RERA

Example

Imagine you want to buy a flat in Pune in 2025. Before getting a home loan, you check the RERA website to confirm that the project is registered and that all needed approvals and timelines are listed. If the builder delays your possession, RERA guarantees compensation for each month you wait. You can file a complaint online, and RERA will resolve the issue quickly.

Key Components

• Project Registration: Required for all eligible projects; details must be online for public access.

• Financial Safeguards: Developers must keep 70% of buyer payments in an escrow account, ensuring that funds are used for the project only.

• Timely Delivery: Developers must meet promised delivery timelines and compensate buyers for delays.

• Quality Assurance: Developers are liable for structural defects for five years after possession.

• Advance Payment Cap: Developers cannot ask for more than 10% of the property cost as an advance before signing the sale agreement.

• Dispute Resolution: State RERA authorities handle complaints, usually within 60 days.

Benefits

• Transparency: Buyers can easily check project details, approvals, and timelines online, reducing fraud risk.

• Financial Security: The escrow system protects buyers' investments by ensuring funds are used for the right project.

• Legal Protection: Buyers are legally protected from delays and defects, with compensation options available.

• Loan Facilitation: Banks prefer financing RERA-registered projects, making loan approvals easier.

• Market Maturity: Better compliance has drawn more investment into the sector, boosting credibility.

Challenges

• Awareness: Many buyers and developers are still unaware of RERA's rules, leading to underuse of the law.

• Enforcement Gaps: RERA's implementation varies by state, affecting consistency nationwide.

• Complex Processes: Filing complaints and resolving disputes can be slow and bureaucratic in some areas.

• Economic Risks: Even with RERA's protections, market downturns or unexpected events can cause project delays.

Conclusion

RERA is crucial in changing India's real estate sector by ensuring transparency and accountability, benefiting homebuyers and investors. Its success relies on increased awareness, consistent enforcement, and overcoming bureaucratic challenges in dispute resolution.