Section 8 of RERA Act – The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, marked a significant milestone in the Indian real estate sector. Its primary aim was to bring transparency, accountability, and efficiency to the real estate industry, which was plagued by issues like delayed project deliveries and financial irregularities. Section 8 of the RERA Act is a crucial provision that plays a pivotal role in achieving these objectives. In this article, we will delve into the specifics of Section 8 and understand its implications on both developers and homebuyers.

Understanding Section 8 of RERA Act

Section 8 of the RERA Act pertains to the obligations of a real estate developer or builder. It outlines the responsibilities they must fulfill to ensure the timely completion and delivery of their real estate projects. This section acts as a safeguard for homebuyers, protecting their interests and investments.

Key Provisions of Section 8 of RERA Act

  1. Adherence to Project Timeline: Perhaps the most critical aspect of Section 8 is that it requires developers to complete their projects within the stipulated timeline. The act mandates developers to provide accurate project delivery timelines at the time of project registration, ensuring that homebuyers have a clear understanding of when they can expect possession of their property.
  2. Conformity to Approved Plans: Section 8 also emphasizes the importance of adhering to the approved building plans and specifications. Any deviation from the sanctioned plans must be disclosed by the developer, and the consent of two-thirds of the allottees is necessary for such changes. This provision safeguards homebuyers from any undesirable alterations to the project.
  3. Accountability for Structural Defects: Developers are liable for any structural defects or poor work quality for a period of five years from the date of possession. If any defects are detected during this time, it is the developer’s responsibility to rectify them at no extra cost to the homebuyer. This provision ensures the quality of construction and protects buyers from shoddy workmanship.
  4. Maintenance of Escrow Account: Section 8 requires developers to open a separate bank account for each project. Seventy percent of the project’s receivables must be deposited in this account and can only be withdrawn for project-related expenses. This provision ensures that funds are not diverted to other projects, which was a common issue before the introduction of RERA.
  5. Registration of Real Estate Agents: Developers must collaborate with registered real estate agents who are also compliant with RERA. This provision aims to bring transparency and professionalism to the real estate brokerage industry.

Implications of Section 8 of RERA Act on Developers

  1. Financial Discipline: Section 8 enforces financial discipline on developers by ensuring that project funds are used exclusively for the project’s development. This has reduced instances of fund diversion, which was a major concern in the pre-RERA era.
  2. Increased Accountability: Developers are now held accountable for project delays and structural defects. The provision of a five-year warranty for structural defects has incentivized builders to maintain construction quality.
  3. Transparent Transactions: The requirement to register real estate agents has brought transparency to property transactions, as registered agents must adhere to ethical and professional standards.
  4. Project Planning and Execution: Developers are now compelled to plan and execute projects meticulously to meet the stipulated timelines. This has improved project management practices in the real estate sector.

Implications of Section 8 Section 8 of RERA Act on Homebuyers

  1. Timely Possession: Section 8 ensures that developers commit to specific project timelines, reducing the risk of delayed possession, which was a common concern for homebuyers.
  2. Quality Assurance: Homebuyers are assured of a higher construction quality, as developers are liable for structural defects for five years after possession.
  3. Protection from Fraud: The requirement for developers to open a separate escrow account provides a level of financial security to homebuyers, minimizing the risk of fraud and misappropriation of funds.
  4. Professional Services: The involvement of registered real estate agents enhances the professionalism and reliability of property transactions, benefiting homebuyers.
Execution Petition Real Estate Regulation and Development act
Section 8 of RERA act

While Section 8 of the RERA Act has brought significant improvements to the real estate sector, there have been challenges in its implementation:

  1. Lack of Awareness: Many developers and homebuyers, especially in smaller towns and cities, are still not fully aware of the provisions and benefits of RERA.
  2. Delayed Regulatory Authorities: In some states, the regulatory authorities responsible for implementing RERA have faced delays in setting up, leading to a slower resolution of disputes.
  3. Legal Complexity: The legal procedures involved in registering complaints and seeking redressal can be cumbersome and time-consuming, deterring some homebuyers from pursuing their rights.
  4. Resource Constraints: Smaller developers, in particular, have struggled to comply with the financial obligations under Section 8 due to resource constraints.
  5. Interstate Variations: While RERA is a central law, its implementation varies from state to state, leading to disparities in the effectiveness of the legislation.

