What is RERA? A Complete Buying Guide

Introduction

Planning to buy a property soon? Before you sign any papers, there’s one important term you should clearly understand—What is RERA? Many buyers focus only on price, location, and amenities, but true peace of mind comes from knowing your investment is protected. RERA was introduced to make the real estate market more transparent and trustworthy for homebuyers. It helps reduce risks, delays, and hidden surprises. But how does it actually safeguard your interests? In this blog, we’ll explain everything in simple words so you can confidently move forward with your property purchase.

What is RERA and Why Was It Introduced?

If you’re planning to buy a property, the first question you should ask is: What is RERA? RERA stands for the Real Estate (Regulation and Development) Act, introduced by the Government of India in 2016. Its main purpose is to bring transparency, accountability, and efficiency to the real estate sector.

Before RERA, many homebuyers faced project delays, misleading advertisements, and unclear agreements. There were limited legal options available, which made property investment risky. This law changed the game by creating a structured system that protects buyers and regulates developers.

In simple words, RERA ensures that what a builder promises is what a buyer receives.

Why Was RERA Introduced?

The introduction of RERA was a response to long-standing problems in the property market. The government aimed to create a fair environment for both buyers and developers.

Here are the main reasons behind its implementation:

• Frequent project delays without proper justification

• Lack of transparency in project approvals and timelines

• Misuse of buyer funds by developers

• Unclear property measurements and changing carpet area definitions

By addressing these issues, RERA helped restore trust in the real estate sector.

Main Goals of RERA

The Act was introduced with clear objectives to improve the industry. Some of its key goals include:

1. Transparency in transactions
   Developers must register their projects and provide accurate details on the official RERA website.

2. Timely project delivery
   Builders are legally bound to complete projects within the promised timeline.

3. Financial discipline
   70% of the project funds must be kept in a separate escrow account to prevent misuse.

4. Buyer protection
   Homebuyers can file complaints with the RERA authority if developers fail to meet commitments.

How RERA Benefits the Real Estate Market

The impact of RERA goes beyond just rules and regulations. It has improved buyer confidence and encouraged ethical practices among developers. Genuine builders now gain more credibility, while dishonest practices are reduced.Understanding What is RERA is essential before investing in property. It not only protects your money but also ensures a smoother and more transparent buying experience.

Key Features of RERA Every Buyer Should Know

Before investing in property, it’s important to understand What is RERA and how it protects you as a buyer. The Real Estate (Regulation and Development) Act has introduced several important rules that make property transactions more transparent and secure. Let’s look at the key features every homebuyer should know.

 Mandatory Project Registration

One of the most important features of RERA is compulsory registration. Developers must register their residential and commercial projects with the state RERA authority before advertising or selling.

This means:

• No more unapproved project launches

• Complete disclosure of project details

• Easy public access to project information

Buyers can verify the project’s legal status directly on the official RERA website.

 70% Funds in Escrow Account

To prevent misuse of funds, RERA requires builders to deposit 70% of the money collected from buyers into a separate bank account.

This amount can only be used for:

• Construction costs

• Land-related expenses

This rule ensures that developers do not divert funds to other projects, reducing the risk of delays.

 Standard Definition of Carpet Area

Earlier, builders used different terms like super built-up area, which often confused buyers. RERA introduced a clear and uniform definition of carpet area.

Now, buyers pay only for the actual usable space inside the apartment. This increases pricing transparency and eliminates hidden charges.

 Timely Project Delivery

Delayed possession was one of the biggest concerns before RERA. Under the new rules, developers must complete the project within the promised timeline.

If they fail:

• Buyers are entitled to compensation

• Developers may face penalties

This makes builders more accountable than ever before.

 Strict Penalties for Non-Compliance

RERA has strong enforcement powers. If a developer provides false information or violates regulations, they may face heavy fines or even imprisonment in serious cases.This strict action discourages unfair practices in the real estate sector.

Benefits of RERA for Homebuyers

If you’re planning to invest in real estate, understanding What is RERA can give you confidence and clarity. The introduction of RERA has reshaped the property market by putting homebuyers first. It ensures fair practices, reduces risks, and makes the buying process much more secure. Let’s explore how this law truly benefits buyers.

 Complete Transparency in Projects

One of the biggest advantages of RERA is clear and honest communication. Builders must share accurate project details such as:

• Legal approvals and land status

• Construction progress updates

• Project completion deadlines

• Exact layout plans and specifications

All this information is available on the official RERA portal, allowing buyers to verify facts before making a decision.

