Advocate Priya Sharma
Legal Consultant
The Real Estate (Regulation and Development) Act, 2016 (RERA) has revolutionized the Indian real estate sector by bringing transparency and accountability. Understanding RERA is crucial for every homebuyer and investor.
What is RERA?
RERA is a landmark legislation enacted to protect the interests of homebuyers and boost investment in the real estate sector. It mandates registration of all residential and commercial projects and establishes regulatory authorities in each state.
Key RERA Provisions Every Buyer Should Know
1. Mandatory Project Registration
All projects with land area exceeding 500 square meters or comprising more than eight apartments must be registered with the state RERA authority before advertising or selling.
2. 70% Escrow Account Rule
Developers must deposit 70% of funds collected from buyers into an escrow account designated for that specific project. This ensures funds are used for construction and land costs only.
3. Limited Advance Payment
Builders cannot demand more than 10% of the property cost as advance payment before signing the sale agreement. This protects buyers from financial pressure and ensures commitment from both parties.
4. Carpet Area Pricing
Properties must be sold based on carpet area (usable floor area), not super built-up area. This brings clarity to what buyers are actually paying for.
5. Project Timeline Disclosure
Developers must declare the project completion timeline in the agreement. Any delay entitles buyers to compensation or the option to withdraw with full refund plus interest.
How RERA Protects You
RERA ensures transparency through public disclosure of project details, financial statements, and approvals on the RERA website. Buyers can verify project authenticity before investing. The regulatory authority also provides a grievance redressal mechanism for quick resolution of disputes.
Checking RERA Compliance
Before investing in any project, verify the RERA registration number on your state's RERA website. Check project details, approvals, timeline, and developer track record. At Shri Rajeshwari Properties, all our projects are fully RERA compliant, ensuring complete transparency and legal security for our investors.