The RERA Act is considered as one of the landmark legislations passed by the Indian Parliament. Its objective is to address grievances of buyers and to bring transparency and accountability in country’s real estate sector. This is in line with the vast and growing economy of India as in future many people will be investing in real estate sector.

Following are the main features of this legislation :

1) According to the new law, the developer can’t make any changes to the plan without the written consent of the buyer. This provision will not allow the developer to increase the cost of their projects.

2) The law ensures that realty project is completed in time. If delayed, then the developer will have to pay interest on the amount paid by the buyer.

3) Registration is mandatory for all commercial and residential real estate projects where the land is over 500 square metres or includes eight apartments & which are under-construction.

4) As per the new act, every phase of apartment will be considered a standalone real estate project, and separate registration needs to be obtained for each project.

5) It is compulsory for a state to establish a State Real Estate Regulatory Authority as per the new act. Buyers could approach this body for redressal of their grievances.

6) The property will have to be sold to buyers based on carpet area and not on super built-up area which will become illegal under the new law.

7) Failing to register a property will attract a penalty up to 10% of the project cost and a repeated violation could send the developer in jail.

8) As per the new law, the developer will have to place 70% of the money collected from a buyer in a separate escrow account to meet the construction cost of the project. This will keep a check on developers who divert the buyer's money to start a new project, instead of finishing the one for which money was collected & also ensure that the respective project is completed in time.

9) If the buyer finds any shortcomings in the project then buyer can contact the developer in writing within one year of taking possession.

10) The law has a provision of a maximum jail term of three years with or without a fine, for a developer who violates the order of the appellate tribunal of the RERA.


  • The Bill proposes to cover residential as well as commercial real estate.

  • Several terms and expressions such as carpet area, common areas, real estate agent, which were not defined by earlier legislations, have been defined under this Bill.

  • One of the key features of the Bill is the Real Estate Regulatory Authority (RERA). The RERA is an authority which is proposed to be setup under the Bill for exercising functions such as clearance and sanctions of plans, development of projects, ensuring compliance by promoters, maintenance of database of defaulters etc.

  • Every real estate project where the area of land proposed to be developed exceeds one thousand square meters, or the number of apartments proposed to be developed exceeds twelve, must be registered with the RERA. No promoter can sell, offer to sell or invite persons to purchase a flat or premises unless such registration has been completed.

  • A promoter must make certain disclosures in its application for registration such as details of its enterprise, a copy of the commencement certificate, details of its layout plans, number and area of apartments, details of its contractors, real estate agents, architects etc.

  • The RERA shall approve or reject the registration within 15 days, failing which it shall be deemed to have been accepted for registration.

  • Real estate agents shall be required to register with the RERA as well. Currently, real estate agents and their activities are not regulated by any law in India.

  • If any real estate agent is found to be in violation of any provision of the Bill, the RERA can revoke or suspend the registration of such real estate agent after according him an opportunity of being heard.

  • A promoter must, upon obtaining registration, enter all details on the RERA website relating to the project, including a stage wise time schedule of the completion of the project.

  • It shall further be incumbent on the promoter, upon entering into an agreement for sale, to provide an allotted with all the relevant details of the project.

  • The Promoters must compulsorily deposit 50% (or such lesser percentage may be notified) of the amount realised for the real estate project from the allottees in a separate account.

  • Promoters are further accountable for statements made in an advertisement or a prospectus for real estate projects and shall be liable to compensate any person incurring a loss having acted on such advertisements or statements in the prospectus.

  • Promoters shall not accept more than 10% of the cost of the apartment or building as the case may be, as advance payment without entering into a written agreement for sale.

  • Promoters must take all necessary steps to execute a conveyance deed and transfer the possession of the property to the allottees. Failure to do so shall render them liable to return the money received by them.

  • The Bill provides several rights to the allottees of the property such as right to know stage-wise time schedule of completion of the project, including the provision for water, sanitation and electricity, right to claim the refund of amount paid from the promoter if the promoter fails to comply with the provisions or is unable to give possession of the apartment and right to know all other relevant details relating to the property.

  • There shall be a Tribunal called the Real Estate Appellate Tribunal ("Tribunal") which shall entertain appeals arising from decisions of the RERA.

  • The Tribunal shall consist of a judicial member and a technical or administrative member. It shall not be bound by the rules of the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872,but by the principles of natural justice.

  • Appeals from the Tribunal shall lie before the appropriate High Court.

  • The Bill confers exclusive jurisdiction on the authorities under the Bill and bars any civil court to entertain disputes over which the Tribunal or RERA have jurisdiction.


The Bill makes an interesting departure from its predecessors. While terms like carpet area had multiple meanings and interpretations ascribed to them earlier, this Bill seeks to remove such ambiguity. The establishment of a body to oversee real estate transactions will bring in more accountability and assurance to buyers. The exclusive jurisdiction sought to be granted to Tribunals under the Bill is an appreciated move to de-clog the judicial system. The features of a Tribunal under the Bill are similar to an arbitral tribunal or quasi court. The Bill helps to address the growing need for transparency. With a clear bend of mind in favour of consumers/buyers, the Bill will help the Indian population find support in their decisions while purchasing property.

- Lavish

Fairfield Institute Of Management & Technology,

GGSIPU, Kapashera, New Delhi

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