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Real Estate Regulatory Authorities (RERA)

Real Estate Regulatory Authorities

The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which looks too safe guard 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 published 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. Leftover provisions came into force on 1 May 2017. The Central and state governments are responsible to notify the Rules under the Act within a statutory period of six months.

RERA Rules

The Act under S.84 contemplates that within 6 months of the RERA Act being enforced, State Governments shall make rules for carrying out the provisions of the setup. The set Rules are to be notified by some of the State Government.

As late as October 31, 2016, Central Government, issued the Real Estate (Regulation and Development) (General) Rules, 2016, vide Notification by the Ministry of Housing & Urban Poverty Alleviation(HUPA). The Rules so published 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 comments.

As of 1 September 2018, Kerala, 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 action from 1st June 2018.



The Real Estate Act makes it necessary for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for establishing a project, in order to provide greater transparency in project-marketing and execution. For ongoing projects which have not received accomplishment 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 granted 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 help in selling or purchase of properties must take prior registration. Such agents will be published as 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 is strict on unaccounted money from being pumped into the sector and as of now 70 percent of the money has to be deposited in bank accounts through cheques is now compulsory. A major advantage 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 cover usable spaces like kitchen and toilets.

Real Estate Regulatory Authority and Appellate Tribunal

It will assist to establish state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely accomplishment and handover. Appellate Tribunals will now be needed 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.


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