Real Estate Sector Anticipates Major Reforms Following Supreme Court Housing Rights Ruling
The Supreme Court's recent ruling declaring housing a fundamental right has sparked a wave of anticipated reforms in the real estate sector. Developers and legal experts welcome the move but emphasize the need for a multi-stakeholder approach to ensure effective systemic changes.
Real EstateHousing RightsIbc ReformsReraSupreme Court RulingReal Estate NewsSep 14, 2025
Stating that housing is neither a luxury nor a speculative instrument but a fundamental human need, the two-judge bench of Justices J B Pardiwala and R Mahadevan issued 12 binding directions. These include framing specific guidelines for insolvency proceedings in real estate, with timelines for project-wise corporate insolvency resolution processes (CIRPs) and safeguards for allottees.
Abhishek A Rastogi, founder of Rastogi Chambers, highlighted that the judgment provides much-needed clarity by distinguishing speculative investors from genuine homebuyers under the IBC framework. “The way forward now lies in a fact-sensitive application of this principle so that bona fide buyers, who often sign builder-dictated agreements, are not unfairly excluded,” he added.
The court also directed the government to address vacancies in the National Company Law Tribunal (NCLT), NCLAT, and state Real Estate Regulatory Authority (Rera) bodies on a war footing, along with constituting dedicated IBC benches with additional strength. Sujay Kalele, founder and managing director of TRU Realty, noted that the court’s directives to fill vacancies in Rera and NCLT will cut down delays and systemic bottlenecks that have long penalised honest developers.
With over 412,000 new housing units launched across the top seven Indian cities in 2024, buyers’ demand remains robust, but regulatory gaps and stalled projects continue to pose challenges, making these reforms both urgent and necessary. Tarun Bhatia, vice-chairman of NAR India, emphasized that any improvements to the Rera Act or related policies must be developed in active partnership with the industry, bringing together developers, realtors, homebuyer associations, financial institutions, legal experts, and regulators.
“Such collaborations will be key to ensuring reforms are both practical and future-ready, striking the right balance between consumer protection and ease of doing business,” Bhatia added. To this end, the Centre has been tasked with creating a committee within three months to suggest commercially viable systemic reforms. The committee, chaired by a retired High Court judge, will include representatives from the law and housing ministries, domain experts in real estate, finance and IBC, and two eminent industry members.
Experts noted that the implications of this ruling are twofold: safeguarding the integrity of the IBC as a collective resolution mechanism and reaffirming housing as a constitutional right. Kushagr Ansal, director of Ansal Housing, stated that protecting homebuyers’ interests, ensuring timely project completion, and strengthening Rera will restore trust and confidence in housing as a fundamental right.
Salil Kumar, director for marketing and business management at CRC Group, added that the measures will improve transparency, accelerate delivery, and strengthen buyer confidence, laying the foundation for sustainable growth. Rastogi cautioned that consistent application by NCLTs and coordination with Rera will be critical to ensure the balance struck by the court translates into real protection for stakeholders.
Calling the ruling a significant step for India’s housing market, G Hari Babu, National President of Naredco, said project-wise insolvency proceedings and escrow accounts for early-stage projects will safeguard homebuyers’ investments while curbing speculative practices that have delayed many developments. “Technology-led practices such as digital escrow tracking, online project monitoring, and transparent disclosure systems will play a vital role in implementing the court’s vision. It will also boost global investor confidence,” Kalele added.
Developers welcomed the decision to consider establishing a revival fund under the National Asset Reconstruction Company Limited (NARCL) or expanding the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund to provide bridge financing for stressed projects under insolvency. “The directives to enhance last-mile funding, consider revival funds, and undertake systemic reforms across the sector are expected to revive stalled projects, improve accountability, and accelerate the delivery of affordable and mid-income housing,” Babu concluded.
Frequently Asked Questions
What did the Supreme Court rule regarding housing?
The Supreme Court declared housing a fundamental right under Article 21 of the Constitution, citing it as a fundamental human need rather than a luxury or speculative instrument.
What are the key directions issued by the Supreme Court?
The key directions include framing specific guidelines for insolvency proceedings in real estate, setting timelines for project-wise corporate insolvency resolution processes (CIRPs), and ensuring safeguards for allottees.
How will the government address vacancies in regulatory bodies?
The government has been directed to fill vacancies in the National Company Law Tribunal (NCLT), NCLAT, and state Real Estate Regulatory Authority (Rera) bodies on a war footing, along with constituting dedicated IBC benches with additional strength.
What are the implications of this ruling for the real estate sector?
The ruling has twofold implications: safeguarding the integrity of the IBC as a collective resolution mechanism and reaffirming housing as a constitutional right. It aims to protect homebuyers’ interests, ensure timely project completion, and strengthen regulatory bodies.
What are the expected outcomes of the reforms?
The reforms are expected to improve transparency, accelerate project delivery, strengthen buyer confidence, and lay the foundation for sustainable growth in the real estate sector. They also aim to revive stalled projects and enhance accountability.
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