The Real Estate (Regulation and Development) Act, 2016

What it does

The Act (Act No. 16 of 2016) regulates the real estate sector and protects the buyers of apartments, plots and buildings. It requires a project above a stated size to be registered with the Real Estate Regulatory Authority of the State before it is advertised or sold. A project is exempt from registration where the land does not exceed 500 square metres or the number of apartments does not exceed eight, among other cases. On registration the promoter declares the details of the project, including the time within which it will be completed, and must keep seventy per cent of the amounts collected from buyers in a separate account for the cost of construction and land.

It also controls the sale. A promoter cannot take more than ten per cent of the cost as an advance without first entering into a written agreement for sale. The agreement, and the date for possession in it, is the document on which most disputes turn.

The Act creates the Authorities, the Real Estate Appellate Tribunals, and the adjudicating officer who decides compensation. Agents must register as well.

Who it binds

Promoters of registered projects, real estate agents, and allottees, who are the buyers. A promoter that develops a project falling in the Act's scope is bound whether it is a company or an individual.

What has changed, and when

The Act was brought into force in stages. A part took effect in May 2016, and the remaining provisions in May 2017. State rules and State authorities vary in their procedure, so the central Act is read with the rules of the State where the project stands. The Supreme Court held in Newtech Promoters and Developers v. State of Uttar Pradesh in 2021 that an allottee's right to a refund with interest under section 18 is unconditional if the promoter fails to give possession on time.

What turns on it in practice

The practice area on this site for RERA and real estate advises on project registration, regulatory compliance and disputes under the Act, and the firm's notes cover the points on which cases turn.

The first is the date from which delay is measured. Section 18(1)(a) fixes the liability by reference to the terms of the agreement for sale and the date specified in it. The completion date a promoter declares to the authority at registration, and any extension of that registration under section 6, belong to a different obligation and do not move the date from which interest for delay is counted. The firm's note records that the Bombay High Court, in CCI Projects Private Limited v. Sriram Krishnan on 18 June 2026, ran the clock from the possession date in the agreement for sale and declined to substitute the later completion date carried by the project's registration. In that case the agreement had specified 30 June 2017 and the registration recorded 31 December 2019.

An allottee who does not wish to withdraw from the project is entitled under the proviso to section 18(1) to interest for every month of delay until possession is handed over. The promoter who relies on a grace period needs it to be in the agreement itself, since a grace period asserted for the first time at the hearing is not part of the date specified.

The firm's note on corporate and commercial law treats the Act as having altered the position between homebuyer and developer.