RERA Compliance Checklist for Builders in 2026

RERA — the Real Estate (Regulation and Development) Act, 2016 — quietly turned into the most consequential law in Indian real estate. Nine years after the Act and seven years after most state regulators became fully operational, RERA compliance is no longer a one-time registration. It is a quarterly heartbeat that every builder must keep, or face penalties, project deregistration, and recovery proceedings from buyers.

This 2026 checklist walks through what RERA compliance looks like for an Indian builder today. Use it to audit your project files, before a buyer files a complaint or your state authority sends a notice.

Why RERA Matters in 2026

Before RERA, the buyer-builder relationship was lopsided. Possession dates slipped by years, sale agreements were vague, and money paid was effectively trapped. RERA changed that — it gave buyers a fast-track regulator, made registration mandatory, mandated escrow, and capped advance collection.

For builders in 2026, this is no longer the new normal — it is the only normal. State authorities like MahaRERA, K-RERA, RERA-Rajasthan, TNRERA, HMDA-RERA, and others have built up detailed quarterly compliance regimes. Buyer awareness is at an all-time high; a single allottee who knows their rights can stall a project's launch.

The good news: builders who run a clean RERA process report fewer disputes, faster sales, and more institutional finance interest. Compliance is no longer pure cost — it is a marketing advantage.

Project Registration: The Starting Point

Any real-estate project that is more than 500 sqm of land area, or has more than 8 apartments, must be registered with the state RERA before any marketing or sale activity. Threshold details vary slightly across states; check your state's RERA notification.

The registration application requires the following:

• Project details — type, address, size, number of units, super area
• Proof of land title — sale deed, mutation extract, conversion certificate
• Approved layout plan, building plan, sanction letters
• Commencement certificate
• Architect, structural engineer, MEP consultant details with certificates
• Promoter details — KYC, financial statements, past projects
• Phasing plan with proposed completion dates
• Disclosure of pending litigations on the land
• Project cost estimate — split land cost, construction cost, IDC, marketing
• Registration fee (varies by state, scaled with project size)

Once approved, you receive a unique RERA registration number that must be displayed on every advertisement, brochure, agreement, and the project website.

Quarterly Compliance: Form 1, 2, 3

This is where most builders slip. Registration is one-time; quarterly compliance never stops until the project is closed.

Form 1 — Architect's Certificate

The project architect certifies that the construction work completed during the quarter conforms to the approved drawings and specifications. Quality and design conformance.

Form 2 — Engineer's Certificate

The structural engineer certifies the percentage of physical work completed up to the end of the quarter — at the building level, floor level, and activity level. Most state authorities require activity-wise progress (excavation, foundation, structure, brickwork, plaster, finishing, MEP) with cumulative percentages.

Form 3 — Chartered Accountant's Certificate

The CA certifies financial progress — money received from allottees, money deposited into escrow, money withdrawn from escrow, and that withdrawals are aligned with the engineer's certified physical progress (per the 70% rule).

All three must be uploaded to the state RERA portal by the deadline (typically within 15-30 days of quarter-end, varies by state). Late filings attract per-day penalties.

The 70% Escrow Rule

RERA Section 4(2)(l)(D) requires builders to deposit 70% of all money received from allottees (against unit sales) into a separate escrow account designated for that project. Withdrawals from this account are restricted to construction and land costs of the same project — fund diversion to other projects or operations is prohibited.

The 30% balance is freely usable by the builder for marketing, overheads, returns to investors, or other purposes. The 70% rule is the single biggest behavioural change RERA introduced for the industry.

Withdrawals from the escrow account must be supported by certificates from architect (for design conformance), engineer (for physical progress), and CA (for financial reconciliation). Banks operating the escrow are required to verify these certificates before releasing funds.

10% Advance Limit & Agreement for Sale

Section 13 of RERA caps the amount a builder can collect before signing a registered Agreement for Sale at 10% of the unit's gross sale value. The booking amount, expression of interest, application fee — taken together — cannot exceed this 10% threshold.

The Agreement for Sale itself must be in the form prescribed by state rules and must include: total consideration, payment schedule, possession date, specifications, common areas, defect liability period (5 years for major defects under RERA), and dispute resolution mechanism.

Common builder mistakes here include: accepting "non-refundable" booking amounts above 10%, using older agreement formats that miss RERA-mandated clauses, and not registering the agreement with the sub-registrar (separate from RERA registration).

State-Wise RERA Authorities

Each state runs its own RERA authority with its own portal, fees, deadlines, and procedural quirks. Some are notably more aggressive on enforcement than others.

If you operate in multiple states, you cannot rely on one process. Each authority has its own quirks — MahaRERA's quarterly format is different from K-RERA's, and a delay penalty in Rajasthan looks different from one in Karnataka.

Penalties & What Triggers Them

RERA penalties have teeth. Common triggers and consequences:

• Non-registration — fine up to 10% of project cost; further violation can attract imprisonment up to 3 years
• Late quarterly filing — per-day penalty (varies by state); accumulates fast
• False / misleading information — 5% of project cost
• Misuse of escrow funds — recovery as land revenue, criminal proceedings
• Violation of advance-collection limit — refund to buyer with interest, fines
• Delay in possession — buyer can claim refund with interest at SBI MCLR + 2% (or as state notifies), or accept delayed possession with monthly interest

The biggest financial risk is not the upfront fine — it is the accumulated buyer-interest liability when possession slips by 18+ months. On a 200-unit project, ₹50 lakhs in interest payouts is not unusual.

Complete 2026 Compliance Checklist

Builders running multi-project portfolios increasingly use software to track this. Site Setu maps each project's RERA milestones, sets quarterly reminders, and pulls physical progress data from daily progress reports directly into Form 2 drafting. For a deeper read, see our companion piece on RERA compliance for Indian builders.

FAQs

Is RERA registration mandatory for all projects?

RERA registration is mandatory for any real-estate project where the land area exceeds 500 sqm or where there are more than 8 apartments (the threshold can vary slightly state-by-state). Smaller projects below the threshold and projects that have received completion certificate before RERA notification are exempt.

What is the 70% escrow rule under RERA?

Section 4(2)(l)(D) of RERA requires builders to deposit 70% of the amounts realised from allottees into a separate escrow account, to be used only for construction and land cost of that specific project. This prevents fund diversion across projects.

What are RERA Form 1, Form 2, and Form 3?

Form 1 is the architect's certificate confirming construction quality. Form 2 is the engineer's certificate on physical progress. Form 3 is the chartered accountant's certificate on financial progress including escrow account utilisation.

What is the 10% advance limit under RERA?

Section 13 of RERA prohibits a builder from accepting more than 10% of the unit price as advance/booking amount before signing a registered agreement for sale with the allottee.

What are the penalties for RERA non-compliance?

Penalties range from monetary fines (up to 10% of project cost for non-registration) to imprisonment up to 3 years and de-registration of the project.