Has RERA been able to achieve what it was meant for?


Reflecting upon the performance of the Real Estate (Regulation and Development) Act 2016


Numerous home buyers were relieved upon the implementation of the RERA in 2016, who would otherwise have been concerned about stalled real estate projects and other related scams. To keep homebuyers’ faith in the real estate sector at that time, a strong regulatory system was essential.

Once the Act was implemented, builders involved in fraudulent activities were put under the scanner. Even though the RERA Act increased the number of compliances for trustworthy and renowned builders, it helped cement and enhance their credibility before potential and existing buyers.

To redress and solve home buyers’ grievances, RERA has prepared a robust grievance redressal process. A state RERA authority or appellate RERA tribunal can hear an issue or complaint, depending on the matter at hand.

Both the home buyers and investors breathed easy when RERA was enacted. The act enforced strict advertising norms preventing developers from making false commitments. Home buyers’ trust was boosted manifold as the level of transparency in-home price rationalisation and “carpet area” enumeration increased.

The greatest achievement of the RERA act has been the improved level of transparency and accountability in the sector. The standardised norms as per the act mention Dos and Don’ts for all stakeholders of the sector. For instance, any defaults in project construction can be attributed to the promoter of the project.

Any structural anomalies, quality issues, services or failure in fulfilling any commitments as per the agreement of sale can be attributed to the developer five years from the date of handover to the buyer. The developer shall rectify such errors without any monetary burden on the home buyers.

Failure to correct such defects may entitle the allottees to have rightful compensation prescribed under RERA Act. 

Since escrow accounts had to be set up (with 70% of the total accrued funds), developers were no longer free to divert the funds to other projects. This ensured timely project completion. 

RERA also requires developers to provide a tentative delivery date for the handover of the project, failing which may impose penalties on the developer.

Projects registered under RERA and cases disposed of

As of November 2021, nearly 71,307 projects have been registered under RERA. In terms of several registered projects, Maharashtra leads with 31,664, followed by Gujarat with 9,272 and Karnataka with 4,497. According to an analysis conducted by Anarock, UP and Haryana disposed of the most cases, with a share of about 61%.

About 78,903 cases of grievances redressal of homebuyers have been disposed of so far by various state and UT regulatory authorities. In UP alone 30,990 cases were disposed of, followed by Haryana with 16,864 as per data released by the Ministry of Housing and Urban Affairs. 

PropUsers.com spoke to a buyer, Mr Zafar, who invested in a residential real estate project in Ghaziabad but did not get the possession even after seven years of booking. He filed a case against the builder under RERA in February 2020 and received compensation in July 2021. “For me, it was a very smooth process. I filed a case under RERA in  February 2020 and got a verdict in my favour for the delay as compensation in October 2020 when the builder did not respond RERA issued an executive order in February and I got my delay compensation cheque in July 2021,” he tells. 

All states and UTs except Nagaland have notified their rules under RERA. Jammu & Kashmir, Ladakh, Meghalaya, Sikkim and West Bengal have already notified their rules but are yet to set up their authorities.  

The Supreme Court stated that the Real Estate (Regulation & Development) Act, 2016 applies to all real estate projects that were underway and were not completed when the law came into effect. RERA is now expected to extend its ambit to include under-construction projects in states that have diluted the provisions.

Loopholes in the Act

No Strict Deadlines

The central government has been easy on the state governments instead of drafting RERA rules and regulations. All 14 states that met the deadline have diluted certain rules in most of their laws. In this way, the goal of strengthening the industry was defeated to some extent.

No Single Window Clearance Provision

Even though the real estate industry has asked for a single-window clearance framework for a very long time, the Act does not address the establishment of one.

Delay Due to Approvals by Government Agencies Attributed to Developer 

The developer fraternity feels the heat of a few RERA guidelines that only imposes penalties on developers for untimely project deliveries. However, developers attribute the delay caused in the projects to the procedure of obtaining clearances and approvals from authorities. As of now, there are 50 irregular approvals that developers need to acquire before kicking off a project and usually, it takes about 1-2 years to obtain these approvals. The act does not hold government authorities accountable for the delays but imposes entire responsibility on developers. 

More Clarity Needed on Defining ‘Net UsableFloor Area’

For buildings that are under construction, builders may have a hard time selling units based on carpet area. Several conflicts have arisen in some places due to the super built-up area. As a result, a few exceptions are required to this effect to settle the conflicts. Further clarification is needed by defining the term ‘net usable floor area’ in the act.


The real estate industry found it difficult to absorb the enabling regulations of the Act at first, but over the years they have helped both buyers and developers. It is expected that the RERA Act will continue to evolve in the coming years with the addition of more enabling provisions.

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