RERA
The 2016 law that regulates builders: mandatory project registration, carpet-area-based selling, and a 70% escrow rule enforced by state authorities.
Definition
RERA is the Real Estate (Regulation and Development) Act, 2016, a central law that brought India's residential and commercial real estate sector under a formal regulator for the first time. Every state and union territory has its own Real Estate Regulatory Authority and web portal (for example, MahaRERA in Maharashtra or TNRERA in Tamil Nadu) where projects and agents are registered and buyers can look up project details, approvals, and completion timelines before booking.
Registration is mandatory for any project where the land proposed for development exceeds 500 square metres or the number of apartments exceeds eight (inclusive of all phases). Unregistered projects cannot be advertised or sold. Two protections matter most for buyers: promoters must sell on the basis of carpet area (not super built-up area), and at least 70% of the money collected from buyers must be kept in a separate escrow account and used only for construction and land cost of that project — preventing developers from diverting funds elsewhere.
RERA also caps booking amounts: under Section 13, a promoter cannot accept more than 10% of the property's cost as advance or application fee without first executing and registering a written agreement for sale. If a builder delays possession or violates the agreement, buyers can file a complaint directly with their state RERA authority, which can order refunds with interest and compensation — a much faster remedy than the civil courts.
Example
Before paying the booking amount for a flat in Pune, Ramesh looked up the project's registration number on the MahaRERA portal to confirm its approvals and promised possession date.
Calculators that use this
Related terms
More Real Estate terms
Sources
See all 60 glossary terms or read our Methodology for how we source these definitions.