Why RERA Registration Is Important?

The real estate sector in India has long been associated with uncertainty, delays, and lack of transparency. However, with the introduction of the Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, there has been a significant shift in how property transactions are regulated and conducted. 

RERA registration has emerged as a critical safeguard for buyers, promoters, and real estate agents. But why exactly is RERA registration so important? Let us explore its necessity, legal implications, and the wide-ranging benefits it offers to all stakeholders.

Introduction to RERA Registration

RERA registration is not just a formality; it is a legal necessity for anyone involved in real estate development or sales above a certain threshold. Whether you are a promoter planning a new housing complex, a builder launching a commercial property, or an agent facilitating sales, RERA registration is mandatory for your project or business if:

• The land area exceeds 500 square metres, or
• The number of proposed apartments is more than eight (in all phases combined).

It is also required for real estate agents dealing in RERA-registered properties. This rule applies across India, with each state having its own RERA authority to regulate and enforce the law.

Bringing Transparency to the Real Estate Sector

One of the core aims of RERA is transparency. Earlier, buyers were often left in the dark regarding the true status of projects, ownership details, or completion timelines. With RERA registration, this has changed in the following ways:

Mandatory Disclosure

Promoters are required to submit and update all essential documents related to the project, such as:

• Land ownership papers
• Approved layout and building plans
• Timelines for project completion
• Financial statements
• Details of previous projects

All these documents are made available to the public on the respective state RERA website. As a buyer, you can now access authentic and up-to-date information about the property you are interested in.

Carpet Area Calculation

Under RERA, all sales must be based on the carpet area (actual usable area), not the super built-up area. This ensures that you pay only for what you actually get and removes ambiguity in pricing.

Accountability and Protection for Homebuyers

The real estate sector has seen several cases of delayed possession, sub-standard construction, or even outright fraud. RERA registration has introduced various mechanisms to protect homebuyers:

Escrow Account Mandate

Promoters are now required to deposit at least 70% of the funds collected from buyers into a separate escrow account. This amount can be used only for the construction and land cost of the project. This provision prevents diversion of funds to other projects or personal purposes.

Timely Possession

If the promoter fails to deliver possession on time, the buyer is entitled to compensation. This provision makes the promoter accountable and minimises delays.

Grievance Redressal

Buyers who feel aggrieved by any act of the promoter or agent can approach the RERA authority for quick and effective resolution. The law mandates that complaints be addressed within a specific time frame, providing a faster alternative to regular courts.

Enhancing Credibility and Market Confidence

Legal Validity

RERA registration provides legal authorisation for the promoter or agent to market and sell real estate properties. Dealing with a registered entity assures buyers of regulatory oversight and legal recourse in case of disputes.

Boosting Reputation

For real estate agents and developers, being registered under RERA is a mark of trust and credibility. It differentiates them from unregistered entities, making it easier to win the confidence of buyers and investors.

Access to a Larger Market

Only RERA-registered agents and developers can participate in RERA-approved projects. This opens up more opportunities and business avenues for compliant professionals.

Preventing Unfair Trade Practices

RERA registration aims to root out unfair practices that were previously rampant in the sector. For instance:

• No more false promises or misleading advertisements
• All agreements between buyers and promoters must follow the standard format prescribed by RERA
• Any advance taken from buyers before signing a sale agreement is strictly regulated

By making these practices illegal, RERA registration protects buyers from exploitation.

Legal Consequences of Non-Registration

Not registering a project or real estate agency under RERA has serious legal consequences:

• Fines: A promoter or agent operating without registration is liable to pay up to ₹10,000 per day, which can be as much as 5% of the total project cost.
• Imprisonment: For certain violations, such as repeated non-compliance or fraud, imprisonment up to one year may be imposed.
• Cancellation of Registration: The authority can revoke the registration, effectively banning the promoter or agent from operating in the market.

These penalties act as a strong deterrent, ensuring greater compliance and discipline in the sector.

Who Benefits from RERA Registration?

Homebuyers

• Get transparent, timely, and legally protected transactions
• Access to authentic project details online
• Legal recourse for grievances

Promoters/Developers

• Can market and advertise legally
• Earn higher credibility in the market
• Attract more buyers and investors

Real Estate Agents

• Are recognised as professionals by law
• Can deal in a wider range of properties
• Stand out in a crowded market

Exemptions: Projects Not Required to Register

While RERA aims for wide coverage, certain projects are exempt from registration, such as:

• Projects on land area not exceeding 500 square metres or not more than eight apartments
• Renovation, repair, or re-development projects not involving new sales or marketing
• Projects that received a completion certificate before RERA’s commencement

However, buyers should be cautious while dealing in such projects, as RERA’s protections may not be available.

RERA Registration Process: An Overview

Understanding why RERA registration is important also involves knowing how it is obtained:

1. Filing Application: The promoter/agent must apply with all required documents and prescribed fees to the state RERA authority.
2. Submission of Documents: Identity proofs, legal ownership papers, layout plans, financial statements, and more must be submitted.
3. Verification: The authority scrutinises the application and documents.
4. Grant of Registration: Upon approval, a unique registration number is issued, which must be mentioned in all advertisements and documents.

The process is transparent and uniform, ensuring only genuine and qualified entities enter the market.

Conclusion

RERA registration is not just a legal obligation; it is a cornerstone of trust, safety, and fairness in Indian real estate. Whether you are a buyer, promoter, or agent, complying with RERA provides you with legal protection, market credibility, and peace of mind.

In an era where property investments are often life’s biggest financial decision, RERA registration is your most reliable safeguard. It empowers you with information, gives you legal remedies, and ensures you are not left at the mercy of unscrupulous players. In today’s Indian real estate landscape, insisting on RERA registration is the smartest choice you can make.