By invitation: Akash Bantia, Advocate, practising at the Karnataka High Court and RERA
The view that the Real Estate (Regulation and Development) Act, 2016 (RERA) has not lived up to its promise remains widespread. Headlines tend to focus on stalled projects, delayed possession, and enforcement challenges — leading many to assume that RERA has fallen short. However, this view does not reflect the experiences of those who have engaged with the Act closely. While RERA is far from flawless, it has significantly reshaped India’s real estate landscape. It has curbed some of the sector’s most harmful practices, strengthened homebuyer protections, and introduced a degree of transparency that was previously unimaginable.
Before RERA, homebuyers often operated in the dark. Developers could divert funds from one project to another, delays were routine, contracts were one-sided, and legal remedies were slow and inaccessible. RERA has changed this equation.
A Framework Built on Accountability and Transparency
At the core of RERA’s design is the 70:30 rule, which requires developers to deposit at least 70 percent of funds collected from homebuyers into a designated escrow account tied to that specific project. These funds can only be withdrawn in proportion to construction progress and only after certification by an architect, engineer, and chartered accountant.
This structure prevents a widespread earlier practice: using funds from new buyers to plug financial gaps in older, delayed projects. By ensuring financial discipline, RERA encourages developers to complete projects on schedule and deliver what was promised.
Transparency is another major reform. Developers must upload quarterly project updates, making real-time construction progress publicly accessible. Buyers no longer have to rely on assurances or visit sites for vague updates; they can track progress online. This access to information has shifted negotiating power back toward the homebuyer.
Critically, RERA also brings personal accountability. Promoters and senior management can be held individually liable for non-compliance under Sections 59, 60, 63, and 69. The requirement that developers deposit 100 percent of the refund amount before appealing a RERA order has substantially reduced frivolous litigation, preventing developers from dragging buyers into prolonged legal battles.
Judicial interpretation has also strengthened the law. Courts have clarified that in cases of direct conflict between RERA and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), homebuyer rights take precedence over banks and financial institutions. This is a noteworthy shift — it places the interests of the end-user at the center of property regulation, rather than those of institutional lenders.
Balancing Interests: Buyers and Builders Both Count
It is equally important to recognize that RERA is not a one-sided buyer-centric law. The narrative that developers are always the wrongdoers — and buyers always innocent — is neither accurate nor helpful. RERA acknowledges that developers must also be protected from defaulting purchasers.
Section 11 allows developers to cancel allotments if a buyer fails to meet payment obligations. Section 67 imposes penalties for the allottee’s non-compliance with regulatory orders. This ensures that accountability under RERA operates both ways — preserving fairness rather than fostering adversarial relationships.
This balanced approach is essential for a functioning real estate ecosystem, where developers can operate confidently and buyers can invest securely.
Where the System Still Breaks Down
Despite its strengths, RERA’s enforcement mechanism often falters at a crucial stage: the execution of orders. Once the Authority issues a Recovery Certificate directing compensation or refund, the process shifts to state revenue authorities. These bodies, burdened with unrelated responsibilities and lacking specialised training in real estate matters, frequently struggle to execute recovery swiftly. The result is delay — and delay erodes trust.
A practical improvement would be the appointment of dedicated Special Recovery Officers at the state level, empowered specifically to implement RERA orders. This reform would not require amending the Act; a simple administrative notification would suffice. The impact, however, would be significant: timely relief, enhanced credibility, and restored public confidence.
The transition from developer control to resident welfare associations or owners’ associations also remains a pain point. In Karnataka, for instance, the outdated Karnataka Apartment Ownership Act of 1972 complicates the handover process, causing disputes and confusion. A harmonized, modern handover framework aligned with RERA would benefit everyone involved. Buyers would gain collective strength to manage property affairs, while developers would gain a clearer exit process.
Lastly, enforcement should be paired with education. Many disputes arise not from intentional misconduct but from lack of clarity about rights and obligations. Awareness programs for developers, buyers, brokers, and housing associations could build informed compliance — compliance by understanding, not fear.
The Way Forward
RERA is not a failed experiment. It is a work in progress — a regulatory foundation that has already achieved more than is commonly acknowledged. For every delayed project that makes news, there are several quiet success stories where buyers received possession, stalled projects were revived, and mismanagement was curtailed. These cases rarely make headlines.
Strengthening enforcement, modernising related legislation, and expanding public awareness will allow RERA to evolve into a more efficient and trust-inspiring framework.
RERA should not merely regulate real estate — it should restore faith in it. That goal is now within reach.
