RERA - REAL ESTATE REGULATION AND DEVELOPMENT ACT
The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which
seeks to protect home-buyers as well as help boost investments in the real estate industry.
The Act establishes Real Estate Regulatory Authority (RERA) in each state for regulation of the real
estate sector and also acts as an adjudicating body for speedy dispute redressal.
The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016.
The Act came into force on 1 May 2016 with 59 of 92 sections notified.
Remaining provisions came into force on 1 May 2017. The Central and state governments are liable
to notify the Rules under the Act within a statutory period of six months.
The key provisions included in the Act, notified by the Government of India are mentioned below.
The act mandates all residential and commercial real estate projects (new or on-going) larger than
500 sqm or eight apartments, to be registered with respective state’s regulatory authority.
On-going projects without Completion Certificates (CC), as on the date of commencement of the Act,
will have to file for registration within three months. The authority will have to either accept or
reject the application within 30 days. Post acceptance of the registration request, the promoters will
be required to submit all the relevant details about the project on RERA’s official website.
The failure to register a project would attract a penalty of 10 percent of the total project cost or an
imprisonment of up to three years.
Real estate agents, facilitating the sale or purchase of realty projects, too, will have to register
themselves with the authority.
As late as 31 October 2016, Central Government, released the Real Estate (Regulation and
Development) (General) Rules, 2016, vide Notification by the Ministry of Housing & Urban Poverty
Alleviation(HUPA). The Rules so issued by the Central Government are applicable to the five Union
Territories without Legislature viz., Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu,
Lakshadweep, and Chandigarh. The Rules have been issued after the prior release of Draft for
As of 1 September 2018, Arunachal Pradesh, Mizoram, Meghalaya, Sikkim and Nagaland have not
notified the Rules. In the case of five north-eastern states, the RERA Act is facing certain
constitutional challenges as the land in those states are community owned. West Bengal notified a
similar law called the West Bengal Housing Industry Regulatory Act, 2017, which came into effect
from 1 June 2018. However, as of November 2018, many of the states have not implemented the
law in its true letter and spirit and failed to notify a Permanent Regulator, Appellate Authority or a website. A chart showing the implementation status by different states as of November 2018 can be
The Real Estate Act makes it mandatory for all commercial and residential real estate projects where
the land is over 500 square metres, 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. Application
for registration must be either approved or rejected within a period of 30 days from the date of
application by the RERA. On successful registration, the promoter of the project will be provided
with a registration number, a login id, and password for the applicants to fill up essential details on
the website of the RERA. For failure to register, a penalty of up to 10 percent of the project cost or
three years' imprisonment may be imposed. Real estate agents who facilitate selling or purchase of
properties must take prior registration. 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.
Protection of buyers
The Act prohibits unaccounted money from being pumped into the sector and as of now 70 per cent
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.
Real Estate Regulatory Authority and Appellate Tribunal
It will help 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 in 60 days while no
time-frame was indicated in earlier Bill.