RERA reality check: Has the regulator failed to protect homebuyers and deliver on its promises?
RERA, once hailed as a solution to safeguard homebuyers, is facing growing criticism for failing to live up to its promises. When a Supreme Court judge calls it a “rehab centre for ex-bureaucrats,” it’s a clear sign that the system needs reform, an article published in Mint has said.
Now, a new initiative promises a unified digital platform for all state RERAs, claiming to offer more transparency, easier access to project details, and a central database. While this sounds promising, the real issue was never about access to information, writes Manisha Natarajan, content strategist and host of Let’s Get Real, in an article in Mint. She says that the true problem is that RERA is failing to deliver the protection it was created to provide.
When RERA was launched in 2016, it offered hope to homebuyers trapped in stalled or delayed projects, promising accountability and compensation. Nearly a decade later, many of those promises remain unmet, she writes.
Transparency, a key RERA promise, remains elusive. Key provisions—like builders depositing 70% of project funds in escrow accounts, providing compensation for delays, offering refunds for cancelled projects, and posting regular updates—are largely ignored, she writes.
Are RERA safeguards falling through the cracks?
RERA’s safeguards are ineffective due to a lack of enforcement. State RERAs rarely audit escrow compliance, scrutinize project updates, or enforce compensation clauses. Without proper oversight, RERA’s transparency mandate remains largely unfulfilled, Natarajan writes.
The article cites a recent report by Square Yards that said that out of 265 cases it filed on behalf of homebuyers, only 28% saw successful recovery from builders. Over 50 cases have been stuck in “reserved orders” for 7–8 months, and more than 30 remain unexecuted despite final rulings. In at least 15 cases, homebuyers were forced to move high courts due to non-compliance with RERA orders.
Even MahaRERA—once a model for other states—often begins with mediation, which can drag on for six months. If unresolved, the case moves to an adjudicating officer, with first hearings taking 12–18 months and multiple rounds lasting up to two years. Yet, enforcing orders remains a major challenge, she writes.
The core issue is not just delays—it’s the lack of enforcement. There’s no fixed timeline for recovery, and RERA depends on state agencies like police and district officials for execution. When these bodies delay or ignore orders, homebuyers are left stranded. Maharashtra alone has hundreds of pending recovery warrants, she writes.
Adding to the problem is the limited capacity of most RERA offices, often overwhelmed and staffed by retired bureaucrats lacking legal or real estate expertise. Builders, meanwhile, exploit legal loopholes to prolong proceedings, turning RERA into a frustrating maze for homebuyers.
Worse still, automatic safeguards like compensation for delays are increasingly treated as disputes, further weakening buyer protection. Compared to efficient regulatory systems like Singapore’s, RERA’s flaws in adjudication, enforcement, and accountability raise serious concerns about its effectiveness, she writes.
So, what needs to change?
First, RERA must function as a true regulator—monitoring builder disclosures and industry practices proactively, not reactively. This demands trained, committed, and adequately staffed officials.
Second, RERA orders shouldn’t depend on state machinery. Penalties must have real impact, and recovery processes need to be swift and enforceable.
But all this hinges on political will and legislative reform. Until then, homebuyers should remain cautious—even if a project boasts a ‘RERA-registered’ tag, Natarajan adds.
