Published On: 25 September, 2023

Authored By: Mansi Singh Asian Law College, Noida



The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, is a landmark legislation enacted by the Government of India to regulate and promote transparency in the real estate sector. Introduced to address the various issues plaguing the Indian real estate market, RERA aims to protect the interests of homebuyers and promote the timely completion of real estate projects. It came into force on May 1, 2017, and has since then played a pivotal role in transforming the real estate industry in the country. RERA seeks to bring about a paradigm shift in the real estate landscape by introducing a more structured and accountable system for developers, agents, and homebuyers.

Before the introduction of RERA, the real estate sector in India was riddled with unscrupulous practices, delayed projects, and misleading advertisements, which led to a lack of trust and confidence among homebuyers. RERA emerged as a game-changer, infusing much-needed transparency and credibility into the market. One of the key provisions of RERA is the establishment of Real Estate Regulatory Authorities (RERAs) in each state and union territory. These authorities act as independent regulatory bodies responsible for implementing the provisions of the Act at the regional level. They are entrusted with the task of registering real estate projects, monitoring their progress, and ensuring compliance with the Act’s guidelines. Developers are required to provide all project-related information, including layout plans, government approvals, and financial details, on the RERA website, enabling homebuyers to make informed decisions.

Under RERA, developers are obligated to deposit a certain percentage of funds collected from buyers into an escrow account dedicated to a specific project. This measure prevents the diversion of funds and ensures that developers utilize the money efficiently to complete the project on time. Furthermore, RERA imposes strict penalties on developers for delays in project delivery, instilling a sense of urgency and discipline in adhering to project timelines.

The Act also addresses the issue of real estate agents, requiring them to register with the respective state’s RERA and operate within the framework of the Act. By bringing agents under its purview, RERA aims to curb unscrupulous practices and protect homebuyers from false or misleading information provided by agents. One of the significant benefits of RERA for homebuyers is the increased accountability of developers. The Act mandates that developers provide a clear timeline for project completion, and any deviation from the schedule must be justified.

Moreover, developers are required to rectify structural defects in the project within a specified period after possession, enhancing the quality of construction and ensuring customer satisfaction. RERA also emphasizes the importance of maintaining transparency in the real estate sector. It mandates that developers disclose carpet area (usable area within the walls of the unit) instead of super-built-up area in advertisements and agreements. This measure prevents the common practice of misleading homebuyers with inflated measurements, enabling them to ascertain the actual usable space they are purchasing.


The Real Estate Regulatory Authority (RERA) is a government body or agency established in many countries to regulate the real estate sector and protect the interests of homebuyers and investors. RERA’s main objective is to bring transparency, efficiency, and accountability to the real estate market, which has often been plagued by malpractices and fraud. In this article, we will explore the key functions, structure, benefits, and challenges associated with the Real Estate Regulatory Authority.

Background and Establishment:

The real estate industry is a significant contributor to a nation’s economy, but its unregulated nature has led to various issues, including delays in project completion, diversion of funds, misleading advertisements, and non-transparent dealings. To address these concerns and ensure the welfare of buyers and investors, the concept of RERA was introduced.

The establishment of RERA involves the passing of legislation that outlines its scope, powers, and functions. The laws empower RERA to monitor and regulate the real estate sector and set up a framework for developers, agents, and buyers to adhere to specific guidelines.


The primary functions of RERA are as follows:

Registration of Projects: RERA mandates that all real estate projects exceeding a certain threshold must be registered with the authority before marketing or selling to the public. This ensures that developers have obtained necessary approvals, maintain financial discipline, and fulfill other statutory requirements.

Promoter’s Obligations: RERA lays down strict guidelines for developers or promoters, defining their responsibilities and liabilities. It mandates timely project delivery, adherence to approved plans, and the use of funds only for the specified project.

Buyer Protection: RERA aims to safeguard the interests of homebuyers by ensuring that developers provide accurate information about the project, including details of the layout, approvals, delivery timelines, and pricing. It also facilitates the formation of residents’ associations for ongoing projects.

Dispute Resolution: RERA sets up fast-track dispute resolution mechanisms to resolve grievances between buyers and developers, reducing the burden on courts and promoting efficiency in the resolution process.

