'Better To Abolish It': SC Slams RERA, Says Authorities Serving Defaulting Builders Instead Of Homebuyers

• The Supreme Court has sharply criticised the functioning of Real Estate Regulatory Authorities (RERA), suggesting states should reconsider their existence.
• Chief Justice of India Surya Kant remarked that RERA bodies appear to be serving defaulting builders rather than homebuyers.
• The top court allowed the Himachal Pradesh government to shift its RERA office to Dharamshala despite earlier High Court objections.
• Homebuyers' groups have backed the court's concerns, calling for urgent reforms or a complete overhaul of the system.

The Supreme Court on Thursday delivered strong observations on the performance of Real Estate Regulatory Authorities (RERA), questioning whether the regulatory bodies have fulfilled their intended purpose of protecting homebuyers and ensuring accountability in the real estate sector.

During a hearing, the court said it may be "better to abolish" such authorities if they continue to fail consumers and instead appear to benefit errant builders.

Supreme Court's sharp observations on RERA

A bench led by Chief Justice of India Surya Kant and Justice Joymalya Bagchi expressed dissatisfaction with the functioning of RERA bodies across states. The court said it was time for states to reassess the need for such institutions if they are not delivering effective relief to homebuyers.

The CJI observed that the regulatory framework, introduced to safeguard consumer interests, seemed to have deviated from its core objective.

Key remarks made by the bench include:

• States should revisit the purpose behind setting up RERA authorities.
• Many such bodies appear to be "facilitating builders in default."
• The institutions have failed to provide effective relief to homebuyers.
• Several RERA offices have become "rehabilitation centres" for retired officials.

The court also noted that homebuyers, for whom the law was enacted, remain "depressed, disgusted and disappointed" due to lack of timely and effective remedies.

Context: Hearing related to Himachal Pradesh RERA office

The strong remarks came while the Supreme Court was hearing an appeal against a Himachal Pradesh High Court order that had stayed a state government notification shifting the RERA office from Shimla to Dharamshala.

Earlier, the High Court had questioned the state's decision, noting that the relocation was announced without identifying an alternative office space. It had also expressed concern that shifting outsourced staff could render the authority defunct.

However, the Supreme Court intervened on February 12 and permitted the state government to shift the RERA office to Dharamshala. The bench also directed that the appellate tribunal be relocated to the same city to avoid inconvenience to affected parties.

The court said:

• The principal appellate authority should also move to Dharamshala.
• The relocation must ensure litigants and stakeholders are not inconvenienced.

'Rehabilitation centres for retired bureaucrats': Court reiterates concerns

This is not the first time the Supreme Court has criticised RERA authorities. In September 2024, another bench of Justices Surya Kant and Ujjal Bhuyan had described RERA bodies as "rehabilitation centres for retired bureaucrats."

The remarks were made during a hearing related to homebuyers seeking relief from banks over pre-EMI and full EMI payments on stalled housing projects.

The court then observed that the original objective of the Real Estate (Regulation and Development) Act, 2016 had been frustrated by ineffective implementation.

Why RERA was created?

• The RERA Act, introduced in 2016, was aimed at bringing transparency and accountability to India's real estate sector. Its primary objectives included:
• Protecting homebuyers from project delays and fraud
• Ensuring timely completion of housing projects
• Regulating developers and real estate agents
• Providing a fast-track dispute resolution mechanism

Despite these goals, many homebuyers continue to face delays, cost overruns and legal hurdles in stalled or incomplete projects.

Homebuyers' groups welcome Supreme Court remarks

Homebuyers' associations have welcomed the Supreme Court's strong observations, saying they reflect long-standing concerns about RERA's performance.
The Forum for People's Collective Efforts (FPCE), a prominent homebuyers' body that played a role in advocating for the RERA law, said the authority has strayed from its core mandate and often appears to shield defaulting builders.

According to the group:

Even after nine years of RERA, there is no certainty of project completion on time.
Many promises made to homebuyers remain unfulfilled.

Confidence in RERA's dispute resolution mechanism has weakened.
Abhay Upadhyay, president of FPCE, said that if RERA cannot meet expectations, authorities must take decisive steps to either reform the system or rethink its existence entirely.

He stressed that restoring trust in the real estate sector requires meaningful structural changes and stronger enforcement mechanisms.

The Supreme Court's observations are likely to intensify debate over the effectiveness of real estate regulation in India. With thousands of homebuyers still awaiting possession of homes or resolution of disputes, the court's comments signal growing judicial impatience with regulatory inefficiencies.
Whether through major reforms or structural overhaul, the future of RERA authorities may now depend on how states respond to the court's call for introspection and accountability.