Supreme Court Raises Concerns Over RERA's Effectiveness, Suggests Abolition

The Supreme Court of India has expressed deep concerns regarding the functioning of Real Estate Regulatory Authorities (RERAs) across different states. The court observed that if RERAs are primarily helping defaulting builders rather than protecting homebuyers, then these authorities should perhaps be abolished.

A bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi made these remarks while hearing an appeal on the issue of moving the state RERA office in Himachal Pradesh. CJI Surya Kant stated, “It is high time that all the states should revisit and rethink constituting this authority.”

The Court did not hold back in its criticism. “Except facilitating the builders in default, this institution is doing nothing. Better abolish this institution, we don't mind that,” the CJI said.

The case in question arose from an order of the Himachal Pradesh High Court, which had stayed a state notification shifting the RERA office from Shimla to Dharamshala. The High Court noted several issues, including the lack of an alternative premises, the potential inconvenience to outsourced employees, and the risk of rendering RERA non-functional. The notification dated June 13, 2025, was stayed until further orders.

However, the Supreme Court allowed the state to move the RERA office to Dharamshala and directed that the appellate tribunal be shifted to avoid inconvenience to litigants.

During the hearing, the CJI remarked on the appointment of a retired IAS officer to RERA, stating, “In every state, it has become a rehabilitation centre. These authorities are all occupied by these persons.” The bench further said, “The people for whom this institution was created, they are completely depressed, disgusted, and disappointed. None of them are getting any effective relief. For whom this institution actually is now serving, you will find out when you meet these people.”

The Court’s criticism highlights several key concerns: - Delays in granting effective relief to homebuyers. - Weak enforcement of RERA orders. - Perceived leniency towards defaulting builders.

The Real Estate (Regulation and Development) Act, 2016, was introduced to regulate the real estate sector, increase transparency, ensure timely project completion, and protect homebuyers against delays and unjust practices. It was broadly considered a significant reform to bring accountability to a sector marked by project delays and a lack of oversight. However, about nine years after its application, the effectiveness of the law enforcement by the authorities is being questioned.

The Forum for Peoples Collective Efforts (FPCE), a homebuyers organization that supported the enactment of RERA, has noted that the Supreme Court’s statements reflect issues of the past that were brought up repeatedly. Its president, Abhay Upadhyay, pointed out that even after several years of RERA’s existence, there is still no guarantee that registered projects will be completed on time or that homebuyers will receive the benefits as promised. He emphasized that if RERA fails to accomplish its objectives, then either major reforms or a strong move may be needed to restore faith in the system.

While the Supreme Court has not given any order to abolish RERA, its critical remarks have certainly intensified the debate about the real estate regulation regime in India. Some legal experts argue that throwing away the law is not the solution; instead, the focus should be on strengthening enforcement mechanisms, ensuring transparent appointments, and improving the effectiveness of dispute resolution.

The Court’s observations have raised the alert of state governments, compelling them to reassess whether their RERA bodies truly cater to the interests of consumers or are merely protecting defaulting builders.