The housing and infrastructure demands of the country are mostly met by the real estate sector, which is a key economic pillar. This industry has expanded significantly in recent years, yet despite this, it has largely remained unregulated, lacking in authority, uniformity, and effective consumer protection. The Real Estate (Regulation and Development) Act, 2016 was passed to make significant efforts in this industry. This law was introduced in an effort to make the purchasing process more transparent for consumers, guarantee delivery on time, and safeguard consumers from purchase fraud.


 This act covers not only commercial projects but also residential project. Where a “real estate project” is described as the development of a building, the conversion of an existing building into apartments or a portion of it, or the development of land into apartments or plots for the purpose of selling, and includes common areas, development works.

Registration of Project:

The “Promoter” requires registering the real estate project with the Real Estate Regulatory Authority, which is situated in the planning regions. In the absence of such registration, the promoter of a real estate project is not permitted to invite investors for any real estate project or portion thereof. Such initiatives are made visible to the customer so that they can follow the procedure.

Duties of Promoter:

The act provides comprehensive function and duties of the promoter who are none less than the builder to ensure no unfair practice are done. They are required to provide compensation to the alottee in case of default. They also require maintaining a separate account where the 2/3rd payment made by the alottee would be kept and used for construction purpose. One of the primary functions is to provide the alottee with timely possession of the property.

Protection to Alottee:

Wide protection to alottee i,e; the person to whom the land, building as been allotted vide agreement of sale. Section 19 provides for the right and duties of alottee, thus conferring right to receive information, possession on completion and claim compensation from promoter when not granted possession. The purchasers are protected against developer manipulation since there is now a precise definition of carpet area, making it impossible for builders and developers to calculate it using their own methods.


It creates a Real Estate Regulatory Authority to oversee and advance the real estate industry and also create a system for conflict resolution and the appellate tribunal to consider appeals from the Real Estate Regulatory Authority’s (RERA) judgments, instructions, or orders

Penalty and Punishment:

One of the essential features of this act is that it provides for punishment and penalties in case of default on the part of promoter to adhere with the provision of this act.

Registration process:

Chapter II deals with the registration of the real estate project:

  1. An application is required to be made under sec 4 by the promoter to the authority with the entire prescribed documents.
  2. The authority within 30 days may grant or reject the application.
  3. Once the application is accepted then within 7 days a login id and password is generated for the project.

The validity of registration remains till the period by the Promoter for completion of the real estate project.

Consequences when registration is not done:

According to Section 59, a fine of up to 10% of the project cost may be assessed, in case of non registration of the project, as well as up to 3 years in jail, or both. Further any aggrieved party may file a complaint with the Authority against the Promoter for breaking the rules under section 31 of the RERA legislation.

When registration is not required :

The following real estate projects are exempt from Section 3 of RERA’s registration requirement:

  • Where the Promoter has already received the certificate of completion prior to RERA;
  • Where the land area does not exceed 500 m2 or where the number of apartments does not exceed 8 ;
  •  When only rehabilitation, repair or redevelopment work is done and no marketing, selling or fresh allotment of any flat is involved.


Before RERA property purchase fraud by the real estate agent was covered under Consumer Protection Act. But with the implementation of this act a transparent system has been made to protect consumer, accountability has been created on the promoter and mechanism for speedy grievance Redressal has been set up.

Written by : Advocate Anjali Bablani (D/3376/2016) and Anjali Kumari.

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