The Real Estate (Regulation and Development) Act, 2016 (the Act) is a landmark initiative by Indian Government to enhance transparency in the real estate sector by creating a systematic and a uniform regulatory environment, thereby protecting consumers’ interest and making real estate developers liable for timely completion of projects.

The RERA bill was drafted in the year 2013 and was passed by the Rajya Sabha on 10thMarch 2016 and by the Lok Sabha on 15thMarch 2016. It received the Presidential nod on 25th March 2016 and some provisions of the Act came into force on 1stMay 2016.

Complete Real Estate (Regulation and Development) Act is effective from 1 May, 2017.

Yes, this Act is applicable to all Indian states. When the law was enacted it was not applicable to Jammu & Kashmir. After abrogation of Article 370 of the Constitution this law is applicable to whole of India including Jammu & Kashmir.

RERA Act is applicable when either
1. land size of the project exceeds 500 Sq. Mtrs or 2. of units (flats, plots, shops, etc) exceeds 8.
No promoter shall advertise, market, book, sell or offer for sale for any real estate project in any planning area without first registering such project.

Initially, the bill was supposed to cover only residential projects. On further amendments, commercial projects including shops, buildings and offices were also included in this.

Yes, A Central Advisory Council (CAC) has been set up

1. To advice the Central Government on the implications of the Act 2. To protect interest of consumers and 3. To supervise the growth & development of the real estate sector.

In addition, there will be a dedicated Appellate Tribunal set up for RERAs to hear appeals from orders of the RERAs and the adjudicating officer.

The Act covers both on-going and incomplete projects.

All on-going projects which have not received the completion certificate (CC) will need to be registered under RERA but on-going project will exclude-

Where common areas and facilities have been handed over to the Association of Allottees or the competent authority, as the case may be, for maintenance. Where sale/lease deeds or possession letter of minimum sixty percent of the apartments/ houses/ plots in the phase/ project have been executed. Where all development works has been completed and completion certificate (CC) has been obtained from chartered engineer in practice. Where completion certificate (CC) has been obtained from the competent authority or where all development works have been completed and application has been filed with the competent authority. Where development is done in phases then each phase shall be considered as a separate project and the phase which fulfills any of the above conditions shall be excluded. Where competent authorities/ local bodies have started issuing lease deed for plots. Where services have been handed over to local authorities for maintenance or more than 50% of the development charges have been deposited to local authorities.

No, RERA does not cover rental arrangements.

The Act covers all bodies (private and public) which develop real estate projects for sale to the general public. Section 2(zk) defines the term ‘promoter’ which includes both private and public real estate promoters. Thus, both Development Authorities and the Housing Boards, when involved in sale are covered under the Act.


5 main objectives of RERA, 2016 are :-

  1.  To establish the Real Estate Regulatory Authority (RERA)
  2.  To promote transparency and efficiency in the sale of real estate projects
  3.  To protect the consumer interest in the real estate sector
  4.  To establish an adjudging mechanism for speedy dispute settlement
  5.  To set up an Appellate Tribunal to hear appeals from the decisions, directions or orders of the RERA

Remedies Available To Homebuyers

As per the RERA rules, the consumer is entitled to

  1.  receive information about the sanctioned plan,
  2.  approved layout plan,
  3.  stage wise progress of the project,
  4.  carpet area and facilitation of basic amenities &
  5.  services such as drinking water, electricity, sanitation etc.
  6.  carpet area and facilitation of basic amenities &
The consumers can claim possession of the unit and the association of consumers can collectively claim possession of the common areas as declared by the real estate developer.

In case the real estate developer fails to meet the timeline or does not deliver what was promised then the consumer has the right to claim refund of amount paid with prescribed interest and compensation for the same.

The aggrieved consumer is required to approach RERA in case of disputes and the RERA will prescribe penalty or punishment by acknowledging the nature of the violation.

In case the consumer is aggrieved by the decisions of the RERA or an adjudicating officer then he / she can appeal to the Appellate Tribunal. This setup will speed up the process of dispute settlement because it minimizes the involvement of the existing judicial system.

Further, if the consumer is not satisfied with the decision of the Appellate Tribunal then he/she can appeal in the High court within 60 days of receiving the decision.

Responsibilities of a consumer

It is mandatory for the consumers :-

1. To make payments on time to the real estate developer as per the agreement.
2. To pay the share of registration charges, municipal taxes, maintenance charges, ground rent, electricity charges, water supply charges etc.
3. Once the real estate developer issue the occupancy certificate, the consumer is required to take possession within two months.
4. To pay prescribed interest if he/she fails to make timely payments for his purchase. It is mandatory for a consumer to actively participate in the formation of an association, a consumer federal or any cooperative society.
5. A consumer must participate towards the registration of the conveyance deed of the unit

Registration of project by builder

Registration by RERA shall be granted within 30 days from date of application.

If RERA fails to grant registration or reject application, project shall be deemed to have been registered. RERA shall also within 7 days (from expiry of 30 days) provide registration number, Login ID and password to applicant for accessing website of Authority and to create his web page and to fill details of proposed project.

The validity of the registration granted to a project shall be the period declared by the promoter at the time of making the application for registration to authority.

In such cases, every phase will be considered a standalone real estate project and the developer has to obtain registration under this Act for each phase separately.

Carpet area is the net usable area which excludes common areas, balconies, verandas, terraces and thickness of outer walls, etc.

Therefore, to let the allottee know what he/ she is paying for, it is mandatory for the real estate developer to specify the carpet area thus enacting a straight forward definition to be adopted across the country.

As per RERA, Carpet area is mandatory to be mentioned in sale agreement.

Responsibilities of the Builder/Developer

An escrow account is a bank account to which an account holder makes periodic deposits, and permit the bank to withdraw funds to pay for certain fixed obligations.

As per RERA regulations, a real estate developer is required to open an escrow account in a government recognized bank. As per the Act, to prevent siphoning or using of funds collected from one project for business expansion, it is mandatory for the developer to deposit 70% of all collections in an escrow account maintained with a scheduled commercial bank.

The real estate developer can withdraw the funds solely for the purpose of the construction of the said project in proportion to the stage of work. The request for withdrawal of the funds is to be certified by an engineer, architect or a chartered accountant.

This will give relief to the consumers from the pain of project delays and will assure them that their payments to the real estate developer are being used for the development of the project where he/she owns unit/units.

The promoter is required to seek an insurance of the real estate project towards title of the land and towards construction of the project.

The promoter is required to withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project after certified by an engineer, an architect and a chartered accountant in practice.

Yes, the promoter shall get his accounts audited within 6 months after end of every Financial Year by a Chartered Accountant in practice, and shall produce a statement of accounts duly certified and signed by such Chartered Accountant and it shall be verified during audit that amounts collected for a particular project have been utilized for project and withdrawal has been in compliance with proportion to percentage of completion of project.

Advertisement means any medium adopted in soliciting for sale would be covered under the said definition, including SMS and emails.