What is RERA? The Real Estate (Regulation and Development) Act, 2016 explainedरेरा क्या है — रियल एस्टेट क़ानून सरल भाषा में

Why a land site is explaining RERA

Around Jaipur, and increasingly along the Phulera–Sambhar belt, the same buyer is often shown two very different things in one afternoon: a khatedari field recorded in the revenue record, and a numbered plot in a colony that the seller calls “RERA approved”. We have compared the two in agricultural land versus a RERA plot near Jaipur. This page steps back and explains the law itself: what the Real Estate (Regulation and Development) Act, 2016 does, what it asks of a promoter, how complaints work, and — just as important for our readers — where it stops.

What the Act is and why it was passed

Parliament passed the Act in 2016, and its provisions came fully into force in 2017. Before it, a buyer paying a builder in instalments had little beyond a one-sided agreement and a slow civil suit when possession was delayed or money collected for one project was spent on another.

The Act answers with four ideas: register before marketing, disclose approvals, title and timeline publicly, ring-fence buyers' money, and give buyers a specialised forum with fixed obligations for delay and defects.

RERA is a central Act, but it is administered state by state. Each state and union territory has its own Real Estate Regulatory Authority and its own Real Estate Appellate Tribunal, and each state government makes its own rules under the Act. In Rajasthan the regulator is RERA Rajasthan.

Which projects have to register

Section 3 is the core rule: no promoter may advertise, market, book, sell or offer for sale any plot, apartment or building in a real estate project without first registering it with the authority. A real estate project in the Act includes buildings and apartments and also the development of land into plots — so a plotted colony is covered, not only towers.

The Act's general exemption is for small projects. Registration is required where the land proposed to be developed is more than 500 square metres, or where more than eight apartments are proposed, in both cases counting all phases together. A project that is split into phases on paper is still measured as a whole. The Act allows a state to lower these thresholds, and each state's rules add detail on documents and procedure, so the state rules are the ones to read for a specific case.

Ongoing projects without a completion certificate when the Act came into force also had to register. A phase can be registered as a separate project, so the number you check must be the one for your phase.

Agents have to register too

A real estate agent who facilitates sales in a registered project must also register with the state authority and quote the registration number. If an agent will not give one, or it is missing from the portal's list of agents, slow down.

What a registered project must disclose

Registration is useful to a buyer mainly because of what it puts on the public record. The details differ in form from state to state, but a registered project's page on the state portal typically carries:

• The promoter. Who is developing the project, with past projects and their status.
• The approvals. The sanctioned plan, layout plan and specifications approved by the competent authority, and the commencement certificate where one applies.
• The land. The promoter's title to the land, and any encumbrances on it.
• The units. The number and type of plots or apartments, with carpet area for apartments, and the common areas.
• The timeline. A declaration by the promoter of the period within which the project will be completed.
• The people. Architects, engineers, contractors and registered agents.

The promoter is also expected to keep the project's page updated as work progresses. Every advertisement or prospectus for a registered project must carry its registration number and the address of the authority's website where the project's details are published.

The 70 per cent separate account

The provision that did most to change the economics of building is in Section 4(2)(l)(D). Seventy per cent of the amounts realised from allottees for a project must be deposited in a separate account with a scheduled bank and used only for the cost of construction and the land cost of that project. Withdrawals must be in proportion to the percentage of completion, certified by an engineer, an architect and a chartered accountant in practice.

Carpet area, and the advance you pay

The Act defines carpet area as the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, an exclusive balcony or verandah area and an exclusive open terrace area, but including the area covered by the internal partition walls of the apartment. Apartments are sold on carpet area, not loose “super area” figures.

Section 13 adds that a promoter cannot accept more than ten per cent of the cost of the apartment, plot or building as an advance or application fee without first entering into a written agreement for sale with the buyer and registering it.

Delay, refund and defects

Under Section 18, if the promoter fails to complete the project or give possession in accordance with the agreement for sale, the allottee who wishes to withdraw is entitled to a refund of the amount paid with interest at the rate prescribed in the rules, along with compensation. An allottee who does not wish to withdraw is entitled to interest for every month of delay until possession is handed over.

Section 14(3) sets the defect liability. If a structural defect, or a defect in workmanship, quality or provision of services, is brought to the promoter's notice within five years from the date of handing over possession, the promoter must rectify it without further charge within thirty days, failing which the allottee is entitled to compensation.

