Supreme Court Questions RERA’s Effectiveness, Says It Appears to Favour Defaulting Builders

The Supreme Court on Thursday voiced strong dissatisfaction over the functioning of the Real Estate Regulatory Authority (RERA), questioning whether the institution is fulfilling its intended purpose of protecting homebuyers.

A bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi observed that States must re-evaluate the objective behind the enactment of the Real Estate (Regulation and Development) Act, 2016. The Court remarked that RERA appears to be serving the interests of defaulting builders rather than safeguarding buyers, suggesting that if this trend continues, it might be better to abolish the institution altogether.

According to court observations reported during the hearing, the bench stated that RERA was established for the benefit of homebuyers, and States should now reflect on whether it is functioning in that spirit.

The remarks were made during the hearing of an appeal challenging a Himachal Pradesh High Court order. The High Court had earlier stayed a State government notification dated June 13, 2025, which proposed shifting the Himachal Pradesh RERA office from Shimla to Dharamshala.

In its earlier order, the High Court noted that the relocation decision had been taken without identifying an alternative office space. It also expressed concern that transferring 18 outsourced employees to other government bodies could effectively disrupt or render RERA’s functioning defunct.

However, the Supreme Court set aside the High Court’s stay order and allowed the Himachal Pradesh government to proceed with relocating the RERA office to Dharamshala. The bench further directed that the principal appellate tribunal under RERA also be moved to Dharamshala to ensure that individuals affected by RERA decisions are not inconvenienced.

The Real Estate (Regulation and Development) Act was enacted in 2016 to bring transparency and accountability to the real estate sector, ensure timely project completion, and protect the rights of homebuyers. The Supreme Court’s latest observations have once again brought the spotlight on the implementation and effectiveness of the regulatory framework across States.