India: Power To Buyer - The New Real Estate (Regulation And Development) Act, 2016


  • Applicable to residential as well commercial projects.
  • Prior registration with the regulator mandatory for projects with land in excess of 500 square meters and projects comprising of more than 8 apartments.
  • On-going projects where completion certificate is yet to be obtained are covered.
  • Projects not to be constructed/ marketed/ sold prior to registration.
  • Builders to disclose, inter alia, stagewise completion schedule at the time of registration.
  • Agreement for sale to be entered with allottees and registered prior to receiving any advance.
  • 70% of the amount realised from allottees to be maintained in a separate account and to be utilised towards cost of construction and cost of land.
  • Regulatory Authority and Appellate Tribunal to be constituted by each State and Union Territory for resolution of disputes.
  • Proceedings of Regulatory Authority and Appellate Tribunal to completed within 60 days from the date of receipt of complaint/appeal.

The real estate sector in India, in the recent times, has been plagued with lack of transparency, unregulated and unscrupulous activities of developers, oppressed and highly dissatisfied consumers and lack of timely and cost effective remedies. The arm twisting tactics and unethical business practices followed by many real estate developers have led to skyrocketing prices of real estate and a pool of consumers which is repelled by such high pricing and absence of proper check on developers. As a result, a large section of our population still dreams of owning a home.

In order to address the aforesaid issues affecting the real estate sector in the country, the Real Estate (Regulation And Development) Act, 2016 ("RERA") has been brought into force. RERA received Presidential assent on March 26, 2016 and the Ministry of Housing and Urban Poverty Alleviation ("MHUPA"), vide its notification dated April 26, 2016, appointed May 1, 2016 as the date for coming into effect of 69 out of total 92 sections of RERA.

The rules for giving effect to the provisions of RERA are to be formulated and notified within a period of 6 (six) months from the date of commencement of the Act by respective State Governments (for each Sate), MHUPA (for Union Territories except Delhi and Puducherry), Ministry of Urban Development (for Delhi) and Union Territory Government (for Puducherry).

RERA aims at putting institutional infrastructure in place in the country for the purpose of ensuring uniform regulatory environment, protection of consumer interest, quick adjudication/ resolution of disputes and overall development of the real estate sector.

The salient features of RERA are discussed hereunder:

1. Uniform Applicability: The provisions of RERA extend to whole of India (except Jammu and Kashmir) and are applicable to commercial as well as residential real estate projects. The said feature of RERA will be crucial in ensuring its uniform applicability and preventing any real estate project from escaping the provisions of RERA, unless expressly exempted, by the reason of said project being commercial or residential.

2. Constitution of Regulatory Authority: RERA provides for constitution of Real Estate Regulatory Authority ("Regulatory Authority") for all States and Union Territories, as regulator for real estate projects, within a period of one year from the date of coming into effect of the Act. The said Regulatory Authority will perform such duties and exercise such powers as are assigned to it under RERA, including but not limited to granting registration to real estate projects/real estate agents, maintaining database of projects/ promoters/ real estate agents, issuing orders/directions to ensure compliance of RERA, imposing penalty for offences, etc.

3. Registration of Real Estate Projects: All real estate projects shall be required to be registered with the concerned Regulatory Authority if the area of land proposed to be developed therein exceeds 500 square meters, or the number of apartments proposed to be developed therein exceeds 8 (inclusive of all phases), or if the completion certificate with respect to such project has not been obtained on the date of commencement of the Act,. The said application shall be filed within a period of 3 (three) months from the date of commencement of this Act with respect to ongoing projects.

Undertaking marketing/sale with respect to a real estate project will not be permissible for promoters till necessary registration has been obtained under RERA.

4. Disclosures by Promoters: While filing an application for registration of a real estate project, promoters are required to provide disclosures with respect to all the details of the project and give declaration with respect to completion schedule and title of the land for the project. The period within which a promoter undertakes to complete the project under its application of registration is the period for which the registration for the said project shall be valid under RERA.

