RERA Act Explained: How It Protects Homebuyers from Builder Delays?
- The Legal Watch
- Jun 13
- 3 min read
Buying a home is often the biggest investment of your life, but builder delays can turn this dream into a nightmare. The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced to protect homebuyers from unfair practices and endless project delays. This guide explains how RERA safeguards your rights as a homebuyer and what you can do if your builder misses deadlines.
What is RERA?
The Real Estate Regulatory Authority (RERA) is a government body established to:
✅ Regulate real estate developers
✅ Ensure timely project completion
✅ Protect homebuyers from fraud and delays
✅ Bring transparency to real estate transactions
Every state in India has its own RERA authority to enforce these rules.
How RERA Protects Homebuyers from Builder Delays
1. Mandatory Project Registration
Builders must register projects (over 500 sqm or 8 apartments) with RERA before selling.
No pre-launch sales allowed without approvals.
Penalty for non-registration: Up to 10% of project cost or even imprisonment.
Impact: Stops builders from collecting money for fake or unapproved projects.
2. Strict Timeline Enforcement
Builders must declare completion date at registration.
Delays beyond this date require valid reasons (natural disasters, court orders).
No indefinite delays – Builder must compensate buyers if delayed without cause.
Compensation Rule:
If the builder delays possession, they must pay 10% interest per year to the buyer.
If the buyer wants to withdraw, the builder must refund the full amount + 10% interest.
3. 70% Funds Locked in Escrow Account
Builders must deposit 70% of project funds in a separate bank account.
Money can only be used for construction of that project (not diverted to other ventures).
Prevents fund misuse that leads to stalled projects.
4. No False Promises or Misleading Ads
Builder must show approved plans, layout, and amenities in brochures.
Cannot advertise features that don’t exist (e.g., "swimming pool" if not approved).
If promises are not fulfilled, buyers can claim compensation.
5. Quarterly Updates on Construction Progress
Builders must upload real-time updates on RERA website:
% of work completed
Funds used
Expected delays (if any)
Buyers can track progress transparently.
6. Defect Liability Period (5 Years)
After possession, if major defects are found (structural issues, plumbing, electrical faults), the builder must fix them for free within 5 years.
If ignored, buyers can complain to RERA for compensation.
7. Right to Cancel & Refund
If the builder delays beyond 1 year of promised date, buyers can:
Wait & claim 10% interest for each delayed year.
Cancel booking & get full refund + interest.
What to Do If Your Builder Delays Possession?
Step 1: Check RERA Website
Verify if the project is RERA-registered (search on your state’s RERA portal).
Check the promised completion date vs. current status.
Step 2: Send a Legal Notice
Demand possession or compensation in writing.
Give builder 30 days to respond.
Step 3: File a Complaint with RERA
Visit your state’s RERA website.
Submit complaint with:
Copy of agreement
Payment receipts
Builder’s delay proof
RERA will summon the builder and order:
Compensation
Refund (if requested)
Timeline for completion
Step 4: Escalate to Consumer Court (If Needed)
If RERA doesn’t resolve, file in Consumer Forum (NCDRC).
Can claim higher compensation for mental harassment.
Key Takeaways for Homebuyers
✔ Always buy RERA-registered projects (check state portal).
✔ Track construction updates quarterly.
✔ If delayed, first demand compensation from builder.
✔ File RERA complaint within 1 year of delay.
✔ Never settle for verbal promises – get everything in writing.
🚀 Final Advice
RERA gives strong protection, but you must act if the builder delays. Don’t wait indefinitely – use your legal rights to get your dream home or your money back!
Have a delayed project? Share your experience in comments! 🏗️⚖️
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