- Supreme Court criticized RERA for benefiting defaulting builders
- Real Estate Regulatory Authority was established in 2016 to regulate real estate
- Builders often bypass RERA rules and continue to sell flats despite project bans
The Supreme Court issued a scathing remark on the Real Estate Regulatory Authority (RERA) on Thursday. Chief Justice Surya Kant said RERA has accomplished nothing concrete beyond providing benefits to defaulting builders. The court said the time has come to shut down RERA.
The Supreme Court made these strong remarks while hearing a case involving the Himachal Pradesh RERA.
Why Was RERA Created
The real estate sector in India expanded rapidly in the first decade of this century. Large buildings with built-in flats appeared in major cities across most states. There was no specific law governing this.
Consequently, builders acted arbitrarily, causing significant hardship for buyers. Projects funded by loans were not completed on time, preventing buyers from receiving possession on time.
Yet, they continued to pay their loan installments. The situation reached such a point that builders in Noida Extension, adjacent to the national capital Delhi, sold flats out of thin air to people. They hadn't done any work on the land.
Later, the cases started reaching courts. With the Supreme Court's intervention, people received their flats with considerable delay, causing them mental and financial distress.
The government took this concern and introduced the Real Estate (Regulation and Development) Act, 2016, in parliament, promising to protect homebuyers' rights and bring transparency.
The law came into force on May 1, 2017. This gave India its first real estate regulatory body. It has been notified by all the states and Union Territories. According to the Union Ministry of Housing and Urban Affairs, RERA has been established in all states except Ladakh, Nagaland, Sikkim, Manipur, and Mizoram.
Builders Showed Disdain
When this law was enacted, the government and its supporters touted it as a law that would empower the consumer. They claimed it would promote accountability and financial discipline.
The law mandates that builders keep 70 per cent of the funds collected from buyers in a separate bank account for the construction of the project. Funds from this account can only be withdrawn after verification by the architect, chartered accountant, and project engineers.
This was intended to ensure timely project completion, as funds can only be withdrawn for construction purposes. The law mandates pre-launch registration with RERA for projects with an area exceeding 500 square metres (sqm) and more than eight apartments.
It also says developers cannot accept any deposits or advances without entering into a sale agreement with buyers. Registration requires providing information such as the project's carpet area, layout, and timeframe. Builders are required to mention the RERA registration number in their project advertisements.
Within a few years of its establishment, questions began to be raised about RERA's relevance. Builders began circumventing RERA regulations. The Maharashtra RERA banned new flat sales due to delays in 189 projects in Pune and Pimpri Chinchwad. However, the builders ignored this and continued selling flats.
Following RERA's action, the builders' organisation CREDAI came in their support. CREDAI said the builders completed projects on time, but for some reason they were unable to upload documents to RERA's website.
Supreme Court's Observations
The Supreme Court's comments on RERA are not new. Previously, in September 2024, a bench of Justices Surya Kant and Justice Ujjal Bhuyan made similar comments about RERA. At that time, the court said RERA had become a haven for former bureaucrats who sabotaged the RERA Act.
"We don't want to talk about RERA. It has become a rehabilitation centre for former bureaucrats who have sabotaged the entire scheme of the law," the Supreme Court said.
In September 2025 too, the Supreme Court issued strong comments expressing concern over the state of RERA. A bench of Justices JB Pardiwala and R Mahadevan directed states to ensure RERA has adequate infrastructure, expertise, and resources.
The Supreme Court mandated that every RERA member must have at least one legal expert or consumer advocate with proven expertise in the real estate sector. It said RERA should conduct thorough due diligence before approving any project.
RERA Receives Barrage Of Complaints
According to data on RERA's website, 1.58 lakh projects are registered across the country. Additionally, 1.12 lakh agents are registered. RERA received 1.89 lakh complaints from across the country. Of these, 1.55 lakh have been resolved.
According to RERA, Maharashtra has the highest number of projects in the country. Of the total 53,046 projects in Maharashtra, 50,487 are residential projects. These residential projects contain 41 lakh flats. RERA received 33,202 complaints against these projects. Of these, 27,060 complaints have been resolved.
Uttar Pradesh has a total of 4,111 projects going on. Of these, 3,464 are residential. These residential projects contain 11 lakh flats. The UP RERA received a total of 60,021 complaints against these projects. Of these, 52,047 complaints have been resolved. UP also reported the highest number of complaints with RERA.
