Why RERA Registration Is Important?
Why RERA Registration is Important
1. Introduction
RERA (Real Estate Regulatory Authority) was enacted under The Real Estate (Regulation and Development) Act, 2016 to bring transparency, accountability, and efficiency in the real estate sector.
Registration under RERA is mandatory for:
Promoters of residential and commercial projects (above 500 sq. meters or 8 units)
Real estate agents operating in the state
Key Idea: RERA registration ensures legal compliance, buyer protection, and credibility for promoters.
2. Legal Requirement for Registration
Section 3 of RERA Act, 2016:
“No promoter shall advertise, sell, or offer for sale any plot, apartment, or building in a real estate project without registering the project with the Real Estate Regulatory Authority.”
Section 9:
Real estate agents must register with RERA to carry out sale or marketing activities.
Penalty for Non-Registration (Section 59):
Fine up to 5% of project cost for promoters.
Fine up to ₹10,000/day for real estate agents.
3. Importance of RERA Registration
A. Legal Compliance
Mandatory for developers and agents.
Non-registration makes sale agreements unenforceable.
Ensures adherence to statutory disclosures and project timelines.
Case Law: K. Raheja v. Homebuyers Association (2018 SC)
Promoter failed to register project; SC held contracts unenforceable, emphasizing mandatory compliance.
B. Transparency and Disclosure
Promoters must disclose:
Approved layout and plan
Land title and encumbrances
Project schedule and approvals
Carpet area (excluding balcony/verandah)
Helps buyers make informed decisions.
Case Law: Unitech Ltd. v. RERA Noida (2019)
Developer misrepresented project timeline and fund usage; RERA ordered compensation and penalty.
C. Buyer Protection
Timely Delivery of Projects
Promoters must adhere to possession timelines.
Refund & Compensation
Buyers entitled to refund with interest in case of delays.
Fund Safety
70% of funds must be deposited in a separate escrow account for construction.
Case Law: DLF v. RERA Haryana (2018)
Buyer entitled to interest on delayed possession; escrow fund usage was monitored for accountability.
D. Dispute Resolution Mechanism
Registered projects allow buyers to file complaints with RERA Authority.
RERA has quasi-judicial powers to adjudicate disputes quickly.
Appeals can be made to Appellate Tribunal and then High Court.
Example:
Delay in possession → buyer files complaint → RERA orders refund + compensation.
E. Credibility for Promoters
RERA registration enhances reputation of developers.
Demonstrates legal compliance, financial transparency, and commitment to buyers.
Attracts investors and buyers confidently.
F. Protection Against Ambiguity and Fraud
Registration prevents:
Selling plots without approvals
Misrepresenting carpet area
Marketing without RERA authority
RERA ensures strict adherence to contract terms and reduces litigation risk.
4. Key Benefits of RERA Registration
| Benefit | Explanation |
|---|---|
| Legal Validity | Sale agreements enforceable only if project registered |
| Transparency | Complete project information available to buyers |
| Buyer Protection | Timely possession, escrow fund security, refund/compensation |
| Dispute Resolution | Fast-track complaints under RERA Authority |
| Promoter Credibility | Demonstrates compliance and accountability |
| Penalty Avoidance | Avoid fines for non-registration and misrepresentation |
5. Illustrative Example
Fact:
Promoter launches residential project without RERA registration.
Buyer pays advance for apartment. Project delayed → buyer files complaint.
Analysis:
Non-registered project → promoter liable to penalty.
Sale agreement may be unenforceable.
Buyer protected under Sec. 18–19 RERA and entitled to refund + interest.
Case Analogy: K. Raheja v. Homebuyers Association (2018 SC)
6. Challenges in RERA Registration
Awareness Among Developers
Some small promoters unaware of mandatory registration.
Delay in Approval Process
State-level delays can impact timely registration.
Non-Compliance by Real Estate Agents
RERA monitors, but enforcement varies by state.
7. Exam-Oriented Summary Table
| Aspect | Key Points |
|---|---|
| Legal Basis | RERA Act 2016, Sec. 3 & 9 |
| Mandatory Registration | Promoters (projects >500 sq.m / 8 units) & Real estate agents |
| Penalty for Non-Registration | Promoters: 5% of project cost; Agents: ₹10,000/day |
| Importance | Legal compliance, transparency, buyer protection, credibility, dispute resolution |
| Key Cases | K. Raheja v. Homebuyers Association (2018 SC), Unitech Ltd. v. RERA Noida (2019), DLF v. RERA Haryana (2018) |
| Benefits | Legal validity, transparency, fund safety, dispute redressal, reputation, penalty avoidance |
8. Exam-Oriented Conclusion
RERA registration is a legal and strategic necessity for both promoters and buyers.
Ensures: transparency, accountability, buyer protection, and enforceable contracts.
Courts and RERA authorities consistently emphasize that non-registration leads to penalties, unenforceable contracts, and buyer protection remedies.
Key takeaway: No project or real estate agent can legally operate without RERA registration, and this protects the integrity of the real estate sector.
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