Functioning of RERA ‘disappointing’, observes Supreme Court

In September last year, the Supreme Court had similarly expressed displeasure over the functioning of the RERA. File
| Photo Credit: R.V. Moorthy

The Supreme Court on Tuesday (March 4, 2025) remarked that the functioning of Real Estate Regulatory Authority (RERA) established under a Central law to protect the investments of homebuyers as well as promote the real estate sector have been “disappointing”.

Also read: What is the lowdown on the Real Estate Regulation Act

The oral observation from a Bench headed by Justice Surya Kant was triggered by a submission from senior advocate K. Parameshwar about the “domino effect” seen in the real estate sector.

Mr. Parameshwar said a commonly seen phenomenon is when a project of a builder fails, other projects also follow suit. The senior lawyer said this train of events was seen across States.

He suggested a regulatory mechanism within the Real Estate (Regulation and Development) Act of 2016 to curb this trend causing extensive damage to both homebuyers and real estate companies. He urged for the Court’s intervention.

“The functioning of RERA has been disappointing,” Justice Kant said.

The Bench however said a regulatory body may be objected to by the States, who would raise the issue of federalism. “States will complain,” Justice Kant noted.

In September last year, the Supreme Court had similarly expressed displeasure over the functioning of the RERA, saying it had become “a rehabilitation centre for former bureaucrats who have frustrated the entire scheme of the Act”.

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The objective stated in the 2016 Act said the establishment of RERA was meant “for the regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector”.

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The Act laid down an adjudicating mechanism for speedy dispute redressal and established an Appellate Tribunal to hear appeals from the decisions, directions or orders of the RERA.