RERA & Real EstateRERA एवं रियल एस्टेट — Real Estate (Regulation & Development) Act 2016 — DRERA Delhi
RERA Protections & Real Estate Remedies
Key Changes in Law
| Aspect | Earlier Position | Current Position |
|---|---|---|
| Real estate regulation | No dedicated regulator — builders unchecked, buyers unprotected | RERA 2016: mandatory project registration, 70% escrow, carpet area disclosure, Agreement for Sale mandate, 5-year defect liability, RERA complaint mechanism. |
| Delayed possession remedy | Only civil suit — years of litigation | RERA S.18: fast track — full refund + SBI MCLR+2% interest OR compensation per month. DRERA complaint — 60-day target. |
| Buyer's money protection | No mandatory escrow — builder could divert funds | RERA S.4: 70% of buyer funds in separate escrow account — only for that project's construction. Cannot be diverted. |
| Homebuyer vs insolvent builder | No specific remedy — ordinary creditor in bankruptcy | Pioneer Urban Land (2019 SC): homebuyers = financial creditors under IBC. Can file NCLT insolvency against builder. Class action available. |
| Agreement for sale | No standard format — builders used unfair terms | RERA: standardised Agreement for Sale format. Cannot take >10% without registered agreement. Carpet area must be stated. |
| Defect liability | No statutory liability | RERA S.14(3): 5-year structural defect liability. Builder must repair at own cost within 30 days of complaint. |
Step-by-Step Procedure
Documents Required
Key Points & Limitation
Relevant Statutes
Landmark & Recent Judgments
Recent Developments
Frequently Asked Questions
RERA (Real Estate Regulation and Development Act, 2016) applies to all new real estate projects where: (a) the plot area is more than 500 square metres; or (b) the project has 8 or more apartments/units. In Delhi — DRERA (Delhi Real Estate Regulatory Authority) administers RERA. Key protections: builders must register before selling, 70% escrow for buyer funds, delayed possession = refund + interest, 5-year defect liability, mandatory registered Agreement for Sale. Verify any project on rera.delhi.gov.in before booking.
RERA S.18 gives two options: (1) Exit: full refund of all amounts paid + SBI MCLR+2% interest per annum from each payment date; (2) Stay: continue with the project + compensation per month of delay (typically same interest rate on invested amount). File complaint on DRERA portal (Delhi). Arifur Rahman (2021 SC): this relief is real and enforceable — builder cannot offer token compensation. Adjudicating Officer target: 60-day decision.
RERA S.4: promoters must deposit 70% of all amounts received from buyers in a separate escrow account — for that specific project only. This money can be used only for land cost and construction of that project. Cannot be diverted to other projects or personal use. The 70% escrow prevents fund diversion — a common cause of project delays and builder insolvency. Buyers should ask the builder to show compliance with this requirement.
Not for the same relief simultaneously. Imperia Structures (2020 SC): doctrine of election — choose RERA or Consumer Forum for the same grievance. Once RERA filed — Consumer Forum for same relief not maintainable. IBC (NCLT) is an independent concurrent remedy — can be filed alongside RERA if builder is insolvent. If there are different grievances — different forums may be available for different aspects.
RERA S.14(3): for 5 years from the date of handing over possession — the promoter must rectify any structural defect or quality deficiency at their own cost and within 30 days of the buyer's complaint. Applies to: cracks, leaks, foundation issues, quality of workmanship, materials, fixtures. If promoter fails to rectify — file complaint before RERA Adjudicating Officer. This is a powerful protection that buyers often overlook.
Visit rera.delhi.gov.in — search by project name, promoter name, or RERA registration number. Verify: (a) registration is valid and not lapsed; (b) approved completion date — compare with what builder is promising; (c) approved plan — match with brochure; (d) land documents and encumbrances; (e) quarterly construction update reports filed by builder. Never book an unregistered project — no RERA protection available.
RERA S.2(k): carpet area = net usable floor area of apartment, excluding area under external walls, service shafts, and exclusive balcony/verandah area. Builders must: sell on carpet area basis, state carpet area clearly in agreement, not charge on super built-up area without separate disclosure. If carpet area delivered is less than agreed — buyer entitled to proportionate refund or compensation. One of the most frequently litigated issues before RERA authorities.
No — RERA does not permit unilateral extension of possession date. Extension only valid if: genuine force majeure (act of God, war — strictly construed) OR buyer's written consent. Builder's extension notices are not legally binding on buyers without consent. Buyers can reject extension and file RERA complaint for delayed possession relief. Pandemic-related extensions were addressed by RERA authorities on a case-by-case basis.
Pioneer Urban Land (2019 SC): homebuyers are financial creditors under IBC. You can file an insolvency application before NCLT against the builder if your claim is above ₹1 crore. Class action: 10% of allottees (or 100 allottees — whichever is lower) can file jointly even if individual amounts are below ₹1 crore. NCLT appoints Resolution Professional — resolution plan must address homebuyer claims. Refund claims treated as financial debt — priority over operational creditors.
RERA S.13: maximum 10% of the total project cost can be taken as advance/booking amount without executing a registered Agreement for Sale. Any amount above 10% — a registered Agreement for Sale must first be executed and registered with stamp duty. Kolkata West (2019 SC): any amount above 10% taken without registered agreement — buyer entitled to full refund. Never pay more than 10% without insisting on a registered agreement first.