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This article discusses non compliance of Rule 16 of Bihar RERA Rules, 2017 which requires the RERA to publish some mandatory information regarding real estate projects in Bihar on their website, including litigation details, land title search report, financial health of promotors etc.

What is Real Estate (Regulation & Development) Act, 2016 (RERA)?

The Real Estate (Regulation and Development) Act, 2016 (RERA) marked a turning point in India’s real estate landscape. Enacted to address deep-rooted issues of fraud, delays, and lack of transparency, the law was designed to protect the rights of homebuyers and introduce much-needed accountability and structure to a largely unregulated sector.

The legislation was passed by the Rajya Sabha on March 10, 2016, and by the Lok Sabha on March 15, 2016. It officially came into effect on May 1, 2016, although only 61 of its 92 provisions were notified at that time. The remaining provisions were brought into force a year later on May 1, 2017.

RERA made it mandatory for each state and Union Territory to establish its own Real Estate Regulatory Authority, responsible for formulating and enforcing state-specific regulations under the broader framework of the central Act.

Divided into 10 chapters and 92 sections, the Act aims to bring transparency, efficiency, and investor confidence to the real estate market. It sets clear obligations for builders and developers, introduces stringent disclosure norms, and empowers consumers with legal remedies in case of non-compliance.

Why the Real Estate (Regulation & Development) Act, 2016 was Needed

Prior to RERA, the real estate sector in India suffered from various issues such as:

• Lack of accountability from developers
• Rampant project delays despite full payments
• Misleading advertising and false promises
• Absence of legal remedies specifically addressing real estate concerns

Buyers were often forced to seek relief under the Indian Contract Act or the Consumer Protection Act. Developers frequently diverted funds from one project to another, resulting in stalled or delayed projects. Moreover, there was no statutory requirement to disclose essential project details, leaving homebuyers uninformed.

RERA was thus enacted to bridge this regulatory gap, build trust, ensure transparency, and protect the interests of consumers and investors alike.

The Responsibility of Bihar RERA to Ensure Compliance by the Builders and Protect Consumers.

Following the enactment of the central Act, the Bihar Real Estate (Regulation and Development) Rules, 2017 were notified to regulate the state’s real estate sector. These rules established Bihar RERA, which mandates registration of all real estate projects and imposes various obligations on builders and promoters.

A critical provision under the Bihar RERA Rules is Rule 16, which prescribes mandatory disclosures by promoters. These include:

• Approved layout and building plans
• Land title and encumbrance certificates
• Project timelines and financial statements
• Insurance details for the project
• Annual reports and litigation disclosures

This rule ensures that homebuyers have access to verified and relevant information before making an investment.

Non-Compliance with Rule 16: Alarming Findings

A survey of 10 random projects in Bihar (conducted by us internally) revealed that out of 42 mandatory disclosure requirements under Rule 16, compliance was extremely poor. Notably, litigation details were disclosed by almost none of the developers, leaving buyers in the dark about potential legal disputes involving the property.

This lack of transparency means that buyers risk:

• Investing in disputed or encumbered properties
• Getting involved in protracted legal battles
• Losing their savings due to project abandonment or fraud

When required disclosures are missing, the intent and objective of RERA are compromised. Despite provisions for penalties, enforcement by the RERA authorities remains inconsistent, allowing non-compliant developers to operate unchecked. This creates an uneven playing field that disadvantages honest builders and erodes buyer confidence.

Impact of Non-Compliance on Homebuyers

Non-compliance with Rule 16 has severe implications:

• Buyers remain uninformed about land titles, approvals, and project timelines.
• Due diligence becomes impossible, exposing them to fraud and delays.
• Financial and emotional stress due to stalled or litigated projects.

Rule 16 was designed to ensure that homebuyers have access to complete and accurate information. When developers fail to disclose this information, the very objective of buyer protection is defeated.

Mandatory Role of Authorities: Rule 17

Under Rule 17, it is the duty of Bihar RERA to collect, verify, and publish all disclosures from promoters on its official website. This includes:

• Verification of land ownership
• Financial credibility of the developer
• Previous projects and litigation history

These disclosures are not optional but statutory obligations. Yet, widespread non-compliance by developers and passive enforcement by authorities remain major challenges.

Why Compliance with Rule 16 is Urgently Needed

The consequences of non-compliance are evident in the growing number of stalled or abandoned projects and increasing buyer complaints. Unscrupulous builders disappear after collecting advances, eroding trust in the sector.

Immediate and strict enforcement of Rule 16 would lead to:

• Restoration of public trust in real estate
• Revival of investor confidence and sector growth
• Prevention of financial losses for innocent buyers
• Fair competition for honest developers

By ensuring mandatory disclosures, RERA can protect consumers and stimulate growth in the housing sector, which plays a vital role in the state’s economic development.

Conclusion

The Real Estate (Regulation & Development) Act, 2016, and Bihar RERA Rules, 2017, were introduced to bring transparency and accountability to the real estate sector. However, the widespread non-compliance with Rule 16, especially regarding mandatory disclosures, remains a serious concern.

This failure undermines buyer protection and promotes fraudulent practices. Strict enforcement of Rule 16 by Bihar RERA is the need of the hour to ensure:

• Transparency
• Accountability
• Consumer protection
• Sectoral growth

It is not just a regulatory requirement—it is a moral and legal duty to protect citizens who invest their life savings in real estate. Timely action and effective enforcement of RERA provisions will pave the way for a robust, fair, and trustworthy real estate market in Bihar. 

About the Authors

Prachi Prashar

B.A. LL.B. (Hons.) Candidate, 2024–2029

KIIT School of Law, Bhubaneswar

Email: prachiprashar14@gmail.com

Prachi Prashar is a law student at KIIT School of Law with a keen interest in regulatory frameworks and consumer protection laws. Her research reflects a strong commitment to legal reform and public interest advocacy.

Md Almas Ahmar

B.A. LL.B. (Hons.) Candidate

Dr. B.R. Ambedkar National Law University, Sonepat

Email: mdalmasahmar@gmail.com

Md Almas Ahmar is pursuing law from Dr. B.R. Ambedkar National Law University with a research focus on real estate regulation and legal compliance. He brings a critical perspective on legal enforcement mechanisms and their impact on the public.

Developers must comply with Rera Bihar to foster trust and integrity in their projects.