Mediation: How It Works and When to Use It
Mediation is a voluntary, confidential process in which a neutral helps the parties reach their own settlement. How it works in India and when it binds.
RERA 2016: Project Regulation and Homebuyer Remedies
RERA explained: registration of real estate projects and agents, disclosures, the separate project account, and remedies before the Authority and Tribunal.
- Instrument
- RERA Act, 2016
- Jurisdiction
- India
RERA regulates projects, promoters and real estate agents. It is both preventive—through registration, disclosure and project-account duties—and remedial—through complaints, refund, interest, compensation, penalties and appeals.
Registration threshold
Section 3 generally requires registration if the proposed land area exceeds 500 square metres or the number of apartments exceeds eight, inclusive of all phases. The appropriate government may reduce this threshold. Projects completed before commencement, certain renovation or repair projects without marketing or new allotment, and other statutory categories require separate analysis.
The separate project account
Section 4 does not merely require a generic "escrow". It requires 70% of amounts realised from allottees to be deposited in a separate account in a scheduled bank to cover land and construction costs of that project. Withdrawals must be proportionate to completion and certified by an engineer, architect and chartered accountant, with annual audit obligations.
Delay, refund and interest
Section 18 gives an allottee a statutory choice where the promoter fails to complete or give possession in accordance with the agreement or because of specified discontinuance. A withdrawing allottee may seek return of the amount with prescribed interest and compensation. A continuing allottee is entitled to prescribed interest for every month of delay until possession.
Authority versus adjudicating officer
The Act does not assign every dispute to one undifferentiated body. The Authority exercises regulatory and complaint jurisdiction. Under Section 71, compensation under Sections 12, 14, 18 and 19 is adjudicated by the adjudicating officer. In Newtech Promoters, the Supreme Court explained the respective roles, including the Authority's power in refund and interest matters and the adjudicating officer's compensation jurisdiction.
Other remedies and arbitration
Sections 88 and 89 state that RERA is additional to other law while overriding inconsistency. In Imperia Structures Ltd. v. Anil Patni (2020), the Supreme Court held that consumer remedies remain available alongside RERA. An arbitration clause also does not automatically wipe out statutory rights, but the precise interaction between arbitration, RERA and consumer proceedings is more nuanced than saying all remedies simply operate "alongside" each other. Forum, relief, election, res judicata and inconsistent outcomes require legal analysis.
Mediation
Parties may mediate a real estate dispute, including online, but a private settlement's enforceability depends on how it is documented or adopted by the relevant forum. Section 27 of the Mediation Act, 2023 has not commenced and should not be described as the present enforcement route.
For the full range of options, see property and real estate disputes.
Key provisions in plain language
- Section 3 (Registration)
- Prohibits advertising, marketing, booking, selling or offering for sale in a covered project before registration, subject to statutory exemptions and state-reduced thresholds.
- Section 4 (Application and separate account)
- Requires disclosures and deposit of 70% of allottee receipts in a separate scheduled-bank account, with proportionate withdrawals, certification and audit.
- Section 12 (Advertisement liability)
- Provides compensation for loss caused by incorrect or false statements in an advertisement or prospectus, subject to the statutory requirements.
- Section 18 (Return, interest and compensation)
- Provides refund, prescribed interest and compensation for specified promoter default, or monthly delay interest where the allottee remains in the project.
- Section 31 (Complaints)
- Allows an aggrieved person to file a complaint with the Authority or adjudicating officer for violation of the Act, rules or regulations.
- Section 71 (Adjudicating officer)
- Assigns adjudication of compensation under Sections 12, 14, 18 and 19 to an appointed judicial officer, subject to the Supreme Court's interpretation of the Authority's and officer's respective powers.
- Sections 43–58 (Appellate Tribunal)
- Establish the Real Estate Appellate Tribunal and appeal structure, including the statutory promoter pre-deposit requirement.
Common questions
Which projects require registration?
Registration is generally required where the proposed land exceeds 500 square metres or the number of apartments exceeds eight, inclusive of phases. The appropriate government may reduce the threshold, and the Act contains other exemptions.
Source: RERA Act, 2016, Section 3
What does the 70% account requirement mean?
Seventy per cent of amounts realised from allottees must be deposited in a separate account in a scheduled bank and used for that project's land and construction costs. Withdrawals are proportionate to completion and require statutory professional certification and annual audit.
Source: RERA Act, 2016, Section 4(2)(l)(D)
What is the Section 18 remedy for delay?
An allottee who withdraws may claim return of the amount with prescribed interest and compensation where the statutory conditions are met. An allottee who remains in the project may claim prescribed interest for each month of delay until possession.
Source: RERA Act, 2016, Section 18
Who decides a RERA complaint?
The Authority deals with complaints and regulatory relief within its jurisdiction. Compensation claims under Sections 12, 14, 18 and 19 are determined by the adjudicating officer under Section 71; Supreme Court case law distinguishes these roles.
Source: RERA Act, 2016, Sections 31 and 71
Does an arbitration clause remove RERA or consumer remedies?
An arbitration clause does not automatically erase statutory remedies. RERA is additional to other law, consumer remedies have been recognised as additional, and the interaction with arbitration depends on the forum, relief and case law. Parties should not assume that all routes can proceed to inconsistent final outcomes.
Source: RERA Act, 2016, Sections 88–89; Imperia Structures Ltd. v. Anil Patni (Supreme Court, 2020)
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General information only — not legal advice.
Sources
- Real Estate (Regulation and Development) Act, 2016Dated
- Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar PradeshChecked
- Imperia Structures Ltd. v. Anil PatniChecked
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