RERA (Real Estate Regulatory Authority) Act

Real Estate (Regulation and Development) Act is effective from 1 May 2017.

It is an act to protect home buyers as well as help in boosting the investments into real estate sector. Real Estate (Regulation and Development) Act, 2016 (“RERA”) states that RERA has been providing transparency in sale and development of plots, apartments and buildings and in real estate projects and also for the purpose of sale.

Objectives and reasons of RERA, 2016:
The Real Estate Act is intended to achieve the following objectives:

  • Ensure accountability towards allottees and protect their interest
  • Establish the Real Estate Regulatory Authority (RERA)
  • Protect the interest of consumers in the real estate sector
  • Infuse transparency, ensure fair-play and reduce frauds & delays
  • Introduce professionalism and pan India standardization
  • Establish symmetry of information between the promoter and allottee;
  • Imposing certain responsibilities on both promoter and allottees;
  • Establish regulatory oversight mechanism to enforce contracts;
  • Establish fast-track dispute resolution mechanism;
  • Promote good governance in the sector which in turn would create investor confidence.
  • Promote transparency and efficiency in the sale of real estate projects
  • Establish an adjudging mechanism for speedy dispute settlement
  • Set up an Appellate Tribunal to hear appeals from the decisions, directions or orders of the RERA


  • The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution
  • For ongoing projects which have not received completion certificate on the date of commencement of the Act, will have to seek registration within 3 months.

On successful registration the promoter of the project will be provided with:

  • A registration number,
  • A login id, and
  • Password

For failure registration:

  • A penalty of up to 10 percent of the project cost or
  • 3 years imprisonment may be imposed.

Real estate agents who facilitate selling or purchase of properties must take prior registration from RERA Consultants. 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.

Documents that are required by a real estate developer while registering:

  • Promoters details of the project like name, address, type, names, and photographs etc.
  • Past details of the projects already done by the real estate developer and their status (in the preceding 5 years).
  • Approval and commencement certificates obtained from the competent authority for each phase of the project separately.
  • Sanctioned layout plan, the development plan for the project and details of basic facilities being made available like drinking water, electricity etc.
  • Proforma of allotment letter, the agreement for sale and conveyance deed to be signed with the consumers.
  • Location of the project with clear demarcation of the land for the project.
  • Number, type and carpet areas of units to be sold.
  • The details of open areas if any like terraces, balconies etc.
  • Details of associated engineers, contractors, architects and intermediaries in the project.
  • A declaration stating that the land of the project is verified & authenticated and the developer has a legal title to it.
  • A written declaration stating that the project will be completed within the specified period of time and 70% of the received funds from the consumers will be deposited in a dedicated escrow account and this amount will be used only for that particular project.


  • Mandatory for builders and developers have a duty to register their new and ongoing projects with the Regulatory Authority.
  • However, if the builder or developer has already obtained the completion certificate, they do not have a duty to register their project under this law.
  • If the area of the land which is going to be developed is less than 500 square meters and the number of apartments is less than eight then no need to register under the act. This exemption might differ from state to state.


  • Builder or developer has to publish entire details of their projects on the website of the regulatory authority after issuance of registration which is valid for the period indicated in the project application as the time required for completion of the project.
  • Once this period is over, the Regulatory Authority has a right to revoke the registration granted for this project.

Can validity extend?
Under given force majeure (clause found in construction and supply contracts) events, may extend the validity of the registration:

  • In the event of a natural calamity like flood, cyclone, drought, fire etc.
  • In the case of war

However, the developer is still required to make a presentation to the RERA by paying the applicable fee and such extension will be valid for a period of one year in aggregate.


  • Clearly defined by the RERA Act which is applied to all builders/developers for calculation of the carpet area.
  • Interest has to pay for both the parties in case of default in payment by the buyer or default in the completion of the project
  • Builder can take not more than 10% of the cost of the apartment, villa etc. as advance or application fees.
  • The builder is liable to deposit 70% of the amount realized in for the project in a separate bank account. He can withdraw from such account only on the basis of completion of the project, which shall be certified by a civil engineer, architect and a chartered accountant in practice.
  • The defect will be rectified by the builder at no extra cost within 30 days if, within 5 years after the possession of the apartment, any structural defect or any defect in workmanship, quality, provision or service is discovered.
  • Right to claim in case of no clear title, default scenarios.
  • A customer had a chance to go for appeal in case of defaults.

