Enacted by Parliament in 2016, the Real Estate (Regulation and Development) Act, or RERA, was introduced to bring greater transparency, accountability and efficiency to India's real estate sector while protecting the interests of homebuyers.Under the law, residential and commercial projects exceeding 500 square metres of land area or comprising more than eight apartments must be registered with the Real Estate Regulatory Authority (RERA) of the respective state before they can be marketed or sold. Developers are required to disclose key project details, including approvals, layout plans and completion timelines, while the Act provides for the establishment of a Real Estate Regulatory Authority in each state and Union Territory to ensure compliance. These authorities are responsible for overseeing real estate projects, enforcing regulatory requirements and safeguarding the interests of homebuyers.RERA addressed a long-standing accountability gap in the sector, where project delays, fund diversion and uncertainty over completion often left homebuyers facing financial losses. The Act requires developers to deposit 70% of the amounts realised from buyers in a separate bank account that can be used only for land and construction costs of the project. It also gives buyers the right to seek refunds, claim interest for delays and file complaints before the designated authority. In addition, the law provides for penalties on developers and real estate agents for non-compliance and establishes dedicated mechanisms for the speedy resolution of disputes.Here are answers to some of the most frequently asked questions about RERA, as provided by the ministry of housing and urban affairs:Q1: Does the definition of 'promoter' cover all promoters in a joint development?A: Yes. Where the developer and the seller are different persons, both are deemed promoters under the Act and are jointly liable for all obligations.Q2: Is the rate of interest for default the same for both the promoter and the allottee?A: Yes. The law mandates an identical rate of interest for defaults by either party. The exact rate is determined by the respective state government through its rules.Q3: Does 'advertisement' cover emails and SMS?A: Yes. The Act defines advertisement broadly to include every medium used to solicit a sale including emails, SMS, and the issuance of a prospectus.Q4: Does the term 'allottee' extend to secondary sales?A: Yes. Anyone who acquires an apartment or plot through transfer or resale qualifies as an allottee. However, a person who takes the property on rent does not.Q5: What if a state issues only one certificate covering both occupancy and completion?A: It suffices. Both definitions under the Act use the phrase "by whatever name called," meaning a single certificate that covers both aspects meets the legal requirement.Q6: What is the difference between a completion certificate and an occupancy certificate?A: A completion certificate confirms that the entire project has been built as per the sanctioned plan and approved specifications. An occupancy certificate confirms that the apartment or building is habitable and has access to basic civic infrastructure water, sanitation, and electricity.Q7: Why does the Act define 'estimated cost of the real estate project'?A: The definition determines the base for calculating penalties. Under Chapter VIII of the Act, any violation by a promoter attracts penalties that are computed as a proportion of the estimated project cost, which includes land cost, taxes, cess, and development charges.Q8: Are real estate agents covered under the Act? Do web portals selling apartments also fall under it?A: Yes. The Act defines 'real estate agents' broadly to cover all forms of agencies involved in the sale and purchase of registered projects. Web portals engaged in selling plots or apartments are explicitly included and must comply with all duties and responsibilities prescribed under the Act and its rules and regulations.Q9: Are Development Authorities and Urban Local Bodies required to register their entire planning areas as a real estate project under RERA?A: No. While the Act defines 'real estate project' to include development of buildings, apartments, or plots for the purpose of sale along with common areas, development works, and appurtenant rights an entire planning area under a Development Authority or Urban Local Body cannot be treated as a single real estate project. A planning area may contain multiple individual real estate projects, each of which must be registered separately.Q10: What are the terms and conditions for extension of project registration?A: The application form, fees, and terms for extension of registration are not fixed under the Act itself. They are prescribed by the respective RERA Authority through its regulations.Q11: Can the registration of a project be revoked?A: Yes. Under Section 7, the Authority holds the power to revoke a project's registration for specified violations. However, revocation is treated as a last resort. It can only be ordered after giving the promoter a reasonable opportunity of being heard.Q12: Does the Act cover real estate agents? What are their duties?A: Yes. Under Section 9, every real estate agent involved in selling a registered project must register with the Authority. Details of registration, fees, validity, and renewal are governed by the Rules. Section 