RERA Officials Warn Builders Against Misleading Property Advertisements

• RERA asks developers to avoid unrealistic property advertisements
• Builders warned against assured return schemes and super area selling
• UP RERA reports rise in project registrations and improved compliance

New Delhi: Real estate developers have been advised to adopt more transparent and responsible business practices, as officials from the Real Estate Regulatory Authority (RERA) warned against misleading advertisements and non-compliance with property laws.

Speaking at a real estate conference organised by FICCI in New Delhi, senior RERA officials stressed that developers must ensure buyers receive accurate information regarding projects, pricing, and legal agreements. They said unrealistic marketing claims and hidden details often lead to disputes between homebuyers and builders.

Delhi RERA Chairman Anand Kumar said advertisements should present a clear and realistic picture of the project rather than relying on exaggerated claims or confusing pricing structures. According to him, developers should disclose actual usable or covered area details instead of heavily promoting properties based only on “super area,” which can sometimes mislead buyers about the true size of a home.

He stated that transparency is essential in maintaining buyer confidence and ensuring smoother transactions in the real estate market. “Advertisements should be realistic and supported by verifiable facts,” he said during the conference.

RERA officials also cautioned builders against offering “assured return” schemes, where buyers are promised fixed monthly or yearly returns on investments. Authorities clarified that such schemes are not permitted under RERA regulations if they are misleading or not legally compliant.

Officials explained that buyers are often attracted by promises of guaranteed returns without fully understanding the risks involved. This can create financial complications later if projects are delayed or developers fail to meet commitments. Developers were advised to ensure that any financial benefits or promotional offers remain transparent and within the legal framework.

Another major point raised by the regulator was regarding advance payments from buyers. Anand Kumar reminded developers that under RERA provisions, builders cannot collect more than 10% of the property cost before executing a registered agreement for sale.

This rule was introduced as a safeguard for homebuyers to prevent misuse of funds and reduce fraudulent practices in the sector. Officials said many buyers are still unaware of these protections and encouraged consumers to understand their rights before investing in property.

The regulator also flagged concerns around emerging concepts such as virtual property sales and fractional ownership models. Buyers were advised to carefully verify ownership structures, legal documentation, and regulatory approvals before investing in such projects.

Uttar Pradesh RERA Chairman Sanjay R Bhoosreddy said regulatory monitoring has significantly improved discipline in the real estate sector over the last few years. According to him, stricter compliance measures have helped ensure better project completion rates and improved adherence to occupancy and completion certificate norms.

He highlighted that the real estate sector contributes nearly 12–13% to Uttar Pradesh’s Gross State Domestic Product (GSDP), which is above the national average. He added that stronger regulations and improved transparency have helped restore confidence among property buyers.

Bhoosreddy noted that disputes between buyers and developers have also reduced considerably. The number of daily cases being filed before the regulator has declined over the past two years, indicating better compliance by developers and greater awareness among consumers.

The UP RERA chairman also shared data showing a steady increase in project registrations in the state. Around 197 projects were registered in 2023, which increased to 259 projects in 2024 and further rose to 308 projects in 2025. Registrations in the current year have already crossed 100 projects, with officials expecting the number to exceed 400 by year-end.

Industry experts believe this growth reflects rising demand for housing and increasing trust in regulated real estate markets. However, officials warned that developers must avoid financial mismanagement and unnecessary project delays, as these issues can push projects towards insolvency and impact both builders and homebuyers.

While discussing challenges faced by the industry, officials pointed out that access to funding remains a major issue for developers. Financial institutions were urged to provide better term-lending support for viable real estate projects to ensure timely completion and healthier market growth.

At the same time, RERA authorities stressed that builders must manage project finances responsibly and prioritise timely delivery commitments.

Officials concluded that the future growth of India’s real estate sector will depend heavily on stronger compliance, transparent communication, and increased awareness among both developers and buyers.