Supreme Court Scrutinizes RERA: The Importance of Annual Reports for Homebuyer Protection
The Real Estate Regulatory Authority (RERA) is once again under the spotlight, this time due to critical observations made by the Supreme Court. The apex court has expressed deep concerns about the role and effectiveness of RERA, particularly in safeguarding the interests of homebuyers. Chief Justice Surya Kant and Justice Joymalya Bagchi remarked that the time has come for all states to reconsider the structure and composition of RERA, suggesting that the body appears to be more focused on facilitating errant builders rather than holding them accountable.
Almost ten years after the Real Estate (Regulation and Development) Act, 2016 came into force, attention is shifting from developers to the functioning of the regulator itself. The apex court observed that the very individuals RERA was meant to protect are now deeply disillusioned. This sentiment is echoed by homebuyer advocacy groups, who have raised concerns about the transparency and accountability of RERA.
Understanding the Importance of RERA Annual Reports
Fundamentally, the objective of RERA was to move away from opaque practices towards transparent and measurable regulatory oversight. The annual report serves as a crucial evaluation tool for the regulator’s functioning. These reports should ideally contain information on project registrations, complaints received, project completion status, enforcement of regulatory orders, and actions taken against non-compliant developers.
According to an ET report, Section 78 of RERA mandates that every state regulator release an annual report detailing its activities and performance. In early 2023, the Ministry of Housing and Urban Affairs issued a standardized reporting format to allow for consistent comparison across states. Discussions around RERA’s performance often focus on metrics like the number of projects registered and the volume of complaints resolved. However, these indicators reflect activity rather than actual outcomes.
Annual reports are intended to provide insight into whether projects were completed on time, whether orders related to refunds and compensation resulted in actual payments, and whether possession directives ultimately led to homes being handed over to buyers. A complaint may be marked as resolved once an order is issued, but genuine relief exists only when that order is implemented. Without enforcement-related data, it becomes difficult to objectively evaluate the effectiveness of the law.
What’s the Row About?
The Forum for People's Collective Efforts (FPCE), an organization representing homebuyers, has alleged that more than 75% of Real Estate Regulatory Authorities have either never released their annual reports, stopped publishing them after the initial years, or failed to keep them updated. According to the group, only a limited number of states have made reports available up to FY24, while some major real estate markets issued reports earlier but subsequently discontinued the practice. FPCE has also noted that in several cases where reports have been published, the format recommended by the ministry has not been followed, making meaningful comparison across states difficult.
What Are the Implications of the Alleged Lapses?
India has a history of significant delays in housing projects. A government-appointed panel chaired by Amitabh Kant identified nearly 412,000 housing units across the country as stressed. RERA was introduced as a structural remedy, incorporating mechanisms such as escrow-linked project funding and mandatory disclosures. However, if data on project completion and enforcement remains unavailable, policymakers are left without a clear basis to judge whether the sector’s apparent recovery reflects a genuine strengthening of delivery standards or simply the beginning of another cycle of new project launches.
While registration figures indicate the addition of supply, completion statistics provide a more accurate measure of the sector’s underlying health. The consequences extend beyond the interests of homebuyers alone. Governments depend on reliable delivery data to shape taxation decisions and urban planning strategies, while financial institutions use completion records to evaluate lending risk. Regular and standardized reporting could help identify whether delays arise from funding constraints, regulatory hurdles, or litigation, and whether certain developers repeatedly default.
RERA was designed to move the sector from a system based on trust to one grounded in transparency. If regulators themselves cannot be assessed, the framework risks operating primarily as a project registration platform rather than a true mechanism of accountability.
Conclusion
The Supreme Court’s scrutiny of RERA highlights the urgent need for transparency and accountability in the real estate sector. Homebuyers, policymakers, and financial institutions all stand to benefit from the timely and accurate publication of RERA annual reports. Ensuring that these reports are comprehensive and standardized is crucial for maintaining the integrity and effectiveness of the regulatory framework.
