RERA Act: Everything Homebuyers Need to Know

When planning to turn your dream of buying a home into reality, it’s crucial to choose trustworthy developers who offer transparency and legal clarity. The real estate sector in India has been growing rapidly, but it has also faced challenges such as project delays, fraud, and a lack of accountability. To address these issues and safeguard homebuyers, the Indian government introduced the RERA Act in 2016. What is RERA registration, RERA abbreviation, and why is it important? Let’s explore its features, benefits, and impact in this blog.

What is RERA and Why Was it Introduced?

The RERA Act came into effect in May 2017, with its primary goal to ensure transparency, reduce fraud, and safeguard the interests of homebuyers. RERA full form is Real Estate (Regulation and Development) Act, 2016. Before RERA, buyers often faced issues like project delays, misleading advertisements, and unfair pricing. With the introduction of this, the government has set guidelines that developers must follow to promote fair practices in the real estate industry. 

Under the RERA Act 2016, it is compulsory to register any residential or commercial real estate project if the land area exceeds 500 square meters. Hence, this Act is enforced across all states in India, with each state establishing its own regulations to implement it at the local level.

What is a RERA Certificate?

A RERA Certificate is an official document issued by the RERA Authority, serving as proof that a real estate project—whether a property, development, or real estate agent—has been registered under the respective state’s RERA authority or tribunal. It is mandatory for all developers and builders to register their projects under it before promoting or selling them. 

Once registered with the RERA applicability, they receive a unique registration number, which legally authorises them to operate in the real estate market. The certificate contains key details about the developer, project, and agent, along with the registration number. Without this certification, authorities prohibit developers, builders, promoters, and real estate agents from advertising, marketing, or selling properties.

Key Features of a RERA Certificate

Here are some of the key features of this certificate, which make it an important part of your home buying process:

• State-Level Regulatory Authority: Each state has a dedicated body to regulate and oversee real estate projects. This authority handles registrations, compliance, and dispute resolution.
• Mandatory Project Registration: Developers must register all residential and commercial projects exceeding a specific land area with the RERA authority before advertising or selling them. Failure to comply can lead to penalties.
• Transparency in Project Details: Builders must disclose key project information, including layout plans, completion timelines, approvals, and financial aspects, on the RERA website for public access.
• Secure Fund Management: Developers are required to deposit at least 70% of the funds collected from buyers into a designated escrow account. This ensures that developers use the money solely for project development and prevents fund misappropriation.
• Timely Project Completion: If a project is delayed, developers must compensate buyers with interest for the delay. This provision holds builders accountable and discourages unnecessary delays.
• Protection Against Misleading Advertisements: Developers must ensure that all promotional content accurately reflects the project details. False or misleading claims can lead to penalties.
• Fair Pricing Regulation: Developers cannot change the price of a property arbitrarily after an agreement is signed. This rule protects buyers from unexpected cost hikes.
• Efficient Dispute Resolution: Buyers, developers, or real estate agents can file complaints in case of disputes. RERA ensures fast-track dispute resolution through an appellate tribunal.
• Legal Safeguards for Buyers: If a developer violates RERA guidelines, buyers can seek legal action. If a builder fails to comply with it’s orders, authorities may impose penalties or imprisonment.
• Third-Party Transfers Require Consent: If a developer wishes to transfer the majority of project rights to a third party, written approval from two-thirds of the allottees and RERA is required.

Advantages of a RERA Certificate

As said, this certificate was introduced to bring transparency, accountability, and efficiency to the real estate sector. A RERA certificate provides several benefits to both homebuyers and developers, ensuring a fair and regulated property market. Some of the advantages include:

• Protection Against Fraud

A RERA-certified project ensures that the builder follows all the legal and ethical practices. Thus, it reduces the chances of property scams, misleading advertisements, and project delays, offering buyers a trustworthy investment.

• Timely Project Completion

One of the major concerns for homebuyers is project delays. RERA mandates strict deadlines for project completion. Therefore, if a builder fails to deliver the project on time, they are liable to compensate buyers, ensuring accountability.

• Right to Compensation for Defects

If inspectors or homeowners find structural defects or poor-quality construction, the builder must fix them at no additional cost. The rules for maintenance charges ensure transparency in fee collection and protect buyers from unfair costs, contributing to long-term satisfaction.

• Increased Credibility for Developers

For developers, obtaining a RERA certificate enhances credibility and market reputation. As a result, it builds trust among buyers and investors, leading to higher demand and better project sales.

• Boosts Real Estate Market Growth

By ensuring fair practices and reducing risks, RERA builds confidence in the real estate sector, encouraging more people to invest in property. Hence, this leads to a healthier and more stable market.

How to Check RERA Registration and Approval?

Verifying a real estate project’s registration ensures transparency and protects buyers from fraud. However, if you are wondering how to check RERA registration and approval of a project, follow these simple steps:

1. Visit the State’s RERA Website

RERA operates at the state level, so each state in India has its own official portal. Firstly, start by visiting the relevant RERA website for the state where the project is located. For instance, you can check Kerala projects on the official Kerala RERA site, while you need to visit the Delhi portal for Delhi projects.

2. Search for the Project

Secondly, to know how to check RERA approval, once on the website, you may use the search function to find the project. For instance, you can search using:

• RERA registration number (if available, this is the quickest method)
• Project name (helpful if you don’t have the registration number)
• Builder’s name (to view all projects by a specific developer)

3. Review Project Details

Thirdly, after searching, the website will display key details, including:

• The registration number
• Project name and developer details
• Construction timelines (start and expected completion dates)
• Current project status (ongoing, completed, or pending approval)
• Sanctioned plans and approvals

4. Verify Approval Status

Fourthly, verify their approval status. If a project appears in the search results, it means it is registered with RERA. However, if not, the project may be unregistered, which is a red flag for potential buyers.

5. Check Additional Information

Finally, check additional information. Many portals provide extra insights, such as:

• Builder’s track record (previous projects and completion history)
• Consumer complaints or penalties (if any issues have been reported)

In brief, by following these steps, you can ensure that RERA approves the project and that it complies with legal requirements before you invest.

Why RERA is Important for Homebuyers?

Now that we have understood what is RERA approved project, here is why it is important. It is important for homebuyers as it helps protect them by ensuring transparency, accountability, and timely project delivery. It prevents fraud by mandating project registration, standardising carpet area calculations, and requiring builders to disclose all essential details. Additionally, it provides a legal framework for addressing disputes, ensuring faster grievance redressal. This regulation empowers buyers with trust and confidence in real estate investments.

To Conclude

Understanding the RERA Act helps you safeguard your investment, ensure transparency, and avoid legal pitfalls. Whether you’re buying your dream home or exploring property options, knowing not just the RERA full form in real estate is essential. Also knowing the regulations will give you confidence in your purchase. 

With Confident Group, you can stay informed about all the essential guidelines for home buying and make smart real estate decisions. Trust the reliable developer and make your home-buying journey smooth and hassle-free!