Protection from Delayed Possession

Project delays were once a common issue. With RERA in place, developers must stick to promised timelines. If there is a delay:

• Buyers are entitled to compensation

• Developers may have to pay interest

This rule encourages timely completion and reduces uncertainty for homeowners.

Better Financial Safety

RERA safeguards your investment by ensuring responsible fund management. Builders must deposit 70% of the buyer’s payments into a dedicated bank account. This amount can only be used for construction and project-related expenses.

This prevents misuse of funds and lowers the chances of stalled or incomplete projects.

Clear Carpet Area Definition

Earlier, buyers often paid for spaces that weren’t fully usable. RERA introduced a standard definition of carpet area, meaning you now pay only for the actual usable space inside your home.

This brings more transparency in pricing and eliminates confusion over area calculations.

Faster Dispute Resolution

If something goes wrong, buyers can file a complaint with the RERA authority. The system is designed to resolve disputes more efficiently than traditional legal routes, giving buyers quicker relief.

How RERA Impacts Builders and Developers

To fully understand What is RERA, it’s important to see how it affects not just homebuyers but also builders and developers. While RERA was introduced mainly to protect buyers, it has significantly changed how developers operate. It promotes discipline, transparency, and professionalism in the real estate sector.

Mandatory Project Registration

One of the biggest changes brought by RERA is compulsory project registration. Builders cannot advertise, market, or sell any project without registering it with the state RERA authority.

During registration, developers must provide:

• Land ownership details

• Project approvals and permissions

• Construction timelines

• Layout plans and specifications

This ensures only legally compliant projects enter the market.

Strict Financial Regulations

RERA enforces financial discipline among developers. Builders must deposit 70% of the funds collected from buyers into a separate escrow account. This money can only be used for that specific project.

This rule prevents:

• Diversion of funds to other projects

• Financial mismanagement

• Unnecessary project delays

As a result, developers must plan their finances more carefully.

Accountability for Timely Delivery

Under RERA, builders are legally bound to complete projects within the promised timeline. If they fail to deliver on time:

• They must compensate buyers

• They may face financial penalties

This has encouraged developers to improve project planning and execution.

Increased Documentation and Compliance

RERA requires regular updates on project progress. Developers must upload construction status, approvals, and other relevant information on the official portal.

Although this increases administrative work, it builds greater trust in the market and enhances the credibility of genuine developers.

Penalties for Non-Compliance

Failure to follow RERA guidelines can lead to heavy fines or even imprisonment in serious cases. This strict approach discourages misleading advertisements, false commitments, and unfair practices.As a result, the real estate sector has become more structured and transparent.

How to Check RERA Registration Before Buying Property

Before investing your hard-earned money, it’s important to understand What is RERA and how to verify whether a project is legally registered. Checking RERA registration is one of the smartest steps you can take before buying any property. It ensures the project follows government rules and protects your interests as a buyer.

Let’s break down the process in simple steps.

Visit the Official State RERA Website

Each state in India has its own RERA authority and official website. To begin:

• Search for your state’s official RERA portal

• Look for the “Registered Projects” or “Project Search” section

Make sure you are visiting the official government site to avoid misleading information.

Search for the Project Details

Once you’re on the portal, you can search using:

• Project name

• Developer name

• Registration number

If the project is registered under RERA, you will find complete details listed on the website.

Verify Important Information

After locating the project, carefully review the available details. Pay attention to:

• Registration number and validity

• Project completion deadline

• Land ownership documents

• Approved layout plans

• Construction progress updates

This transparency helps you confirm whether the builder’s promises match official records.

Check Developer Credentials

RERA portals also provide information about the developer’s past and ongoing projects. This helps you evaluate:

• Track record of timely delivery

• History of complaints or penalties

• Overall credibility

A developer with proper RERA compliance and a clean record is generally more trustworthy.

Confirm the Registration Certificate

Always ask the builder for the RERA registration number and cross-check it online. Never rely solely on brochures or advertisements.If a project is not registered (and registration is required), it’s a major red flag.

RERA Rules and Regulations You Must Understand

If you’re exploring What is RERA, it’s equally important to understand the key rules that protect you as a homebuyer. RERA is not just a concept—it’s a set of clear regulations designed to bring fairness and transparency to real estate transactions. Knowing these rules can help you make smarter and safer property decisions.

Let’s look at the most important regulations you should be aware of.

Project Registration is Mandatory

Under RERA, builders must register their residential and commercial projects before advertising or selling them. Without registration, a developer cannot legally market the project.

