Supreme Court Directs States to Strengthen Real Estate Regulatory Authorities

The Supreme Court has issued a series of directives to enhance the effectiveness of real estate regulatory authorities across the country, including the Odisha Real Estate Regulatory Authority (ORERA).

Real EstateReraSupreme CourtOreraRegulatory AuthoritiesReal EstateSep 16, 2025

Supreme Court Directs States to Strengthen Real Estate Regulatory Authorities
Real Estate:The Supreme Court has issued a series of directives aimed at enhancing the effectiveness of real estate regulatory authorities across the country, including the Odisha Real Estate Regulatory Authority (ORERA). The judgment, delivered in the case of Mansi Brar Fernandes vs Shubha Sharma and others on September 12, mandates states and Union Territories to implement comprehensive measures to ensure RERA bodies are fully equipped to regulate the sector effectively.

The SC order emphasizes the need for adequate staffing and infrastructure within RERA authorities. It stipulates that each RERA must include at least one member who is a legal expert or consumer advocate with proven expertise in real estate. The move is intended to prevent RERA bodies from becoming 'toothless tigers' and to facilitate the timely implementation of orders.

Key directives include the requirement for RERA authorities to conduct thorough diligence before approving projects. The court warned that any failure in this regard, leading to a miscarriage of justice, would be considered 'an error unpardonable in law' and could result in strict judicial intervention. Additionally, the SC instructed RERA bodies to establish standard operating procedures (SOPs) for escrow accounts within six months. The SOPs are crucial for projects in their nascent stages, ensuring that funds from allottees are managed transparently and disbursed in alignment with project progress.

The judgment also mandates the registration of residential transactions with local revenue authorities once a buyer has paid at least 20% of the property cost. This measure aims to enhance transparency and protect vulnerable groups, such as senior citizens. Furthermore, contracts that significantly deviate from the model RERA agreement to sell, particularly those with returns or buyback clauses, must be supported by an affidavit. The affidavit, sworn before a competent revenue authority, is designed to safeguard bona fide homebuyers and senior citizens by ensuring they understand the risks involved.

The apex court reaffirmed RERA's role as the primary forum for addressing homebuyers' grievances, distinct from the Insolvency and Bankruptcy Code (IBC) and consumer forums. The clarification is intended to prevent overlapping proceedings and jurisdictional confusion. In a bid to achieve uniformity in RERA rules across the country, the court urged the Union government to conduct a consultative exercise to address ambiguities and fill legislative gaps.

The state government has already begun taking steps to strengthen ORERA, coordinating with related departments to implement the SC directives. Real estate expert Bimalendu Pradhan emphasized the importance of RERA acting as a regulatory body rather than a grievance redressal system. 'RERA should be strengthened to bring much-needed regulation to the real estate sector, especially in cities like Bhubaneswar and Puri,' he said.

Frequently Asked Questions

What is the purpose of the Supreme Court's directives to RERA authorities?

The purpose of the Supreme Court's directives is to enhance the effectiveness of real estate regulatory authorities (RERA) by ensuring they are adequately staffed, have the necessary infrastructure, and follow standard operating procedures to regulate the real estate sector effectively.

What are the key requirements for RERA authorities as per the Supreme Court's order?

Key requirements include conducting thorough diligence before approving projects, establishing standard operating procedures for escrow accounts, and registering residential transactions with local revenue authorities once a buyer has paid at least 20% of the property cost.

Why is the registration of residential transactions important?

The registration of residential transactions with local revenue authorities aims to enhance transparency and protect vulnerable groups, such as senior citizens, by ensuring that transactions are properly documented and monitored.

What is the role of RERA in addressing homebuyers' grievances?

RERA is the primary forum for addressing homebuyers' grievances, distinct from the Insolvency and Bankruptcy Code (IBC) and consumer forums. This role is intended to prevent overlapping proceedings and jurisdictional confusion.

How will the Union government ensure uniformity in RERA rules?

The Union government is urged to conduct a consultative exercise to address ambiguities and fill legislative gaps, ensuring uniformity in RERA rules across the country.

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