In the evolving landscape of Indian real estate, one term every homebuyer should be familiar with is RERA. If you are planning to invest in a new home or commercial space, it’s crucial to understand why RERA approval is required. RERA, short for the Real Estate (Regulation and Development) Act, 2016, was introduced by the Government of India to ensure transparency, accountability, and timely delivery in the real estate sector. This approval acts as a legal assurance that a project complies with state regulations and that the developer operates under strict rules designed to protect the interests of buyers.
Before RERA came into effect, homebuyers often found themselves at the mercy of builders who operated with little regulation. From project delays and hidden charges to misleading advertisements and substandard construction quality, the sector was plagued by serious concerns. RERA has changed the game, and its approval is now a must-have for any legitimate real estate project.
Why RERA Is Important to Buyers
Understanding why RERA is important to buyers starts with its core benefits. Under RERA, any residential or commercial project that exceeds 500 square meters or has more than eight apartments must be registered with the respective state RERA authority. This requirement ensures that only legally compliant and authorized projects are promoted and sold in the market.
RERA registration offers the following protections to buyers:
Developers are required to provide complete transparency regarding the project’s land title, layout, approvals, construction schedule, and amenities.
Builders must commit to specific possession timelines. If there’s any delay, they are legally bound to compensate the buyer.
Seventy percent of the funds collected from buyers must be kept in a separate escrow account, used exclusively for that project. This prevents diversion of funds to other ventures.
Buyers have access to a dedicated grievance redressal system, where complaints can be addressed quickly by the state RERA authority.
These measures significantly reduce the risks associated with property investment and make the buying process more transparent and secure.
Buying Home Before RERA: The Risks
To truly appreciate the value of RERA, one must consider the challenges of buying a home before RERA. In the pre-RERA era, developers operated in a largely unregulated market. Project delays were common, and buyers often had no legal route for refunds or penalties. Builders would frequently change building plans without notice, increase prices mid-project, or delay handovers for years without accountability.
One of the biggest issues was the misleading way in which property sizes were advertised. Buyers were often shown a “super built-up area” that included lifts, staircases, and even garden spaces. The actual “carpet” area” the usable area inside the home, was much smaller. RERA has corrected this practice by making it mandatory to quote prices based only on the carpet area.
There was also no standard framework for addressing disputes. If a project was abandoned or a developer failed to deliver, the buyer had little recourse. Today, under RERA, buyers can exit a project and receive a full refund along with interest if the developer fails to meet agreed terms.
Legal Protection and Peace of Mind
Another reason why RERA is important to buyers is its emphasis on legal accountability. Developers are no longer free to make arbitrary changes to the project or delay deliveries without consequences. Non-compliance with RERA can result in severe penalties, suspension of licenses, or even imprisonment for the developer.
Conclusion
In conclusion, if you are planning to buy a property in India, it’s essential to understand why RERA approval is required. It protects your investment, ensures timely possession, provides transparent project details, and offers legal protection in case of any disputes. Buying a RERA-approved property means buying with confidence.