RERA under SC criticism: Why are RERA annual reports important to protect the interests of home buyers?
The Real Estate Regulatory Authority or RERA, is once again in focus. Recently the Supreme Court made blunt comments regarding the role of RERA and its importance. The top court remarked that it is time for all states to reconsider the structure and composition of RERA, noting that the body appears to be merely “facilitating” the erring builders instead of holding them accountable. The apex court has expressed concern over whether real estate regulatory authorities are adequately protecting the interests of home buyers. A bench of Chief Justice Surya Kant and Justice Joymalya Bagchi said that the persons whom RERA was created to protect are now deeply disappointed. The Chief Justice remarked, “It would be better if this institution were abolished; we have no objection to that.” Nearly ten years after the Real Estate (Regulation and Development) Act, 2016, was enacted and implemented in all states in 2017, the focus is increasingly shifting from developers to the functioning of the regulator. In this context, a homebuyer advocacy group has alleged that many states have failed to publish annual reports as mandated under regulatory law. Has RERA improved project delivery? What are RERA reports and why are they important for protecting home buyers? We take a look:
Understanding the Importance of RERA Annual Report
Originally, RERA was intended to move away from opaque practices towards transparent and measurable regulatory oversight, with annual reports serving as an evaluation of the regulator’s functioning. Ideally, the report should not only contain information about project registration and complaints received but also about the status of completion of the project, enforcement of regulatory orders and action taken against developers who fail to comply with the rules. According to an ET report, Section 78 of RERA makes it mandatory for every state regulator to issue an annual report detailing its activities and performance. This is a key element of the framework of the law. In early 2023, the Ministry of Housing and Urban Affairs released a reporting format to allow consistent comparison across states. Discussions on RERA’s performance generally focus on metrics such as the number of projects registered and the volume of complaints resolved. However, these indicators reflect activity rather than actual results. The objective of the annual report is to provide information on whether the projects were completed within the timelines, whether orders related to refunds and compensation resulted in actual payments, and whether the homes were ultimately handed over to the buyers due to possession instructions. A grievance may be marked as resolved after an order is issued, but actual relief comes only when the order is implemented. In the absence of enforcement-related data, it becomes difficult to objectively evaluate the effectiveness of the law.
What is the controversy about?
Forum for People’s Collective Efforts (FPCE), an organisation representing homebuyers, has alleged that more than 75% of real estate regulatory authorities have either never released their annual reports, stopped publishing them after the initial years, or failed to keep them updated. According to the group, only a limited number of states have made the reports available as of FY2014, while some major real estate markets had released reports earlier but later discontinued the practice. The FPCE also said that in many cases where the reports have been published, the format recommended by the ministry has not been followed, making it difficult to make meaningful comparisons across states.
What are the implications of the alleged omission?
India has, in the past, grappled with significant delays in housing projects. The government-appointed panel, headed by Amitabh Kant, had identified around 412,000 housing units across the country as stressed. RERA was introduced as a structural measure, including mechanisms such as escrow-linked project funding and mandatory disclosure. However, if data on project completions and commissioning remains unavailable, policymakers have no clear basis to judge whether the apparent recovery of the sector reflects a genuine strengthening of delivery standards or is just the beginning of another cycle of new project launches, according to ET analysis. While registration figures indicate an increase in supply, completion figures provide a more accurate measure of the underlying condition of the sector. The consequences go beyond just the interests of home buyers. Governments rely on reliable delivery data to shape taxation decisions and urban planning strategies, while financial institutions use closing records to evaluate the risk of lending. Regular and standardised reporting can help identify whether delays arise from funding constraints, regulatory hurdles or litigation, and whether certain developers repeatedly default. RERA was designed to move the sector from a system based on trust to one based on transparency. If regulators cannot self-evaluate, the framework risks serving primarily as a project registration platform rather than a genuine mechanism of accountability.
