Which is Better - RERA or Non-RERA Projects?

Choosing between a RERA-registered and a non-RERA project can significantly impact your home-buying journey. With property purchases being one of the most important financial decisions in life, understanding the differences between the two is crucial. 

From legal safeguards to transparency and delivery timelines, the type of project you invest in can shape your overall experience. 

So, which is better - RERA or non-RERA projects? Let’s break it down to help you make an informed and confident choice.

What Are RERA Projects?

RERA stands for the Real Estate (Regulation and Development) Act, 2016. India’s Parliament enacted this law to bring transparency, discipline, and legal protection to the real estate market. 

Under this Act, every new or ongoing residential or commercial project must be registered with the respective State’s Real Estate Regulatory Authority (RERA).

This requirement applies to projects that either cover more than 500 square metres of land or include more than eight apartments or units.

Developers must also submit detailed project documentation, such as land titles, layout plans, financial estimates, and completion timelines, to ensure credibility before marketing begins. 

A key difference in comparing RERA vs non-RERA projects is that RERA-registered developments ensure buyer confidence, whereas non-RERA project developers face financial penalties and potential legal action.

Key Features of RERA Projects:

• Builders must deposit at least 70% of the money collected from buyers into a separate escrow account.
• RERA enforces a clear formula for carpet area (usable floor space within walls).
• Timely delivery with penalties for delays.
• Builders must repair any structural or workmanship defects (such as plumbing or electrical issues) at no additional cost within five years of the date of possession.
• Buyers can access key project information, file complaints online, and request refunds or compensation when developers fail to meet their obligations.

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RERA Projects Benefits for Homebuyers

1: Legal Protection

When developers register under RERA, they must adhere to strict timelines, quality standards, and legal requirements. If they break these rules, RERA can fine them up to 10% of the project’s estimated cost. 

The law even allows imprisonment of up to three years for persistent non-compliance. This legal framework discourages builders from mismanaging projects, ensuring buyer protection within a governed structure. 

2: Transparency and Accountability

RERA requires developers to publish key project information, including plans, permits, and financial details, on a state portal. This makes it easy for buyers to verify project status and funding. 

For instance, in Maharashtra, QR codes on promotional materials lead directly to project details online. This visibility helps buyers avoid misleading claims and holds builders accountable to shared public standards.

3: Timely Delivery

Under RERA, if a builder delays possession, buyers can request a refund with interest and receive monthly compensation for the delay. 

These penalties include interest at rates such as SBI MCLR + 2% until delivery. Many RERA tribunals enforce these rules; for example, in Gurgaon, a builder had to pay 11% annual interest for delayed handover. 

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4: Quality Assurance

Builders must repair major and minor defects reported within five years of possession at no additional cost. This covers problems like poor plumbing or structural faults. 

RERA makes builders accountable for construction quality long after handover, helping safeguard buyer interests and reduce the burden of later repairs. 

5: Grievance Redressal

Buyers can file complaints directly with their state's RERA authority. Complaints must be addressed within 60 days, which is significantly faster compared to traditional courts. 

If unsatisfied, buyers can appeal to the Appellate Tribunal again within 60 days of the initial decision. This two-tier system of authority and tribunal provides buyers with a clear and efficient path to resolve disputes.

6: Financial Security

RERA mandates that 70% of the buyer's payments be deposited into a dedicated escrow account. This measure prevents builders from using funds for other projects. 

If builders misappropriate money even from non-RERA projects, RERA can still order refunds with interest. For example, Telangana RERA refunded buyers with 11% interest after detecting fund diversion. 

7: Enhanced Market Credibility

Strong RERA compliance boosts trust among homebuyers. As of May 2025, Maharashtra had registered over 50,000 RERA housing projects, more than any other state. 

This widespread adoption encourages builders to follow the rules and assures buyers that RERA projects are trustworthy and well-regulated. 

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What Are Non-RERA Projects?

Non-RERA projects are residential or commercial developments that are not registered under the Real Estate (Regulation and Development) Act, 2016. 

These schemes often fall into one of two categories: they are exempt (small projects under 500 square metres or eight units), or the developer chooses not to register, avoiding compliance requirements.

Without RERA oversight, these projects often lack standardised timelines, adequate funding safeguards, external audits, and clear disclosure obligations. 

Buyers may encounter hidden risks, including uncertain handover dates and a lack of legal clarity, as well as inconsistent quality. 

How Non-RERA Projects Might Benefit

1: Low Price

Without RERA registration costs or escrow mandates, developers selling non-RERA units often offer lower booking amounts or flexible pricing. They might waive standard fees, bundle amenities, or provide discount schemes tied to personal negotiations.

These savings sometimes pass directly to buyers. For investors seeking bargains or renters looking for immediate deals, the short-term financial appeal is clear. 

2: Greater Flexibility

Non-RERA projects operate with greater administrative flexibility; developers can alter project plans, payment schedules, or marketing timelines without state approval. They avoid bureaucratic scrutiny on layout changes, material quality, or pricing structures. 

This flexibility may allow developers to pivot quickly in response to market conditions or buyer feedback. 

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Risks Associated with Non-RERA Projects

1: Lack of Legal Protection

Non-RERA projects operate outside the protections of the RERA Act. Buyers lose access to essential safeguards, such as escrow rules, standard contracts, or penalty clauses for delays. 

Disputes must be resolved in conventional civil or consumer courts, where resolutions are slow and uncertain. 

Without access to the RERA tribunal, buyers face longer legal battles and lack the statutory recourse that makes RERA projects safer. 

2: Transparency Issues

These projects do not require public disclosure of approvals, land titles, design plans, or the utilisation of funds. Buyers must rely on the developer's claims and conduct their due diligence. 

Without clear documentation or oversight of the registry, hidden legal or financial flaws may emerge late in the process. 

It increases the risk of purchasing unapproved or overpromised properties, resulting in costly surprises and limited buyer protection.

3: Risk of Delays

Non-RERA projects have no law enforcing delivery by a fixed date. Builders can postpone handover indefinitely without incurring any financial consequences, leaving buyers liable for dues or rent while awaiting possession. 

Without penalties or compensation mechanisms, buyers face prolonged uncertainty and financial strain if project completion drags on.

4: Difficulty Obtaining Loans

Lenders, including banks and non-banking financial companies (NBFCs), often hesitate to finance non-RERA projects due to their uncertain legal status and lack of transparent documentation. 

Loans may require higher collateral or stricter conditions, and some institutions may outright refuse financing. This restriction forces buyers to depend on personal funds or high-cost loans from informal lenders. Such financing hurdles add expense and risk to non-RERA purchases. 

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Summary

What Are RERA Projects?

RERA projects are real estate developments registered under the Real Estate (Regulation and Development) Act, 2016, ensuring transparency, legal protection, and accountability.

RERA Projects Benefits for Homebuyers

• Legal protection
• Transparency and accountability
• Timely delivery
• Quality assurance
• Grievance redressal
• Financial security
• Enhanced market credibility

What Are Non-RERA Projects?

Non-RERA projects are real estate developments that are not registered under the RERA Act, as they are exempt for small-scale projects under 500 square metres or eight units or by the developer's choice. 

How Non-RERA Projects Might Benefit

• Low price
• Greater flexibility

Risks Associated with Non-RERA Projects

• Lack of legal protection
• Transparency issues
• Risk of delays
• Difficulty obtaining loans