RERA
RERA, or the Real Estate (Regulation and Development) Act, 2016, was a landmark Indian legislation that established regulatory authorities in each state and union territory to protect homebuyers, bring transparency to real estate transactions, and promote accountability in the residential and commercial property sector.
The enactment of RERA in May 2016 was a response to decades of widespread malpractice in the Indian real estate sector. Prior to RERA, homebuyers had virtually no legal recourse when developers delayed possession, changed project specifications without consent, diverted buyer funds to other projects, or failed to deliver promised amenities. Litigation in consumer courts was time-consuming and outcomes were uncertain. The sector was largely unregulated, and developer accountability was minimal.
RERA's core provisions fundamentally restructured the developer-buyer relationship. All residential projects with more than eight units or a land area exceeding 500 square metres were required to be registered with the state RERA authority before marketing or selling. Developers were obligated to deposit 70 percent of project funds received from buyers into a separate escrow account, ensuring ring-fencing of funds to prevent diversion. Project timelines, floor plans, land title details, and builder qualifications were required to be disclosed publicly on the RERA portal and updated quarterly.
The Act also covered real estate agents, who were required to be individually registered with state RERA authorities and could only facilitate sale of registered projects. This brought agents under regulatory oversight for the first time and enabled action against unscrupulous intermediaries.
RERA implementation was the responsibility of individual states, leading to significant variation in the quality and coverage of state RERA frameworks. Maharashtra's MahaRERA was widely regarded as one of the most effective implementations — with a well-functioning portal, transparent project data, and an active grievance redressal mechanism with a significant backlog of cases resolved. States like Uttar Pradesh (UP-RERA), Telangana, and Karnataka also developed relatively functional authorities. Critics noted that several states diluted the central Act's provisions through state-level rules — exempting large categories of projects, setting lower escrow requirements, or underfunding regulatory capacity.
For homebuyers under RERA, delayed possession entitled them to interest compensation at the SBI MCLR plus 2 percent (typically 10–11 percent per annum) for each month of delay. Buyers also gained the right to withdraw from a project with full refund (plus interest) in cases of structural defects or misrepresentation, with a five-year defect liability period for structural quality. Disputes were adjudicated by RERA adjudicating officers with a 60-day resolution timeline (in principle), and appeals went to the RERA Appellate Tribunal.
Pre-RERA buyers in ongoing projects or projects registered under earlier approvals were not covered by RERA's protective provisions — a significant limitation that left many affected buyers without recourse under the new framework.