10 Ways RERA Protects Homebuyers in India

The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, was introduced to make property transactions more transparent and strengthen the rights of homebuyers. The law requires eligible projects to be registered, regulates how buyer funds are used, sets rules for advance payments and project changes, and gives buyers a formal mechanism to raise complaints.

For anyone buying an under-construction property, understanding these protections can help reduce financial and legal risks.

Why Was RERA Introduced?

Before RERA, homebuyers often faced problems such as delayed possession, unclear project information, changes to promised specifications and difficulties in recovering money from developers.

RERA created a central legal framework for regulating real estate projects and protecting the interests of consumers. It also established Real Estate Regulatory Authorities and Appellate Tribunals for handling disputes.

Here are the key RERA provisions that every homebuyer should know.

1. Mandatory Registration of Eligible Real Estate Projects

One of the most important RERA protections is project registration.

A promoter cannot advertise, market, book or sell a real estate project covered by RERA without registering it with the relevant state or Union Territory RERA authority. The Act provides an exemption where the land area does not exceed 500 square metres or the number of apartments does not exceed eight, although the appropriate government can reduce these thresholds.

Registered projects must disclose important information, allowing prospective buyers to check project-related details before making an investment.

A buyer should therefore verify the project’s RERA registration number and details on the relevant state RERA portal before booking a property.

2. Buyers Get Access to Important Project Information

RERA requires promoters to disclose important information about registered projects.

Depending on the applicable requirements, buyers can check details such as:

• Sanctioned plans and project specifications
• Details relating to the land and title
• Project completion timelines
• Approvals and other prescribed documents
• Information about the promoter
• Project status and other disclosures required by the RERA authority

This gives buyers a better opportunity to compare the information provided by a developer with the records available on the official RERA portal.

RERA also places obligations on promoters regarding the accuracy of advertisements and prospectuses.

3. The 70% Separate Account Helps Protect Buyer Funds

RERA requires 70% of the amounts realised from allottees for a real estate project to be deposited into a separate bank account. The money is intended to cover the land cost and construction cost of that project.

Withdrawals are linked to the percentage of project completion and require certification by an engineer, architect and practising chartered accountant.

The purpose is to reduce the risk of project funds being diverted and to create greater financial discipline during construction.

For buyers, this is particularly relevant when purchasing an under-construction property because construction progress and the use of project funds are closely connected.

4. Developers Cannot Take More Than 10% as Advance Without an Agreement for Sale

A promoter cannot accept more than 10% of the cost of an apartment, plot or building as an advance or application fee without first entering into a written agreement for sale and registering it as required under the law.

For example, if a flat costs ₹50 lakh, 10% would be ₹5 lakh.

This provision is important because it prevents a buyer from being asked to pay a large portion of the property’s price before the formal agreement is executed.

5. Buyers Have Remedies When Possession Is Delayed

The possession date declared by the promoter is an important part of a property transaction.

If the promoter fails to give possession according to the terms of the agreement for sale, RERA provides remedies to the allottee. Depending on the circumstances, a buyer who does not wish to withdraw from the project can be entitled to interest for the period of delay. A buyer who withdraws can be entitled to a refund along with applicable interest and compensation as provided under the Act.

This gives homebuyers a legal remedy instead of leaving them entirely dependent on the developer’s internal timelines.

6. The Five-Year Defect Liability Period Protects Buyers

RERA provides protection against certain structural defects and defects in workmanship, quality or the provision of services.

If such a defect 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 30 days. If the promoter fails to do so, the affected allottee can seek appropriate compensation under the Act.

This can cover issues that become apparent after possession, such as certain construction or workmanship-related problems.

7. RERA Regulates Changes to Approved Plans

A developer cannot freely make major changes to the sanctioned plans, layout plans or specifications.

For alterations or additions covered by the Act, the previous written consent of at least two-thirds of the allottees is required, subject to the specific provisions and exceptions under RERA.

This gives buyers a say in significant changes to the project after they have committed their money.

For example, a major alteration to the approved project layout or specifications cannot simply be imposed on buyers without following the applicable consent requirements.

8. Project Transfer Also Requires Buyer Protection

RERA also regulates the transfer or assignment of the promoter’s majority rights and liabilities in a project.