 If defaulting on agreement or regulation:

  • If the builder or developer has not handed over the property by the date mentioned in agreement for sale or if the registration granted by the Regulatory Authority has been suspended or revoked, we have the right to withdraw from the project.
  • If you choose to withdraw from the project, we have the right to be compensated for the full amount which paid till date along with interest.
  • If you choose not to withdraw from the project, you have the right to be compensated with interest for every month of delay. Interest amount will differ from state to state and regulations issued.

Legal procedure – Non – compliance:

  • We have the right to file a complaint with the regulatory authority if the builder or developer is not voluntarily compensated.
  • State regulatory authority individually is supposed to appoint an officer who performs the functions of a judge.
  • They will conduct an inquiry and pass an order once he/she has decided whether you are actually supposed to get the interest or money spent.
  • Not mandatory to hire a lawyer to represent yourself and also can appear yourself or even hire a chartered accountant or cost accountant or company secretary.
  • If you are not satisfied with the decision of the officer, you can file an appeal before the Appellate Tribunal set up under this law within 60 days. Every state is supposed to have one such appellate tribunal.
  • Every state and union territory is supposed to have such an authority and an appellate tribunal. Since this is a very recent law (important provisions came into force on May 1, 2017) and a number of states have not yet set up authorities, you will need to check if the state in which the property is located has set up the Regulatory Authority and Appellate Tribunal.

Roles and responsibilities of a Real Estate Developer:

  • It is mandatory for the real estate developer to register the project with the RERA and obtain a valid registration number before proceeding.
  • Any kind of marketing, advertising or selling of units is strictly prohibited before the registration of the project.
  • The real estate developer is required to submit all documents related to the project which is considered necessary by the RERA.
  • The real estate developer must deposit 70% of the payment received from the consumers in an escrow account and ensure that the amount is solely used for the development of the project for which it was taken
  • Must adhere (follow) to the project plan at all times.
  • Refund the money taken from the consumers with an applicable interest in case the project cannot be completed.
  • Compensate the consumer for the time delay if any.
  • To repair any structural defects in the construction even after 5 years of a handover of the project.

Protection of Buyers:

  • The Act prohibits unaccounted money from being pumped into the sector and as of now 70 percent of the money has to be deposited in bank accounts through cheques is now compulsory.
  • A major benefit for consumers included in the Act is that builders will have to quote prices based on carpet area, not super built-up area, while carpet area has been clearly defined in the Act to include usable spaces like kitchen and toilets.

Mandatory rules for the intermediary:

  • An intermediary is required to be registered with the RERA and retain a valid registration number before facilitating any real estate deal on the behalf of any real estate developer.
  • Also required to maintain and preserve account logs and other documents as prescribed by the Act and facilitate all information and provide any further assistance as prescribed by the Act to the consumer.

A situation where RERA can revoke the registration of an intermediary:

  • The Act promotes professionalism in conducting real estate business and prompts intermediary to adopt ethical means of dealing with consumers.
  • Fraud, misrepresentation, breach of any terms & conditions of the Act and any sort of unfair practice can cause the registration to be revoked by RERA after not getting a satisfactory reply from the intermediary.

Penalties an intermediary would face if fails:

  • In case if an intermediary violates the rules prescribed by the RERA, he/she will be liable to a penalty up to 5% of the estimated cost of the unit in question.
  • Also, the intermediary can face imprisonment up to one year if he/she breaches any orders, decisions or directions given by the Appellate Tribunal.

A situation where RERA revoke a registration?
Upon receiving a complaint against the real estate developer, the RERA can revoke registration under certain conditions:

  • If it is satisfied that the real estate developer has not complied with the rules and regulations stated under the Act or rules & regulations.
  • If he has violated the terms & conditions of approval given by the competent authority.
  • If he is involved in unfair practices to sell, market or advertise his project.

