RERA Act Explained: What Buyers and Sellers Should Know

The Real Estate (Regulation and Development) Act, commonly known as the RERA Act, was introduced to bring transparency, accountability, and fairness to the real estate sector in India. It protects the interests of both property buyers and sellers (developers) and promotes trust in real estate transactions.

What is the RERA Act?

1. Project Registration is Mandatory
   Builders must register their projects with RERA before advertising or selling. Buyers can check project details on the official RERA website.
2. Transparency in Information
   Builders must provide accurate details about project layout, approvals, completion date, and pricing. Any false information can lead to penalties.
3. Timely Possession
   If the builder delays possession, buyers are entitled to compensation or a refund with interest.
4. Advance Payment Limit
   Builders cannot take more than 10% of the property cost as advance without signing a registered agreement for sale.
5. Defect Liability
   Any structural or quality defect noticed within 5 years of possession must be fixed by the builder at no extra cost.

Key Points Sellers and Developers Should Know

1. Mandatory RERA Registration
   All eligible residential and commercial projects must be registered before marketing or selling.
2. Separate Bank Account
   Developers must deposit 70% of project funds in a separate bank account to ensure money is used only for that project.
3. Timely Project Completion
   Developers must complete projects within the declared timeline. Delays can lead to fines and interest payments.
4. Regular Updates
   Project progress and financial updates must be uploaded regularly on the RERA portal.
5. Penalties for Non-Compliance
   Failure to follow RERA rules can result in heavy fines or even imprisonment in serious cases.

Benefits of the RERA Act

• Increased transparency and trust
• Protection of buyer rights
• Reduced project delays
• Better accountability for developers
• More organized real estate market

Conclusion

The RERA Act has made the real estate sector more buyer-friendly and disciplined. Buyers can invest with more confidence, while honest developers benefit from increased trust and credibility. Understanding RERA rules helps both buyers and sellers avoid disputes and make informed decisions.