'Better to abolish': Supreme Court questions RERA credibility; has the authority lost its way?

Reramm

• Supreme Court criticizes RERA for favoring builders over buyers
• Court allows Himachal RERA office shift, urges smooth functioning
• Experts call for RERA reforms, not abolition, to restore trust

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The Supreme Court has come down hard on real estate regulatory authorities, saying they should be abolished as they appear to favour builders and have failed to protect homebuyers, which is their intended purpose.

“All states should now think of the people for whom the institution of RERA was created. Except facilitating builders in default, it is not doing anything else. Better to just abolish this institution,” Chief Justice of India (CJI) Surya Kant said while hearing a case recently.

The Real Estate Regulatory Authority (RERA) was enacted in 2016 under the Real Estate (Regulation and Development) Act, 2016 to bring transparency, accountability, and efficiency to the real estate sector. RERA’s main aim was to ensure timely delivery for homebuyers who battled years-long delays to get their houses.

The country’s top court slammed RERA for functioning like “rehabilitation centres for retired bureaucrats lacking legal and sectoral expertise,” said Alay Razvi, Managing Partner, Accord Juris.

What is the case?

The case concerns the transfer of the RERA office from Shimla to Dharamshala in Himachal Pradesh. The state government issued a notification to shift the office but the move was stayed by the Himachal High Court. It said in the absence of proper alternative arrangements, the transfer could disrupt the authority’s functioning.

The Supreme Court set aside the order, allowing the relocation. It also directed that the functioning of both RERA and its appellate tribunal should not be affected and pending cases heard regularly.

“With a view to ensure that persons affected by RERA orders are not inconvenienced, the principal appellate is also moved to Dharamshala,” the bench directed, as it made scathing observations about the authority’s functioning.

Why is RERA losing credibility?

“RERA is losing credibility primarily because of weak enforcement, delays in adjudication, poor recovery of awarded amounts and perceived leniency towards defaulting developers,” said Raheel Patel, Partner, Gandhi Law Associates.

In several states, orders remain on paper without meaningful execution, which undermines homebuyer confidence. Inconsistent functioning across states and a lack of institutional independence have further diluted its authority,” Patel said.

Echoing concerns over implementation gaps, industry and consumer voices also point to a deeper shift in the regulator’s functioning.

“RERA has abandoned its consumer protection mandate and become a real estate sector growth catalyst, prioritising builders over homebuyers,” said Abhay Upadhyay, President, Forum For People's Collective Efforts and Member, Central Advisory Council, RERA, MoHUA.

“Authorities grant indiscriminate extensions violating Section 6, ignore pre-registration sales despite Section 3 prohibition, impose trivial penalties making non-compliance profitable, among other things."

How to make RERA effective?

The Supreme Court’s remarks can act as a catalyst for strengthening the regulatory framework.

“Positive and practical amendments, along with more uniform implementation, will enhance investor confidence and encourage responsible growth,” said Vikas Bhasin, Managing Director, Saya Group.

A stronger and more efficient RERA ecosystem will contribute to a more stable, transparent and professionally managed real estate sector, he said.

Abolishing RERA is not the solution, say experts.

“The sector requires a dedicated regulator and before 2016, homebuyers were left to pursue fragmented remedies before consumer and civil courts. The legislative framework remains sound. The issue lies in its implementation rather than in its existence,” Patel said.

Others agree that reform, not removal, is the way forward.

“Based on my experience in Tamil Nadu, what is crucial at this stage is consistency in the functioning of the authority, effective monitoring of project registrations, timely uploading of documents and mandatory disclosures, prompt issuance of notices, and swift action against defaulters. Establishing Conciliation Forums with civil society representation, within RERA, would be a positive step,” said S Saroja, Executive Director, Consumer and Civic Action Group.

What should RERA do to maintain its credibility?

RERA must enforce strict timelines, ensure swift recovery of dues, publish compliance and enforcement data, strengthen institutional capacity, and maintain independence from executive interference.

“Implementation must always be sought to be improved. Delays should be reduced and enforcement of orders must be quick and effective,” said Anil Harish, Managing Partner, DM Harish & Co.

Clarity of regulatory intent is equally critical to rebuilding trust, say experts.

“RERA authorities must choose: protect buyers or protect builders. They cannot do both. The gap between RERA's intent (consumer protection) and execution (builder facilitation) is where credibility has been lost. Closing that gap is how it's regained,” Upadhyay said.