Role of RERA after revocation of registration:

  • RERA will prohibit promoter from accessing its website for that project, specify his name in the list of defaulters, display his photograph on its website and also inform RERAs in other States & Union territories about such revocation or registration.
  • RERA will direct the bank holding the project back account, to freeze the account, and take necessary actions including consequent de-freezing of the said account to facilitate remaining development work in accordance with provisions of section 8.
  • RERA may issue necessary directions to protect the interest of allottees.

Real Estate Regulatory Authority and Appellate Tribunal:

  • To establish state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover.
  • Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints within 60 days while no time-frame was indicated in earlier Bill.

Is there any time period to dispose of the complaint by authority?
Yes, regulatory authority should endeavor to dispose of the complaints within 60 days from the date of filing. However, the authority can take more time and is only required to record the reasons for not completing the proceeding within the 60-day period.

Can I still approach a civil court or file a writ petition before the High Court even if there is a regulatory authority set up in my state?

  • No, if the regulatory authority has been set up in your state, you cannot file a case before a civil court or file a civil writ petition before the High Court.
  • However, since this is a very new law and some states may not have set up a regulatory authority, you might still have the option of filing a civil case.
  • Some High Courts have in fact been directing those who file civil write petitions before it to approach the Regulatory Authority in that state.

Is there a time limit in which RERA must grant an application?
Application for registration must be either approved or rejected within a period of 30 days from the date of application by the RERA.

Is RERA act, 2016 applicable to all Indian States?
Yes, this act is applicable to all Indian states excluding Jammu & Kashmir.

Does the Act cover both residential and commercial real estate project?
The Act covers both residential and commercial real estate project.

Does it cover rental arrangements also?
RERA does not cover rental arrangements.

If real estate project will be developed in phases? Should promoter get a single registration or multiple registrations?
In such cases, every phase will be considered a standalone real estate project and the developer has to obtain registration under this Act for each phase separately.

What if RERA fails to grant registration or reject the application?
If RERA fails to grant registration or reject the application, the project shall be deemed to have been registered.

What is the period of validity of registration granted to a real estate project by the Regulatory Authority?
The validity of the registration granted to a project shall be the period declared by the promoter at the time of making the application for registration to authority.

Are there any supporting government bodies set up to assist the RERA?
Yes, A Central Advisory council will be set up to advice the Central Government on the implications of the Act to recommend policies in order to protect consumers’ interest and to supervise the growth & development of the real estate sector. In addition, there will be a dedicated Appellate Tribunal set up for RERAs to hear appeals from orders of the RERAs and the adjudicating officer.

Will the on-going projects have to be registered as well?
Yes, if the project in question meets the criterion for registration then the application for the same has to be submitted within 3 months of commencement of the Act.

Can a promoter or a real estate agent also file a complaint against a buyer?
Yes, an aggrieved person having any interest in the registered real estate project can file a complaint.

Pradhan Mantri Awas Yojana:
Pradhan Mantri Awas Yojana is a combination of Pradhan Mantri Awas Yojana (Urban) (
PMAY-U) for the urban poor and Pradhan Mantri Awas Yojana (Gramin) (PMAY-G and also PMAY-R) for the rural poor. The scheme is converged with other schemes like the provision of toilets, electricity connection (Soubagya Yojana), gas connection (Ujwala yojana), drinking water, banking (Jan Dan yojana), etc., The Indian government took up a step towards abolishing homelessness with the introduction of Pradhan Mantri Awas Yojana which was previously known as Housing for All. The Ministry of Housing and Urban Poverty Alleviation has set a route map and has also made clear the eligibility criteria a prospective applicant need to meet.

The government has approved an investment of ₹439.22 billion (US$6.7 billion) for construction of 6,83,724 houses for urban poor including central assistance commitment of ₹100.50 billion (US$1.5 billion) by April 2016

Why is it initiated?
Provision of the house for poorer sections of India.

