Real Estate Regulation Act explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Real Estate (Regulation and Development) Act 2016 (RERA) transformed India's real estate sector from an unregulated builder-driven market to one with statutory accountability, mandatory disclosures, and an efficient dispute resolution mechanism.
Key Objectives of RERA
- Ensure transparency in real estate transactions
- Protect homebuyers from builder defaults, delays, and fraud
- Establish a regulatory authority with adjudication powers
- Promote fair competition and efficient redressal of disputes
Mandatory Project Registration (Section 3)
Who Must Register?
- Any residential or commercial real estate project where land area exceeds 500 sq m OR the project has more than 8 apartments
- Ongoing projects (where OC not fully received as of RERA commencement = 1 May 2017) in respective states
- Projects in development phases: each phase separately registered
Exemptions
- Projects where land area ≤ 500 sq m AND ≤ 8 apartments
- Projects where renovation/repair does not require new allotments
- Plotted development of individual plots (some states exempt, others register)
Builder/Promoter Obligations
Disclosures at Registration
- Approved plans, sanctioned building permits
- Land title documents and encumbrance status
- Financial details of the project
- Proforma of sale agreement
- Past track record of the promoter
Ongoing Obligations
- 70% escrow: Deposit 70% of collections in a dedicated bank account; withdraw only based on construction progress certified by CA + engineer
- Quarterly updates: Upload project status (construction completed, percentage sold, payments received) on RERA portal every quarter
- No change in plans: Cannot alter specifications or common areas without written consent of at least 2/3 of allottees
- Defect liability: 5 years after possession — must rectify structural defects reported by buyers at no cost within 30 days
Homebuyer Rights Under RERA
| Right | RERA Provision |
|---|---|
| Right to information about project | Section 4 — all documents on RERA portal |
| Right to timely possession or compensation | Section 18 — interest at SBI MCLR+2% |
| Right to file complaint | Sections 31-35 — RERA adjudication |
| Right to refund on delay | Section 18(1)(a) — full refund + interest |
| Right against plan changes | Section 14 — 2/3 consent required |
RERA Complaint Process
- Homebuyer files complaint on State RERA portal (MahaRERA at maharera.mahaonline.gov.in, UP-RERA at up-rera.in, etc.)
- Pay nominal filing fee (varies by state, typically Rs.1,000–5,000)
- RERA sends notice to builder; builder files reply
- Adjudicating Officer holds hearing (can be video conference)
- Order issued within 60 days
- If not satisfied: Appeal to RERA Appellate Tribunal within 60 days of order
- From tribunal: Appeal to High Court on questions of law
Interest Compensation Calculation (Section 18)
If builder delays possession by 2 years:
- Amount paid by buyer: Rs.50 lakh
- SBI MCLR + 2% = say 10% (illustrative)
- Annual interest = Rs.5 lakh
- For 2 years: Rs.10 lakh compensation
Alternatively, buyer can claim full refund of Rs.50 lakh + Rs.10 lakh interest = Rs.60 lakh (Section 18(1)(a)).
Need Expert Help?
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Get Free ConsultationKey Facts About Real Estate Regulation Act
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
Which real estate projects must register with RERA?
Section 3: Projects with land area exceeding 500 sq m or more than 8 apartments must register before advertising, booking, or construction. Ongoing projects (partial OC not obtained as of 1 May 2017) must also register.
What are the builder obligations under RERA?
Builders must: maintain 70% of collections in a separate escrow account, provide quarterly progress updates on RERA portal, not change approved plans without 2/3 buyer consent, complete construction in time, and deliver possession on promised date.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
Real Estate Regulation Act: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.
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Why This Matters
Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in rera are revised periodically, so it helps to review your obligations at the start of each financial year.
Getting Real Estate Regulation Act right the first time saves both time and money. Many businesses seek expert help for Real Estate Regulation Act to stay fully compliant.