The Real Estate (Regulation and Development) Act 2016 (RERA) was a landmark reform bringing transparency and accountability to India's real estate sector. Effective from 1 May 2017, RERA established state-level Real Estate Regulatory Authorities and mandated project registration, bringing protection to millions of home buyers.
Which Projects Must Register Under RERA?
- All commercial and residential projects where land area exceeds 500 sq.m. OR
- Number of apartments exceeds 8 units (in any phase)
- Projects where marketing/advertisement has not started yet and all units not sold
- Real estate agents: must register with state RERA
Builder's Obligations Under RERA
- Register project before launch/marketing with state RERA
- Deposit 70% of project funds in a separate designated account (RERA escrow)
- Disclose: floor plans, layout, approvals, specifications, timeline on RERA portal
- Quarterly update project progress on portal
- No structural changes without buyer's consent
- Deliver possession as per registered timeline (3% interest for delay)
- 5-year warranty on structural defects after possession
Home Buyer Rights Under RERA
- Right to receive timely possession (or compensation with interest)
- Right to know all project details before booking
- Right to quality construction (5-year structural defect warranty)
- Right to refund with interest on project cancellation
- Right to form Association of Allottees
- Right to documents (approved plans, land title)
Compensation for Delay
If the builder fails to deliver possession as per registered date, the buyer is entitled to:
- Interest on amount paid at SBI MCLR + 2% for the period of delay, OR
- Full refund with interest if buyer chooses to exit
Filing RERA Complaint
- File complaint on state RERA portal (most states have online portals)
- Pay nominal complaint fee (varies by state)
- RERA Adjudicating Officer hears the matter
- Order within 60 days typically
- Appeal: RERA Appellate Tribunal → High Court
Penalties on Builders
- Non-registration: Up to 10% of project cost + 3 years imprisonment (repeat)
- False statement: Up to 5% of project cost
- Non-compliance with RERA order: 5% of project cost daily until compliance
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Frequently Asked Questions
What projects must register under RERA?
Projects with land area over 500 sq.m. or more than 8 apartments must register with the state RERA before launch or marketing.
What is the 70% RERA escrow rule?
Builders must deposit 70% of project collections from buyers in a designated bank account, usable only for project construction and land costs — preventing fund diversion.
What compensation does a buyer get for RERA delay?
Interest at SBI MCLR + 2% on amounts paid for the delay period, or full refund with same interest if the buyer opts to exit.
What is the 5-year RERA warranty?
Builders must rectify any structural defects (plumbing, electrical, construction) reported within 5 years of possession handover at no extra cost.
Where do I file a RERA complaint?
On the state RERA portal (e.g., MahaRERA for Maharashtra, HRERA for Haryana). Filing is online with a nominal fee. Orders are typically passed within 60 days.
Can buyers get a refund under RERA?
Yes. If a builder fails to deliver possession as promised, buyers can seek full refund with interest at MCLR + 2% before the RERA Adjudicating Officer.
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