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Supreme Court says it's 'better to abolish’ RERA as it benefits only defaulting builders
The Supreme Court has raised serious concerns about RERA, noting that the authorities seem to primarily serve defaulting builders
The Supreme Court took a critical view of the functioning of real estate regulatory authorities, stating it may be ‘better to abolish’ them and that it is high time for states to reconsider their establishment, as the authorities appear to serve little purpose beyond facilitating defaulting builders.
A bench of Chief Justice of India (CJI) Surya Kant and Justice Joymalya Bagchi said that states should reflect on the purpose behind introduction of Real Estate Regulatory Authority (RERA), the Bar and Bench reported.
"It is high time that all the states should revisit and rethink constituting this authority," CJI Surya Kant said.
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"Except facilitating the builders in default, this institution is doing nothing. Better abolish this institution, we don't mind that," the CJI said.
"...high time that all the states should revisit and rethink of even constituting this authority," the bench said.
The Court made the observation while hearing an appeal challenging Himachal Pradesh High Court's decision to stay a State government notification for shifting the state RERA office to Dharamshala.
When the bench was informed that a retired IAS officer was appointed in RERA, the CJI said, “In every state, it has become a rehabilitation centre. These authorities are all occupied by these persons.”
"The people for whom this institution was created, they are completely depressed, disgusted and disappointed. None of them are getting any effective relief. For whom this institution actually is now serving, you will find out when you meet these people," the CJI said.
In the order passed last year, the High Court had noted the decision to shift RERA had been taken "without even identifying the alternative office place," the website reported.
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"We are of the considered opinion that the Notification dated 13.06.2025 shall remain stayed till further order and the subsequent order that the 18 outsourced employees further on their application have been directed to be adjusted in other Boards and Corporations since the same would render the functioning of RERA defunct," the High Court had said.
The top court on Feb 12 interfered with the High Court order and permitted the State to shift the RERA office to Dharamshala from Shimla. It also ordered shifting of the appellate tribunal, the report said.
"With a view to ensure that persons affected by RERA orders are not inconvenienced, the principal appellate is also moved to Dharamshala," the Bench directed.
In September 2024, the Supreme Court had expressed its displeasure over the functioning of Real Estate Regulatory Authorities (RERA), describing them as “rehabilitation centres for retired bureaucrats.”
A bench of Justices Surya Kant and Ujjal Bhuyan had made the remark while hearing an appeal against a Delhi High Court judgment that had dismissed pleas seeking directions for banks and financial institutions to refrain from charging pre-EMIs or full EMIs from the petitioners.
“We do not want to speak about RERA. It has become rehabilitation centers for former bureaucrats who have frustrated the entire scheme of the Act,” the bench had then said during the hearing.
The RERA Act of 2016 was enacted to regulate the real estate sector, promote transparency, safeguard homebuyers, and ensure timely project delivery.
Here's what homebuyers' have to say
The Forum for People’s Collective Efforts, a homebuyers’ body that spearheaded the enactment of RERA, said it has long highlighted how the authority has strayed from its core mandate of protecting homebuyers, instead becoming a refuge for defaulting builders.
“The Supreme Court’s Chief Justice has now echoed this concern in the strongest possible terms, even suggesting that such an institution is better closed if it continues to serve builders rather than consumers,” it said in a statement.
“Despite nine years since RERA was legislated, there is still no certainty that a RERA‑registered project will be completed on time, that all promises made to homebuyers will be fulfilled, or that families can invest without tension. This itself shows what RERA has achieved—or failed to achieve since its inception,” said Abhay Upadhyay, president, FPCE and member, CAC, MoHUA.
“If RERA cannot deliver on the expectations of homebuyers, then tough steps must be taken to either reform it fundamentally or rethink its existence altogether. Decisive action is needed to restore trust and fairness in the real estate sector,” he added.
