow Account for Funds:
Developers are required to deposit 70% of the amounts collected from homebuyers into a separate escrow account for each project. These funds can only be utilized for the construction and development of that specific project.


Buyer Benefit: This crucial provision prevents diversion of funds to other projects, significantly reducing the risk of project delays or abandonment due to financial mismanagement. It provides financial security to homebuyers.

5. Timely Project Completion and Penalties for Delays:
RERA enforces strict timelines for project completion. If a developer fails to deliver the property within the agreed-upon date, they are liable to pay compensation to the buyer. Buyers have the right to withdraw from the project and claim a full refund with interest, or opt to continue and receive interest for every month of delay.



Buyer Benefit: This has brought much-needed accountability to developers and has drastically reduced instances of prolonged project delays, ensuring buyers get possession of their homes on schedule.
6. Defect Liability Period:
Developers are held responsible for any structural defects or defects in workmanship for a period of five years from the date of handing over possession. If any such defect is brought to the developer's notice, they must rectify it within 30 days at no extra cost to the buyer.


Buyer Benefit: This provides post-possession protection to buyers, ensuring the quality of construction and holding developers accountable for their work.
7. Regulation of Real Estate Agents:
RERA also mandates the registration of real estate agents with the state RERA authority. Registered agents are required to provide accurate information about the projects they deal with and cannot indulge in unfair trade practices.


Buyer Benefit: This brings credibility and professionalism to the real estate brokerage sector, protecting buyers from unscrupulous agents.
8. Robust Grievance Redressal Mechanism:
RERA establishes state-level Real Estate Regulatory Authorities (RERA) and Real Estate Appellate Tribunals (REATs) to hear and resolve disputes between homebuyers and developers or agents. The aim is to resolve complaints within 60 days.

Buyer Benefit: This provides a streamlined, time-bound, and accessible platform for homebuyers to file complaints and seek redressal, avoiding lengthy and expensive traditional court battles.
What Every Buyer Should Do Before Buying a RERA-Registered Property:
While RERA provides significant protection, homebuyers still need to be diligent. Here's a checklist of essential steps:

Verify RERA Registration: Always check the project's RERA registration on the official state RERA website. Ensure the details on the website match the information provided by the developer.
Scrutinize the Agreement for Sale: RERA mandates a standardized format for the Agreement for Sale. Read every clause carefully, paying close attention to the possession date, payment schedule, specifications, amenities, and penalty clauses for delays.
Understand Carpet Area: Confirm that the pricing is based on the RERA-defined carpet area.
Check Approvals and Documents: Insist on seeing all necessary approvals and clearances from relevant authorities, including the Commencement Certificate (CC), Building Plan Approval, and importantly, the Occupancy Certificate (OC) or Completion Certificate (CC) for completed projects. Without an OC, the property is deemed unfit for occupation, and you might face issues with utility connections.

Inspect the Title Deed: Ensure the developer has a clear and marketable title to the land, free from any encumbrances. A title search report is crucial.
Review Developer's Track Record: Research the developer's past projects, their reputation, and their history of timely delivery and quality construction.
Consult a Legal Expert: It is highly recommended to consult a lawyer specializing in real estate before signing any agreement. They can review all documents and ensure your interests are protected.
Conclusion
RERA has undoubtedly been a game-changer for the Indian real estate sector, shifting the balance of power in favor of the homebuyer. It has instilled a sense of transparency, accountability, and professionalism that was long overdue. For any individual embarking on the journey of homeownership, understanding the provisions of RERA and exercising due diligence is paramount. By leveraging the protective framework that RERA offers, homebuyers can make more confident, secure, and informed decisions, transforming the dream of owning a home into a reality without undue stress or financial risks.