What is RERA and Why Was It Enacted?
Before RERA was enacted, the Indian real estate sector was largely unregulated, leaving home buyers vulnerable to builder delays, misleading advertisements, sudden project cancellations, and arbitrary changes to project specifications. Builders could collect money without proper accountability. The Real Estate (Regulation and Development) Act, 2016 was enacted by the Parliament of India and came into force on May 1, 2017. It established a regulatory framework to bring transparency, accountability, and efficiency to real estate transactions. Karnataka implemented the Act through the Karnataka Real Estate Regulatory Authority (RERA Karnataka), which began operating from July 10, 2017, making Karnataka one of the first states to operationalize the authority.
Key Rights of Home Buyers Under RERA
RERA confers several important rights on home buyers that builders are legally bound to respect:
- Right to Information: Buyers have the right to obtain all project-related documents including the approved plan, layout, government approvals, land title documents, and the stage-wise progress of construction.
- Right to Carpet Area: Builders must sell only on the basis of carpet area — the net usable floor area of the flat — not super built-up area. This prevents overcharging by inflating area calculations.
- Right to Timely Possession: Builders must deliver possession by the date specified in the registered agreement. Delays attract compensation at the SBI MCLR rate, currently around 8.5% per annum, on the amount paid.
- Right to Structural Defect Remedy: If any structural defect is reported within five years of possession, the builder is obligated to rectify it free of cost within 30 days of receiving the complaint.
- Right to Refund: If the builder fails to complete the project, buyers can withdraw and claim a full refund of all amounts paid along with interest.
Mandatory RERA Registration for Projects in Karnataka
Under RERA, all residential projects where the land area exceeds 500 square metres or where more than 8 apartments are proposed to be developed must be registered with RERA Karnataka before any marketing, advertising, or sale can begin. Builders cannot accept any advance exceeding 10% of the apartment cost without first executing a written agreement for sale with the buyer. This agreement must be registered. Every advertisement must carry the RERA registration number. Buyers should always verify the RERA registration number at rera.karnataka.gov.in before paying any amount. An unregistered project is a serious red flag indicating the builder may be operating illegally.
Escrow Account Protection — Your Money is Ring-Fenced
One of the strongest protections RERA provides is the mandatory escrow account requirement. Builders must deposit at least 70% of all amounts collected from buyers into a dedicated escrow account maintained with a scheduled bank. This money can only be used for land and construction costs of that specific project. Builders cannot divert your money to other projects or personal expenses. Withdrawals are only permitted based on certified completion of construction stages verified by an engineer, architect, or chartered accountant. This mechanism significantly reduces the risk of fund diversion, which was one of the most common causes of project stalling in the pre-RERA era.
How to File a Complaint with RERA Karnataka
If a builder violates any of the provisions of the RERA Act, buyers can file a complaint with the Karnataka Real Estate Regulatory Authority. Complaints can be filed online at rera.karnataka.gov.in. There is a nominal complaint filing fee. The authority is mandated to adjudicate complaints within 60 days in most cases. Penalties for builders found guilty can include fines of up to 10% of the project cost, and in serious cases involving wilful default, imprisonment of up to three years. Decisions of RERA can be appealed to the Real Estate Appellate Tribunal (REAT) and thereafter to the High Court. Buyers can also simultaneously pursue remedies through the Consumer Forum for deficiency of service claims.
- Visit: rera.karnataka.gov.in and navigate to the Complaints section
- Register as a complainant and fill in project and builder details
- Attach supporting documents: agreement for sale, payment receipts, correspondence
- Pay the prescribed fee and submit — you will receive an acknowledgement number
✅ Key Takeaways
🔗 Official Portal: rera.karnataka.gov.in
📅 Published: August 8, 2026 | This blog is a public awareness initiative. Verify all information with official sources before making financial decisions.
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