The Supreme Court delivered a sharp rebuke to the functioning of Real Estate Regulatory Authorities (RERAs) across the country, observing that States may be “better off abolishing” them if they continue to function in a manner that benefits defaulting builders rather than homebuyers.
A Bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi made the remarks while hearing an appeal against a decision of the Himachal Pradesh High Court that had stayed a State government notification shifting the Himachal Pradesh RERA office from Shimla to Dharamshala.
High Time to Revisit the Institution
During the hearing, the Bench questioned the effectiveness of RERAs, stating that it was time for States to reconsider their continued existence.
“It is high time that all the States revisit and rethink even constituting this authority,” the Chief Justice observed. He further remarked that, except for facilitating defaulting builders, the institution appeared to be serving little purpose. “Better abolish this institution, we don’t mind that,” he said.
The Court expressed concern that the very stakeholders for whom RERA was created—homebuyers—seemed disillusioned and dissatisfied. According to the Bench, many homebuyers are “depressed, disgusted and disappointed” due to the lack of effective relief.
When informed that a retired IAS officer had been appointed to the regulatory authority, the Chief Justice commented that in many States such bodies had become “rehabilitation centres” for former bureaucrats, undermining the objectives of the statute.
Background of the Case
The observations came in the context of a dispute over the State government’s decision to relocate the Himachal Pradesh RERA office. The High Court had earlier stayed the June 13, 2025 notification ordering the shift, noting that the alternative office premises had not been identified. It had also stayed orders adjusting outsourced employees to other boards and corporations, observing that such moves could render the authority defunct.
On February 12, however, the Supreme Court intervened and allowed the State to proceed with shifting the RERA office to Dharamshala. To ensure litigants were not inconvenienced, the Court also directed that the principal appellate tribunal be relocated to Dharamshala.
Earlier Criticism of RERA
This is not the first time the Supreme Court has voiced dissatisfaction over the functioning of RERAs. In September 2024, while hearing an appeal arising from a judgment of the Delhi High Court, a Bench of Justices Surya Kant and Ujjal Bhuyan had similarly criticised these authorities. At that time, the Court had remarked that RERAs had turned into “rehabilitation centres for former bureaucrats” and had frustrated the legislative intent behind the statute.
The Promise of the RERA Act
The Real Estate (Regulation and Development) Act, 2016 was enacted to regulate the real estate sector, promote transparency, ensure timely completion of projects, and protect homebuyers from delays and unfair practices. The law was widely welcomed as a landmark reform aimed at restoring trust in the housing market.
However, nearly a decade after its enactment, concerns persist about inconsistent enforcement, delays in adjudication, and weak compliance mechanisms across States.
Homebuyers React
The Forum for People’s Collective Efforts (FPCE), a homebuyers’ association that played a key role in advocating for the law, said the Supreme Court’s remarks validate long-standing concerns.
According to Abhay Upadhyay, President of FPCE and a member of the Central Advisory Council under the Ministry of Housing and Urban Affairs, nine years after the legislation was passed, there is still no certainty that RERA-registered projects will be completed on time or that promises made to homebuyers will be honoured.
He stated that if RERA fails to meet the expectations of consumers, serious reforms—or even a reconsideration of the institution’s continued existence—may be necessary. Restoring fairness, accountability, and trust in the real estate sector, he said, requires decisive structural action.
A Call for Structural Reform
The Supreme Court’s latest observations signal growing judicial impatience with regulatory inefficiencies in the real estate sector. While the Court stopped short of issuing directions regarding the future of RERAs nationwide, its remarks place renewed pressure on States to reassess the effectiveness, independence, and accountability of these authorities.
With homebuyers continuing to grapple with project delays and enforcement hurdles, the coming months may determine whether States undertake meaningful reform—or face deeper scrutiny over the functioning of a law that was once hailed as transformative.