How a complaint moves

• The authority. Under Section 31, any aggrieved person may file a complaint with the state authority about a violation of the Act, the rules or the regulations by a promoter, an allottee or an agent.
• The adjudicating officer. Claims for compensation — for example for delay or defects — are decided by an adjudicating officer appointed under the Act, not by the authority itself.
• The appellate tribunal. Section 43 provides for the Real Estate Appellate Tribunal. An appeal against an order of the authority or the adjudicating officer goes to the tribunal of that state.
• The High Court. A further appeal from the tribunal's decision lies to the High Court.

Home buyers sometimes also approach consumer commissions, and courts have held that route remains open. Which forum suits a particular dispute is a question for your advocate, on your documents. Our legal help page explains how to find one.

What RERA does not cover

On our belt, the word RERA is used to sell things it has nothing to do with.

• Agricultural land. A sale of a khatedari field from one person to another is not a real estate project. It is governed by the state's revenue and tenancy law, the registration law and the land-holding rules. Its papers are the jamabandi, khasra map and mutation trail, not a RERA page.
• A farmhouse on your own land. Building a farmhouse on land you hold is a land-use and conversion question for the revenue and planning authorities. RERA has no role in it.
• “Farmhouse plots” sold by a developer. Where a developer divides land into plots and sells them to the public, the question whether it is a real estate project that needs registration arises on the facts. Do not assume either way; check the state portal and the land-use status of the parent land.
• Plots outside a registered project. A plot in a layout that was never registered does not carry RERA's disclosures or remedies, whatever the seller says.
• Resale between individuals. A sale by one owner to another is not a sale by a promoter. You verify it through the deed chain and the sub-registrar.

How to check a project's registration

• Take the registration number from the advertisement. If there is none, ask for it in writing.
• Open the state authority's own portal yourself. For Rajasthan that is RERA Rajasthan, at rera.rajasthan.gov.in, which has a project search and a list of registered agents. For other states, the central housing ministry keeps a list of every state and UT authority at rera.mohua.gov.in. Type the address yourself.
• Match the details. Promoter name, project name, phase, location and the number of units should all agree with what you are being sold.
• Read the documents on the page. Approvals, title, the declared completion period and the latest progress update.
• Check the agent. Search the agent's registration number in the same portal.

Our land verification directory lists every state's RERA portal with the date each address was checked, and flags lookalike sites that imitate them. The state-wise document directory covers the revenue portals you will need for the parent land.

Red flags

• An advertisement with no registration number for a project large enough to need one.
• “RERA approved”. RERA registers projects; plans are approved by the development authority or local body. The phrase is used loosely to suggest an endorsement that does not exist.
• “Registration applied for”. Marketing and booking before registration is exactly what Section 3 prohibits.
• A number that belongs to a different phase or project. Check the phase, not just the promoter.
• Agricultural land sold with RERA language. A field described as a “RERA plot” is either not a field or not a RERA plot. Find out which.

Questions we are asked about this

Does RERA apply to agricultural land?

Not to an ordinary sale of agricultural land. RERA regulates real estate projects put up by promoters — apartments, buildings and plotted developments sold to the public. A farmer selling a khatedari field to a buyer is not a real estate project, and that sale is governed by the revenue law, the registration law and the land-holding rules of the state, not by RERA.

Which projects must be registered under RERA?

As a general rule, the Act requires registration where the land proposed to be developed is more than 500 square metres or the number of apartments proposed is more than eight, counting all phases together. The Act lets a state lower these thresholds, and each state's rules add detail, so check the rules of the state where the project is.

What does the 70 per cent rule mean?

Section 4(2)(l)(D) requires the promoter to deposit seventy per cent of the amounts realised from allottees for a project in a separate account with a scheduled bank, to be used only for the cost of construction and the land cost of that project. Withdrawals are to be in proportion to the completion of the project, certified by an engineer, an architect and a chartered accountant.

How long is the builder responsible for structural defects?

Under Section 14(3), if a structural defect or a defect in workmanship, quality or provision of services is brought to the promoter's notice within five years from the date of handing over possession, the promoter must rectify it without further charge within thirty days. If the promoter fails to do so, the allottee is entitled to compensation under the Act.

Where do I complain about a RERA-registered project?

A complaint about a violation of the Act, the rules or the regulations goes to the state's Real Estate Regulatory Authority under Section 31. Claims for compensation are decided by the adjudicating officer appointed under the Act. An appeal against an order of the authority or the adjudicating officer lies to the state's Real Estate Appellate Tribunal, and from the tribunal to the High Court.

Does RERA registration mean the project is approved or safe to buy?

No. RERA registers a project on the basis of the approvals and documents the promoter files. Building and layout approvals come from the development authority or local body, and title comes from the land records and the deeds. Registration is a compliance regime that gives you disclosure and a regulator; it is not a valuation or a guarantee of anything the brochure says.