Buying a property in India is likely the biggest investment decision you will ever make. Before 2016, this process was often risky, complicated, and heavily favoured the builders. Buyers had little power if a project was delayed or if the builder changed the design.

This changed completely with the introduction of the Real Estate (Regulation and Development) Act, 2016, widely known as RERA.

RERA is an important law that creates fairness and transparency in the real estate sector across India. It gives homebuyers strong legal protection and holds developers strictly accountable. If you are planning to buy a home, understanding RERA is essential for a safe investment.

What is the Main Function of RERA

RERA’s main goal is to create a transparent, reliable, and standardised system for real estate transactions. RERA ensures that buying a home is a trust-based relationship between the builder and the buyer, rather than a one-sided deal.

The Act established a regulatory body, the Real Estate Regulatory Authority, in every Indian state to enforce the rules. For example, in Haryana, it is called HRERA, and in Maharashtra, it is MahaRERA. These bodies act as watchdogs, promoting standardised practices and ensuring consumer protection.

Why Is RERA Registration Mandatory for Every New Project

RERA introduced mandatory registration for almost every real estate project. This rule is the foundation of the law’s effectiveness.

Mandatory Project Registration

A project must apply for RERA registration if:

• The land being developed is more than 500 square meters (or 5,382 square feet).
• The project involves more than eight apartments (units).

If a project meets these conditions, the developer cannot advertise, book, sell, or offer for sale any unit until they receive a valid RERA registration number. This ensures that only projects with necessary regulatory approvals can be marketed.

Mandatory Developer and Agent Registration

Similarly, every real estate agent and developer involved in a RERA-regulated project must also be registered with their respective state RERA body. This ensures that only verified and accountable professionals are operating in the market.

How to check RERA registration

Every official advertisement, brochure, or website for a project must prominently display the unique RERA registration number. This number is your first and most important check of the project’s legality.

What Rules Does RERA Enforce to Protect Homebuyers

RERA introduced several strict rules that shifted power from the developer to the homebuyer, offering protection at every stage of the transaction.

Financial Discipline: The 70% Rule

Before RERA, a builder could use the money collected from one project to fund a completely different project, often leading to delays and project failure.

• The Rule: RERA mandates that the developer must deposit 70% of the money collected from buyers into a separate bank account (an escrow account) dedicated only to the construction and land cost of that specific RERA-approved project.
• The Impact: This rule guarantees that the majority of the funds are available when needed for construction, significantly reducing the chances of delay due to diversion of money.

Transparency in Project Details and Design Changes

Before RERA, builders could easily change floor plans, unit sizes, or the number of towers advertised.

• The Rule: Any change to the project plan, unit size, or common areas requires the written consent of two-thirds (2/3) of the project’s homebuyers.
• The Impact: This ensures that buyers get exactly what was promised in the original plan. If the builder makes a major change without consent, the buyer has the right to withdraw and receive a full refund.

Standardised Measurement: The Carpet Area Rule

Before RERA, unit measurements were often confusing, using terms like “super area” which included common walls, lifts, and stairs. This often led to inflated pricing.

• The Rule: All property prices and sales must be quoted strictly based on the Carpet Area (the net usable floor area within the walls).
• The Impact: This ensures buyers know exactly what usable space they are paying for, eliminating unfair pricing.

Penalty for Project Delays

This is arguably the most powerful buyer protection. Before RERA, builders faced few penalties for delays, which often stretched for years.

• The Rule: If the developer fails to complete the project by the promised date, they must pay the homebuyer interest every month on the amount invested. The interest rate is the same rate the developer would pay if the buyer delayed payments.
• The Impact: This creates a huge financial incentive for the builder to deliver on time, and it compensates the buyer for the loss they suffer while waiting for their home.

The 3-Step RERA Check Before Investing in Real Estate 

As a high-intent homebuyer, you must always verify the project’s status yourself:

1. Check for RERA Registration: Before paying any booking amount, find the project’s RERA registration number on the builder’s official site or advertisement.
2. Verify the Number Online: Go directly to your state’s RERA website (e.g., h-rera.in or maharera.mahaonline.gov.in) and enter the number in the RERA-registered projects search bar. The site will show the developer’s name, the officially approved completion date, and the list of approved documents.
3. Confirm the Carpet Area: Ensure the price calculation in your agreement is strictly based on the Carpet Area, not the misleading Super Area. The developer is legally required to mention the Carpet Area clearly.

Final Words

By making the RERA registration check a non-negotiable step, you protect your money, your timeline, and your peace of mind. RERA is the single most important tool for ensuring that your real estate investment is safe, transparent, and legally protected.

Frequently Asked Questions (FAQs)

1. Is the builder allowed to take the entire cost of the flat before possession?

No. A developer can only take up to 10% of the apartment’s cost as a booking amount. Any amount beyond that must be processed through a registered Agreement for Sale.

2. If I find an issue in my apartment after moving in, how long does the builder remain responsible?

RERA mandates that the developer is responsible for any structural defects or quality issues discovered in the apartment for five years from the date of handover to the buyer.

3. Where can I file a complaint if my RERA-registered project is facing serious delays?

You must file a complaint with the Real Estate Regulatory Authority of the state where the property is located (e.g., HRERA Gurugram for projects in the Gurugram district). They will hear the case and issue a binding order.

4. Does RERA protect buyers in resale properties (second-hand flats)?

No. RERA is primarily designed to regulate the primary real estate market, meaning transactions between the developer and the first buyer. Resale transactions between two individuals are not covered by RERA.

5. What is the difference between Carpet Area and Super Area?

Carpet Area is the actual usable area inside your apartment walls. Super Area includes the carpet area plus a share of the common spaces like lobbies, staircases, and lifts. RERA insists on using the carpet area only for pricing.