Provision of financial support to people who can’t bear the entire cost of building a residential property.
To offer houses to the Economically Weaker Sections (EWS) of the society.


Economically Weaker Section (EWS) People who earn an annual household income < ₹ 3,00,000
Light Income Group (LIG) People who earn an annual household income ranging from ₹ 3,00,000 to       ₹ 6,00,000
Medium Income Group (MIG1) People who earn an annual household income below ₹ 12,00,000 fall under the MIG1 category. These people can avail loans of up to ₹ 9,00,000 for the construction of a residence
Medium Income Group (MIG2) Individuals earning an annual household income between ₹ 12,00,000 to ₹ 18,00,000 These people can avail loans of up to ₹ 12,00,000
Minorities People hailing from minority groups like SC/ST/OBC will fall under minorities. To be considered under the PMAY scheme, these people need to meet to provide relevant caste and income certificates
Women Belonging to EWS/LIG categories will be considered if they apply under the PMAY scheme.

Note: people have to show necessary income proof with relevant to the category. Terms and conditions have to meet.

Pradhan Mantri Awas Yojana Home Loan Scheme for LIG/EWS Category

For the loan amount of Rs.3 lakh:

Amount of loan ₹ 3,00,000
Loan amount eligible for the subsidy ₹ 3,00,000
Balance loan ₹ 1,66,360
Interest subsidy ₹ 1,33,640
Initial EMI ₹ 2,895
Reduced EMI after subsidy credit ₹ 1,605
Savings on a monthly basis ₹ 1,290
Savings on an annual basis ₹ 15,840

For the loan amount of Rs.6 lakh:

Amount of loan ₹ 6,00,000
Loan amount eligible for the subsidy ₹ 6,00,000
Balance loan ₹ 3,32,720
Interest subsidy ₹ 2,67,280
Initial EMI ₹ 5,790
Reduced EMI after subsidy credit ₹ 3,211
Savings on a monthly basis ₹ 2,579
Savings on an annual basis ₹ 30,948

For the loan amount of Rs.10 lakh:

Amount of loan ₹ 10,00,000
Loan amount eligible for the subsidy ₹ 6,00,000
Balance loan ₹ 7,32,720
Interest subsidy ₹ 2,67,280
Initial EMI ₹ 9,650
Reduced EMI after subsidy credit ₹ 7,071
Savings on a monthly basis ₹ 2,579
Savings on an annual basis ₹ 30,948

Pradhan Mantri Awas Yojana Loan Scheme for MIG – 1

Income of the household per year ₹ 12,00,000
Maximum tenure of the loan 20 years
Interest subsidy per year 4%
Eligible amount of loan for interest subsidy under CLSS (Credit Linked Subsidy Scheme) for MIG ₹ 9,00,000
Maximum interest subsidy ₹ 2,35,000
The rate of discount for NPV (Net Present Value) calculation of the interest subsidy 9%
Dwelling unit max carpet area 90 SQ MT
Monthly EMI (8.65%) with interest subsidy ₹ 5,834
Monthly EMI (8.65%) without interest subsidy ₹ 7,894

Pradhan Mantri Awas Yojana Loan Scheme for MIG – 2

Income of the household per year ₹ 18,00,000
Maximum tenure of the loan 20 years
Interest subsidy per year 3%
Eligible amount of loan for interest subsidy under CLSS (Credit Linked Subsidy Scheme) for MIG ₹ 12,00,000
Maximum interest subsidy ₹2,30,000
The rate of discount for NPV (Net Present Value) calculation of the interest subsidy 9%
Dwelling unit max carpet area 110 SQ MT
Monthly EMI (8.65%) with interest subsidy ₹ 8,059
Monthly EMI (8.65%) without interest subsidy ₹ 10,528

GST on Affordable Homes Slashed to 8%
Any person who is buying a home for the first time will have to pay an 8% GST instead of 12% earlier, provided he/she takes a home loan through the Credit-Linked Subsidy Scheme (CLSS) under the PMAY and eligibility criteria have to meet to avail this. If anyone who does not meet the aforementioned requirements will have to pay 12% GST.

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