Real Estate Agents Registration: RERA mandates the registration of real estate agents, ensuring they adhere to a code of conduct and ethical practices while dealing with buyers and developers.

Transparency and Accountability: RERA promotes transparency by making project-related information available online. This includes project status, approvals, financial disclosures, and other essential details.


RERA is typically a statutory body with a chairman and members appointed by the government. The members often include professionals from the real estate, legal, and financial sectors, along with government representatives. The authority functions independently and has the power to take punitive actions against defaulters, including fines and imprisonment.


The introduction of RERA has several benefits:

Buyer Confidence: RERA installs confidence among homebuyers, as they can make informed decisions based on reliable and verified information provided by developers.

Timely Project Completion: With stringent regulations and penalties for project delays, developers are encouraged to complete projects on time, reducing instances of stalled or abandoned projects.

Transparent Transactions: RERA ensures transparency in real estate transactions, minimizing the scope for fraudulent practices and misleading advertisements.

Dispute Resolution: The fast-track dispute resolution mechanism helps in the quick resolution of grievances, protecting the interests of buyers and maintaining a positive image of the real estate sector.

Professionalization of Real Estate Agents: Registration of real estate agents ensures that only qualified and ethical agents operate in the market, enhancing the overall professionalism of the sector.


Despite its many advantages, RERA may encounter some challenges:

Compliance: Some developers may find it challenging to comply with the strict regulations and financial discipline mandated by RERA, leading to delays in project registrations or implementation.

Awareness: Lack of awareness among homebuyers and developers about RERA’s provisions and procedures may hinder its effective implementation.

Enforcement: In some cases, enforcing penalties and actions against defaulters might face resistance or legal hurdles.

Variability in State Laws: In countries where RERA is implemented at the state level, there might be variations in laws and rules, leading to inconsistency and confusion.


Vinod Kumar Aggarwal VS Jaipur Development Authority (2020)

In Vinod Agarwal v. Jaipur Development Authority (JDA) [vii], the Rajasthan RERA in a landmark decision held that the RERA Act is mandatory.

Rajasthan RERA ruled that all rules and regulations under the Act would apply to the project which is registered under it and directed JDA to execute the sale agreement before demanding an additional amount. Section 13 of the Act mandates the execution of the sale agreement.

Violation of laws by the promoters can lead to imprisonment for up to 3 years or cost them 10% of the project’s estimated cost. Penalties for non-compliance with RERA are provided in sections 9 (7), 62, 65, and 66 of the Act.

Avinash Saraf, Neha Saraf vs. Runwal Homes Pvt. Ltd.(2017):

In Avinash Saraf v. Runwal Homes Pvt. Ltd, Maharashtra RERA held that RERA has jurisdiction even for agreements executed before RERA was enacted since the cause of action has survived even after RERA came into force. Further, it held that without a certificate is illegal that already grant the complainant a full refund along with interest and the cost of the complainant.


Real estate laws in India are a crucial aspect of the country’s legal framework, governing the acquisition, ownership, transfer, and management of property. These laws have evolved over the years to address various challenges in the real estate sector and protect the interests of both buyers and sellers. In this conclusion, we will summarize the key points about real estate laws in India and their impact on the property market. India’s real estate laws are primarily governed by two main acts: the Transfer of Property Act, of 1882, and the Registration Act, of 1908. These acts lay down the legal framework for property transactions, ensuring that the transfer of property is carried out in a transparent and legally valid manner. Additionally, each state has its own set of rules and regulations related to land and property transactions, which can lead to some variation in real estate practices across different regions of the country.

One of the significant developments in recent years is the introduction of the Real Estate (Regulation and Development) Act, of 2016 (RERA). RERA is a landmark legislation aimed at protecting the interests of homebuyers and regulating the real estate sector. It mandates that all real estate projects with more than a certain number of units must be registered with the state’s respective regulatory authority. Builders and developers are required to provide complete and accurate information about their projects, such as project timelines, plans, approvals, and financial details. This increased transparency has helped in reducing fraudulent practices and builder-buyer conflicts. RERA also brings greater accountability to developers by enforcing strict penalties for project delays and other violations.  It has contributed to a more disciplined approach among developers encouraging them to complete projects on time and adhere to quality standards Homebuyers, on the other hand, are assured of a grievance redressed mechanism through the Real Estate Regulatory Authority in case of any disputes.

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