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.
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:
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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.
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.
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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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.
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.
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.
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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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.
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.
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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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.
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.
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.
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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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
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
Risks Associated with Non-RERA Projects
RERA projects follow standardised area definitions, timelines, and quality norms and provide grievance tribunals. Non-RERA projects lack these legal safeguards and mandated disclosures.
Yes, they enforce transparent disclosures, timeline accountability, quality checks, financial monitoring, and fast dispute resolution, making them much safer.
RERA projects offer escrow protection, delayed delivery penalties, standardised area accounting, five-year defect fixes, transparent data, and quick grievance mechanisms.
Some builders opt to avoid RERA registration to avoid regulatory scrutiny, minimise compliance costs, and maintain flexibility in project timelines and finances.
Trust is risky without RERA; there is no guarantee of fund safety, timely delivery, loan disbursement, or legal oversight. Buyers rely solely on contracts and their reputation for goodwill.
No, it is not mandatory for all real estate projects to register under RERA. Projects are exempt if they cover less than 500 square metres of land or have fewer than eight apartments or units.
Visit your state’s official RERA website. Search by project name, promoter, or RERA registration number to verify status and view details.
For long-term security, RERA projects are safer. Non-RERA might be cheaper initially, but risks of delays, legal disputes, or loan issues can erode returns.
Yes, builders can face fines up to 10% of the project cost and imprisonment if they persist or refuse to comply with RERA registration.
Yes, buyers can file a complaint with the RERA authority for tribunal review, claiming a refund with interest or compensation for delay.