RERA and Its Role in Enhancing Transparency and Buyer Protection in Indian Real Estate

RERA is a central legislation, implemented by individual states and Union Territories through their own regulatory authorities. Its core objective is to protect homebuyers, streamline project delivery, and regulate builders and agents. 

Key Objectives of RERA

1. Ensuring Transparency in Project Details

2. Protecting the Interests of Buyers

3. Reducing Project Delays

4. Promoting Fair Trade Practices

5. Creating a Regulatory Framework for Dispute Resolution

By creating an organized ecosystem for real estate, RERA aims to increase investor confidence and revive the credibility of the real estate market in India.

Major Provisions of RERA

1. Mandatory Registration of Projects

Under RERA, all residential and commercial projects above a specified size (500 sq. m or 8 units) must be registered with the respective State RERA authority before being marketed or sold. Developers must disclose:

• Land title details

• Project layout plans

• Timelines for completion

• Financial disclosures

• Approvals from authorities

This provision eliminates fly-by-night operators and allows buyers to access verified project information.

2. Project Timeline and Delay Penalty

One of RERA’s biggest achievements is holding developers accountable for project completion timelines. If a project is delayed, the buyer is entitled to:

• Interest compensation for the delay, calculated at the rate equal to the State Bank of India’s highest lending rate + 2%

• Refund with interest, if the buyer chooses to withdraw from the project

This has created a strong deterrent against unjustified delays and improved project management.

3. Escrow Mechanism for Buyer Funds

RERA mandates that 70% of the project funds collected from buyers must be deposited in a separate escrow account. These funds can only be withdrawn in proportion to the project’s progress, certified by an engineer, architect, and CA.

This provision prevents diversion of funds to other projects and ensures that buyer money is used strictly for the development of the project they invest in.

4. Transparency in Advertisements and Promises

Developers can no longer make unverified claims about amenities, carpet area, or possession dates. Any deviation from approved plans is punishable under the Act. Carpet area is now clearly defined under RERA, eliminating confusion with built-up or super built-up areas.

This has reduced misleading marketing tactics and empowered buyers with accurate information.

5. Builder Accountability and Structural Defects

If any structural defects or quality issues are found within 5 years of possession, the builder is obligated to fix them at no extra cost to the buyer. This provision protects buyers from post-possession problems and ensures long-term construction quality.

6. Regulatory Authority and Fast-Track Dispute Resolution

Each state has established a RERA authority and an Appellate Tribunal to address complaints from buyers, developers, or agents. Cases are expected to be resolved within 60 days, making RERA an effective tool for quick grievance redressal.

Buyers no longer have to depend solely on long court proceedings in consumer forums.

7. Regulation of Real Estate Agents

RERA also requires property brokers and agents to register themselves. This has brought greater professionalism and accountability into the brokerage ecosystem, protecting buyers from fraudulent intermediaries.

Benefits to Buyers

Thanks to RERA, the Indian homebuyer now enjoys several protections that were previously unavailable:

• Legal Safeguards: Buyers now have legal recourse in case of violations.

• Informed Decision Making: With access to project and developer data online via state RERA portals.

• Financial Security: Escrow norms ensure that funds are not misused.

• Standardization: Uniform definitions (like carpet area) reduce buyer confusion.

• Trust: Increased compliance has led to renewed trust in the sector.

Challenges in Implementation

Despite its positive impact, RERA’s implementation has not been without hurdles:

• State-wise Variations: RERA is implemented differently across states, with some offering more lenient terms to developers.

• Backlog of Cases: Some tribunals are understaffed, leading to delays.

• Limited Coverage: Some states exclude smaller projects or plotted developments.

• Lack of Awareness: Many buyers are still unaware of their rights under RERA.

Addressing these challenges will be crucial for the Act to realize its full potential.

Impact on Developers

While developers initially resisted RERA, many have now embraced it as a badge of credibility. Transparent practices have improved market reputation, and serious players are benefiting from a more organized environment. RERA has also encouraged better financial discipline and efficient project execution, especially among reputed builders.

Digital Integration and Future Outlook

The future of RERA lies in greater digital integration, with online portals offering:

• Real-time project tracking

• Online complaint registration

• Automated case updates

• Integration with land records and environmental clearances

By making data more accessible and verifiable, RERA can further boost buyer confidence and market integrity.

Conclusion

RERA has been a turning point for Indian real estate, shifting the power balance toward the buyer. It has instilled accountability, minimized malpractices, and made real estate more transparent and reliable. While implementation gaps remain, especially at the state level, the Act has undeniably raised industry standards and empowered consumers.

At HexaHome, we advocate for ethical and transparent real estate practices. Our listings prioritize RERA-registered properties, ensuring our users can invest with peace of mind.

With the support of Hexadecimal Software, we integrate RERA data directly into our property dashboards, giving users real-time insights into project approvals, timelines, and legal compliance. Our smart tech tools empower homebuyers with clarity and confidence in every step of their real estate journey.

Together, HexaHome and Hexadecimal Software are redefining the future of property discovery—where trust, technology, and transparency come together.