How the Real Estate Regulatory Authority (RERA) Act Impacts Home Loan Borrowers


The Real Estate Regulatory Authority (RERA) Act, enacted in 2016, revolutionized the Indian real estate sector. Aimed at enhancing transparency and safeguarding homebuyers’ interests, this legislation has profoundly influenced the dynamics for home loan borrowers. Dive in as we shed light on the positive transformations RERA has ushered for home loan borrowers and elucidate the benefits they can reap.

Impact of RERA on Home Loan Borrowers:

  1. Increased Transparency: With RERA, gone are the days of hidden agendas. Developers must now share comprehensive details about their projects – from blueprints to permits, and expected timelines. Home loan borrowers can conveniently access these on the RERA website, ensuring an informed property purchase decision.
  2. Diminished Fraud Risks: RERA mandates that developers deposit 70% of the funds accrued from buyers into an escrow account. This initiative guarantees that the money is strictly utilized for the said project, minimizing the risk of diversion.
  3. Protection against Delays: No one enjoys the anxious wait due to project delays. RERA binds developers to strict project completion timelines. Any deviation, and the developer compensates the buyer, shielding them from potential financial and emotional strains.
  4. Streamlined Dispute Resolution: Gone are prolonged legal battles. RERA offers an expedited dispute resolution mechanism, ensuring timely and efficient grievance redressal for homebuyers.

Benefits of RERA for Home Loan Borrowers:

  1. Minimized Financial Risks: Thanks to RERA’s emphasis on transparency and accountability, home loans have become more secure. Lenders exhibit heightened confidence, knowing the financed projects are likely to conclude as planned.
  2. Enhanced Credit Accessibility: With RERA’s stringent norms, lenders show a favorable inclination towards borrowers purchasing properties from RERA-certified developers. This has facilitated smoother home loan approvals.
  3. Empowered Negotiation: Knowledge is power. RERA has armed homebuyers with rights and insights, giving them an upper hand during negotiations with developers.


In essence, the RERA Act is not just a regulation but a boon for home loan borrowers. By infusing transparency, ensuring timely project completion, and bolstering buyer confidence, RERA has reshaped the home loan landscape in India. Borrowers now venture into property investments with reinforced trust and assurance.

Key Takeaways:

  • Enhanced transparency and accountability in the real estate sector.
  • Escrow accounts ensure the rightful use of buyers’ funds.
  • Quick dispute resolution mechanisms in place.
  • Borrowers benefit from better loan accessibility and negotiation power.


  • Q: Is it advisable to buy properties only from RERA-registered developers?
    • A: Yes, RERA-registered developers adhere to strict guidelines, ensuring buyers’ safety and investment security.
  • Q: How does RERA ensure timely project completion?
    • A: Developers are bound to project timelines under RERA, with compensations due in case of delays.
  • Q: Can buyers access a project’s details?
    • A: Absolutely! RERA mandates developers to list all project details on the RERA website, available for public viewing.

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