RERA Act 2016: Home Buyer Rights
Project registration, 70% escrow, carpet-area pricing, delay interest, 5-year defect liability and how to file a complaint.
Updated 27 September 2026 · 17 lenders trackedWhat you need to know
The Real Estate (Regulation and Development) Act, 2016 requires builders to register most projects with the state RERA authority, disclose approvals and timelines, keep buyers’ money in a separate account and compensate buyers for delays and defects. Lenders generally fund under-construction homes only in RERA-registered projects.
Key protections
| Right | What the Act provides |
|---|---|
| Registration | Projects on land over 500 sq m or with more than 8 units must be registered before advertising or selling |
| Escrow | 70% of money collected from buyers kept in a separate account, used only for land and construction cost of that project |
| Carpet area | Price must be based on carpet area (usable area inside walls, excluding external walls, shafts, balcony and open terrace) |
| Advance | Builder cannot take more than 10% of cost before a registered agreement for sale |
| Delay | Buyer can withdraw with full refund plus interest, or stay and get interest for every month of delay (rate under state rules, commonly SBI MCLR + 2%) |
| Defects | Structural defects or poor workmanship reported within 5 years of possession must be fixed free, normally within 30 days |
| Plan changes | No change to sanctioned plans or common areas without buyers’ consent as the Act requires |
| Disclosure | Quarterly updates of construction progress and approvals on the RERA website |
How to file a complaint
- Check registrationSearch the project on your state RERA portal.
- File onlineComplaint before the authority (Sec 31); compensation claims go to the adjudicating officer.
- Hearing & orderAuthorities are meant to decide complaints within 60 days.
- AppealTo the Real Estate Appellate Tribunal within 60 days, then the High Court.
Home loan angle
- Stage-wise disbursal follows the construction progress disclosed on RERA.
- Tripartite agreements (buyer–builder–lender) should match the RERA agreement for sale.
- Pre-EMI during delay is your cost — RERA delay interest can offset it.
Frequently asked questions
Does RERA apply to resale flats?
RERA mainly governs sales by the builder; resale between individuals is outside its scope, though the project’s registration and OC status are still worth checking.
What is the penalty for an unregistered project?
Up to 10% of the estimated project cost, with further penalties and possible imprisonment for continued violation.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.