RERA Guidelines for Small Contractors and Builders

Introduction

The Real Estate (Regulation and Development) Act, 2016 (RERA) regulates the sale and marketing of real estate projects. Small contractors and builders often ask: Does RERA apply to me? This guide clarifies when RERA applies and what small contractors need to know.

Related: For daily operations, use Muster Roll Generator, RA Bill Generator, and Labour Attendance. For building approval, see Building Plan Approval Guide.

Who Does RERA Apply To?

RERA primarily applies to promoters — those who:

• Construct or develop a real estate project
• Sell or market plots, flats, or buildings to end buyers
• Advertise such projects

Usually not covered:

• Contractors doing labour-only or work contracts (mistry, carpenter, etc.)
• Sub-contractors engaged by a developer (the developer is the promoter)
• Individuals building on their own plot for self-use (no sale)
• Projects below state-defined thresholds (e.g., small land area or few units)

Check your state RERA website for exact thresholds. Some states exempt projects below a certain size.

Key RERA Requirements (For Promoters)

1. Project registration with the state RERA authority before advertising or selling
2. Escrow account — a percentage of buyer payments in a separate account
3. Disclosures — project details, approvals, timeline, layout
4. Timeline and delivery — penalties for delay; no arbitrary changes to layout
5. Carpet area — sale and agreement based on carpet area, not super built-up

State-Wise RERA

Each state has its own RERA authority and rules:

• Maharashtra: maharera.mahaonline.gov.in
• Karnataka: rera.karnataka.gov.in
• Gujarat: GujRERA
• Uttar Pradesh: UPRERA
• Tamil Nadu: TNRERA
• Telangana: RERA Telangana

Rules, thresholds, and penalties differ. Always verify on the official state portal.

For Small Contractors: Practical Takeaways

1. Labour contractors: Focus on BOCW compliance, muster roll, and attendance. RERA typically does not apply.
2. Small builders selling units: If you develop and sell flats/plots, you may be a promoter. Register the project with state RERA before marketing.
3. Work contractors: If you only execute work for a developer (who sells to buyers), you are not the promoter. The developer handles RERA.
4. Self-construction: Building your own house on your plot — no RERA (no sale). Ensure building plan approval.

Escrow and Funds

Promoters must deposit a portion of buyer payments in an escrow account. Withdrawals are linked to construction progress. This protects buyers. Contractors working for a promoter are paid by the promoter from their own funds, not directly from escrow.

Penalties for Non-Compliance

• Failure to register: Fines (often up to 10% of project cost)
• False disclosures: Penalties and possible imprisonment
• Delay in delivery: Compensation to buyers; in some cases, refund

State RERA websites list exact penalty amounts.

Summary

• RERA applies to promoters selling real estate projects to buyers
• Labour/work contractors usually do not need RERA registration
• Small builders selling units must check state thresholds and register if required
• State-wise rules vary; check the official state RERA portal
• Focus on labour law compliance and attendance for daily contractor work

For billing and site management, use RA Bill Generator, BOQ Tool, and Yojo contractor app.