RERA: Built for protection, undone by inaction

Hindustan Times

02-05-2025

When a Supreme Court judge calls RERA a 'rehab centre for ex-bureaucrats', it's a wake-up call. Justice Surya Kant's blunt remark in March 2025 isn't the first indictment of the Real Estate Regulatory Authority, and likely won't be the last.
Insiders have been sounding the alarm for years. Former UP 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 criticised states back in 2022 for weakening the law and diluting its core purpose: protecting homebuyers.
Now comes a shiny new IT 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 one central database. But access to information was never the real issue.
The problem is RERA simply isn't delivering the protection it promised.
When it was launched in 2016, RERA gave hope to lakhs of homebuyers trapped in stalled, delayed, or subpar projects. It promised accountability, compensation, and a way to fight back. Nearly a decade later, many of those promises remain unfulfilled.
In a recent conversation with three experts Anand Moorthy, Co-Founder, PropsAMC by Square Yards, Avikshit Moral, Partner at S&R Associates, and Aditya Parolia, Partner PSP Legal, who've taken numerous homebuyer cases to various state RERAs, I ran a simple yes-or-no check on some of RERA's most basic provisions: 70% of project funds must be deposited in an escrow account to prevent diversion, builders must compensate buyers with the same interest they charge for delays, 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.
The most startling takeaway? Most RERA safeguards are falling through the cracks simply because no one is really checking, all three experts agreed.
There is hardly any audit by state RERAs on whether the 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.
The RERA Act also lays out a solid dispute redressal mechanism. Complaints to be resolved in 60 days; appeals must be decided within another 60 days; and orders can include refunds, interest, compensation, or a direction to complete the project, and jail term for defying builders.
But here's the problem. According to data shared by Square Yards, of the 265 cases filed by them on behalf of their home buyers, across UP, Maharashtra, Haryana, and Karnataka RERA in the past two years, 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 are pending execution even after the final orders. In at least 15 cases, homebuyers have had to escalate to High Courts because RERA orders were simply not complied with.
Even MahaRERA, once considered the poster boy among all state RERAs, first tries to get a mediation between the builder and the homebuyer. That can take up to … wait for it—six months. When things don't work out, the case has to be listed under the adjudicating officer. According to Avikshit Moral, partner at S&R Associates, the first hearing could take between 12 and 18 months. Even after multiple hearings that could easily go up to 2 years, it doesn't matter if orders aren't enforced. That's the Achilles heel of RERA. It has no teeth to bite when builders are barking at its directives.
The problem isn't just delayed orders. Anand Moorthy adds, there's no fixed timeline for enforcement or recovery. Even after you win a case, implementation can take up to a year or more, depending on which state RERA you're dealing with.
RERA relies on state agencies—the police, district collectors, and revenue officials for execution of its orders. But when those bodies either delay action or blatantly ignore RERA's orders, the home buyers are left helpless. Maharashtra alone has hundreds of unexecuted recovery warrants gathering dust.
This is compounded by 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 where builders delay proceedings or run to the NCLT to stall action, and you're left with a system designed to exhaust the buyer, not protect them.
The issue isn't just with adjudication alone. It's that even provisions meant to apply automatically, like compensation for delays, are now being treated as matters for dispute resolution, says Aditya Parolia. If you look at similar laws in places like Singapore, the difference is stark, he adds. Their systems implement regulatory and adjudicatory functions in a well-synchronised, streamlined way. At the heart of it, if regulation becomes lax, and developers aren't held to what they promise buyers, the system fails.
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 to make it work.
Second, orders cannot remain hostage to state machinery. Penalties must be meaningful, and recovery mechanisms must be quick and binding.
None of this requires a shiny new website in the form of Unified RERA portal. It needs political will and legislative reform.
Until that come about, homebuyers would do well to stay cautious, even when the project proudly flaunts that RERA registration number.