What is RERA? How It Helps Home Buyers in Tamil Nadu

The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced to bring transparency and accountability to India’s real estate sector. It aims to protect home buyers while ensuring that real estate projects are completed on time. Tamil Nadu has implemented this law through TNRERA (Tamil Nadu Real Estate Regulatory Authority).

Many home buyers in Tamil Nadu face delays, fraud, and lack of information. RERA aims to resolve these issues by mandating project registration, standardizing rules, and enforcing penalties. In this blog, we will explore how RERA benefits home buyers in Tamil Nadu by providing security, transparency, and legal support.

1. Ensuring Project Registration

Under RERA, all residential and commercial projects must be registered with TNRERA. This applies to:

Projects covering more than 500 square meters.
Projects with more than eight apartments.

Without registration, builders cannot advertise, sell, or book units. This law prevents unauthorized constructions and scams. Buyers can check a project’s registration status on the TNRERA website (rera.tn.gov.in) before making a purchase.

Many buyers in Tamil Nadu have suffered financial losses from unapproved projects. With RERA, the risk of fraud is minimized. Since builders must submit clear project plans and obtain approvals before registration, home buyers are assured of the project’s legality. This simple rule ensures buyers invest only in approved developments.

Additionally, project details such as completion deadlines, floor plans, and approval documents are accessible online. This prevents developers from making misleading promises. Before RERA, many builders started projects without necessary approvals, leading to legal disputes and losses for buyers. Now, such practices are punishable by law.

2. Transparency in Project Details

RERA mandates that all registered projects disclose essential information, including:

Land ownership details.
Construction approvals.
Proposed timeline for project completion.

Before RERA, buyers often faced uncertainty about project delays. Many were given false commitments, leading to financial burdens. Under RERA, builders must submit a detailed project report, making the process transparent.

Buyers can now verify:

Whether the project is legally approved.
The estimated completion date.
Any changes to the project plan.

If developers fail to meet commitments, they face strict penalties. This level of transparency empowers buyers to make informed investment decisions. They no longer need to rely on verbal assurances from builders. All information is available online for easy verification.

3. Protection Against Delayed Possession

One of the biggest problems in real estate is delayed possession. Many home buyers have waited years to receive their apartments. Under RERA, developers must:

Clearly mention the possession date in agreements.
Compensate buyers for any delay in possession.

If the developer fails to deliver the home on time, they must pay interest for the delay. This ensures that builders prioritize timely project completion. Previously, developers would shift deadlines without consequences. Now, delays come with financial penalties.

For buyers, this rule provides security. If a builder delays possession, buyers can claim compensation through TNRERA. This financial safeguard makes home buying less risky and prevents unnecessary waiting periods.

Additionally, if a project is abandoned, buyers have legal rights to get their money refunded with interest. This ensures that no home buyer loses their investment due to project failures

4. Standardization of Carpet Area

Before RERA, developers used different definitions of carpet area, leading to inflated prices. RERA introduced a standard definition:

“Carpet area is the net usable floor area, excluding walls, balconies, and common areas.”

This definition eliminates overpricing. Many buyers were misled into paying for super built-up area, which includes walls, staircases, and even parking areas. Now, buyers pay only for usable space.

For example, if a builder advertises a 1000 sq. ft. apartment, the actual carpet area may be just 700 sq. ft.. With RERA, the carpet area must be disclosed accurately. This protects buyers from overpaying for non-usable space.

This rule has increased fairness in Tamil Nadu’s real estate market. Buyers now receive clear information about what they are paying for.

5. Advance Payment Cap

RERA protects buyers from excessive advance payments. Developers cannot demand more than 10% of the property’s value before signing a sale agreement.

Earlier, some developers collected large advance payments and then delayed projects. Buyers had no legal way to recover their money. With RERA, this is illegal.

The 10% cap ensures that buyers pay in phases, reducing financial risk. Additionally, all payments must be documented in a written agreement. This protects buyers from unexpected cost increases.

If a builder violates this rule, buyers can file a complaint with TNRERA and get their money back.

6. Establishment of Grievance Redressal Mechanism

If a home buyer faces issues with the builder, they can file a complaint with TNRERA. Complaints include:

Project delays.
False promises.
Poor construction quality.

TNRERA resolves complaints within 60 days. If the buyer is unsatisfied, they can appeal to the Real Estate Appellate Tribunal. This ensures that buyers have a legal platform to fight against unfair practices.

Previously, buyers had to go through lengthy court battles. Now, RERA provides a faster and more efficient resolution process.

7. Financial Discipline of Promoters

Developers must deposit 70% of the project funds into a separate escrow account. This ensures that:

Funds are used only for construction.
Builders cannot divert money to other projects.

Before RERA, many developers misused funds, causing project delays. Now, they must submit proof of fund usage to TNRERA. This ensures that buyers’ money is protected.

If a builder misuses funds, they face legal penalties and cancellation of project approval.

8. Accountability of Real Estate Agents

RERA requires real estate agents to register with TNRERA. They receive a unique registration number, which must be used in all transactions. This:

Prevents fraudulent agents from scamming buyers.
Ensures that agents follow ethical practices.
Provides buyers with a safe and verified process.

If an agent misleads a buyer, they can be reported to TNRERA. This regulation creates a more trustworthy buying process.

9. Provision for Quality Assurance

Builders are liable for structural defects for five years after possession. If defects arise, they must be fixed within 30 days.

This rule ensures that:

Homes meet high-quality construction standards.
Buyers are protected from poor workmanship.

Previously, buyers had no recourse for construction defects. Now, builders must fix issues at their own cost.

10. Empowerment Through Information Access

The TNRERA website allows buyers to:

Verify project approvals.
Check developer records.
File complaints online.

This makes real estate transactions transparent and reliable. Buyers now have access to all necessary information before making a purchase.

Summary

The Real Estate (Regulation and Development) Act, 2016 (RERA) has transformed Tamil Nadu’s real estate market. It brings transparency, accountability, and legal protection for home buyers.

RERA mandates that all real estate projects and agents be registered with TNRERA. This prevents unauthorized developments. Buyers can now verify project details online, reducing the risk of fraud.

The act enforces timely possession, ensuring buyers are compensated for delays. The standardized carpet area prevents price inflation. Advance payments are capped, protecting buyers from financial burdens.

RERA introduces a fast-track grievance redressal system. Buyers can file complaints with TNRERA and get disputes resolved within 60 days. Additionally, builders must ensure quality construction and fix defects for up to five years. With RERA, home buying in Tamil Nadu has become safer, fairer, and more transparent. Buyers can now invest with confidence.