5. Agreement with Buyers: RERA mandates the promoters to first enter into a written agreement for sale with the buyers and register the said agreement before accepting any advance payment or application fee (not exceeding 10% percent of the cost). Further, the said agreement for sale shall be in the prescribed form in order to prevent promoters from drafting one-sided agreements in their favour.

6. Maintenance of Project Receivables in a Separate Account: RERA directs promoters to deposit and maintain at least 70% (seventy percent) of the amounts realised for the real estate project from the allottees, from time to time, in a separate account to be maintained in a scheduled bank, to be withdrawn in proportion to percentage of completion of project for covering the cost of construction and the land cost. The said requirement has been incorporated in RERA in order to prevent diversion/misappropriation of funds so obtained by promoters from allottees of a real estate project.

7. Check on Promoters' Powers: RERA imposes several checks on powers/activities of promoters, including but not limited to the requirements of seeking prior consent of at least two third allottees before altering sanctioned plans/common areas of a project and/or transferring the project to a third party, rectifying structural/ workmanship/ quality defects within a period of 30 days of being notified, maintaining insurance with respect to land and building of the project, refunding the money or paying monthly interest, as the allottee may desire, in the event of delay in completion, etc.

8. Registration of Real Estate Agents: RERA has mandated all real estate agents to get themselves registered with the Regulatory Authority before facilitating any real estate transaction. Further, RERA incorporates a provision that requires real estate agents to facilitate possession of all necessary documents that an allottee is entitled to and perform all such other function as may be prescribed under the rules.

9. Buyers' Rights: RERA grants several rights to the buyers, including but not limited to right to have access to database of promoters/projects/real estate agents, right to claim refund/monthly interest in the event of delay, right to claim compensation for any loss caused due to defect in title of project land, etc.

10. Time Bound Dispute Resolution Mechanism: In addition to constitution of Regulatory Authorities, RERA also provides that appropriate Government shall constitute an Appellate Tribunal ("Appellate Tribunal") within a period of 1 (one) year from the date of commencement of the Act for hearing appeals against the orders of Regulatory Authority that are preferred within a period of 60 (sixty) days from the date of receipt of copy of concerned order.

RERA also provides that the proceedings of Regulatory Authority and Appellate Tribunal shall be completed within a period of 60 (sixty) days from the date of receipt of complaint or appeal, as the case may be.

11. Offences and Penalties: Failure of any promoter to get its real estate project registered in compliance with section 3 of RERA may result in levy of penalty up to 10% of the estimated cost of the project along with imprisonment for a term up to 3 (three) years in the event of continued default. Further, in the event of any promoter failing to provide correct information for registration or failing to adhere to any other provision of RERA, apart from section 3, such promoter shall be liable to a penalty up to 5% of the estimated cost of the project.

The Central Government has, as of now, notified 69 out of the total 92 sections under RERA. However, the 22 sections that are yet to be notified, such as prior registration of real estate projects; registration of real estate agents; duties/ obligations of promoters, are essential for regulating the activities of promoters and achieving the key objective of bringing transparency in the real estate sector.

Until the said remaining sections are notified, constitution of Regulatory Authority and framing of necessary rules under RERA will not result in achievement of desired results of transparency, accountability and timely handovers. Therefore, it will have to be seen as to how much time the Government takes before notifying the remaining sections and, accordingly, makes it obligatory for the promoters to ensure full compliances of their duties under the Act.

© 2016, Vaish Associates Advocates,
All rights reserved
Advocates, 1st & 11th Floors, Mohan Dev Building 13, Tolstoy Marg New Delhi-110001 (India).

The content of this article is intended to provide a general guide to the subject matter. Specialist professional advice should be sought about your specific circumstances. The views expressed in this article are solely of the authors of this article.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Vinay Vaish, Partner, Vaish Associates Advocates
Amit Bhandari
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.