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Real Estate (Regulation and Development) Act, 2016 [ RERA ]

Real Estate (Regulation and Development)


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It’s every person’s dream come true for buying a home. Due to the surging prices of real estate and insufficient income levels, everyone can’t afford to buy a home.

The builder-buyer agreement was practised and structured in different ways according to every builder which was not any standardized norms. 

Every builder followed different practices and structured the builder-buyer agreement in such a manner that is in favour of the builder. A person who invested his life savings towards buying a property had very limited rights.

The RERA Act was introduced to protect and shield the interests of property buyers by ensuring that their investments were not misused by the developers/builders for buying homes. 

What is RERA?

 Introduced in 2016, RERA stands for Real Estate Regulations Act and to shield the profits of the home buyers.

RERA’s main aim is to deliver support to the buyers from the violating practices of unethical builders.

RERA implies certain criteria for building and development of real estate for ensuring transparency in transactions of the real estate sector.

It proposes all builders/ developers follow established certain rules and regulations which ensured numerous rights to the home buyers.

Besides, the RERA Act also states the nature of a Real Estate Authority and Appellate Tribunal ( a special court or committee formed to reconsider a decision made by another court or committee) for each state.

In the event of any fraud done by the builder/developer, the home buyer can likewise file a charge to the authority. 

10 Significant Advantages of RERA Act are as follows 

advantages of RERA act


# 1 Standard carpet area

Previously the builder’s calculating price of the carpet area was never fixed and the method of calculation of carpet area was different from every builder/developer. Usually, the builder would carry a different method of calculations leading to various carpet areas for the same flat. 

The RERA Act introduced and implied a standardized formula for the calculation of the carpet area for all the builders/developers.

Now the carpet area determines only the net available floor size of an apartment and excludes various factors such as

  • area covered by the external walls
  • areas under services shafts
  • balcony or verandah area 
  • exclusive open terrace area

Though it includes the area covered by the internal partition walls of the apartment.

Previously the builder used to calculate carpet area in such a way that it would increase the area leading to an increase in the cost of the property. In this way, builders used to manipulate the property buyer by increasing the carpet area but due to RERA, it is not possible anymore.

# 2 Rate of interest

In the event of the buyer failing to make payment to the builder or the builder lacks in completion of the project, the rate of interest to be compensated for both buyer and the builder would be the same. 

Previously the rate of interest paid by the builder to the buyer due to delay in possession of the property was less and the interest paid by the home buyer due to default in payment was much higher.

Earlier there was no equality in the interest paid but now because of the RERA Act, both parties have to pay the same amount of interest lacking in payment or delay in possession. 

# 3 Reduces Risk of Builder Bankruptcy

Usually, developers construct several projects simultaneously. For this, the Builders used to divert the funds raised from one project to another freely without any authorial issues.

After introducing RERA this isn’t possible as the builder must deposit 70%  of the amount deemed for the project in a different bank account. The criteria for the builder to withdraw from that account would be the completion of the project further needing a certification from a civil engineer, architect and chartered accountant in practice.

There are numerous cases where builders used to raise funds from home buyers and invest them for other purposes leading the builders to become bankrupt and unable to complete the project.

According to the RERA Acts rules and regulations, the funds cannot be diverted from a project to another or used for other projects ensuring the purpose for which the funds have been raised.

Now, these funds raised by the builder will ensure the timely completion of the project and govern them whether it is getting diverted somewhere else. 

# 4 Right of the Buyer in case of False promises

If the builder fails to fulfil his commitments mentioned in the actual project or there is any mismatch then the buyer can claim a full refund amount paid by him in advance or likewise claim compensation along with interest by withdrawing from the project. 

# 5 Advance Payment

RERA Act states that the builder cannot ask for more than 10% of the cost of the flat, bungalow, etc. as advance or application fees on agreeing with a sale. 

# 6 Right of the buyer in the event of any flaws after possession

In events leading to structural defect or any flaws in workmanship, quality, equipment or service which is discovered within 5 years after the possession of the property, then the builder holds responsibility for its rectification at no extra cost within 30 days.

If the builder neglects to do so, the buyer shall be qualified to demand compensation for the same.

# 7 Rights of the buyer if there is a delay in possession

If the developer fails to complete the project and hand over the flats to the buyer on the possession date then the buyer has two possibilities such as

  • To withdraw from the project, where he will be eligible to claim a full refund along with interest owed from the possession date until the amount is refunded.


  • To proceed with the project until it’s finished, where he is eligible for compensation including interest owed from the possession date of the project until it’s completion.

# 8 Rights of the buyer in case of a fault in Title

After the possession of the property, you can claim compensation for the property for having a default title. There is no barrier or time limitation to discover the false name of the property. 

# 9 Right to information

The buyer is eligible for all the information related to the project, whether be it the plan layout, execution plan, stage-wise completion status, etc. The buyer has to be acknowledged of all the single details of the property.

# 10 Establishing Authority for Grievance Redressal:

In case of any objection or complaint against the builder is filed then he can be taken to the state authority under the RERA Act. This act shall take into consideration all the objections and has the power to redress it all. Real estate issues are taken to Appellate Tribunal who will rectify your case within 60 days period if it fails then the reason for its failure is recorded. 


This article provides you with all the benefiting factors introduced to a property buyer and the builder under the Real Estate (Regulation and Development) Act, 2016 also known as RERA. In this way, the act has provided and mentioned all the authority needed for a property buyer and his rightful laws in case of any dispute, malpractices or fraud.


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