- Why in news
- On 30 July 2026, the Minister of State for Housing and Urban Affairs told the Lok Sabha in a written reply how RERA, 2016 is being implemented, covering registration, escrow, dispute resolution and the Central Advisory Council.
- What it is
- The Real Estate (Regulation and Development) Act, 2016 is a Central law that regulates the contractual relationship between homebuyers and promoters. It requires project registration with a state Regulatory Authority and sets duties on disclosure and use of buyers' money. It also sets up Regulatory Authorities, Appellate Tribunals and Adjudicating Officers to settle disputes.
- Registration and penalty
- Projects must be registered before any advertisement, marketing, booking or sale. Violation attracts a penalty of up to 10% of the estimated project cost.
- 70% escrow rule
- Promoters must deposit 70% of money collected from buyers in a separate bank account, used only for land cost and construction.
- Dispute resolution
- The Act provides fast-track disposal of disputes within 60 days.
- Section 40 recovery
- Unpaid interest, penalty or compensation can be recovered from the promoter as arrears of land revenue.
- Central Advisory Council
- Section 41 provides for the CAC, chaired by the Union Minister of Housing and Urban Affairs, to advise the Centre on implementation.
Don’t confuse with Regulatory Authority vs Appellate Tribunal: The Regulatory Authority registers projects and penalises violations. The Appellate Tribunal hears appeals against its orders.
Don’t confuse with Central Advisory Council vs state authorities: The CAC advises the Centre on implementation. State Regulatory Authorities regulate projects on the ground.
Laws, judgments and statutory bodies: 30 Prelims questions since 2013 (what the law says, who chairs, legal basis). In Mains, 44 news-triggered questions, most in GS2, asking for provisions and challenges.
Why it matters
- Protects homebuyers by making promoters accountable and transparent.
- Shows Parliament legislating on a State subject through Concurrent List entries.
Problems
- Uneven implementation and registration of eligible projects across States and UTs.
- Limited autonomy and staff of state Regulatory Authorities.
Way forward
- Strengthen the functional and administrative autonomy and staffing of Regulatory Authorities.
- Frame SOPs and amend the Act after consulting homebuyers, developers and regulators.
Put in your answer
Escrow safeguard: The 70% deposit rule ring-fences buyers' money for land and construction, curbing diversion of funds.
Ministry committee on registration: A committee set up by the Ministry examined registration challenges across States and UTs, and its report was shared with all Authorities.
- 2017Mains GS4 · Q13Illegal building extension and collapse; builder accountability and cash relief for migrant labourers.
- 2015Mains GS2 · Q16Whether regulatory institutions can remain independent and autonomous, based on recent experience.
- 2013Mains GS4 · Q13Official's ethics when builders seek insider information on housing policy decisions.
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Law enacted under Concurrent List entries 6, 7, 46; 10% penalty for unregistered projects, 70% deposit rule. Standing background, no fresh change.
Worth revising until Prelims 2028: most news questions come within two years of the event.