Supreme Court on RERA: Says It May Be ‘Better to Abolish’ Authority Serving Defaulting Builders

The Supreme Court on RERA delivered sharp observations on the functioning of Real Estate Regulatory Authorities, questioning whether the institution is effectively serving its intended purpose. The top court suggested that states may need to reconsider the existence of RERA if it continues to benefit defaulting builders rather than protect homebuyers.

The remarks came during a hearing related to the functioning of the Himachal Pradesh Real Estate Regulatory Authority, where the bench expressed dissatisfaction with how regulatory bodies are operating across states.

Supreme Court Raises Concerns Over RERA’s Functioning

The Supreme Court on RERA stated that it may be “better to abolish” such authorities if they fail to provide meaningful relief to consumers. The bench, headed by Chief Justice of India Surya Kant and Justice Joymalya Bagchi, observed that states must revisit the rationale behind constituting these regulatory bodies.

During the proceedings, the Chief Justice remarked that except facilitating builders who default on obligations, the institution appears to be doing little for the people it was created to protect. The Supreme Court on RERA emphasized that regulatory authorities must function as safeguards for homebuyers, not as administrative shelters.

The bench further indicated that it was time for state governments to reflect seriously on the operational effectiveness of RERA authorities.

Context: Himachal Pradesh RERA Relocation Case

The observations from the Supreme Court on RERA were made while hearing an appeal challenging a Himachal Pradesh High Court order. The High Court had stayed a state government notification shifting the RERA office from Shimla to Dharamshala, citing concerns about the lack of preparedness and administrative clarity.

The Supreme Court later allowed the relocation of the RERA office and directed that the appellate tribunal also be shifted to Dharamshala to avoid inconvenience to affected parties. The court’s intervention highlighted broader concerns about institutional efficiency and accountability.

Previous Criticism of RERA by the Supreme Court

This is not the first time the Supreme Court on RERA has expressed dissatisfaction. In 2024, the apex court had described certain regulatory authorities as “rehabilitation centres” for retired bureaucrats, suggesting that such appointments were undermining the spirit of the legislation.

The court’s recurring concerns indicate systemic issues in how RERA authorities function across various states.

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The Intent Behind the RERA Act

The Real Estate (Regulation and Development) Act, 2016, was enacted to bring transparency, accountability, and timely project delivery to India’s real estate sector. It aimed to protect homebuyers from project delays, financial irregularities, and misleading advertisements.

However, the repeated remarks from the Supreme Court on RERA suggest that the implementation of the Act may not be aligning with its original objectives.

Homebuyer’s Response to Supreme Court Remarks

Homebuyer advocacy groups have echoed similar concerns in the past. The Forum for People’s Collective Efforts (FPCE), which played a key role in pushing for the enactment of RERA, stated that the authority has strayed from its core mandate.

According to representatives of the forum, despite nearly a decade since the law was introduced, there remains uncertainty about timely project completion and enforcement of developer commitments. The observations made by the Supreme Court on RERA have reinforced demands for structural reforms.

Implications for the Real Estate Sector

The latest remarks from the Supreme Court on RERA could trigger serious policy discussions at both state and central levels. While abolishing the authority may not be an immediate step, the call for reform signals potential structural changes.

If state governments undertake a review of regulatory mechanisms, it could lead to improved transparency, stricter enforcement, and stronger consumer protection measures. At the same time, developers may face increased scrutiny and compliance requirements.

Conclusion

The strong observations made by the Supreme Court on RERA mark a critical moment for India’s real estate regulatory framework. By questioning whether the institution is fulfilling its intended purpose, the apex court has reignited debate around accountability, governance, and consumer protection in the property sector.

Whether the outcome results in reform or structural overhaul, the message is clear: regulatory bodies must function in the interest of homebuyers and uphold the principles for which they were established.