RERA Compliance: Registration, the 70% Escrow, and Quarterly Returns (2026)

What RERA changed

The Real Estate (Regulation and Development) Act, 2016, RERA, brought the property sector under a regulator for the first time. Before it, a builder could advertise, take bookings and delay possession indefinitely with little recourse for buyers. RERA replaced that with mandatory registration, a ring-fenced escrow, a standardised definition of carpet area, and a fast grievance authority. Each state runs its own authority, MahaRERA in Maharashtra, UP RERA in Uttar Pradesh, and so on, so the framework is central but the portal and fees are state-specific.

Who must register, and when

RERA registration is mandatory for any residential or commercial project where:

• The land area exceeds 500 square metres, or
• The project has more than 8 apartments (counting all phases).

Projects below both thresholds are generally exempt, though many builders register voluntarily for the credibility it signals. The timing is the part that catches promoters out: registration must be obtained before any advertising, marketing, booking or sale. Section 3 of the Act prohibits all of those without a valid registration number, you cannot even put up a hoarding for an unregistered project.

The 70% escrow rule

The financial heart of RERA is the escrow. A promoter must open a project-specific escrow account and deposit 70% of all money collected from buyers into it. This money is legally ring-fenced:

• It can be used only for that project's land cost and construction, not diverted to other projects.
• Withdrawals must be proportional to construction progress, and certified, typically by an engineer, an architect and a Chartered Accountant.

This single mechanism is what stopped the old practice of funding one project with another's buyer money, the cause of countless stalled developments. Getting the withdrawal certifications right, and the accounting behind them, is where professional support matters.

Quarterly reports, audit and defect liability

Registration is the start, not the end. Ongoing RERA compliance includes:

• Quarterly Progress Reports (QPRs), updating construction milestones, approvals, timelines and often photographs, published on the state RERA portal for buyers to see.
• Annual audit of the project accounts, confirming that collections and escrow withdrawals reconcile.
• A five-year structural defect liability, the promoter must rectify structural defects reported within five years of possession.

Because these obligations run for the life of the project and beyond, RERA compliance is closer to an ongoing engagement than a one-off filing, much like ROC compliance for a company.

Real estate agents

RERA does not only regulate developers. Real estate agents must register separately, and in each state where they operate, before facilitating any transaction in a registered project. An agent's registration is generally valid for about five years and must be renewed on expiry. Operating unregistered exposes the agent to penalties in their own right.

Penalties and fees

The penalties are deliberately heavy, which is why compliance is not optional:

• Promoters: non-registration can attract a penalty of up to 10% of the estimated project cost, with continued default risking imprisonment of up to three years.
• Agents: penalties of up to ₹10 lakh for operating without registration.

Registration fees themselves are state-specific, typically a per-square-metre charge for projects (often in the ₹5 to ₹25 range) and a fixed fee for agents. Given the scale of the penalties relative to the modest fees, registering correctly and on time is simply good economics.

Our RERA compliance service handles project and agent registration, the escrow-withdrawal certifications, quarterly progress reporting and the annual audit, so a missed filing never puts a project's sales on hold.

Quick answers

When is RERA registration mandatory? For any project on land over 500 sq.m or with more than 8 apartments, before any advertising or sale. What is the 70% rule? 70% of buyer collections must sit in a project-specific escrow, drawn only for that project in proportion to progress. Do agents register? Yes, separately in each state. What are the penalties? Up to 10% of project cost for promoters, up to ₹10 lakh for agents. Need help? Our RERA team handles registration and ongoing compliance.