Supreme Court Delivers Blunt Assessment of RERA's Performance
The Real Estate Regulatory Authority (RERA) finds itself under intense judicial scrutiny following recent observations from the Supreme Court of India. The apex court has raised fundamental questions about whether RERA is effectively fulfilling its mandate to protect homebuyers or has instead become an institution that primarily facilitates errant builders.
Judicial Frustration with Regulatory Performance
A bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi expressed deep concern about the disillusionment among homebuyers, the very stakeholders RERA was established to protect. In remarkably candid remarks, Chief Justice Surya Kant stated, "Better abolish this institution, we don't mind that," highlighting the court's frustration with what it perceives as systemic failures in regulatory oversight.
The Supreme Court has explicitly called for all states to reconsider the structure and composition of their respective Real Estate Regulatory Authorities. This judicial intervention comes nearly a decade after the Real Estate (Regulation and Development) Act, 2016 came into force and was implemented across states in 2017.
The Critical Importance of RERA Annual Reports
At the heart of the current controversy lies the alleged failure of state regulators to publish annual reports as mandated by law. Section 78 of RERA makes it compulsory for every state regulator to release a comprehensive annual report detailing its activities, performance metrics, and enforcement actions.
These reports serve as crucial transparency tools, designed to move the real estate sector away from opaque practices toward measurable regulatory oversight. Ideally, they should contain detailed information about:
- Project registrations and completion status
- Complaints received and their resolution
- Enforcement of regulatory orders
- Action taken against non-compliant developers
- Implementation of refund and compensation directives
In early 2023, the Ministry of Housing and Urban Affairs issued a standardized reporting format to enable consistent comparison across states, recognizing the importance of uniform data collection and presentation.
Widespread Non-Compliance with Reporting Requirements
The Forum for People's Collective Efforts (FPCE), a prominent homebuyer advocacy organization, has alleged that more than 75% of Real Estate Regulatory Authorities have either never released their annual reports, discontinued publication after initial years, or failed to keep reports updated.
According to FPCE's assessment, only a limited number of states have made reports available up to the financial year 2023-24. Even more concerning, some major real estate markets that initially published reports have subsequently discontinued the practice. In cases where reports have been published, many regulators have allegedly failed to follow the ministry's recommended format, making meaningful cross-state comparisons virtually impossible.
Broader Implications for the Real Estate Sector
The absence of reliable, standardized reporting has significant consequences beyond individual homebuyer grievances. India has historically struggled with substantial delays in housing project completions, with a government-appointed panel chaired by Amitabh Kant identifying nearly 412,000 housing units across the country as stressed.
RERA was introduced as a structural remedy incorporating mechanisms such as escrow-linked project funding and mandatory disclosures. However, without comprehensive data on project completion rates and enforcement effectiveness, policymakers lack the necessary information to determine whether the sector's apparent recovery represents genuine improvement in delivery standards or merely the beginning of another cycle of new project launches.
The implications extend to multiple stakeholders:
- Homebuyers cannot assess whether their complaints result in genuine relief or merely paper resolutions
- Governments lack reliable delivery data to inform taxation decisions and urban planning strategies
- Financial institutions cannot accurately evaluate lending risks without completion records
- Policymakers cannot identify whether delays stem from funding constraints, regulatory hurdles, or litigation issues
Moving Beyond Registration Metrics to Outcome Measurement
Current discussions about RERA's performance typically focus on activity metrics such as the number of projects registered and complaints resolved. However, these indicators reflect administrative activity rather than actual outcomes for homebuyers.
Annual reports are intended to provide insight into whether projects were completed within promised timelines, whether compensation orders resulted in actual payments to aggrieved buyers, and whether possession directives ultimately led to homes being handed over. A complaint may be technically marked as resolved once an order is issued, but genuine relief only occurs when that order is fully implemented and enforced.
RERA was designed to transition the real estate sector from a system based on trust to one grounded in transparency and accountability. If regulators themselves cannot be objectively assessed through standardized reporting, the framework risks operating primarily as a project registration platform rather than a true mechanism of consumer protection and industry accountability.
The Supreme Court's intervention has brought renewed attention to these systemic issues, potentially setting the stage for significant reforms in how real estate regulation is implemented and monitored across India.
