{"id":6880,"date":"2020-04-03T02:16:45","date_gmt":"2020-04-03T02:16:45","guid":{"rendered":"https:\/\/www.commercialproperty.review\/?p=6880"},"modified":"2026-10-17T07:44:48","modified_gmt":"2026-10-17T07:44:48","slug":"rera-loopholes","status":"publish","type":"post","link":"https:\/\/www.commercialproperty.review\/index.php\/2020\/04\/03\/rera-loopholes\/","title":{"rendered":"RERA LOOPHOLES"},"content":{"rendered":"

<\/strong><\/span><\/p>\n

<\/div>\n

Article by Vikas Sharma<\/strong><\/p>\n

Real Estate Regulation (and Development) Act, 2016, or RERA was introduced by the Indian National Congress in 2013. The full form of RERA is the Real Estate Regulatory Authority that aims at the protection of home purchasers and sellers and boosting the real estate investments. On March 10, 2016, the bill of this Parliament of India Act was passed by the Rajya Sabha (Upper House). RERA is a progressive Act in the Indian real estate sector. It was effective from May 1, 2016. It contains various pro-buyer provisions and the establishment of regulatory authority for the settlement of grievances. The Act was expected to increase investor confidence in housing projects leading to increased home purchases.<\/p>\n

Rules of RERA Rules<\/strong>
\nThe RERA ( Real Estate Regulation and Development Act), 2016 under Section 84 proposed that the State Governments will set the rules to carry out the provisions associated with the Act within a period of six months from its date of commencement.<\/p>\n

Through Housing and Urban Poverty Alleviation (HUPA) Ministery, the center released the general rules of the RERA Act, 2016 on October 31, 2016. All these rules apply to the Union Territories like Andaman & Nicobar Islands, Chandigarh, Daman and Diu, National Capital Territory of Delhi, Dadra & Nagar Haveli and Lakshadweep.<\/p>\n

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These were the points covered under Real Estate Regulation and Development (RERA) Act, 2016<\/strong>
\n1.<\/strong> Registration: Section 3 requires promoters to register covered projects before marketing or selling them; statutory exemptions apply.
\n2.<\/strong> Funds and advances: Section 4 requires 70% of allottee receipts in a separate scheduled-bank account for land and construction, with regulated withdrawals. Section 13 requires a written, registered agreement for sale before collecting more than 10%.
\n3.<\/strong> Defects: Section 14(3) covers specified defects reported within five years of possession handover. Covered defects require free rectification within thirty days; failure can lead to compensation.
\n4.<\/strong> Delay: Under Section 18(1), qualifying non-delivery can support withdrawal and repayment with prescribed interest and applicable compensation. Buyers who stay receive prescribed interest for each month of delay until possession.<\/p>\n

Primary legal reference:<\/strong> Real Estate (Regulation and Development) Act, 2016, Sections 2, 3, 4, 6, 13, 14, 18, 32 and 84, India Code<\/a>.
\n5.<\/strong> Alterations: Section 14 distinguishes individual-unit consent, limited minor-change exceptions and written consent from at least two-thirds of allottees for specified building or common-area changes.<\/p>\n

The RERA Act (Real Estate Regulation and Development Act), 2016 is all-encompassing and aims to make the real estate sector a fairground for all stakeholders including agents, buyers, developers, and promoters. However, despite being a well-drafted Act, there are many loopholes in RERA that have to be addressed on a priority basis. Some of the shortcomings in RERA Act are as follows:<\/span><\/p>\n

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1. Approval delays and accountability<\/h2>\n

Approval coordination remains an implementation concern. Section 32(b) addresses recommendations for time-bound single-window approvals; it does not itself create every local clearance process.<\/p>\n

2. Rule-making deadlines and implementation<\/h2>\n

Section 84(1) specifies a six-month rule-making period. Claims about current non-compliance or dilution in individual states require the relevant notifications and evidence.<\/p>\n

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3. Single-window clearance: recommendations and delivery<\/h2>\n

Section 32(b) expressly mentions a single-window system. The practical question is whether local approvals are coordinated effectively.<\/p>\n

4. Carpet area and sale disclosures<\/h2>\n

Section 2(k) defines carpet area. Buyers should compare the agreement and area disclosures, rather than treat older super-built-up marketing figures as equivalent.<\/p>\n

5. Check current state-specific rules<\/h2>\n

Registration forms, fees and compliance procedures should be checked against the applicable authority\u2019s current rules. The earlier blanket claims about named states are not supported here by dated notifications.<\/p>\n

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6. Separate-account safeguards and enforcement<\/h2>\n

Certification and audit requirements need effective enforcement. This is a governance concern; payment by a developer alone does not establish that a professional\u2019s certificate is false.<\/p>\n

7. Funding and construction costs<\/h2>\n

Project funding costs can affect prices, but any claimed increase needs project-specific evidence. A separate-account requirement does not by itself prove that every buyer will pay more.<\/p>\n

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8. Possession dates and delay remedies<\/h2>\n

Check the registered project timeline and agreement. RERA does not create blanket permission for unlimited delay; extensions and delay remedies depend on the applicable provisions and facts.<\/p>\n

RERA Act is a constructive change in the real estate industry by increasing the accountability of the builders but the Act cannot be executed effectively until the inherent loopholes of the law are plugged immediately. To conclude, many procedures and branches will have to be updated along with the up-gradation of land records and framework. Conflicts may arise due to the interest of politicians who have a major stake in the real estate industry which might be a major roadblock. Any type of shortcomings in real estate laws can also disturb the market competition in the real estate sector that will affect the customers and economic growth rate of the nation.<\/p>\n

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<\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by Vikas Sharma Real Estate Regulation (and Development) Act, 2016, or RERA was introduced by the Indian National Congress in 2013. The full form of RERA is the Real Estate Regulatory Authority that aims at the protection of home purchasers and sellers and boosting the real estate investments. On March 10, 2016, the bill […]<\/p>\n","protected":false},"author":1,"featured_media":6884,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[604],"tags":[],"gp_videos":[],"class_list":["post-6880","post","type-post","status-publish","format-standard","has-post-thumbnail","category-knowledge-base"],"yoast_head":"\nRERA Loopholes: Buyer Protection & Implementation Concerns<\/title>\n<meta name=\"description\" content=\"Read our discussion of RERA, including buyer protection, project registration, disclosures and concerns about implementation and enforcement in real estate.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialproperty.review\/index.php\/2020\/04\/03\/rera-loopholes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" 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