RERA Decoded: The hidden rules every Indian homebuyer must know before signing anything

You’ve worked hard for years, saved every penny and finally you’re ready to buy your first home. Your heart races as you look at property brochures and imagine your family in that perfect apartment. Then reality hits. The seller throws terms like RERA registration, escrow accounts and carpet area at you. Your confidence shakes. What if you sign something that costs you money? What if the builder takes your cash and disappears?

This is exactly where RERA comes in to protect you.

Understanding RERA: Your shield in the property market

RERA stands for the Real Estate Regulation and Development Act, 2016. Think of it as a rulebook that forces developers and builders to play fair with you. Before RERA existed, buyers had no protection. Developers delayed projects for years. They used your money for other projects. They misled you about property sizes and specifications. People lost everything.

Then the government said enough. They created RERA to shift power from builders to homebuyers like you. Today, every state in India has its own RERA authority that watches over real estate transactions. These authorities have teeth. They can penalize builders, order refunds and even throw the worst ones in jail.

From April 2025, RERA became even stricter. Builders cannot even advertise a project without first getting a compliance certificate from RERA. This means no fake projects. No clever tricks. No empty promises.

The six hidden rules that protect your investment

When you sit across from a builder with your check-book ready, these are the six rules protecting you:

Rule one: The 70 per cent money rule

Here is what happens to your money. The moment you pay the builder for your apartment, 70 per cent of that payment goes into a separate bank account called an escrow account. The builder cannot touch this money. It is locked away specifically for building your project. The remaining 30 per cent helps the builder pay for land, approvals and other project costs.

Why does this matter? Before RERA, builders collected money from 100 buyers. Then they took those funds and invested them in another project across the city. Your project remained stuck. Your money disappeared. The escrow rule stops this completely. Your money can only be used for your building.

Rule two: The 10 per cent advance cap

Before you sign the formal agreement, the builder can ask for only 10 per cent of the total property price. That is it. Not 15 per cent. Not 20 per cent. Only 10 per cent.

This protects you from situations where you pay big amounts and then the builder changes their mind or disappears. After you sign the formal agreement, only then can you pay the remaining 90 per cent according to a schedule.

Rule three: Carpet area, not built-up area

Builders used to play games with measurements. They would tell you that you are buying 1000 square feet. But 400 square feet was outside walls, common corridors and unusable space. You actually got only 600 square feet of real living space.

RERA fixed this. Now builders must sell based on carpet area. The carpet area is only the actual living space. Your bedroom, kitchen, bathroom and living room. The outer walls do not count. The hallways outside your apartment do not count. You get what you pay for.

Rule three: Carpet area, not built-up area

Builders used to play games with measurements. They would tell you that you are buying 1000 square feet. But 400 square feet was outside walls, common corridors and unusable space. You actually got only 600 square feet of real living space.

RERA fixed this. Now builders must sell based on carpet area. The carpet area is only the actual living space. Your bedroom, kitchen, bathroom and living room. The outer walls do not count. The hallways outside your apartment do not count. You get what you pay for.

Rule four: Builders must update you every quarter

Three months. That is how often builders must update their projects on the RERA website. You can log in anytime and see how much construction is complete. You can see which government approvals they have received. You can check if there are any court cases against them.

This transparency stops builders from lying about progress. Satellite photos and site inspections back up their reports. They cannot claim the building is 50 per cent complete when it is actually 20 per cent done.

Rule five: Five-year defect responsibility

Your building has problems after you move in. The tiles are cracked. The plumbing leaks. The walls have cracks. Before RERA, tough luck. You own the building now.

Under RERA, the builder must fix everything for five years. Free of cost. If they refuse, you can take them to RERA and get compensation. These five years are called the defect liability period. It is your insurance against poor construction.

Rule six: Delay compensation is automatic

The builder promised to hand over your apartment by March 2025. Now it is December 2025 and the building is still incomplete. You can claim compensation. The amount equals the SBI home loan rate plus 2 per cent per month for every month of delay. So if SBI rates are at 8 per cent, you get 10 per cent interest per month.

You do not need to ask for this. It is automatic. The builder owes it to you.

How to verify your project is truly RERA registered

Do not trust what the builder tells you verbally. Verification is simple and takes five minutes.

Step one: Open the official RERA website of your state. If you are buying in Delhi, search for Delhi RERA. In Mumbai, search MahaRERA. Each state has its own portal.

Step two: Look for the project search option on the homepage.

Step three: Enter your project name or the RERA registration number. The builder should give you this number. It looks like a unique code.

Step four: Hit search. The portal shows you everything about the project. The owner’s name. The completion date is promised. How much land is involved? Which approvals are pending?

Step five: Check for any litigation. The portal shows if anyone has filed complaints against this builder.

Step six: Download and save all documents. Print the RERA registration certificate.

This process takes 10 minutes. It saves you from fake projects and dishonest builders.

Five mistakes homebuyers make even today

People still make preventable mistakes:

1. Paying an advance before reading the agreement – You give money before seeing the formal contract. The builder then changes terms. By then, you are stuck.
2. Confusing carpet area with built-up area – The brochure says 1200 square feet. Only 800 of that is actually yours to live in. The rest is walls and common space.
3. Trusting only marketing materials – Brochures show fancy renderings that may never become reality. Always verify on RERA websites instead.
4. Ignoring quarterly updates – Builders post project status every quarter. You ignore them. Later, you discover the project is nowhere near completion.
5. Not checking the builder’s history – A builder with 10 delayed projects in the past will likely delay this one too. Check their track record on RERA portals before committing your money.

What rights do you actually have

RERA gives you rights that your parents never had:

You can get your full money back if the project is abandoned or the builder cannot complete it. You receive compensation for delays without going to court. The compensation is calculated automatically. You can complain to RERA and get a decision within 60 days. You can appeal if you disagree. You can force the builder to fix construction defects free of cost for five years.

These rights are not optional. The builder cannot remove them from the agreement. They exist whether the builder likes it or not.

Updates you need to know

This year brought major changes that make your protection even stronger.

All state RERA websites now connect to one national portal. You can check a builder’s history across multiple states from one place. This stops dishonest builders from running to another state after cheating people.

From April 2025, builders must get pre-launch compliance certificates before even advertising a project. No more soft launches that trick people. No more pre-launch bookings for unregistered projects. Everything must be official and RERA-approved.

RERA authorities are now using satellite imagery to verify construction progress. Builders cannot fake their quarterly reports anymore. The satellite images tell the truth.

The Bottom line

You are making one of the biggest financial decisions of your life. RERA exists to make sure you are protected. Use these hidden rules. Verify your project. Check quarterly updates. Know your rights.

An informed buyer is a safe buyer. Do not sign anything until you have done your homework. Your dreams of owning a home are worth the extra 30 minutes you spend verifying everything on the RERA portal.

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