Review of RERA’s Effectiveness in Protecting Home Buyers: A Critical Analysis

Summary

The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted to shield home buyers from pervasive malpractice in India’s real estate sector. Yet, despite nine years of enforcement, RERA has largely failed to deliver the protection it promised. Judicial pronouncements, including the Supreme Court’s observations in Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors. (2021), have acknowledged that while the Act is consumer-centric in spirit, its implementation remains deeply flawed.

Fundamental issues—weak enforcement powers, judicial delays, institutional deficiencies, and limited administrative capacity—have rendered RERA a “toothless tiger,” often leaving home buyers exposed to exploitation. A planned unified IT platform to centralize information may improve transparency but cannot fix the systemic flaws highlighted consistently by courts and practitioners alike.

Key Themes and Critical Issues

1. Widespread Failure of RERA’s Core Objectives

When RERA was enacted, it was hailed as a comprehensive shield against common issues like developers absconding with funds, project delays, poor quality construction, unauthorized plan changes, and inadequate delay compensation. However, real-world outcomes tell a different story.

The Supreme Court, in Newtech Promoters, stressed that although RERA’s design is consumer-focused, weak state-level enforcement compromises its efficacy. This disconnect was also publicly acknowledged by Union Housing Minister Hardeep Singh Puri in 2022, who criticised states for diluting key protections through local rules and amendments, thereby defeating the Act’s purpose.

2. Significant Enforcement Deficiencies

Perhaps the most crippling weakness lies in enforcement. Balvinder Kumar, former member of UP RERA, candidly admitted that the authority has “no control over defiant builders.” Furthermore, as highlighted by the Haryana RERA adjudicating officer Rajendra Kumar, RERA’s dependency on state revenue recovery mechanisms relegates its orders to a low priority, effectively making the authority powerless to enforce its rulings.

The Supreme Court’s decision in Experion Developers Pvt. Ltd. v. Sushma Ashok Shiroor (2022) also reflected this grim reality. It noted that unless RERA orders are treated with the seriousness accorded to civil court decrees, mere issuance of recovery certificates achieves little. Developers often ignore RERA directions with impunity, exacerbating buyer grievances.

3. Pervasive Judicial Delays

Although RERA mandates disposal of complaints within 60 days and appeals within an additional 60 days, procedural complexities and backlog have rendered these timelines theoretical. In practice, first hearings often take over a year, and case conclusions typically span 18–24 months, mirroring the delays in traditional consumer courts.

The inefficiency was underscored by the Supreme Court in M/s Imperia Structures Ltd. v. Anil Patni (2020), where the Court observed that despite statutory timelines, consumers were being subjected to prolonged litigation, diluting the legislative intent behind speedy resolution under RERA.

4. Institutional and Capacity Constraints

Another critical weakness is the institutional incapacity of RERA bodies. Major cities like Mumbai, facing thousands of disputes, operate with inadequate benches, leading to untenable backlogs. Compounding this is the appointment of officials lacking specialized knowledge of real estate dynamics.

In March 2025, the Supreme Court, while reviewing a batch of RERA appeals, sharply criticised this trend. Justice Surant described RERA authorities as functioning like “rehab centers for ex-bureaucrats,” a stinging indictment highlighting that many appointees neither possess sectoral expertise nor the urgency the role demands.

5. Developer Non-Compliance and Exploitation of Loopholes

RERA’s protective measures, including the requirement that 70% of project funds be kept in escrow, are often honored more in breach than in compliance. Experts point out that escrow maintenance happens “only on paper.” The requirement that builders compensate for construction delays at rates comparable to interest charged on buyer defaults is similarly ignored.

This problem was starkly visible in the DLF Ltd. v. Manmohan Lowe (2022) case, where the National Consumer Disputes Redressal Commission (NCDRC) found that despite clear RERA guidelines, developers often delay payments or offer inadequate settlements, forcing buyers into protracted battles.

Moreover, obligations relating to fixing structural defects for five years post-handover, providing full refunds for indefinitely delayed projects, and seeking two-thirds buyer consent for plan alterations are poorly enforced. As seen in the NBCC (India) Ltd. v. Amrapali Home Buyers case, judicial intervention becomes necessary to safeguard buyer interests when RERA’s mechanisms fail to act decisively.

6. Home Buyer Ignorance and Lack of Vigilance

Another contributing factor is the low level of awareness among home buyers. Many buyers lack understanding of crucial project details such as the sanctioned layout, Floor Space Index (FSI), and associated rights. They often fail to maintain written documentation of communication with developers, weakening their legal positions.

The Delhi High Court in Shree Vardhman Promoters Pvt. Ltd. v. Sudha Gupta (2022) stressed the importance of diligent record-keeping by buyers. The Court emphasized that reliance on verbal assurances, without documentary proof, undermines claims and provides developers with easy defenses.

7. Proposed Solutions and Necessary Changes

• For RERA to become genuinely effective, several reforms are necessary:
• Granting RERA authorities greater enforcement powers akin to those under Order 21 of the Civil Procedure Code.
• Enhancing coordination between RERA and municipal authorities, planning departments, and sub-registrars.
• Establishing a Uniform Building Code with consistent definitions for terms like Occupancy Certificates (OC) nationwide.
• Appointing adjudicators with specialized real estate knowledge, not merely retired bureaucrats.
• Automating delay penalties and refunds based on factual project timelines.
• Standardizing the builder-buyer agreement to eliminate exploitative clauses.
• Enforcing strict quarterly disclosure norms by developers with meaningful penalties for non-compliance.

These recommendations align with observations made in the Newtech Promoters judgment, where the Supreme Court urged strengthening RERA’s adjudicatory and enforcement frameworks to truly serve its protective purpose.

8. Limitations of the Proposed Unified IT Platform

The Government’s proposal for a unified RERA platform may centralize project data, but it will not solve deeper systemic problems. As noted by the Supreme Court in M/s Imperia Structures Ltd., data transparency must be backed by strong enforcement action. Home buyers need not just access to information but concrete action against defaulting developers.

Conclusion

RERA’s noble intent stands severely compromised by systemic flaws that successive judicial pronouncements have exposed. Without urgent structural reforms—focused on enforcement, adjudication, and capacity building—RERA risks degenerating into a mere bureaucratic formality.

Home buyers, who invest their life savings in real estate, deserve a regulatory environment that genuinely protects their rights, not one that merely pays lip service to consumer interests. Strengthening RERA from within, not merely modernizing its facade, is the need of the hour.

King Stubb & Kasiva,
Advocates & Attorneys

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