Supreme Court Questions Effectiveness of RERA, Says It Appears to Benefit Builders

New Delhi, February 12, 2026:

The Supreme Court of India on Wednesday made strong observations regarding the functioning of Real Estate Regulatory Authorities (RERA), remarking that the regulatory framework appears to be aiding defaulting builders rather than protecting homebuyers.

A Bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi was hearing an appeal filed by the State of Himachal Pradesh challenging a High Court order that had stayed a government notification shifting the State RERA office and its appellate tribunal to Dharamshala.

During the hearing, the Bench expressed dissatisfaction with how RERA authorities are functioning across several States. The Court observed that instead of fulfilling its statutory mandate of safeguarding the interests of homebuyers and ensuring accountability of developers, the system seems to be operating in a manner that benefits promoters.

In a sharp remark, the Court noted that if the institution is not serving its intended purpose, there may be little justification for its continuation. However, the comment was made in the course of proceedings and does not amount to any direction to abolish the regulatory mechanism established under the Real Estate (Regulation and Development) Act, 2016.

The case arose after the Himachal Pradesh High Court stayed the State government’s decision to relocate the RERA office, observing that such relocation, coupled with changes to staffing arrangements, could render the authority ineffective.

Setting aside the High Court’s interim order, the Supreme Court permitted the State to proceed with shifting the RERA office and appellate tribunal to Dharamshala. At the same time, the Court directed that adequate safeguards be put in place to ensure that litigants and stakeholders are not inconvenienced.

The Real Estate (Regulation and Development) Act, 2016 was enacted to bring transparency, accountability, and speedy dispute resolution to the real estate sector. The Supreme Court’s remarks signal judicial concern over whether the regulatory framework is functioning as intended in practice.

Further proceedings in the matter are expected.

Discription: The Supreme Court of India has raised serious concerns about the functioning of the Real Estate Regulatory Authorities (RERA), observing that the framework appears to benefit defaulting builders instead of protecting homebuyers. The remarks were made by a Bench of Chief Justice Surya Kant and Justice Joymalya Bagchi while hearing an appeal by the State of Himachal Pradesh against a High Court order staying the relocation of the State RERA office to Dharamshala. The Court expressed dissatisfaction over the performance of RERA bodies across States, noting that they seem to be falling short of their statutory mandate under the Real Estate (Regulation and Development) Act, 2016. While sharply criticizing the system, the Court clarified that its observations do not amount to abolishing RERA. It allowed the State to shift the office, subject to safeguards ensuring that litigants and stakeholders are not inconvenienced.