A promoter cannot transfer or assign these rights and liabilities to a third party without prior written consent from two-thirds of the allottees, along with the prior approval of the relevant RERA authority.

The law also provides that such a transfer should not automatically give the incoming promoter additional time to complete the project. The pending obligations of the earlier promoter continue to matter.

9. Buyers Can Approach RERA Authorities for Disputes

RERA provides a dedicated regulatory and dispute-resolution framework through the Real Estate Regulatory Authority and the Real Estate Appellate Tribunal.

A buyer can raise a complaint regarding matters covered by the Act and, where applicable, challenge an order before the Appellate Tribunal.

The availability of a specialised regulatory mechanism gives homebuyers a formal route for dealing with issues such as delayed possession, non-compliance with project obligations and other violations covered by RERA.

However, the exact procedure, filing process and timelines can vary depending on the applicable state or Union Territory rules and regulations.

10. Developers Can Face Significant Penalties for Violations

RERA contains substantial penalties for non-compliance.

For example, failure to register a project when registration is required can attract a penalty that may extend up to 10% of the estimated cost of the real estate project. Continued violation can lead to a further penalty and imprisonment of up to three years, or both, as provided under the Act.

The Act also contains separate penalties for other violations and for failure to comply with orders of the Authority or Appellate Tribunal.

These provisions create a legal incentive for promoters to comply with their obligations.

RERA Buyer Protection: Before and After 2016

Feature	Before RERA	Under RERA
Project registration	No uniform central framework for registration of projects under RERA	Eligible projects must be registered with the relevant RERA authority
Project information	Often depended heavily on information supplied by the developer	Prescribed project information is required to be disclosed
Buyer funds	Fewer uniform safeguards under a dedicated real estate law	70% of amounts realised from allottees is required to be deposited in a separate account, subject to the Act
Advance payment	Greater scope for large pre-agreement payments	More than 10% cannot be accepted without first entering into the required agreement for sale
Project changes	Buyer protection varied under different legal arrangements	Certain major changes require consent of at least two-thirds of allottees
Construction defects	Protection depended on applicable contracts and laws	Specific five-year defect liability protection is provided under RERA
Delayed possession	Remedies could be difficult to enforce	RERA provides statutory remedies for eligible cases of delay
Dispute resolution	Buyers often had to rely on multiple legal forums	Dedicated RERA Authorities and Appellate Tribunals provide a specialised framework

What Should Homebuyers Check Before Buying a RERA-Registered Property?

RERA registration is an important safeguard, but buyers should not treat the registration number as a substitute for due diligence.

Before booking a property, check:

• The project’s RERA registration details
• Promoter and land-related information available on the RERA portal
• Sanctioned plans and approved specifications
• Declared completion or possession timeline
• Carpet area and the details mentioned in the agreement
• Payment schedule and applicable charges
• The agreement for sale before making substantial payments
• Any complaints, orders or project updates available through the relevant RERA authority

These checks can help a buyer identify potential issues before committing a large amount of money.

Key Takeaways

• RERA created a dedicated legal framework for regulating eligible real estate projects and protecting homebuyers.
• Project registration improves transparency by requiring prescribed project information to be disclosed.
• The 70% separate-account requirement is designed to restrict the use of project funds to specified project-related costs.
• A promoter generally cannot take more than 10% of the property cost as advance without first entering into the required agreement for sale.
• Buyers have statutory remedies in cases covered by RERA, including certain delays and construction defects.
• Significant project changes and transfers are subject to buyer-consent requirements under specified circumstances.
• Developers can face substantial penalties for violating RERA provisions.

Conclusion

RERA has changed the way buyers and developers approach residential and commercial real estate transactions in India. Its provisions bring greater transparency to registered projects, place specific obligations on promoters and give buyers stronger legal remedies.

For a homebuyer, the practical benefit of RERA is not simply having a registration number. The real value comes from using the information available through the RERA framework, reading the agreement carefully, checking project approvals and understanding the rights available if something goes wrong.

Before purchasing an under-construction property, buyers should therefore verify the project’s RERA records and carry out their own legal and financial due diligence rather than relying only on the developer’s sales claims.