Centre Tightens RERA Norms to Protect Homebuyers, Crack Down on Delayed Projects

The Central Government has strengthened the enforcement of RERA by issuing fresh guidelines to all State Real Estate Regulatory Authorities (RERAs) to improve transparency, protect homebuyers, and curb project delays.

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PROPERTY PLUSE

The Central Government has introduced stricter regulatory measures to strengthen transparency and protect homebuyers from project delays and fund diversion in the real estate sector. The Ministry of Housing and Urban Affairs has issued fresh guidelines to all State Real Estate Regulatory Authorities (RERAs), directing them to enforce the provisions of the Real Estate (Regulation and Development) Act more rigorously.

Under the new framework, developers who fail to complete projects within the promised timeline may face stringent action, including hefty penalties, suspension, or even cancellation of project registration. State RERA authorities have also been asked to closely monitor quarterly compliance reports and take action against defaulting developers.

The Centre has further tightened norms governing project finances. As mandated under the RERA Act, 70% of the funds collected from homebuyers must remain in a dedicated escrow account and be used exclusively for the construction and land costs of the same project. Withdrawals from this account will continue to require certification from an engineer, architect, and chartered accountant based on construction progress.

Several states have already intensified enforcement. Gujarat has imposed penalties exceeding ₹3.5 crore for violations related to escrow accounts, while Uttar Pradesh has strengthened monitoring to prevent fund diversion. Experts believe the measures will improve financial discipline, reduce stalled projects, and enhance buyer confidence across India's real estate market.