Regulatory reset: Strengthen Rera to protect homebuyers' interests

The Eco Survey 2025-26 notes quarterly average housing sales stood at 101,300 units up to Q2, compared to 81,600 in FY22-FY24, reflecting healthy demand and renewed confidence in the housing market

The recent remarks by the Supreme Court on the workings of the Real Estate (Regulation and Development) Act, 2016, have brought back the spotlight on India’s real-estate regulation. While hearing a matter related to the Himachal Pradesh Real Estate Regulatory Authority (Rera), the court observed that the authority appeared to be helping defaulting builders rather than protecting homebuyers. In unusually strong language, it even warned that if the regulator failed in its purpose, there would be little reason to continue it. These observations go to the heart of why the law was enacted. It was introduced to address chronic delays, fund diversion, and opaque contracts, while institutionalising transparency, accountability, standardisation, and fast-track dispute resolution in the property market. The Act mandated compulsory project registration, disclosures of layouts and timelines, and, crucially, the requirement that 70 per cent of the buyer funds be kept in a separate escrow account, to be used only for constructing that specific project.

 

A decade on, the institutional footprint of Rera is undeniable. The latest data on the status of all-India Rera implementation, released by the Ministry of Housing and Urban Affairs, shows 160,551 registered projects and 112,877 registered agents. As many as 190,475 cases have been filed before various authorities. Of those, 155,946 have been disposed of. This translates into a disposal rate of roughly 82 per cent, suggesting that the grievance-redress mechanism is active and widely used. The Forum for People’s Collective Efforts (FPCE), a national homebuyers’ body, has pointed to some serious non-compliance with Section 78 of the Act, which mandates annual reporting. Over 75 per cent of state Rera authorities have either never published annual reports or discontinued publication, or their reports are not up to date. More importantly, in several states, adjudication takes longer than the timelines envisaged in the Act. Orders are sometimes challenged and stalled, penalties are either modest or poorly enforced, and compensation recovery can be slow. Some authorities suffer from vacancies, lack of technical staff, or weak monitoring systems for escrow compliance. In such situations, buyers are forced back into lengthy court battles — precisely what Rera was meant to obviate.

 

The Economic Survey 2025-26 notes quarterly average housing sales stood at 101,300 units up to Q2 FY26, compared to 81,600 in FY22-FY24, reflecting healthy demand and renewed confidence in the housing market. However,  the answer is not to dilute or dismantle Rera, but to strengthen it. Regulators need adequate staffing, especially by legal and financial experts. Escrow accounts should be digitally tracked in coordination with banks. Grievance redress must be strictly timebound, and penalties for non-compliance should be consistently enforced. Equally important is to improve coordination among the agencies, like the state government instructing development authorities to sync with financial regulators. Further, ensuring uniform definitions of things coming under Rera across states would help improve compliance. The Supreme Court’s intervention should be read as a corrective signal. Rera was conceived as a confidence-building reform in a sector long marked by opacity. Clear regulation and transparent enforcement will generate confidence and activity in the sector.