10 years of RERA: Homebuyers’ wait for final solution continues

Experts say pace of dispute resolution remains concern as buyers face proceeding delays

- ARSHAD KHAN @NewDethi

THE Real Estate (Regulation and Development) Act, 2016 (RERA), on May 1, is completing 10 years of regulating real estate sector, with the twin objectives of protecting home-buyers’ interests and promoting transparency.

Introduced after a series of projects collapsed and developers were accused of duping buyers, RERA ushered in several key reforms, including mandatory project registration, escrow requirements mandating 70% of buyer funds be set aside for construction, and quarterly updates on construction progress. It also required developers to disclose project details and laid down penalties for delays beyond stipulated timelines.

However, RERA has its shortcomings, and questions are often raised about whether the law is fully meeting its objectives. The Supreme Court recently made sharp observations on the functioning of RERA, questioning whether the law has drifted from its original purpose of protecting homebuyers and instead become a shield for defaulting builders. Experts also point to weak enforcement, low recovery rates and developers often ignoring penalties due to reliance on slow-moving state mechanisms.

Major hits

Despite these shortcomings and wide differences in implementation across states, experts and developers say the Act has played a significant role in formalising the real estate sector. Ankita Sood, National Director—-Research at Knight Frank India, said RE-RA’s biggest achievement has been bringing much-needed transparency, accountability and structure to India’s real estate market.