RERA: Built for homebuyer protection but undone by inaction

Mint

01-05-2025

When a Supreme Court judge calls the Real Estate Regulatory Authority (RERA) a 'rehab centre for ex-bureaucrats," it's a wake-up call. Justice Surya Kant's blunt remark in March isn't the judiciary's first indictment and likely won't be the last.
Insiders have been sounding the alarm for years. Former Uttar Pradesh RERA member Balvinder Kumar admitted the authority lacks teeth to rein in rogue builders. Haryana's adjudicating officer Rajender Kumar called it a 'toothless tiger." Even Union minister Hardeep Singh Puri criticized states in 2022 for weakening the law and diluting its core purpose: protecting homebuyers.
Now comes a shiny new infotech initiative: a unified digital platform for all state RERAs. It sounds great on paper, with the promise of more transparency, easier access to project details and a single central database. But access to information was never the real issue. The problem is that RERA is simply not delivering the protection it promised.
When it was launched in 2016, RERA gave hope to millions of
homebuyers
trapped in stalled, delayed or sub-par projects. It promised accountability, compensation and a way to fight back. Nearly a decade later, many of those promises remain unfulfilled.
Transparency? Hazy at best:
Startling results emerge from a check of some basic RERA provisions: 70% of project funds must be deposited in an escrow account to prevent diversion; builders must compensate
buyers
with the same interest rate they charge for delayed payments; full refunds with interest are due if a project is cancelled or indefinitely stalled; and quarterly updates on construction, finances and approvals must be uploaded on the RERA site.
Most RERA safeguards are falling through the cracks because no one seems to be holding builders accountable. There is hardly any audit by state RERAs on whether a builder is meeting the money-in-escrow requirement, little or no scrutiny of project updates and poor enforcement of compensation or fair agreement clauses. In the absence of proper monitoring, RERA's transparency mandate remains a hollow promise.
Redressal mechanism? Don't count on it:
The RERA Act also lays out a clear dispute redressal mechanism. Complaints must be resolved in 60 days, appeals must be decided within another 60 days and orders can include refunds, interest payments, compensation or directions to complete projects, apart from jail terms for errant builders.
According to data shared by Square Yards, of the 265 cases filed by it on behalf of homebuyers, recovery of claims from builders has been just 28%. More than 50 cases are stuck with 'reserved orders" for 7–8 months and over 30 await execution even after final orders. In at least 15 cases, homebuyers have had to escalate matters to high courts because RERA orders were not complied with.
Even MahaRERA of Maharashtra, once considered the poster boy among all state RERAs, first tries to arrange mediation between the builder and homebuyers. That can take up to six months. If things don't work out, the case needs to be listed under an adjudicating officer. The first hearing could take between 12 and 18 months. Even after multiple hearings that could go on for up to two years, a remedy for orders not being enforced can prove elusive. That's RERA's Achilles heel. It has no teeth to bite when builders ignore RERA directives.
The problem isn't just delayed orders. There's no fixed timeline for enforcement or recovery. Even after a case is won, implementation of orders can up take up to a year or more, depending on which state's RERA one is dealing with.
RERA relies on state agencies—the police, district collectors and revenue officials—for the execution of its orders. But when those bodies either delay action or blatantly ignore RERA orders, homebuyers are left helpless. Maharashtra alone has hundreds of unexecuted recovery warrants gathering dust.
This is compounded by a serious lack of capacity. Most RERA offices are swamped, handling 80–100 cases a day. Many are staffed by retired bureaucrats, often with no legal training or understanding of real-estate complexities. Add to this the legal maze that builders use to delay proceedings, and you're left with a system designed to exhaust homebuyers, not protect them.
The problem is not just with adjudication. Even provisions meant to apply automatically, like compensation for delays, are now being treated as matters for dispute resolution. The difference is stark with systems in places like Singapore, where regulatory and adjudicatory frameworks operate smoothly.
If regulation is lax and developers aren't held to the promises they make buyers, the system can be deemed a failure.
So, what needs to change?
First
, RERA must start acting like a real regulator— watching builder disclosures and industry practices closely and stepping in at the first sign of a gap, not after things fall apart. That requires officials who are trained, agile,
committed
and enough in number.
Second
, orders must not be hostage to state machinery. Penalties must be meaningful and recovery mechanisms quick and binding.
This requires political will and legislative reform. Until that comes about, homebuyers would do well to stay cautious, even when a housing project proudly flaunts a 'RERA registration' number.
The author is a journalist, content strategist, and host of 'Let's Get REal'.