The journey of the Indian real estate sector toward increased transparency and accountability, as facilitated by Section 8 of the RERA Act, is a dynamic one. As the real estate market continues to evolve, it’s important to assess the ongoing and future implications of this important legislative provision:

Enhanced Investor Confidence: Section 8 has been a game-changer in enhancing investor confidence in the Indian real estate market. With developers being held accountable for project timelines, quality, and financial discipline, both domestic and international investors are more inclined to consider real estate as a viable investment option. The increased transparency and adherence to regulations have reduced the perceived risks associated with real estate investments.

Shift Towards Professionalism: The real estate sector is undergoing a transformation, with developers increasingly adopting professional project management practices. They are now more inclined to collaborate with registered real estate agents who bring expertise and ethical standards to property transactions. This shift toward professionalism is gradually changing the perception of the real estate industry from being opaque and unorganized to a sector governed by rules and professionalism.

Consumer Empowerment: Homebuyers have become more empowered due to Section 8. They have the legal backing to demand timely possession of their properties, high construction quality, and protection from financial mismanagement. This empowerment has made consumers more discerning, and they now actively seek projects that comply with RERA regulations, which has forced developers to align their practices accordingly.

Legal Redressal Mechanisms: With the establishment of real estate regulatory authorities in each state and Union Territory, there is now a formal mechanism for resolving disputes between developers and homebuyers. Section 8 provides homebuyers with a platform to voice their concerns and seek legal redressal. While there have been challenges in the effectiveness and speed of dispute resolution, the existence of these authorities is a significant step forward.

Impact on Smaller Developers: Smaller developers have faced challenges in complying with the financial obligations under Section 8. The requirement to maintain a separate escrow account for each project can strain their resources. However, it is crucial for smaller developers to adapt to these regulations to compete effectively in the market and gain the trust of homebuyers.

Continuous Improvement: The implementation of RERA and Section 8 is an ongoing process. As the real estate sector matures and stakeholders become more accustomed to the regulatory framework, it is expected that there will be continuous improvements and refinements to the legislation. This may include addressing the challenges in dispute resolution, streamlining the registration process, and further strengthening consumer protection measures.

The Role of Technology: Technology has played a significant role in facilitating compliance with Section 8. Online project registration and tracking systems have made it easier for developers to adhere to reporting requirements, while homebuyers can access project-related information more conveniently. Technology also has the potential to enhance transparency further by providing real-time updates on project progress.

Increased Accountability for Industry Bodies: Industry bodies and associations have also become more accountable in the post-RERA era. They play a crucial role in educating developers, real estate agents, and homebuyers about RERA compliance. These organizations have a responsibility to ensure that their members adhere to the regulatory framework, which, in turn, contributes to the sector’s overall professionalism.

Also Read A Comprehensive Overview of RERA Laws: Ensuring Transparency and Protection in Real Estate


Section 8 of the RERA Act has played a pivotal role in transforming the Indian real estate sector. It has instilled transparency, accountability, and efficiency in the industry, benefiting both developers and homebuyers. Developers are now compelled to adhere to project timelines, maintain construction quality, and handle finances responsibly. Homebuyers, on the other hand, are protected from delayed possession, structural defects, and financial fraud.

While there have been challenges in the implementation of RERA, the overall impact of Section 8 has been positive. As awareness grows and regulatory authorities become more effective, the real estate sector is likely to continue its journey towards becoming more consumer-centric and professional, further boosting investor and consumer confidence in the industry.

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