RERA—the Real Estate (Regulation and Development) Act, 2016—was enacted to bring transparency, accountability, and efficiency in the real estate sector. One of the most significant features of the Act is its focus on regulating the conduct of promoters and builders to safeguard the interests of homebuyers and ensure timely delivery of projects.
If you’re a developer, builder, or involved in the promotion of real estate projects, it’s crucial to understand your duties under RERA to avoid penalties and maintain credibility.
Who is a Promoter Under RERA?
As per the RERA Act, a promoter is any person or entity responsible for developing or marketing a real estate project. This includes developers, builders, landowners, and even contractors who advertise or sell a real estate project.
Top Duties of Promoter Under the RERA Act, 2016
To be RERA-compliant, every promoter must fulfill the following key responsibilities:
1. Register All Projects with RERA
Before launching, advertising, or selling any real estate project, the promoter must register it with the State RERA Authority. Without registration, no bookings or sales can be made.
2. Maintain a Dedicated Bank Account
Promoters must deposit 70% of the funds collected from buyers into a separate bank account, which should be used only for construction and land-related costs of that specific project.
3. Provide Accurate Project Updates
Promoters are required to update the RERA web portal every quarter, giving details about:
- Stage-wise progress of construction,
- Number of units sold/booked,
- Status of approvals and certificates.
4. Adhere to Approved Plans and Specifications
Builders must construct the project strictly as per the sanctioned plans. Any changes require prior consent from the buyers and approval from the authorities.
5. Execute and Register Sale Agreements
All sale agreements must be in the prescribed format, legally executed, and registered under the applicable property laws.
6. Obtain Occupancy Certificate
It is the promoter’s duty to obtain the Occupancy Certificate (OC) and make it available to the allottees or the association of allottees.
7. Facilitate Formation of Association of Allottees
Once a majority of units are booked, the promoter must assist in forming a Resident Welfare Association or Co-operative Society within three months.
8. Ensure Maintenance of Essential Services
Promoters must maintain all essential services like water, electricity, lifts, etc., until the association of allottees formally takes over the responsibility.
9. Pay Outgoing Charges Until Possession
All statutory dues, such as property tax, electricity bills, water charges, and maintenance costs, must be paid by the promoter until the physical possession of the unit is handed over.
10. Obtain All Required Insurances
Promoters are obligated to secure insurance for land title, building construction, and other project-related elements and hand over all policy documents to the allottees or their association.
11. Execute the Conveyance Deed Timely
The registered conveyance deed in favor of the allottee must be executed within 3 months of receiving the Occupancy Certificate, transferring ownership and common area rights.
12. Disclose All Project Documents
Buyers must be given copies of:
- Sanctioned plans,
- Title documents,
- Legal approvals,
- Building drawings,
with originals to be handed over to the association once the project is completed.
13. Compensate for Delays or Defective Titles
If there’s a delay in possession, or if the buyer suffers a loss due to defective land title, the promoter is required to compensate the buyer with interest and damages.
14. Fix Structural Defects
Promoters are liable to repair any structural defects or poor workmanship reported by buyers within five years from the date of handover—free of cost.
RERA: A Step Towards Transparency and Accountability
The RERA Act, 2016 was passed by the Rajya Sabha on 10th March 2016 and came into full effect from 1st May 2017, with all 92 sections notified. It ensures that homebuyers’ rights are protected while imposing strict obligations on promoters to deliver what they promise.
Final Thoughts
Being a RERA-compliant promoter is not just about following legal obligations—it also builds trust with buyers, improves brand credibility, and ensures smooth project execution without legal hassles.
For promoters and developers, understanding and following these duties under RERA is a key step towards responsible real estate development in India.