RERA Needs Strengthening, Not Repeal, to Protect Home Buyers

Remarks by the apex court on the functioning of the Real Estate (Regulation & Development) Act (RERA), a 2016 legislation to protect home buyers, have sparked significant debate. Chief Justice Surya Kant, while hearing a plea by the Himachal Pradesh government to move its RERA offices from Shimla to Dharamshala, noted that the institution was primarily “facilitating” defaulting builders. He further stated that consumers were “completely disappointed” and suggested that it might be “better to abolish this institution.” He also urged states to reconsider constituting this authority.

RERA was introduced to address long-standing demands for protection against cheating builders. The Congress-led UPA government introduced a home buyers protection bill in 2013, which underwent several changes before being passed by Parliament in 2016 and notified for implementation from May 1, 2017. While RERA is a central act, it is the states that notify the rules and appoint regulators for its implementation.

RERA came not a moment too soon. The real estate industry was rife with cases of promoters taking advances from buyers and failing to deliver homes. In the Delhi-NCR region, builders Sanjay and Ajay Chandra, former promoters of Unitech, have been in and out of jails since 2011 for cheating and money laundering. In Mumbai, Dharmesh Jain of Nirmal Lifestyle was arrested in April 2023 for cheating 34 flat-buyers of Rs 11 crore.

RERA is essentially a consumer protection act designed to ensure transparency and compliance. All projects must be registered with the Regulatory Authority, and developers are required to deposit 70% of the funds raised into an escrow account dedicated to the project. Builders must disclose project layouts, approvals, and timelines, and cannot change plans without the buyers’ consent. If projects are delayed, developers are liable to be penalized. The regulator must also set up dedicated tribunals and dispose of complaints within 60 days.

The problem, however, lies in the implementation. Over the last 8 years, RERA’s results have been mixed. In Maharashtra, MahaRERA has had a good track record with over 50,000 project registrations, accounting for 69% of all projects registered in the country. It has also received the highest number of complaints—31,000 by the end of 2025, of which nearly 80% were resolved through ‘conciliation’ or adjudication. However, even in Maharashtra, the tribunals had over 8,000 complaints awaiting hearing by the end of 2025.

In most states, the tribunals are either not set up or are non-functional, and there is little to no complaint disposal machinery. RERA’s weakest link is its inability to enforce its own orders. For instance, Sumeet Mehta, a resident of Mumbai’s Goregaon suburb, has been waiting to recover 75% of the down payment he made to a builder since January 2024, despite an order in his favor. Section 40 (1) of the act provides for the recovery of payments and penalties, but consumers must navigate a lengthy process to convert an order into a ‘warrant’ and then execute it through asset auctions using police machinery.

In Maharashtra, by the end of 2025, warrants for the recovery of Rs 980 crore were issued by the RERA tribunal, but only Rs 209 crore had been recovered. In most states, the legal machinery is ineffective, and builders often ignore RERA Authority and tribunal directions. In Uttarakhand, for example, the RERA Authority had information on the completion of only 163 out of 643 registered projects.

“RERA can only function if there is 90-95% compliance. If the majority don’t comply, how can anything be enforced,” a former chairman of MahaRERA, Gautam Chatterjee, once told this writer.

Despite its flaws, this does not mean that the legislation should be repealed. The process of project registration under Section 5 of RERA, the monitoring of project progress, and the power given to consumers to file and process complaints against developers and realtors, have had a deterrent effect. In 2022, the Haryana Real Estate Regulatory Authority issued an order freezing the bank accounts of three mass housing projects of Ocean Seven Buildtech (OSB). Dozens of Mumbai builders have been fined heavily, up to Rs 20 lakh in some cases, for issuing misleading advertisements. These actions have had a positive impact on industry behavior.

However, the legislation needs significant amendments to provide more resources and enforcement power to RERA. The dispute resolution machinery, which is currently inadequate, should be bolstered with more tribunals and faster case closure. RERA authorities require stronger execution powers, similar to those of civil courts, including dedicated recovery cells to enforce monetary orders. Finally, stricter penalties for non-compliance, including criminal action where necessary, will help clean up the industry more effectively.