Why RERA Hasn't Delivered for India's Urban Homebuyers?

The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted by Parliament to overhaul India’s housing market and protect homebuyers. Government documents hailed RERA as a “transformative legislation” to ensure efficient, transparent and accountable development, by empowering homebuyers with rights to timely possession and speedy dispute resolution. For example, it requires developers to register projects and deposit 70% of all funds into an escrow account for that project. Industry groups note these safeguards have already bolstered buyer confidence – National Real Estate Development Council (NAREDCO) reported that the mandatory 70% escrow rule “instilled confidence and trust in buyers” and led to fewer legacy disputes. In short, RERA was designed to end the era when the real estate sector “was plagued by project delays, diversion of funds, and lack of transparency”.

The Act was passed by the BJP-led government in early 2016, and came into force in stages by May 2017.  Since land and housing are state subjects, RERA allowed each State/UT to form its own regulatory authority and enact detailed rules under the central Act. In practice this meant uneven roll-out. While most states (including Haryana, Uttar Pradesh, Delhi, Maharashtra, etc.) set up RERA authorities by 2017, West Bengal initially rejected the law and instead enacted a separate state housing law in 2017.  The Supreme Court ultimately struck down West Bengal’s Housing Act in 2021 as “repugnant” to RERA, bringing all states under the central framework. (This episode highlights how RERA’s federal design both expanded protections and invited state-level loopholes.) At the time of enactment, RERA was viewed as part of broader reforms – alongside bankruptcy and banking reforms – to boost investment by giving homebuyers legal recourse. In reality, however, RERA’s success has varied greatly across states depending on political will and institutional capacity.

Failures and Implementation Gaps

Despite RERA’s promise, its record has been mixed. Regulators themselves describe RERA as a “toothless tiger” due to weak enforcement. By law RERA adjudicators can order refunds, impose penalties or even jail defaulters, but in practice they lack the tools to execute orders. As one adjudicating officer noted, he had issued hundreds of arrest warrants on defaulting builders, but “not a single person has been arrested” by police. Indeed, the Supreme Court has repeatedly rebuked state governments for RERA’s failures.  In March 2025 a bench observed that RERA’s functioning was “disappointing” and heard advocates say the Act had “failed in its implementation”.  Earlier, in September 2024 Justices Surya Kant and Bhuyan scolded authorities that RERA “has become a rehabilitation centre for former bureaucrats who have frustrated the entire scheme of the Act”. This criticism reflects another problem: almost all RERA chiefs are retired IAS or other officers, so regulators are often led by career administrators rather than housing experts or consumer advocates. In short, observers say RERA has been undermined by bureaucratic inertia and lack of enforcement. Even an all-India forum of RERA chiefs urged in 2022 that the Act’s wording be clarified and that RERAs be given “executive power” to implement decisions.

Many specific issues have emerged in the Delhi–NCR region. For example, Haryana RERA initially excluded any project that had applied for an occupancy certificate (OC) before RERA’s launch. This loophole meant the NBCC Green View housing project in Gurugram (built by a government company) escaped RERA’s scrutiny, because the builder had sought an OC just before RERA took effect. When buyers later suffered serious structural defects, Haryana RERA refused relief on procedural grounds, leaving homeowners in limbo. Even when regulators do pass favorable orders, compliance is slow: one analysis found buyers often “wait for months or even years” for RERA orders to be executed. In practice, many judgments remain unimplemented because there is no mechanism (like police or revenue authorities) to force builders to pay.

These failings show up starkly in Delhi-NCR statistics. A recent study noted that as of 2025 about 4.8 lakh housing units nationwide remain delayed by 3+ years, despite RERA.  Many of those are in big cities: stalled projects by Unitech, Amrapali, Jaypee and Supertech in Noida and Gurgaon have left tens of thousands of buyers waiting. In fact, the Supreme Court has resorted to assigning NBCC to complete these projects— “from Amrapali to Supertech, Unitech to Jaypee” —because neither RERA nor any other remedy had delivered the homes. The backlog of housing cases has spilled over into the courts: by mid-2024 more than 50,000 real-estate disputes were pending in consumer courts, with no clear end in sight. In other words, the “legalistic” RERA framework has often failed to give buyers timely possession or compensation.

