Supreme Court Criticizes RERA: Says Authority Only Helps Builders, Not Homebuyers
Bench questions effectiveness of Real Estate Regulatory Authorities
Remarks made during Himachal Pradesh RERA office relocation case
By Legal Reporter
New Delhi: February 12, 2026:
The Supreme Court of India has strongly criticized the functioning of the Real Estate Regulatory Authority (RERA), observing that the institution appears to serve builders more than homebuyers. A bench led by Chief Justice Surya Kant and Justice Joymalya Bagchi remarked that it may be “better to abolish RERA” altogether if it continues to fail in protecting the interests of consumers. The Court made these observations while hearing an appeal related to the relocation of the Himachal Pradesh RERA office from Shimla to Dharamshala.
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Background of the Case
- Dispute origin: The Himachal Pradesh government issued a notification shifting the State RERA office to Dharamshala.
- High Court ruling: The Himachal Pradesh High Court stayed the notification, noting that the decision was taken “without even identifying the alternative office place.”
- Supreme Court hearing: While considering the appeal, the apex court expressed dissatisfaction with RERA’s functioning nationwide.
Court’s Observations
The bench made several sharp remarks:
- Failure of purpose: RERA was created to protect homebuyers, but in practice, it has largely facilitated defaulting builders.
- Consumer interests ignored: The Court noted that RERA has not delivered on its promise of safeguarding buyers from delays and fraud.
- Call for reflection: States were urged to reconsider the purpose of RERA and whether it is serving its intended beneficiaries.
- Abolition remark: CJI Surya Kant stated, “Better to just abolish this institution, except facilitating builders in default, it is not doing anything else.”
Reasons Behind the Criticism
The Supreme Court’s dissatisfaction stems from several issues:
- Implementation gaps: RERA has failed to enforce strict timelines for project completion.
- Weak penalties: Builders often escape with minimal consequences despite violating rules.
- Delayed justice: Homebuyers face long waits for resolution of complaints.
- Structural flaws: Relocation of offices without proper planning reflects administrative inefficiency.
Wider Legal Context
- RERA Act, 2016: Enacted to regulate the real estate sector, ensure transparency, and protect homebuyers.
- Earlier criticism: In 2025, the Supreme Court had already termed RERA’s functioning “disappointing,” noting that project failures create a domino effect across the sector.
- Consumer expectations: Homebuyers hoped RERA would provide quick remedies against builder defaults, but many cases remain unresolved.
Implications of the Ruling
- For homebuyers: The remarks highlight the need for stronger enforcement mechanisms to protect consumer interests.
- For builders: Signals that leniency towards defaulting builders may not continue unchecked.
- For states: Encourages state governments to review their RERA authorities and improve efficiency.
- For judiciary: Reinforces the Court’s role in ensuring accountability in regulatory institutions.
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Conclusion
The Supreme Court’s sharp criticism of RERA underscores the growing frustration with its performance. By suggesting that the authority may be abolished if it continues to favour builders over buyers, the Court has sent a strong message to both regulators and policymakers. The ruling is expected to spark debate on whether RERA needs structural reforms or stricter enforcement to fulfil its original mandate of protecting homebuyers.
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