Buying a home is one of the biggest financial decisions most people make in their lifetime. For years, homebuyers in India faced serious challenges such as delayed possession, misleading advertisements, hidden charges, and poor construction quality. To address these issues and bring transparency to the real estate sector, the Government of India introduced the Real Estate (Regulation and Development) Act, 2016, commonly known as the RERA Act.
The RERA Act aims to protect homebuyers, regulate real estate projects, and ensure accountability of developers. This article explains the RERA Act in simple terms, highlights the rights of homebuyers, and outlines key real estate laws every buyer should know.
What is the RERA Act?
The Real Estate (Regulation and Development) Act, 2016 is a central law enacted to regulate the real estate sector and protect the interests of consumers. It establishes Real Estate Regulatory Authorities (RERAs) in every state and union territory to monitor projects, register developers, and resolve disputes.
The Act applies to:
- Residential and commercial real estate projects
- Developers, promoters, and real estate agents
- Ongoing projects that have not received completion certificates
Objectives of the RERA Act
The main goals of RERA include:
- Ensuring transparency in real estate transactions
- Protecting homebuyers from unfair practices
- Promoting timely completion of projects
- Establishing fast and effective dispute resolution mechanisms
- Bringing professionalism and accountability to the sector
Mandatory Registration of Projects and Agents
Under RERA:
- All eligible real estate projects must be registered with the State RERA Authority before advertising or selling.
- Real estate agents must also obtain registration to operate legally.
This registration ensures that buyers can verify project details on the official RERA website, including approvals, layout plans, timelines, and promoter information.
Key Rights of Homebuyers Under RERA
1. Right to Information
Homebuyers have the right to access accurate and complete information about:
- Project layout and floor plans
- Land status and approvals
- Construction schedule
- Status of completion
This information must be updated regularly on the RERA portal.
2. Right to Timely Possession
Developers must adhere to the declared project completion timeline. If possession is delayed, homebuyers are entitled to:
- Full refund with interest, or
- Interest for every month of delay while continuing with the project
3. Right to Refund
A buyer can seek a refund with interest if:
- The developer fails to complete or hand over the project
- The developer violates the terms of the agreement
- The buyer chooses to withdraw due to the delay
4. Right to Fair Agreement
The agreement for sale must be in a standard format and cannot contain one-sided clauses. Developers cannot accept more than 10% of the property cost as advance without signing a registered agreement.
5. Right to Quality Construction
If structural defects or workmanship issues arise within five years of possession, the developer must rectify them within 30 days at no additional cost.
6. Right to File a Complaint
Homebuyers can file complaints against developers or agents before:
- State RERA Authority
- RERA Adjudicating Officer
- Real Estate Appellate Tribunal
Obligations of Developers Under RERA
Developers must:
- Deposit 70% of project funds in a separate bank account
- Use funds only for that specific project
- Obtain all approvals before marketing
- Provide accurate advertisements
- Not alter sanctioned plans without buyer consent
Failure to comply can attract heavy penalties and imprisonment.
Penalties Under RERA
Some key penalties include:
- Up to 10% of project cost for non-registration
- Daily penalties for continuing violations
- Imprisonment up to three years in serious cases
These strict consequences ensure developer accountability.
Role of Real Estate Regulatory Authority (RERA)
Each state’s RERA Authority:
- Registers projects and agents
- Maintains public database
- Resolves disputes
- Imposes penalties
- Issues directions to developers
This creates a dedicated regulatory body for real estate grievances.
Real Estate Appellate Tribunal
If a party is dissatisfied with a RERA order, an appeal can be filed before the Real Estate Appellate Tribunal within the prescribed time.
How RERA Has Helped Homebuyers
Since implementation, RERA has:
- Increased transparency
- Reduced project delays
- Improved accountability
- Boosted buyer confidence
- Standardized contracts
Homebuyers today are better informed and legally empowered.
Important Real Estate Laws Alongside RERA
Apart from RERA, homebuyers should be aware of:
- Transfer of Property Act, 1882
- Registration Act, 1908
- Indian Contract Act, 1872
- Consumer Protection Act, 2019
- Stamp Acts (State-specific)
Together, these laws regulate property transactions in India.
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