The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced to bring transparency, accountability, and efficiency to the real estate sector in India. One of the most significant aspects of this Act is the mandatory RERA registration for real estate projects and agents. Without this registration, developers cannot advertise, sell, or book properties, ensuring that buyers deal only with credible projects.
In this article, we will discuss why RERA registration is important and how it benefits homebuyers and the real estate market.
What is RERA Registration?
RERA registration is a mandatory approval that real estate developers and agents must obtain before launching or selling a project. It ensures that the project follows all legal and financial regulations, protecting homebuyers from fraud and delays.
Who Needs RERA Registration?
- Real Estate Developers: Any residential or commercial project covering more than 500 sq. meters or 8 apartments must be registered with RERA before advertising or selling.
- Real Estate Agents: All property brokers and agents must register with RERA to legally conduct transactions.
Why is RERA Registration Important?
1. Protects Homebuyers from Fraud
- Before RERA, many builders collected money from buyers but failed to deliver on time.
- With RERA registration, builders are legally bound to disclose complete project details, ensuring no false promises or misleading advertisements.
2. Ensures Transparency in Real Estate Transactions
- RERA requires builders to publish all project details on the state’s RERA website.
- Buyers can verify project approvals, timelines, carpet area, pricing, and legal clearances before investing.
3. Prevents Project Delays
- Builders must specify a completion date during registration.
- If there is a delay, the builder must pay interest to the buyers.
- This ensures timely possession of homes.
4. Guarantees Fair Pricing Based on Carpet Area
- Builders can only charge based on carpet area, not super built-up area.
- This prevents inflated property pricing and ensures buyers pay for the actual usable space inside the home.
5. Secures Buyers’ Money with an Escrow Account
- Builders must deposit 70% of the project funds in an escrow account.
- This prevents misuse of funds and ensures they are used only for construction.
6. Provides Legal Protection to Homebuyers
- If a builder fails to meet commitments, buyers can file complaints with RERA authorities.
- The Real Estate Appellate Tribunal resolves disputes within 60 days, providing quick relief.
7. Holds Builders Accountable for Construction Quality
- Builders are responsible for structural defects for up to 5 years after possession.
- They must fix any defects within 30 days at no extra cost.
8. Reduces the Risk of Unapproved Projects
- RERA ensures that developers obtain all approvals before selling units.
- Buyers can check a project’s RERA status to verify whether it is legally approved.
9. Regulates Real Estate Agents
- All brokers and agents must register with RERA, preventing fraudulent practices.
- Agents must provide accurate information about the projects they sell.
10. Strengthens Trust in the Real Estate Market
- With RERA, homebuyers can invest with confidence, knowing they are protected by law.
- It creates a transparent and trustworthy real estate sector, benefiting both buyers and developers.
How to Check if a Project is RERA-Registered?
- Visit your state’s RERA website (e.g., Maharashtra RERA, Karnataka RERA, etc.).
- Search for the project name or developer’s name.
- Check registration details, approvals, and project progress.
Conclusion
RERA registration is a crucial safeguard for homebuyers, ensuring that real estate transactions are transparent, fair, and legally protected. It prevents fraud, delays, and unfair pricing, making property purchases more secure. Always verify a project’s RERA registration before investing to avoid risks and ensure a safe real estate transaction.