'Only Facilitating Builders': Supreme Court Expresses Sharp Dissent Over RERA's Failure To Protect Homebuyers

The Supreme Court of India expressed sharp disapproval of the current performance of the Real Estate Regulatory Authority (RERA) during a hearing on Thursday.

Why SC is angry with RERA

In a significant development reported by Bar and Bench, presiding over the case State of Himachal Pradesh vs Naresh Sharma, a bench led by Chief Justice of India Surya Kant and Justice Joymalya Bagchi questioned whether the regulatory body is fulfilling its intended purpose.

CJI Kant remarked that instead of protecting the public, the institution appears to be primarily assisting defaulting builders. He suggested that if the authorities continue to fail the people for whom they were created, the states might be better off abolishing the institution altogether.

The court’s observations surfaced during an appeal against a Himachal Pradesh High Court decision that had previously stayed a government notification.

This notification sought to move the state’s RERA headquarters and its 18 outsourced employees from Shimla to Dharamshala. While the high court had paused the move due to concerns over the lack of a designated alternative office space, the Supreme Court overturned this stay. The top court permitted the relocation to Dharamshala and further ordered that the principal appellate tribunal also be moved to the same location to ensure consistency and minimise inconvenience for those affected by RERA orders.

What is RERA?

The Real Estate (Regulation and Development) Act was established in 2016 as a landmark reform designed to bring transparency and accountability to a previously fragmented industry. By creating a unified legal framework, the Act sought to bridge the power gap between developers and individual purchasers. Central to this mission is the requirement for developers to register projects publicly and disclose essential details such as layout plans and completion timelines before any sales can occur.

A core pillar of the Act is the mandate for developers to deposit 70 per cent of buyer funds into a dedicated escrow account to prevent the diversion of capital to other projects. Additionally, RERA standardised the sale of property based on "carpet area" rather than misleading "super built-up" measurements. The framework also introduced specialised tribunals for faster dispute resolution, imposing interest penalties on developers for delays to ensure a balanced environment of mutual responsibility.

Published on: Thursday, February 12, 2026, 12:36 PM IST