RERA

What is RERA ?
RERA stands for Real Estate Regulatory Authority, which came into existence as per Real Estate (Regula-
tion and Development) Act, 2016 which aims to bring transparency to the real estate industry and address the
existing discrepancies and issues within it. The act was passed by the Indian Parliament in 2016 and came
into effect in May 2017 to make the home buying process more transparent and address the concerns of
home buyers, builders, brokers, and other real estate industry stakeholders. Since its inception, RERA has
implemented many reforms, and more are on the anvil. That is why, as a home buyer or a builder, knowing
RERA rules and guidelines will help you navigate the real estate landscape with ease.
Why RERA came ?
Its objective is to reform the real estate sector in India, encouraging greater transparency, citizen centricity,
accountability and financial discipline.
What is benefits of RERA ?
1. Enhanced Transparency
RERA ensures utmost transparency in every real estate transaction by making it mandatory for builders and
developers to provide timely, accurate, and comprehensive information about the project so that buyers can
make an informed decision while purchasing any property.
2. Standardised Carpet Area Calculation
RERA has standardised a nationwide measurement of carpet area on which real estate developers can sell
properties. It denotes the actual usable area within walls rather than the space before finalising the entire lay-
out of the property.
3. Promptness in Project Delivery
One of the biggest impacts RERA has had on the real estate industry is strictly enforcing the project delivery
timeline for developers to help buyers set realistic expectations for the possession of the property.
4. Establishing Escrow Account
To ensure the funds are utilised only for their intended purpose during property development, RERA ensures
that builders put a certain percentage of funds for property development in the escrow account.
5. Eliminating False Advertising
RERA regulations ensure that developers cannot add misleading information while promoting the property.
All the information included in the promotional material must be accurate and recorded with RERA to pre-
vent customers from being victims of misleading advertisements.
6. Expediting Grievance Redressal
RERA has established a specialised grievance redressal mechanism to address the issues of homebuyers.
Any buyer can file an official complaint against developers for non-compliance or financial or emotional dis-
tress.
7. Structural Defect Liability
The developer’s accountability to buyers doesn’t end with the possession of the property. RERA holds devel-
opers accountable for any structural defects for a certain period after completion.
8. Mandatory Consent for Any Changes
Under RERA, developers cannot make any changes, alterations, or modifications to the property plan on a
whim. They must obtain official consent from homebuyers to make any changes to the property’s layout and
specifications.
9. Clarity of Carpet Area Pricing:
RERA mandates builders to clearly disclose carpet area pricing to make cost calculations more transparent.
Buyers can get more clarity on the pricing structure for a better comparison.
10. Right to Information
RERA empowers buyers with the right to know every crucial detail of the real estate project they want to in-
vest in. It allows buyers to make sound decisions by helping them get the most accurate, real-time informa-
tion and cost calculations without any discrepancies or misleading advertisements.
Penalties for promoters
1. As per Section 59, if a project is not properly registered, the fee to be paid by the promoter will be 10% of
the total estimated cost of the project. Furthermore, failure to pay the fine will result in imprisonment up to a
maximum of three years.
2. As per Section 60, if a promoter provides false information regarding a project, he or she will have to pay
a fine amounting to 5% of the total estimated cost of the project.
3. Section 61 states that any default or delay will lead to the promoter having to pay up to a maximum of 5%
of the total estimated cost.
Penalties for real estate agents
1. As per Section 62, failure to comply with the rules mentioned in the Act can result in fines that add up to
either Rs. 10,000 a day, and may even go up to 5% of the total cost of the project.
2. As per Section 65, failure to comply with the rules mentioned in the Rera Complaint can result
in daily fines which may even go up to 5% of the total cost of the project.
3. Furthermore, as per Section 66, failure to comply with the orders of a tribunal may result in imprisonment
for a year.
Penalties for Allottees
1. As per Section 67, failure to comply with the rules mentioned in the Act can result in daily fines. It may
add up to a total that amounts to 5% of the total cost of the project.
2. Moreover, according to Section 68, failure to comply with the orders given by a tribunal may result in im-
prisonment for up to a year.
Conclusion
RERA has brought monumental change to the real estate industry since its inception. The benefits of the new
RERA Act go beyond simply keeping developers accountable for the completion of the project within the set
timeline and to the highest safety standards. It has become an empowering tool for buyers that helps in deci-
sion-making and ensures that everyone gets a fair deal on every property purchase.

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RERA

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What is RERA ?

Why RERA came ?

What is benefits of RERA ?

2. Standardised Carpet Area Calculation

3. Promptness in Project Delivery

4. Establishing Escrow Account

5. Eliminating False Advertising

6. Expediting Grievance Redressal

8. Mandatory Consent for Any Changes

9. Clarity of Carpet Area Pricing:

10. Right to Information

Penalties for promoters

Penalties for real estate agents

Penalties for Allottees

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