RERA Compliance: The Investor's Pre-Purchase Checklist

RERA (Real Estate Regulation and Development Act) compliance is the most important legal safeguard for a real estate investor in India. A RERA-registered project provides transparency, legal recourse, and a regulatory framework that protects the buyer. Here's the 8-point checklist we use to verify RERA compliance before any property purchase.

1. Verify RERA registration number: Every project with a plot size of 500 sq m or 8 units must be RERA-registered. Check the state RERA website (MahaRERA for Maharashtra, K-RERA for Karnataka, T-RERA for Telangana, etc.) and verify the registration number. The number should be active, not lapsed or revoked.

2. Check the project disclosure: The RERA filing includes a detailed project disclosure — the land title, the approvals, the timeline, the specifications, and the developer's track record. Review this disclosure carefully. Any discrepancy between the disclosure and the marketing material is a red flag.

3. Verify the timeline: The RERA filing includes the promised possession date. Check whether the developer has a history of meeting RERA timelines (look at the developer's other projects on the RERA website). A developer who consistently misses RERA timelines is a risk.

4. Check the approvals: The RERA filing lists all approvals — environmental, municipal, building plan, fire safety, etc. Verify that all approvals are in place. Missing approvals are a common reason for project stalls.

5. Verify the land title: The RERA filing includes the land title details. Check for any litigation, encumbrance, or dispute on the title. A clear title is non-negotiable.

6. Check the escrow account: RERA mandates that 70% of the project funds be kept in an escrow account, used only for the project's construction. Verify that the escrow account is in place and being used correctly. This prevents the developer from diverting funds to other projects.

7. Check for complaints: The RERA website lists complaints filed against the project and the developer. Review the complaints and their resolution. A high number of unresolved complaints is a red flag.

8. Verify the agent registration: If you're buying through a real estate agent, the agent must be RERA-registered. Verify the agent's RERA registration number. An unregistered agent is a legal risk.

The RERA framework provides: - Transparency: The project disclosure, timeline, and approvals are public. - Legal recourse: If the developer defaults, the buyer can file a complaint with RERA for compensation or project completion. - Escrow protection: The 70% escrow rule prevents fund diversion. - Standardized agreements: RERA mandates a standardized sale agreement that protects the buyer's interests.

The limitations of RERA: - RERA does not guarantee delivery. It provides a framework and recourse, but a financially weak developer may still stall a project. - RERA does not cover projects below 500 sq m or 8 units (though many states have lower thresholds). - RERA's enforcement varies by state. Maharashtra (MahaRERA) and Karnataka (K-RERA) are more active; some other states are less so.

Our view: RERA compliance is non-negotiable. We never recommend a project that is not RERA-registered, and we verify all 8 points before any recommendation. For investors evaluating projects on their own, use this 8-point checklist — if a project fails on any point, proceed with caution or walk away. RERA is the most important legal safeguard available, but it must be actively verified, not assumed.

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