Home Buying Checklist 2025: Your Guide to a Smart Purchase

Introduction

The Indian real estate sector has long been plagued by issues such as project delays, lack of transparency, and unscrupulous practices by some developers. In response to these challenges, the Government of India enacted the Real Estate (Regulation and Development) Act (RERA) in 2016. The objective of RERA is to protect the interests of homebuyers while ensuring greater accountability and transparency in the real estate sector. The implementation of RERA has significantly reshaped the real estate landscape, offering a more secure environment for homebuyers and investors alike.

What is RERA?

RERA is a landmark legislation aimed at regulating the real estate sector in India. It establishes guidelines that developers and real estate agents must follow, ensuring that buyers are protected from unfair practices. The Act applies to all residential and commercial real estate projects exceeding a specified area and mandates their registration with the respective state-level RERA authority.

The key objectives of RERA include:

• Enhancing transparency in real estate transactions
• Establishing a fast-track dispute resolution mechanism
• Promoting accountability among developers and real estate agents
• Ensuring timely delivery of projects
• Boosting investor confidence in the real estate market

Key Provisions of RERA

RERA contains several provisions that safeguard the interests of homebuyers. Some of the most important ones include:

1. Mandatory Project Registration

Under RERA, all real estate projects exceeding 500 square meters or involving more than eight apartments must be registered with the respective state RERA authority before being marketed or sold. Developers must provide comprehensive project details, including land status, project completion timeline, layout plans, and financial disclosures. This ensures that homebuyers have access to verified information before making a purchase.

2. Standardized Sales Agreements

The Act mandates the use of a model sales agreement to prevent unfair terms in property transactions. Developers cannot impose arbitrary terms on buyers, reducing instances of one-sided agreements that previously favored developers.

3. Escrow Account for Project Funds

To prevent fund misallocation, RERA mandates that developers deposit 70% of the funds received from homebuyers into a separate escrow account. These funds can only be used for project construction and land costs. This provision ensures that developers do not divert money from one project to another, minimizing delays and financial fraud.

4. Timely Project Completion

One of the major issues faced by homebuyers in India has been delayed project deliveries. RERA imposes strict timelines for project completion, and any delay beyond the promised date makes developers liable to compensate buyers. Developers must pay interest for the period of delay, providing homebuyers with legal recourse against delays.

5. Penalty for False Advertising

RERA prohibits misleading advertisements and false claims. Any information provided by the developer in marketing brochures, advertisements, or prospectuses is legally binding. If a developer fails to deliver as promised, the buyer has the right to withdraw from the project and claim a full refund with interest.

6. Five-Year Defect Liability Period

Under RERA, developers are held responsible for structural defects and quality issues in the property for five years from the date of possession. If any issues arise within this period, the developer is required to rectify them within 30 days at no additional cost to the buyer.

7. Clear Title on Land

To prevent property disputes, RERA mandates that developers must have clear legal ownership of the land before initiating a project. This provision ensures that homebuyers do not face legal complications after purchasing a property.

8. Right to Information

Buyers have the right to obtain complete information about the project, including layout plans, execution status, and financial disclosures. Developers are required to update project progress regularly on the respective state RERA website, making it easier for buyers to track developments.

9. Grievance Redressal Mechanism

To address disputes between homebuyers and developers, RERA has established Real Estate Regulatory Authorities and Appellate Tribunals at the state level. Homebuyers can file complaints with the respective state RERA body if developers violate any provisions of the Act. If unsatisfied with the ruling, they can escalate the matter to the Appellate Tribunal and even approach the High Court for further resolution.

Implications of RERA for Homebuyers

The implementation of RERA has significantly improved the home-buying experience in India. Some of the notable benefits include:

1. Enhanced Transparency

RERA makes it mandatory for developers to disclose key project details, enabling buyers to make informed decisions. This has eliminated the uncertainty and lack of information that previously plagued real estate transactions.

2. Reduced Risk of Project Delays

With strict timelines and financial discipline enforced by RERA, the risk of project delays has decreased. Homebuyers now have legal backing to claim compensation if developers fail to meet deadlines.

3. Increased Financial Security

By ensuring that homebuyer funds are used solely for the project they invest in, RERA prevents mismanagement and financial fraud, giving buyers greater confidence in their investments.

4. Legal Protection Against Fraud

Homebuyers now have a structured grievance redressal mechanism in place. Developers are legally bound to honor commitments, and buyers can take legal action in case of discrepancies.

5. Improved Quality Assurance

With the five-year defect liability provision, homebuyers are assured of construction quality, reducing post-possession repair costs and increasing trust in the sector.

Challenges in RERA Implementation

While RERA has significantly improved the real estate sector, certain challenges remain:

• State-Level Variations: Since RERA is implemented at the state level, there are discrepancies in how different states enforce regulations. Some states have diluted key provisions, limiting the effectiveness of the Act.
• Limited Awareness: Many homebuyers are still unaware of their rights under RERA, making it crucial to increase awareness through government campaigns and industry participation.
• Delays in Tribunal Decisions: Although RERA aims for faster dispute resolution, delays in legal proceedings continue to be an issue in certain states.
• Developer Resistance: Some developers have resisted compliance with RERA regulations, requiring stricter enforcement by authorities to ensure full adherence to the law.

RERA has emerged as a game-changer in the Indian real estate sector, instilling greater transparency, accountability, and trust. By safeguarding homebuyers from fraudulent practices and project delays, the Act has significantly improved the home-buying experience. While challenges persist in its implementation, ongoing efforts to strengthen RERA enforcement will further enhance its effectiveness.

For homebuyers, understanding RERA and their rights under the Act is essential for making informed property decisions. As the real estate sector continues to evolve, RERA will remain a cornerstone of regulatory reforms, shaping a more transparent and consumer-friendly real estate market in India.