10 lays out their specific functions and duties.Q13: What are a promoter's key responsibilities after project registration?A: Under Section 11, the promoter must update all project information as originally submitted at the time of application on the Authority's website. Certain information must be updated on a quarterly basis to help buyers make informed decisions. The promoter is also required to fulfil all responsibilities prescribed under Section 11 at every stage of development and upon project completion.Q14: What disclosures must a promoter make on the authority's website?A: Section 4 and section 11 provide for a detailed list of disclosures on the website of the Authority by the promoter for public viewing. Also, the detailed list is required to be specified in the Rules.Q15: What are a promoter's obligations regarding refund and compensation to the allottee?A: Under Section 18, if a promoter fails to hand over possession of a booked unit, the allottee has two options. First, the allottee may withdraw from the project and claim a full refund along with interest and compensation. Second, if the allottee chooses to stay with the project, they are entitled to interest for every month of delay until possession is handed over, and compensation in circumstances specified under the section.Q16: What are the rights of allottees under the Act?A: Section 19 grants allottees the following rights:To obtain information regarding sanctioned plans, layout plans, and the project completion schedule.To claim timely possession of the booked unit as per the terms of the agreement.In case of delay or breach by the promoter, to either withdraw and claim a full refund with interest and compensation, or continue with the project and receive monthly interest for the period of delay.To receive all necessary documents and plans related to the property after taking possession.Q17: What are the duties of allottees under the Act?A: Section 19 also prescribes the following duties for allottees:To make timely payments towards the apartment or plot as agreed.To pay interest in case of any delay in payments.To take possession of the unit within the stipulated time.To participate in the formation of the residents' association.To participate in the registration of the conveyance deed.Q18: Is the promoter responsible for the accuracy of advertisements and prospectuses?A: Yes. Under Section 12, the promoter is fully liable for the truthfulness of all information contained in any advertisement or prospectus. If any person suffers a loss on account of false information, the promoter is obligated to compensate that person for the loss.Q19: Can a promoter collect booking amounts before signing an Agreement for Sale?A: No. Section 13 prohibits a promoter from collecting more than 10 per cent of the apartment or plot cost as advance payment or application fees without first executing a formal Agreement for Sale with the allottee.Q20: What is the Agreement for sale and is it binding?A: The Agreement for Sale is a standardised agreement prescribed by the appropriate government through Rules under Section 13(2). It is binding on both the promoter and the allottee. While internal flexibility exists for promoters to include additional provisions, no term in the agreement can be contrary to the Act or its Rules.Q21: Can a promoter alter sanctioned plans after they have been approved and disclosed?A: Only to a limited extent. Under Section 14, minor additions or alterations can be made with competent authority approval and disclosure to allottees. For major modifications, prior consent of at least two-thirds of the allottees is mandatory. In calculating this two-thirds, apartments held by the promoter are excluded, and each allottee regardless of how many apartments they hold is entitled to only one vote.Q22: What is the penalty for failing to register a project under the Act?A: Under Section 59, a promoter who fails to register a project is liable to a penalty of up to 10 per cent of the estimated project cost. If the promoter persistently defaults or refuses to comply with the Authority's directions on registration, the penalty escalates to an additional ten percent of the estimated project cost, or imprisonment of up to three years, or both.Q23: What is the penalty for violation of Section 4, which governs registration applications?A: Under Section 60, any default by the promoter in matters covered under Section 4 attracts a penalty of up to 5 per cent of the estimated cost of the real estate project.Q24: What is the penalty for violation of other provisions of the Act?A: Under Section 61, if a promoter defaults on any other provision of the Act or the rules and regulations framed thereunder, they are liable to a penalty of up to five percent of the estimated project cost.Q25: What is the penalty for non-compliance with orders of the Authority?A: Under Section 63, a promoter who fails to comply with any order of the Authority is liable to a daily penalty for every day of continued default. This penalty can cumulatively extend up to five percent of the estimated cost of the real estate project.The Act lays down clear rules for developers, agents, and buyers, and supports them with penalties for non-compliance. For anyone buying property in India today, understanding RERA is important.Ready to Make a Smarter Property Decision? Build Your Legacy with TOI Homes.