What are the Objectives of RERA?
Breakdown of the objectives of RERA (Real Estate Regulatory Authority) as established under the Real Estate (Regulation and Development) Act, 2016:
🎯 Objectives of RERA
| # | Objective | Explanation |
|---|---|---|
| 1️⃣ | Protect Homebuyers | Safeguard buyers from fraud, delays, and false promises made by developers. |
| 2️⃣ | Promote Transparency | Ensure disclosure of all project-related information, including approvals, plans, timelines, etc. |
| 3️⃣ | Ensure Accountability | Hold builders accountable for what they promise — especially regarding project timelines, quality, and specifications. |
| 4️⃣ | Standardize Practices | Introduce uniform procedures and standards across the real estate sector. |
| 5️⃣ | Boost Investor Confidence | Create a trustworthy environment for investors by regulating the sector. |
| 6️⃣ | Establish Adjudication Mechanism | Set up fast-track dispute resolution through RERA Authorities and Appellate Tribunals. |
| 7️⃣ | Reduce Project Delays | Mandate timelines and penalize delays to prevent indefinite postponements. |
| 8️⃣ | Regulate Real Estate Agents | Ensure that brokers and agents are registered and follow ethical practices. |
| 9️⃣ | Create a Centralized Database | Provide easy public access to project details via official RERA portals. |
| 🔟 | Promote Good Governance | Encourage fair play, efficiency, and professionalism in the real estate market. |
🏡 Summary
RERA's ultimate aim is to make 🔹 Objectives of RERA (Real Estate Regulation and Development Act, 2016)
1. Introduction
The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted to regulate the real estate sector in India and protect the interests of homebuyers.
Real estate sector in India has traditionally faced problems like project delays, lack of transparency, misrepresentation of project details, and poor quality of construction.
RERA aims to bring transparency, accountability, and efficiency to real estate transactions.
2. Main Objectives of RERA
Objective 1: Protect Homebuyers’ Interests
Ensure buyers are not misled by builders or developers.
Promote fair practices, such as correct disclosure of:
Carpet area of apartments
Project approvals and plans
Schedule of completion and delivery
Case Law:
Laxmi Narayan Builders v. RERA Maharashtra (2019) – RERA held the builder liable for delayed delivery and misrepresentation, protecting homebuyers’ interest.
Objective 2: Ensure Transparency in Real Estate Transactions
Developers must register projects and submit detailed information, including:
Project layout, plans, and specifications
Status of approvals from authorities
Financial details, including allocation of funds to project
Prevents fraudulent practices, such as selling more units than approved or diverting funds.
Case Law:
R.K. Developers v. RERA Delhi HC (2020) – Authority emphasized strict adherence to approved plans and disclosure, holding builder accountable for misrepresentation.
Objective 3: Promote Timely Project Completion
Developers must complete projects within promised timelines.
Mandates use of escrow accounts to ensure funds collected from buyers are used only for construction of the specific project.
Penalties: Delay leads to interest payments, compensation, or refund to buyers.
Case Law:
RERA Maharashtra v. Laxmi Narayan Builders (2019) – Builder ordered to refund buyers with interest due to project delay.
Objective 4: Establish Regulatory Authority and Dispute Resolution Mechanism
Creation of State Real Estate Regulatory Authority (RERA Authority):
Grants registration
Monitors compliance
Hears complaints from buyers and developers
Creation of Appellate Tribunal to hear appeals against Authority orders.
Provides speedy dispute resolution compared to traditional civil litigation.
Case Law:
M/s ABC Developers v. Appellate Tribunal (2021) – Tribunal upheld revocation of registration due to non-compliance, demonstrating functioning of RERA dispute resolution.
Objective 5: Encourage Fair Practices and Accountability of Promoters
Developers are required to:
Avoid misrepresentation of project details
Use funds collected for construction only
Rectify structural defects for 5 years after possession
Promotes professionalism and accountability in real estate sector.
Case Law:
R.K. Developers v. RERA Delhi HC (2020) – Authority revoked registration for violating conditions, holding builder accountable.
Objective 6: Standardization and Consumer Confidence
Introduces standard definitions, such as carpet area, saleable area, and timelines.
Promotes buyer confidence and encourages investment in real estate.
Case Law:
Lodha v. Rustomjee Developers (2018) – Court recognized RERA as a statutory framework ensuring buyer protection, increasing confidence in real estate sector.
Objective 7: Facilitate Real Estate Sector Growth
By reducing disputes and enhancing transparency, RERA encourages developers to adopt ethical practices.
Leads to sustainable growth of organized real estate sector.
3. Salient Features Supporting Objectives
Feature Purpose Project Registration Ensures transparency and buyer awareness Escrow Account Funds used only for construction; timely delivery Mandatory Disclosure Carpet area, approvals, status of project Penalty for Non-Compliance Promotes accountability Buyers’ Complaints Mechanism Speedy resolution of disputes Structural Defects Liability Ensures quality assurance post-possession 4. Illustrative Case Example
Promoter promises possession by Dec 2022; delays until Dec 2024; misrepresents project approvals.
Buyer files complaint under RERA.
Authority orders:
Refund of payments collected
Interest for delay
Compensation for loss of use
Promoter held accountable, illustrating protection of buyers, transparency, and enforcement of obligations.
5. Summary
RERA Objectives:
Protect homebuyers’ interest
Ensure transparency in real estate transactions
Promote timely completion of projects
Establish regulatory authority and dispute resolution
Encourage accountability of promoters
Standardize norms and build consumer confidence
Facilitate growth of real estate sector
Case Law References:
Laxmi Narayan Builders v. RERA Maharashtra (2019) – delay + misrepresentation
R.K. Developers v. RERA Delhi HC (2020) – violation of registration conditions
M/s ABC Developers v. Appellate Tribunal (2021) – revocation upheld
Lodha v. Rustomjee Developers (2018) – statutory protection for buyers
Takeaway: RERA ensures a transparent, accountable, and buyer-friendly real estate sector, protecting consumers and encouraging ethical practices by promoters.the real estate sector more buyer-friendly, transparent, well-regulated, and efficient, while also balancing the interests of developers and agents. Do write to us if you need any further assistance.
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