This ensures:

• Only approved projects are sold

• Buyers get access to verified project information

• Legal compliance is maintained

Always check the project’s RERA registration number before investing.

Advance Payment Limit (10% Rule)

One major rule protects buyers from financial risk. A builder cannot accept more than 10% of the property cost as an advance before signing a formal sale agreement.

This prevents:

• Excessive upfront payments

• Unfair financial pressure on buyers

It also ensures that proper documentation is completed early in the transaction.

70% Funds in Escrow Account

RERA requires developers to deposit 70% of the funds collected from buyers into a separate bank account. These funds must be used only for construction and land-related costs of that specific project.

This rule reduces:

• Fund diversion

• Project delays due to financial mismanagement

It increases financial discipline in the real estate sector.

Standard Carpet Area Definition

Before RERA, different builders used varying area calculations. Now, properties must be sold based on a standardized carpet area definition.

This means:

• You pay for actual usable space

• No confusion about super built-up areas

• Greater pricing transparency

Five-Year Defect Liability Period

If any structural defect appears within five years of possession, the builder must fix it at no extra cost. This rule gives buyers long-term protection and peace of mind.

Common Misconceptions About RERA

When people first hear about What is RERA, they often come across half-truths and misunderstandings. While RERA has brought major reforms to the real estate sector, many buyers and even developers still have confusion about how it actually works. Let’s clear up some of the most common misconceptions so you can make informed decisions.

RERA Applies to All Properties

One common myth is that RERA covers every type of property. In reality, RERA applies mainly to residential and commercial projects that meet specific size and unit criteria.

For example:

• Small projects below a certain land area may not require registration

• Completed projects with occupancy certificates before the Act may be exempt

So, it’s always important to check whether a particular project falls under RERA guidelines.

RERA Only Protects Homebuyers

Many people believe RERA is only beneficial for buyers. While buyer protection is a key objective, the law also benefits honest developers.

RERA helps:

• Improve transparency

• Build trust in the market

• Create fair competition

Developers who follow the rules gain credibility and attract more serious buyers.

RERA Guarantees Zero Delays

Another misunderstanding is that RERA completely eliminates project delays. While it enforces strict timelines and penalties, delays can still happen due to factors like legal issues or force majeure events.

However, the difference now is:

• Developers are accountable

• Buyers can claim compensation

• Clear timelines must be shared in advance

This makes the system more balanced and transparent.

Filing a Complaint is Complicated

Some buyers think raising a complaint under RERA is difficult. In reality, most state RERA authorities provide online complaint filing systems. The process is generally faster compared to traditional court cases.

This accessibility empowers buyers to take action if needed.

RERA Makes Property More Expensive

There’s also a belief that RERA has increased property prices. While compliance may involve additional documentation and processes, the law mainly promotes financial discipline and transparency—not unnecessary price hikes.

Why Understanding What is RERA is Important Before Buying Property

Buying a property is a life-changing decision, and it often involves years of savings and careful planning. That’s why knowing What is RERA before making a purchase is so important. RERA was introduced to make the real estate market more organized, transparent, and buyer-friendly. When you understand how it works, you reduce uncertainty and protect yourself from common property risks.

Here’s why this knowledge truly matters.

Protects Your Financial Investment

Property transactions involve large amounts of money, and without proper regulations, buyers can face serious losses. RERA ensures that:

• Developers must register projects before selling

• 70% of buyer payments are kept in a dedicated bank account

• Funds are used only for that particular project

These rules reduce the chances of stalled or incomplete developments and provide better financial security.

Increases Transparency in Deals

One major benefit of RERA is clear and verified information. Builders must disclose:

• Legal approvals and land status

• Project timelines and completion dates

• Accurate carpet area details

• Construction progress updates

This transparency allows you to check facts independently instead of depending solely on marketing promises.

Gives You Legal Support

Understanding What is RERA also means knowing your rights as a buyer. If a developer delays possession or fails to meet commitments, you can:

• Claim compensation for delays

• File a complaint with the RERA authority

• Seek resolution through a faster legal process

This structured system strengthens buyer protection.

Encourages Accountability

RERA holds developers responsible for their commitments. Strict timelines and penalties push builders to plan better and complete projects on schedule. This accountability has improved trust in the real estate market.

Helps You Make Confident Decisions

When you are aware of RERA rules, you can:

• Verify project registration online

• Review the developer’s history

• Avoid risky or unapproved projects

Being informed helps you invest wisely and confidently.

conclusion