17th, Apr, 2025

What is RERA and Why Is It Important for Homebuyers to Check RERA Approval?

Planning to Buy Your Dream Home? The first thing you must know is RERA!

For every Indian, buying a house is one of their greatest aspirations, but this ambition becomes a nightmare due to project delays, hidden costs, or builder-broken promises. For homebuyers, RERA thus becomes a strong shield. 

Originally designed to provide the real estate industry openness, responsibility, and fairness, RERA guarantees you protection throughout the process. Therefore, knowing RERA is essential even before you buy your dream house!

What is RERA? 

RERA full form is Real Estate Regulatory Authority. The RERA Bill, passed by the Indian Government in May 2016, helps to introduce openness to the property purchase process. The Government proposed the Real Estate (Regulation and Development) Act to safeguard Indian home buyers' rights and increase real estate investments throughout the nation. 

From its establishment, the RERA Act has brought about many reforms in the real estate sector, including stronger fraud protection, timely project delivery, etc. For this reason, choosing a RERA-registered property is always a wise decision. The RERA Act covers every Indian State and Union Territory. 

Key Features of RERA

• If a project gets delayed, developers might have to pay back customers.

• Before advertising or selling, any real estate project has to be registered with RERA.

• If you've got any issues, buyers can easily get answers by reaching out to RERA directly.

• Builders are on the hook for any structural issues for up to five years after you move in.

• Builders have to provide project information, designs, schedules, and approvals on the RERA website.

• To guarantee funds used for the same project, 70% of the gathered money from buyers has to be retained in an escrow account.

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How RERA Protects Homebuyers

RERA serves as a protector for homebuyers. It can help the buyers in the following ways:

• Restriction on Malpractices 

RERA specifies particular guidelines for building, development, and sales, thereby giving homeowners a means of recourse to handle problems such as project delays, building quality, and pricing. Any problems that can develop are the responsibility of developers; homebuyers have RERA available for dispute resolution. 

• Transparency and Accountability

RERA requires developers to register their projects with the Real Estate Regulatory Authority in each state to provide comprehensive information about the project, including land titles, project plans, timeframes, price, and fund use. As this material is freely available, homebuyers can review thorough details before making a purchase. 

• Fair and Accurate Pricing 

RERA requires that homes be sold based on carpet area rather than super-built-up area, therefore ensuring that purchasers are not paid for shared rooms. Developers also have to reveal all project expenses, including building, maintenance, and any other related fees. 

• Speedy Dispute Redressal

Established in every state, RERA agencies are meant to supervise real estate projects and settle conflicts between developers and homebuyers, therefore offering a quicker and more effective means of grievance resolution. 

• Creation of Escrow Accounts

RERA requires developers to form escrow accounts and deposit some project money, which can only be utilized for building, in which case RERA helps to guarantee efficient use of money and discourages developers from using cash for other purposes. 

• Better Construction Quality 

RERA guarantees standards for construction quality and safety, guiding developers to follow particular rules and regulations. It guarantees that the property is safe and of good quality and helps avoid structural flaws. 

Benefits of RERA-Verified Property

Here are the key benefits of buying a RERA-verified property:

• Standard Carpet Area

Builders used any instrument at their disposal in relation to the carpet area before RERA, which caused overcharging. By means of RERA, a uniform approach to the computation of carpet area was developed to eliminate the inflated size by builders. It also prevents buyers from paying unnecessary charges for less useful areas. 

• Lower Insolvency Risk 

Developers used to be free to allocate money from one project to another, which put the consumers at risk. At least 70% of the money collected in RERA must be placed in one single account; thereafter, it can only be accessed following the engineer, chartered accountant, and architect's permission.

• Resolve Complaints Timely

If any hardship arises from a project, such as a complaint lodged against the developer by a buyer, promoter, or even agent, it is to be reported to RERA. And if the dissatisfied party does not agree with RERA's ruling, they can once more bring the appeal before the Appellate Tribunal. 

• Limitation on Advance Payments

Builders can only pay less than 10% of the project's cost upfront or through application costs. It will thus stop the pressure on a buyer to pay a large upfront payment for the property or to come up with money quickly.

• Rights Regarding Defects

In case some structural or quality flaws develop within five years of the date of acquisition, the builder is obligated to fix them within 30 days at no additional cost to the buyer.

• Case of Unfulfilling Promises

If the builder fails to fulfil their promises, the buyer has easy access to retrieve the entire advance. In some situations, the builder is also obligated to pay the interest on the same sum.

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How to Check If a Project is RERA Registered

To check if a project is RERA registered, follow the given steps:

Step 1: Visit the official RERA website of the individual state. Each state in India has its own separate RERA portal.

Step 2: Locate the 'Registered Projects' section on the website's Home page or under the "Projects" tab.

Step 3: Enter project details, such as the project name, the builder/promoter's name, the detailed location, or the registration number.

Step 4: Once you provide all the details, the system will show whether the project is registered or not. 

What Happens If a Builder Violates RERA Norms?

If builders, developers, or real estate agents break the RERA Act, they face harsh punishments. Sections 59 to 72 of Chapter VIII of this Act list the crimes and punishments for the violation of the RERA guidelines. 

Under the RERA Act, builders and organizers can be fined the following amounts:

• Up to 10% of the project's expected cost is taken as a fine for the lack of registration for the project. 

• Giving wrong information about the project costs up to 5% of the project's expected cost as a fine. 

• Breaking the law is fined either 10% of the estimated cost of the job or up to three years in prison. 

• A fine of up to 5% of the expected project cost per day is taken against a serious failure to follow RERA rules. 

The RERA fines that real estate agents have to pay are listed below:

• For default, Rs. 10,000 per day for promoting a project that isn't listed.

• If they don't follow what the Appellate Tribunal says, they could be jailed for up to a year or charged 10% of the expected project cost. 

RERA vs. Pre-RERA: A Quick Comparison

Here’s a quick comparison between RERA and Pre-RERA real estate practices to help you understand the key differences:

Comparison Between RERA-Approved and Non-RERA-Approved Property

Here is a simple and clear comparison between RERA-approved and non-RERA-approved properties based on key factors:

Conclusion

RERA has transformed the real estate business since its inception. The benefits of the new RERA Act go beyond holding developers accountable for project completion on time and to the greatest safety standards. Home buyers now use it to make decisions and secure fair deals on property purchases.