RERA at Eight: What India's Real Estate Law Has Delivered: and Where the Gaps Remain

Before RERA: The Problem It Was Designed to Solve

To appreciate what RERA has and has not achieved, it helps to remember the landscape before it. For decades, Indian residential real estate operated in conditions that were systemically tilted against buyers. Builders sold projects on the basis of brochures and promises, collected substantial sums through under-construction payments, routinely delayed possession, modified project plans without consent, and faced no effective regulatory accountability. Consumer courts were available but slow and limited in their remedies. Civil courts were slower still. The balance of information, financial power, and legal resources lay overwhelmingly with developers.

The Real Estate (Regulation and Development) Act, 2016: which received Presidential assent in March 2016 and came into force in May 2017: was designed as a structural correction. It mandated registration of projects, disclosure of project details, escrow of funds collected from buyers, defined timelines for possession, and established state-level regulatory authorities (Real Estate Regulatory Authorities) with the power to impose penalties, direct refunds, and order compensation.

It was a significant legislative intervention. The question, eight years on, is how much of that intervention has translated into changed behaviour on the ground.

What RERA Has Genuinely Delivered

Mandatory Disclosure and Project Registration

The requirement to register projects with the state RERA authority and disclose project details: the layout plan, approvals obtained, timeline for completion, details of the promoter: has been a genuine improvement. Buyers can now verify whether a project is registered, check the declared possession date, and see what approvals the builder has obtained. This information was simply not publicly available before RERA. The RERA portals maintained by states like Maharashtra (MahaRERA), Gujarat, and Delhi have become genuinely useful research tools for prospective buyers.

Escrow and Fund Ring-Fencing

RERA's requirement that 70 per cent of amounts collected from buyers be deposited into a dedicated escrow account, to be used only for the construction of that specific project, was designed to address the commonest source of builder default: the diversion of funds from one project to another. In states where RERA authorities have enforced this requirement rigorously, there is evidence that it has reduced diversion. In states where enforcement has been weak, builders have found ways to work around it: but the legal framework for accountability now exists.

A Forum That Takes Complaints Seriously

RERA authorities in several states have shown real willingness to adjudicate complaints against builders and pass orders for refunds, interest, and compensation. MahaRERA in particular has built a reputation for relatively efficient processing of homebuyer complaints. For individual buyers with straightforward complaints: delay in possession, defects in construction, non-compliance with project specifications: RERA offers a faster and more targeted forum than the civil courts or consumer commissions.

"RERA gave Indian homebuyers something they had never had before: a regulator who was watching the sector and a forum that understood what they were complaining about. That is not nothing. But eight years on, the implementation gap between the law's promise and the ground reality remains wider than it should be."

Where RERA Has Fallen Short

Uneven Implementation Across States

Real estate is a state subject, and RERA's effectiveness depends heavily on how seriously individual state governments take the legislation. The contrast between high-performing RERA authorities like MahaRERA and poorly resourced authorities in other states is stark. In some states, the RERA authority has a skeletal staff, a backlog of unresolved complaints running into thousands, and limited capacity to enforce its own orders. Builders in these states continue to operate with relative impunity.

The Enforcement Gap

Obtaining a RERA order and actually enforcing it are two different challenges. RERA authorities can pass orders directing builders to refund amounts with interest. But if the builder does not comply voluntarily: and many do not: enforcement requires recovery proceedings that can take years. RERA authorities do not have the same enforcement machinery as civil courts, and the process of converting an unenforceable RERA order into actual recovery is often as slow and expensive as the original litigation was intended to avoid.

Stressed Developers and Financial Insolvency

RERA works well when a builder has the financial capacity to comply. It works poorly when the builder is itself financially stressed or insolvent. Many of the homebuyers who need relief most urgently: those whose builders have stopped construction entirely, have multiple stalled projects, or are facing insolvency proceedings: find that RERA cannot give them what they need. The regulatory tool requires a functional counterparty.

This is why the Supreme Court in Mansi Brar Fernandes identified IBC as a last resort for homebuyers in exactly these situations: where the builder is beyond RERA's reach. But IBC proceedings are slow, complex, and uncertain in their outcomes for individual homebuyers, particularly given the priority structure that financial creditors (primarily banks) occupy.

The Carpet Area and Configuration Gap

One of RERA's less-discussed weaknesses is enforcement of the configuration commitment. Builders continue to modify apartment configurations, reduce specifications, or change common areas in ways that differ from what was represented at the time of booking. While buyers can complain to RERA about these deviations, the standard remedy: compensation for the difference in value: is often difficult to quantify and hard to enforce. The deterrent effect is weaker than it should be.

What Needs to Change

The gap between RERA's legislative promise and its ground reality is primarily an implementation and institutional capacity problem, not a legislative drafting problem. The core framework is sound. What is needed is genuine investment in state RERA authorities: in staffing, technology, and enforcement machinery: and a stronger culture of treating RERA non-compliance as a serious regulatory offence rather than a cost of doing business.

The Supreme Court has, in multiple decisions, reinforced RERA's primacy for homebuyer disputes and emphasised that builders must honour their statutory obligations under the Act. What the judiciary cannot supply is the administrative will to make enforcement routine rather than exceptional.