Supreme Court rap puts spotlight on RERA's weak links

New Delhi: Days after the Supreme Court questioned the functioning of the RERA, experts said lack of intent by RERA chiefs, poor coordination with state governments, and inadequate use of existing powers have limited the effectiveness of regulators across India, underscoring the need for major reforms to protect homebuyers.

"No organisation can be given power beyond a limit. RERA should have learned to act within the power given to it. One of the structural weaknesses in the current system is that relief often remains limited only to those buyers who approach courts or authorities individually," said S K Singh, a retired IAS officer who was in the MoHUA when RERA was being drafted and legislated.

He was a member of the Bihar RERA Tribunal.


Experts said that for any regulatory system to function effectively, the cost of violating the law must be significantly higher than the benefits derived from wrongdoing. In the real estate sector, however, this balance often works in the opposite direction.

"It is up to the RERA chief how they implement the Act and work within the guidelines. For example, if builder floors are not getting registered in Delhi, the RERA chief should write to the state government to change the definition of projects that need to be registered. A strong administrator can bring relief to homebuyers within the current framework of RERA," said KK Khandelwal, former Haryana RERA chief for Gurugram.

In several states, regulators have been a "toothless tiger," without having the power to make builders obey the rules or to ensure that people get their money back through rulings. Since the application of the law is so slow, developers who do not pay what they owe are managing to avoid doing so.

"Frequently, the staff employed by these organisations are retired bureaucrats who lack the domain expertise desired for the role. Also, a lack of resources, vacancies in appellate courts, and poor supervision have all diminished the belief that building firms will be penalised for their wrongdoings. The result is a credibility gap between RERA's promise of swift homebuyer protection and its ground-level performance," said Varun Singh, founder and managing partner of Foresight Law Offices.

Experts, however, said that abolishing or diluting RERA is not a solution; reforming it is. The existing framework needs reforms, and a possible alternative could be a centralised real estate regulator with uniform powers across states.