Basics of RERA

The much needed Real Estate (Regulation and Development) Act, 2016 came into effect on 1st May, 2016. 59 of 92 Sections of the Act were notified on 15 April, 2016 making them effective from May 1, 2016. This enabled preparation of Real Estate Rules, setting up of Regulatory Authorities and other infrastructure. Remaining sections were notified on 19th April 2017 making them effective from 1st May, 2017 which required registration of the projects within 3 months of the notification.

The Act is aimed to regularise and boost investment in real estates industry in India and at the same time protecting the interest of the home buyers, speedy dispute redressal. It requires registration of the real estate projects as well as those which have not got completion or occupancy certificates.

Under the Act, Real Estate Regulatory Authority (RERA) is to be established by each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute redressal.

Registration of Projects and agents

Section 3 of the Act mandates registration of the real estate projects.

Prior Registration- Prior registration with Regulatory Authority- RERA is required for sell or offer of sale of any plot, apartment or building. For the ongoing projects, the promoter shall make application with the RERA within 3 months from the date of commencement of the Act.

Where the project is to be developed in phases, registration to be done for every phase separately.

Exemption from registration- The projects having land area less than 500 square meters or having number of apartments less than 8 (eight) are exempt from registration. Also the project for renovation or repair or re-development which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building are exempt.

Application for Registration- The application for registration to be made under section 4 of the Act with the prescribed documents and information. Application for registration must be disposed of within a period of 30 days by RERA. On successful registration, the applicant shall be provided with a registration number, a login id, and password to fill up essential details on the website of the RERA.

The registration as granted may be revoked by the Authority on receipt of complaint or suo motu on the basis that the promoter makes default, violation of any the terms and conditions, promoter is involved in any kind of unfair practice or irregularities.

Registration of real estate agent- As per section 9 of the Act, the real estate agents must obtain prior registration from RERA. Such agents will be issued a single registration number for each State or Union Territory, which must be quoted by the agent in every sale facilitated by him.

The registered real estate agent shall not- facilitate the sale of a plot, apartment or building which are not registered under RERA.

 Functions and duties of Promoters

Chapter III of the Act states about the functions and duties of the promoters.

  • The promoters shall create his web page on the website of the Authority and enter all relevant details of the proposed projects, registration details and other information as may be specified.
  • The Promoters must include in the prospectus or the advertisement registration number and the website address of the authority where the detail of the registered project has been entered and shall make available the allottees the information including sanction plan, lay out, the stage wise time schedule of completion of the project.
  • The promoter shall obtain the completion certificate, occupancy certificate. In case any person wish to withdraw from the proposed project on the basis of incorrect information, he shall be refunded the entire investment along with interest at such rate as may be prescribed.
  • The promoter shall not accept a deposit or advance exceeding 10% of the of the cost of the property without first entering into agreement for sale.
  • The promoter is to adhere to the sanctioned plans and project specifications as approved by the competent authorities.
  • The promoter shall not transfer or assign his majority rights and liabilities in a real estate project to a third party without obtaining prior written consent from two third allottees, excluding the promoters, and without the prior written approval of the Authority.
  • If the promoter fails to complete or is unable to give possession of an apartment, he shall be liable to pay on demand to the allottees, the investment made along with the interest at the rate as may be specified.

Security of Home buyers

The Act empowers the home buyers to receive the property within stipulated time, obtain all the relevant information relating to the project, take the possession and title of the property. 70 per cent of the money has to be deposited in bank accounts through cheques. The promoters will have to quote prices based on carpet area not on super built-up area. Under RERA, it is mandatory for the builders to disclose the carpet area.

Real Estate Regulatory Authority and Appellate Tribunal

The appropriate Government shall establish a state level Authority under section 20 of the Act, to be known as Real Estate Regulatory Authorities (RERA) to regulate transactions related to residential and commercial projects and ensure their timely completion and delivery. The objects of the Authority is to facilitate the growth and promotion of a healthy, transparent, efficient and competitive real estate sector. The objective of the Authority is the protection of interest of the home buyers, creation of a single window system for ensuring time bound project approvals and clearances, creation of a transparent and robust grievance redressal mechanism, encouragement of investment in the real estate sector, encourage construction or environmentally sustainable and affordable housing.

The appropriate Government shall within a period of one year, establish an Appellate Tribunal in the State or UT. Appellate Tribunals will be required to adjudicate cases in 60 days and Regulatory Authorities to dispose of complaints in 60 days while no time-frame was indicated in earlier Bill.

RERA Rules

Section 84 of the Act sates that within six months of the Act being enforced, State Governments shall make rules for carrying out the provisions of the Act. The Authority shall within a period of three months, make regulations consistent with this Act and the rules made thereunder to carry out the purposes of this Act.

*So far, the following States have implemented the Rules and formed the Authority in their respective states/ UT:

  • 30 states/ UTs have notified rules under RERA.

Uttar Pradesh, Gujarat, Chandīgarh, Madhya Pradesh, Delhi, Lakshadweep, Maharashtra, Dadra and Nagar Haveli, Bihar, Andaman and Nicobar Islands, Daman and Diu, Andhra Pradesh, Rajasthan, Odisha, Jharkhand, Uttarakhand, Tamil Nadu, Karnataka, Haryana,   Punjab, Chhattisgarh, Assam, Puducherry, Tripura, Telangana, Himachal Pradesh, Goa, Kerala, Manipur, Mizoram.

  • 4 North Eastern states – Arunachal Pradesh, Nagaland, Meghalaya and Sikkim are under the process to notify the Rules.
  • RERA was not applicable on J&K.
  • West Bengal has enacted its own Act, however, MoHUA has advised the State to notify the Rules under RERA, 2016.
  • Haryana has two regulatory authorities, one is for Gurugram and other is at Panchkula for rest parts of Haryana.

*Source: website of Ministry of Housing and Urban Affairs

The Real Estate (Regulation and Development) Act, 2016 aims at bringing in a healthy, competitive, transparent and safe real estate industry, which is secured and safe for home buyers and also boost the investment in the sector.

Author- Sonika Bharati- Email id-


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Qualification: CS
Company: AKG Advisory LLP
Location: Delhi, New Delhi, IN
Member Since: 03 Oct 2019 | Total Posts: 10

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  1. vivek mhaskar says:

    Hello Sonika, I like your reply stating that now the home-buyers can now be treated as Financial creditors. Can you elaborate and let us know the process as to how to go about it under Insolvency and Bankruptcy Code. Need to connect with you on that. my email ID

  2. LAL SAHAB SINGH says:

    There are many cases where builders have not registered ongoing projects and also not giving possession. When approached MahaRERA, chairman simply passed interim order to register within a month time. Builder did not.
    MahaRERA kept on waiting for 6 months time.
    In the 2nd hearing after 6 months, chairman told what he can do. He can only impose penalty on builder which is not going to solve your problem of not getting possession.
    What I mean is RERA does not have teeth.

    1. sonikabharati says:

      Thanks Mr. Singh for your comment. The home buyers are now treated as financial creditors. As such, if you have dues more than Rs. 100,000 on the Builder, you can go to NCLT under the Insolvency & bancrupcy Code.

      1. vivek mhaskar says:

        Thanks for sharing the provisions of Financial creditors under Insolvency & bankruptcy Code. Can you elaborate how should one proceed against a developer for NCLT and getting the desired recovery with compensation. my email ID is Do connect with sharing your contacts pls. Thanks

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