Supreme Court Critiques

Post-2020 Supreme Court rulings have underscored RERA’s shortcomings. As noted, in 2024 a bench condemned RERA as a “rehabilitation centre” for ex-bureaucrats. On another occasion (March 2025) the Court flatly said RERA’s functioning was “disappointing”. In that case the lawyer for homebuyers argued that because one project’s collapse “engulfs the entire sector,” the regulatory regime must be strengthened. Justice Kant agreed but warned that states might resist new measures. In a different line of cases, the Court has strictly interpreted RERA remedies: for example, it recently ruled that developers cannot be forced to reimburse home-loan interest for delays beyond the refund of principal and agreed compensation (holding the liability solely to the contractual clause). While that verdict reflects contract law, it also highlights how homebuyers continue to bear the brunt of unfinished homes despite all RERA’s protections. In yet another development, the Court in 2021 invalidated West Bengal’s parallel law as unconstitutional, reinforcing that only Parliament (via RERA) can set national standards for homebuyer rights.

Recommendations for Reform

To make RERA effective, experts and officials recommend several key changes. In particular, RERA must be given real “teeth” in execution.

A first step is to explicitly empower regulators or district authorities to implement orders without state interference. For instance, RERA already allows recovery of unpaid compensation as an arrear of land revenue, but this provision needs stronger use. State RERA chiefs often urged that every authority be vested with executive power to enforce its rulings. Courts and analysts agree: RERA amendments could clarify that adjudicating officers have the same power to execute orders as, say, family courts (which can attach property). At minimum, states should direct police and revenue collectors to act swiftly on RERA directives.

Second, the law itself should be tightened. Some loopholes need closing: as one RERA forum noted, any project on a large plot (e.g. >500 m²) should require registration, regardless of the number of flats.  (Delhi and Rajasthan have already taken this approach to stop builders from skirting RERA by slicing sites into small phases.) Similarly, definitions of “flat,” “carpet area,” and project stages should be uniform nationwide. If builders can’t game the entry criteria, more projects and buyers will truly fall under RERA’s ambit.

Third, capacity-building is crucial. The government should ensure each RERA has enough trained staff, office space and technical support. Regulators need officials who are “trained, agile, committed and enough in number”. Filling vacancies for adjudicating officers and members must be a priority (several high courts have already been asked to expedite RERA appointments). In addition, RERAs would benefit from members with diverse expertise – e.g. technical experts, economists or urban planners alongside administrators. This could prevent the “rehabilitation centre” effect noted by the Supreme Court.

Fourth, coordination between agencies should improve. State governments must instruct development authorities (like DDA, GMADA, etc.) and financial regulators to sync with RERA orders. For example, project approvals should be linked to RERA compliance: no new phase should be approved without RERA registration and escrow. Courts could also mandate periodic status reports. One concrete idea is to set up a unified online platform (as already planned) where all state RERAs and courts upload decisions and compliance status. Having transparent, up-to-date data would help track enforcement and identify lagging projects.

More broadly, RERA reform must be part of a wider housing policy push. The Act’s escrow rules and project-disclosure norms are sound, but must be backed by supply-side measures. For instance, fast- tracking approvals and improving public housing schemes (like PM Awas Yojana) would relieve pressure on the formal market. Incentives for completing delayed projects – such as allowing additional FSI in return for finishing 80% of units – could be explored. The government may also encourage models where homebuyers themselves (through associations) take over stalled projects under supervision; some RERAs are now piloting such “assisted completion” schemes.

In summary, RERA’s promise has not yet been fully realized. Nine years on, many homebuyers remain stranded, as reflected by the backlog of over 4.8 lakh delayed flats and mounting court cases. Fixing RERA will require political will and legislative reform, as commentators warn. If authorities empower regulators, close legal gaps, and truly enforce orders, RERA can become the robust protector of homebuyers that it was intended to be. Only then – with RERA functioning effectively alongside affordable housing initiatives – can India hope to restore trust in its real estate market and deliver housing justice to millions.