RERA (Real Estate Regulatory Authority)
The Real Estate (Regulation and Development) Act, 2016 (RERA) has transformed the Indian real estate sector by introducing transparency, accountability, and efficiency. Builders and developers must comply with RERA regulations to avoid penalties, ensure smooth project execution, and gain buyers’ trust. This blog provides a detailed compliance checklist, references landmark case laws, and highlights recent developments in RERA implementation.
RERA Compliance Checklist for Builders and Developers
1. Project Registration with RERA
- Builders must register all projects exceeding 500 square meters or eight apartments with the respective State RERA Authority.
- The registration process requires submission of:
- Approved project layout plans
- Ownership and legal documents
- Estimated project completion timeline
- Financial details, including an escrow account
Case Law:
M/s Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan (2019) – The Supreme Court ruled that failure to register a project under RERA can result in the cancellation of the builder’s rights and refunds to homebuyers with compensation.
2. Maintaining a 70% Escrow Account
- Builders must deposit 70% of buyer payments into an escrow account, ensuring that funds are used only for project-related costs.
- Funds can be withdrawn only based on project progress, certified by an engineer, architect, and chartered accountant.
Case Law:
Rohit Kumar v. Supertech Ltd. (2021) – The UP RERA ruled against the developer for misusing funds from multiple projects, directing them to refund homebuyers with interest.
- If a developer fails to complete the project on time, buyers have two options:
- Continue with the project and receive compensation (interest for every month of delay).
- Seek a refund with interest on the amount paid.
3. Providing Accurate Project Information
- Builders must disclose project details, including:
- Total carpet area and built-up area
- Construction phases and deadlines
- Legal status and approvals
- Any misrepresentation can lead to penalties or legal action.
Case Law:
Delhi Development Authority v. Skipper Construction Co. (2022) – The Supreme Court imposed strict penalties on the developer for misleading project advertisements, setting a precedent for transparency under RERA.
4. Timely Project Completion and Delivery
- Projects must be completed within the timeline promised at the time of RERA registration.
- Delays require compensation to homebuyers at an interest rate prescribed by RERA.
Recent Development:
In 2023, Maharashtra RERA (MahaRERA) implemented stricter progress monitoring mechanisms, requiring developers to update project milestones every quarter.
5. Adhering to the Five-Year Defect Liability Period
- Developers are liable to fix structural defects and poor construction quality for five years post-handover.
- Failure to comply allows homebuyers to claim compensation or demand repairs.
Case Law:
Kolkata West International City Pvt. Ltd. v. Devasis Rudra (2019) – The Supreme Court upheld a homebuyer’s complaint regarding poor construction quality, ordering the developer to compensate and rectify the defects.
6. Transparent Pricing and Advance Payment Restrictions
- Properties must be sold based on carpet area, not super built-up area.
- Builders cannot collect more than 10% of the total cost as an advance without a sale agreement.
Recent Development:
MahaRERA imposed a ₹5 crore fine on a leading developer for misleading advertisements regarding carpet area calculations.
7. RERA Registration for Real Estate Agents
- Any agent involved in selling, advertising, or facilitating real estate transactions must register under RERA.
- Non-compliance can lead to penalties and disqualification.
8. Setting Up a Dispute Resolution Mechanism
- Developers must resolve homebuyer grievances through the RERA Tribunal before escalating matters to civil courts.
- Quick resolutions improve credibility and ensure customer satisfaction.
Case Law:Imperia Structures Ltd. v. Anil Patni (2020) – The Supreme Court reaffirmed that homebuyers can seek relief under both RERA and consumer protection laws
Compliance with RERA is not optional—it is essential for builders and developers to maintain credibility and avoid legal repercussions. By adhering to this checklist, real estate companies can enhance buyer confidence, streamline operations, and ensure timely project completion. Staying updated with recent legal rulings and regulatory changes will further strengthen compliance and business sustainability.
Builders who proactively follow RERA guidelines not only avoid hefty fines but also gain a competitive advantage in India’s evolving real estate market.
For a seamless property development experience, always check and ensure your project is RERA-compliant!
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