The Real Estate (Regulation and Development) Act or RERA is a parliamentary enactment which came into force in the year 2016. The main objective of the act is govern the real estate transactions in India and provide for development of the same. The act also aims at brining reforms in the real estate sector. The set forth the “regulatory or appellate authority” for governing the sale purchase of real estate and adjudicating the disputes which may arise in such transactions. Moreover, the act brings transparency in the transactions related to buying and selling of real estate sector by keeping  check over the promoters of a commercial real estate projects and thus protects the interest of the home-buyers.

RERA consists of  92 sections under 10 chapters. In this study, we will be dealing with detailed study and analysis of the Real Estate ( Regulation and Development ) Act, 2016.


  1. A developer of a real estate project can not make alterations to the plans of his development without obtaining due written consent of the buyer with whom he is dealing with.
  2. RERA restricts the developers of a real estate project from increasing cost of their projects.
  3. The law imposed obligation on the developer to complete the project within stipulated time period. In case the developer fails to complete the project in time then has to pay interest to the buyer on the amount he had already paid.
  4. Act requires every state to establish “Real Estate Regulatory Authority” and “Real Estate Appellate Tribunal” where the can approach in case they are aggrieved by any unlawful act of the developer.
  5. RERA makes the compulsory registration of for all the residential and commercial projects of a developer. It case the developer fails to register his project then he has to bear a penalty up to 10 percent of the cost of his project.
  6. Where a buys finds any fault and defect in the project, in that case the act provides opportunity to the buyers to contact the developer within one year after taking possession, for removal of such defects.
  7. RERA restricts the developer of a project from diverting the funds of a project to a new project, by making a check over the 70 percent of funds collected from buyer for such project.
  8. The act requires the developer to keep all records in digital form with a view to avoid loss of data.
  9. The act also provides fine and imprisonment up to 3 years for the developer of a project in case contravene the orders of the Appellate Tribunal.




Sec. 20 (1) of the Real Estate ( Regulation and Development ) Act, 2016 requires every state of India to establish Real Estate Regulatory Authority to enforce the regulatory provisions of this law. This authority established by virtue of aforesaid provision is compatible for hearing complaints and disputes filed by the a person who is aggrieved by the infringement of provision of RERA.

“Authority’s  broad objectives and functions includes inter alia, ensuring transparency by registering and maintaining a database of real estate projects and publishing it on its website for public viewing, protection of interest of promoters, allottee and real estate agents, development of environmentally sustainable and affordable housing, rendering advice to the government and ensuring compliance with its Regulations and the Act in general”.

Sec 43 of RERA requires the appropriate government to establish benches of Real Estate Appellate Tribunal in the states and union territories. The orders and decisions of the aforesaid authority can be challenged before  the Appellate Tribunal. Any person aggrieved by the orders or decision of the authority can file an appeal before Tribunal within 60 days from the on which such order or decision is made.


Sec 3(1) of the mandates the registration of a project with the  Real Estate Regulatory Authority. Every real estate property. “No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act”

Sec 4(1) requires the promoters to make application in a prescribed form to the authority for registration of their real estate project. The application shall be accompanied by the details and documents sought under clause (a) to (m) of the sub-section (2) . The Act also requires the authority to establish web based online process for submitting application for registration of a project.


RERA restricts the developers to make any alteration to the lay out plans once it is sanctioned and agreed by the buyer and also approved by the authority. However the alteration can be made with prior consent of the buyer or with previous written consent of the at least two third of the allottees   other  the than promoter.


Various provisions of the Real Estate (  Regulatory and Development ) Act, 2016 provides for the penalties to be imposed on the promoters and the buyers for non-compliance with the act. Where a promoter fails to register the real estate project with the authority, he shall be liable to pay penalty of which may amount to 10% of the total cost of the project.

Further, the act sets up to 3 years of imprisonment to a promoter where he fails to obey and comply with the orders or directions of the authority and kept continuing the aforesaid violation of Sec.3 of the Act. The imprisonment may be coupled with the further penalty which may amount to 10% of the total cost of the real estate project.

RERA also puts penalty on the promoters for furnishing false and misleading information regarding project while applying for registration such project. The penalty under this may amount up to 5% of the total cost of the project as estimated by the authority.

Also if a promoter fails to comply with any orders and directions of the Appellate  Tribunal. He shall be sentenced to imprisonment of up to 3 years or with penalty for per day during which such default continue. However the penalty shall be exceed 10% of the total cost of the project.

Section 67 and 68 of the RERA provides penalties and imprisonment to the allottee for non-compliance and contravention to the provisions of this Act. Where a allottee do not  comply with any order and directions of the authority, in such case he is liable to pay penalty of up to 5% of the cost of the property allotted to him.

On the other hand if a allottee do not comply with any order or direction of the Appellate Tribunal, in such case shall be liable for imprisonment which of up to 1 year or with penalty which shall not exceed 10% of the total cost of the property allotted to him.


While concluding this study I would like say that the Real Estate ( Regulatory and Development ) Act 2016 is one of the great enactment of the legislature. Prior to this act, the buyers were prone to many illegitimate fraudulent practices of the developers and there were many cases of dispute between the buyers and the promoters or developers. The act ensure complete transparency in the buy and selling process a real estate property thus it protects the legitimate interest of the buyers. To a great extent this enactment has restricted the fraudulent acts of the  promotes by creating legitimate check over the process and development of a real estate project. The act also sets penalties for the agents of the promoters who used to escape from their liability prior to this act. Further, this act set the grievance settlement bodies which boosted the very purpose of RERA and ensures the effective enforcement and implementation of the provisions of this act.


Author: Lalit Mohan,
Delhi Metropolitan Education,GGSIPU ( 4th year )

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