Real Estate Regulatory Authority

The Real Estate (Regulation and Development) Act, 2016 applies to commercial and residential real estate projects on land exceeding 500 square metres or having more than eight apartments. Developers must register the project with the State RERA before marketing, deposit 70% of collections in an escrow account, sell on carpet area, give a five-year structural defect warranty and file quarterly project updates. Real estate agents need separate registration. Allottees have enforceable rights to refund with interest on delay and access to State RERA authorities and the Real Estate Appellate Tribunal. The framework operates throughout FY 2026-27.

Priyanka Wadhera

Published: 10 Aug 2022

Updated: 16 May 2026

3 min read

The Real Estate (Regulation and Development) Act, 2016, popularly known as RERA, has reshaped India's residential and commercial real estate market. By FY 2026-27, RERA is fully operational across most States and Union Territories, with State-level RERA authorities adjudicating thousands of complaints every year. Whether you are a developer, broker, allottee or institutional investor, understanding the applicability of RERA is now non-negotiable.

Purpose of RERA

RERA was enacted to bring transparency, accountability and efficiency to the real estate sector. The objectives include protecting homebuyers, regulating project marketing and sale, ensuring timely delivery, mandating escrow of project funds, and creating a fast-track dispute-resolution forum at the State level.

Applicability of RERA

RERA applies to most real estate projects involving sale of plots, apartments or buildings in India. The key applicability rules are:

All commercial and residential real estate projects on land exceeding 500 square metres or having more than eight apartments (inclusive of all phases) must be registered with the State RERA.
Projects where the completion certificate has not been issued before the commencement of the State RERA Rules also require registration if they qualify.
Real estate agents who facilitate sale or purchase in registered projects must register separately.
Renovation or repair works that do not involve marketing or sale are generally outside RERA.
Plots of land sold without development obligations may fall outside RERA depending on the State Rules.

Developer Obligations Under RERA

Register the project with the State RERA before any advertisement, marketing or booking.
Deposit 70% of buyer collections in a dedicated escrow account for land and construction costs.
Upload quarterly project updates including approvals, construction status and financials on the RERA portal.
Sell on the basis of carpet area only, not super built-up area.
Provide structural defect warranty for five years from possession.
Refund booking amounts with interest at the prescribed rate in case of project delay or withdrawal.

Allottee Rights Under RERA

Buyers and allottees enjoy enforceable rights, including the right to receive accurate project information, the right to inspect approved plans, the right to claim refund with interest on delay, and the right to file complaints with the State RERA authority or appellate tribunal. The agreement for sale must be in the form prescribed by the State Rules and cannot contain one-sided clauses that override RERA.

Real Estate Agents Under RERA

Every real estate agent operating in a State must obtain a separate registration. Agents are required to disclose registration details, maintain books of account, and ensure that they facilitate transactions only in registered projects. Non-registration can attract penalty up to ₹10,000 per day during the period of default and prosecution in repeat cases.

Penalties and Dispute Resolution

Non-registration of a project can invite penalty up to 10% of the estimated cost of the project.
Continued contravention can attract imprisonment up to three years.
False or misleading information in the application can lead to revocation of registration.
Complaints from allottees are decided by the State RERA authority and appealable to the Real Estate Appellate Tribunal.
Further appeal lies with the High Court on questions of law.

Why RERA Matters in FY 2026-27

For FY 2026-27, RERA data has become a credit-decisioning input for banks and NBFCs financing developers, an input for institutional investors evaluating real estate exposure, and a litmus test for retail buyers. Several States have integrated RERA portals with GST, MCA and municipal approval systems, sharply reducing the room for unregistered or misrepresented projects.

Conclusion

RERA has converted real estate from a buyer-beware market into a regulated, transparent sector. Developers should treat RERA registration and quarterly updates as a core compliance ritual, and buyers should always verify the RERA registration number before paying any token. The Act will continue to evolve through State Rules and tribunal jurisprudence, but its fundamental architecture is now embedded in Indian property transactions.

Frequently Asked Questions

Which real estate projects need RERA registration?

Projects on land exceeding 500 square metres or having more than eight apartments (all phases included) must be registered with the State RERA before any marketing or booking. Smaller projects and renovation works without sale obligations are generally exempt, subject to State Rules.

What is the 70% escrow rule under RERA?

Developers must deposit 70% of the amounts collected from allottees in a separate bank account dedicated to the project. The escrow money can be withdrawn only for land cost and construction cost, in proportion to the percentage of project completion certified by the engineer, architect and chartered accountant.

Are real estate agents required to register under RERA?

Yes. Every real estate agent facilitating sale or purchase of plots, apartments or buildings in a registered project must obtain a separate RERA registration in the State of operation. Non-registration can attract daily penalty and prosecution under the Act.

What can an allottee do if a project is delayed?

Allottees can either choose to withdraw and seek refund of amounts paid with interest at the prescribed rate, or continue with the project and claim interest for the period of delay until possession. Complaints are filed before the State RERA authority and decided in a time-bound manner, with appeals to the Real Estate Appellate Tribunal.