Supreme Court Mandates Registration of New Housing Projects with Local Revenue Authorities
The Supreme Court has issued a directive that every new residential real estate transaction must be registered with local revenue authorities upon the buyer paying at least 20% of the property cost. This move aims to protect homebuyers, especially senior citizens, and ensure the timely completion of housing projects.
Real EstateHousing ProjectsSupreme CourtReraHomebuyersReal Estate NewsSep 13, 2025
The Court further directed that contracts significantly deviating from the Model RERA Agreement to Sell, or those incorporating returns or buyback clauses where the allottee is over 50 years old, must be supported by an affidavit sworn before the competent Revenue Authority. This affidavit must certify that the allottee understands the attendant risks.
The bench, comprising Justice JB Pardiwala and Justice R Mahadevan, passed these directions while upholding an NCLAT judgment that rejected insolvency petitions filed by speculative buyers against a housing project. The Court's decision emphasizes the need to protect the interests of genuine homebuyers and ensure the stability of the real estate market.
To further safeguard the interests of homebuyers, the Court directed that in projects at nascent stages, such as where land is yet to be acquired or construction has not commenced, proceeds from allottees must be placed in an escrow account and disbursed in phases aligned with project progress, as per a RERA-sanctioned SOP. Every RERA must devise such SOPs within six months from the date of the order.
The Court also declared that the right to housing is not merely a contractual entitlement but a facet of the fundamental right to life under Article 21. The Union Government has been directed to consider creating a revival fund to revive stressed housing projects to avoid their liquidation. The judgment, authored by Justice Mahadevan, expresses deep concern over the plight of homebuyers whose hard-earned money gets stuck in stalled apartment projects.
A home is not merely a roof over one's head; it is a reflection of one's hopes and dreams – a safe space for a family, a refuge from the worries of the world. With India rapidly industrializing and rural-to-urban mobility proceeding at a rapid pace, the demand for housing has risen sharply. Yet, the plight of tax-paying middle-class citizens paints a disheartening picture. Many are compelled to shoulder a double burden – servicing EMIs on one hand and paying rent on the other – only to find their “dream home” reduced to an unfinished building.
For many individuals, a stable roof over their family's head is all they desire. The anxiety of not having a home despite paying a fortune is bound to take a serious toll on health, productivity, and dignity. It is therefore imperative that the life savings of a common person culminate in timely possession of their promised home. Article 21 would mandate nothing less. The Court observed that it would be thoroughly erroneous to treat home-buying as a mere commercial transaction or to reduce housing to the status of speculative instruments such as stocks, debentures, futures, or options through creative contractual devices.
The right to secure, peaceful, and timely possession of one's home is therefore a facet of the fundamental right to shelter enshrined under Article 21. The State has the corresponding duty to secure this right. The Court also issued various other directions, such as filling up vacancies in NCLT, NCLAT, and RERA, and made various other suggestions to fortify the regulatory framework.
The Court further ordered that the resolution of real estate insolvency should proceed on a project-specific basis rather than the entire corporate debtor. This approach would protect solvent projects and genuine homebuyers from collateral prejudice. Through these directions, the Court seeks to restore faith in the regulatory and insolvency framework, deter speculative misuse, and ensure that the “dream home” of India's citizens does not turn into a lifelong nightmare.
Frequently Asked Questions
What is the new directive from the Supreme Court regarding new housing projects?
The Supreme Court has directed that every new residential real estate transaction must be registered with local revenue authorities upon the buyer paying at least 20% of the property cost.
What additional measures are required for contracts with senior citizens?
Contracts that significantly deviate from the Model RERA Agreement to Sell or incorporate returns/buyback clauses for allottees over 50 years old must be supported by an affidavit sworn before the competent Revenue Authority, certifying that the allottee understands the risks.
How will the funds be managed in nascent projects?
In projects at nascent stages, proceeds from allottees must be placed in an escrow account and disbursed in phases aligned with project progress, as per a RERA-sanctioned SOP.
What is the significance of the right to housing under Article 21?
The right to housing is declared as a facet of the fundamental right to life under Article 21, emphasizing the need for timely possession of a home and the state's duty to secure this right.
How will the resolution of real estate insolvency be handled?
The resolution of real estate insolvency should proceed on a project-specific basis rather than the entire corporate debtor to protect solvent projects and genuine homebuyers from collateral prejudice.
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