What is RERA & Why It Matters?

What is RERA and Why It Matters?

The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, is a landmark legislation passed by the Government of India to regulate the real estate sector and protect the interests of homebuyers. For years, real estate buyers in India faced problems such as delayed possession, misleading advertisements, poor construction quality, and lack of transparency. RERA was introduced to address these challenges and to bring about accountability and discipline among builders and developers. It is applicable to both residential and commercial real estate projects and mandates compulsory registration of projects and real estate agents with the respective State Real Estate Regulatory Authorities before any advertisement, sale, or promotion. One of the most significant contributions of RERA is that it puts the interests of homebuyers at the center of real estate transactions.

Under Section 3 of the Act, no promoter is allowed to market or sell any project without prior registration with the RERA authority. This provision ensures that only those projects that have received necessary approvals and have complied with statutory requirements can be launched in the market. Section 4 further mandates full disclosure from builders, including project plans, layout, schedule of completion, and financial details, enabling buyers to make informed decisions. Another critical safeguard is found in Section 18, which gives the buyer the right to seek a refund with interest if the promoter fails to deliver the project as per the agreed timelines or terms. In such cases, the promoter is also liable to compensate the buyer for any losses incurred. To ensure that the funds collected from buyers are used only for the intended project, the Act requires that at least 70% of the money collected be kept in a separate escrow account under Section 4(2)(l)(D), which prevents fund diversion and misuse.

RERA also provides a fast-track mechanism for resolving disputes between buyers and builders through a dedicated authority and appellate tribunal. Under Section 31, any aggrieved person can file a complaint directly with the authority, making justice more accessible and affordable. The enforcement of this Act has been supported by several landmark judgments. In the case of M/s Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors. (2021), the Hon’ble Supreme Court held that the remedies provided under RERA are in addition to the remedies available under the Consumer Protection Act, thereby offering multiple avenues for buyers to seek justice. In Pioneer Urban Land & Infrastructure Ltd. v. Union of India (2019), the Court upheld the constitutional validity of RERA and clarified that it complements the Insolvency and Bankruptcy Code (IBC), further strengthening the legal rights of homebuyers by recognizing them as financial creditors.

The importance of RERA cannot be overstated. It promotes transparency by making all project details publicly accessible on the respective state RERA websites. Builders are now legally bound to deliver what they promise—be it the date of possession, layout, or amenities. Failure to comply can result in hefty penalties or cancellation of the project’s registration under Section 7. Buyers are no longer left at the mercy of powerful developers. With legal backing, they can demand what they are rightfully owed and are better protected against fraud and delays. Moreover, the Act boosts confidence in the real estate sector, making it more attractive for both end-users and investors. It establishes a much-needed sense of order and discipline in a previously unregulated and chaotic sector.

To verify whether a project is RERA-registered, one can visit the state-specific RERA portal and search using the project name or developer’s name. The RERA registration number must be mentioned in all promotional materials, and buyers are encouraged to check this before investing. For example, in Maharashtra, all registered projects can be accessed at https://maharera.mahaonline.gov.in. This allows every prospective buyer to review the project’s details, status of approvals, and previous compliance records of the builder.

In conclusion, RERA is a revolutionary step in real estate regulation that transforms the way real estate transactions are conducted in India. It empowers homebuyers, promotes transparency, enforces accountability, and brings credibility to the real estate industry. Whether you are planning to buy your first home or invest in property, understanding your rights under RERA can protect you from future troubles and help you make a well-informed decision. RERA is not just a law—it is a promise of justice, transparency, and trust in the housing sector.