Buying a home is the biggest purchase most families make, and for years builders held all the power. RERA was created to give buyers a fairer deal.
Must Know
The Real Estate Regulator
What RERA Is
- Full formRERA is the Real Estate (Regulation and Development) Act, 2016.
- PlainIt is the law that regulates how real estate projects are sold, to stop unfair practices.
- OperativeIt became fully operative on 1 May 2017.
- StructureEvery state and Union Territory must set up its own state-level Real Estate Regulatory Authority.
- Key pointThere is no single national authority; each state runs its own.
Project Registration
- RuleAny project with land over 500 square metres, or with more than 8 apartments, must register with its state RERA.
- TimingThis must happen before any marketing or sale begins.
- WhyRegistration forces builders to disclose project details before taking buyers’ money.
- SoA buyer can check a project’s registration before committing any money.
The Escrow Rule
- RuleBuilders must deposit 70% of the money buyers pay into a separate escrow account.
- UseThat money can only be used for that project’s own construction and land costs.
- WhyIt stops a builder from diverting one project’s money to another, or running away with it.
- SoThe escrow account ties buyers’ money to their project.
Good to Know
Buyer Protections
Carpet Area
- RuleFlats must now be priced by carpet area.
- DefinitionCarpet area is an apartment’s actual usable floor space.
- WhyIt replaces the vaguer “super built-up area” builders used to advertise, which inflated the space buyers got.
- EffectBuyers now know exactly how much usable space they are paying for.
- SoPricing became more honest and comparable between projects.
Defect Liability
- RuleBuilders are liable for structural defects for 5 years after possession.
- FixThey must fix a reported defect within 30 days, free of charge.
- WhyIt stops builders from washing their hands of a building once it is sold.
- HowA buyer who spots a structural problem can demand a free fix within the five years.
- SoBuilders stay responsible for quality long after handover.
Delays and Refunds
- RightUnder Section 18, a delayed buyer has two options.
- Option 1Withdraw and get a full refund with interest.
- Option 2Stay and receive monthly interest until possession.
- RateState Rules set the interest, typically at SBI’s highest lending rate plus 2%.
- WhyInterest compensates the buyer for the builder’s delay and the money tied up.
- SoDelay now costs the builder, not the buyer.
The Appellate Tribunal
- Full formEach state must set up a Real Estate Appellate Tribunal (REAT).
- JobIt hears appeals against the state RERA’s orders.
- CompositionIt is usually chaired by a retired High Court judge, alongside a judicial and a technical member.
- WhyAn appeals body ensures a buyer or builder who disagrees with RERA has a fair second look.
- SoRERA’s decisions are not final; they can be challenged.
✅ Test Yourself
Work through a 5-question chain on RERA, then keep practising with a random Indian Polity question.
Great to Know
RERA’s Real-World Limits
Enforcement Gap
- CoverageSeveral northeastern states and Ladakh still lack a permanent functioning Authority.
- ConcentrationMaharashtra alone accounts for roughly 40% of all RERA-registered projects.
- Recovery gapMahaRERA ordered ₹724 crore in recoveries, but only about 32% was actually recovered.
- PenaltiesUnder 1% of separate penalties ordered against builders was collected.
- SoRuling for buyers and actually getting them paid are very different things.
Supreme Court Criticism
- EventIn February 2026, the Supreme Court sharply criticised how RERA works in practice.
- RemarkThe Chief Justice said it might be “better to abolish the institution altogether.”
- AllegationThe Court said RERA was “providing convenience to defaulting builders.”
- CauseAppointments of retired bureaucrats hollowed out its own enforcement.
- Wider pointA regulator is only as strong as the people running it and the will to enforce its orders.
Current Affairs
📰 Current Affairs
Unified National RERA Portal
- EventOn 4 September 2025, the Housing Ministry launched a Unified National RERA Portal.
- CoverageIt is a single search window covering 35 states and Union Territories.
- SourcePIB.
MahaRERA Bulk Suspension
- EventOn 9 January 2025, MahaRERA suspended about 1,950 project registrations.
- ReasonThey failed to respond to disclosure-compliance notices.
- FirstIt was the first bulk suspension by any state RERA.
- SourceThe Realty Today.
🎯 Exam Angle (PYQ & MCQ Traps)
The Escrow-Percentage Trap
- Trap option‘Builders must deposit 50% of buyers’ money into an escrow account.’
- Distractor50% sounds like a clean half, so it feels plausible.
- Fact testedRERA requires 70% of buyers’ money into a separate escrow account.
- Eliminate fastIf an option says anything other than 70%, it is wrong.
- Try this rule70% escrow, 5-year defect liability, 30-day fix — lock these three numbers.
The ‘National Authority’ Trap
- Trap option‘There is a single national RERA authority.’
- DistractorRERA is a central Act, so a central body feels natural.
- Fact testedEach state/UT runs its OWN Real Estate Regulatory Authority; there is no single national one.
- Eliminate fastIf an option names one national authority, it misstates the structure.
- Try this ruleCentral Act, state-level enforcement.
The Delay-Remedy Trap
- Trap option‘A delayed buyer’s only option is to wait.’
- DistractorWaiting seems like the obvious course.
- Fact testedSection 18 gives a delayed buyer two options: withdraw for a full refund with interest, or stay and get monthly interest.
- Eliminate fastIf an option omits the refund/withdraw choice, it is incomplete.
- Try this ruleDelay = refund+interest OR monthly interest — buyer’s choice.
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