Forbes India
Ten years after it came into existence, the Real Estate Regulation and Development Act (RERA) has seen mixed fortunes. While the Act has been hailed for the transparency it has brought in, others have criticised the delays in enforcement around it.The act, passed on May 1, 2016, was introduced with the twin objectives of protecting homebuyers’ interests and promoting transparency. Brought in after a series of projects folded and developers were accused of duping buyers, RERA ushered in several key reforms, including mandatory project registration, escrow requirements mandating 70 percent 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."A decade of RERA has been transformative for Indian real estate. It has moved the sector from intent to accountability. Mandatory disclosure norms, escrow discipline, and structured timelines have fundamentally changed how developers plan, finance, and deliver projects, raising the bar for the entire industry,” says Manik Malik, CEO and president of BPTP, a real estate developer. “RERA has also played a significant role in accelerating the formalisation of Indian real estate and encouraging stronger governance and execution discipline across the industry. The momentum is strong, and as implementation continues to mature across states, RERA's full potential will only grow," he adds.The industry becoming disciplined has led to buyer confidence, says Rupam Dey, head - marketing communication & brand at real estate developer HubTown Limited. “One of the biggest positives of the Act has been transparency. Consumers today are significantly more aware and informed before making purchase decisions. Mandatory disclosures, escrow mechanisms, and registration norms have improved credibility across the sector. It has also helped organised and compliant developers stand apart from speculative players, thereby improving overall market maturity,” he adds.But RERA has had its share of problems as well. The Supreme Court recently made sharp observations on its functioning, saying that it appears to be helping builders more than buyers, particularly in cases of project delays and non-compliance. Experts also point to weak enforcement, low recovery rates and developers often ignoring penalties due to reliance on slow-moving state mechanisms.Also Read: Luxury that Lasts: Homes that can be passed down generationsOne of the major problems with RERA has been its decentralised system, where each state frames its own rules and establishes its own Appellate Tribunal. It has led to significant fragmentation, creating inconsistencies in rulings, procedural delays, and reduced effectiveness in protecting homebuyers.“While some states have strong, efficient systems, others lag in implementation or dilute provisions. This lack of uniformity can lead to confusion for both buyers and developers, especially those operating across multiple regions,” says Sidharth Chowdhry, managing director of real estate firm Dalcore. “It also impacts predictability and trust. Ideally, a balance is needed, where states retain flexibility but operate within a more standardised and consistently enforced national framework.”Another area of confusion for RERA has been the overlapping of rules with the Insolvency and Bankruptcy Code (IBC), which was introduced in the same year as RERA. The confusion stems from the fact that both laws aim to protect homebuyers but through entirely different mechanisms, creating conflicts in jurisdiction, priority, and outcomes.While Section 238 of the IBC states that it overrides any other law in case of inconsistency, Section 89 of RERA provides that it prevails over other laws. In such cases, homebuyers often face a dilemma—either approach RERA for project completion or NCLT (via IBC) for insolvency, as both cannot effectively run together. Once a moratorium is imposed under IBC, proceedings under RERA are usually stayed.Chowdhry says the relationship between the two has created practical complexities, particularly when stalled real estate projects enter insolvency. “While both laws serve different purposes—RERA focusing on regulation and buyer protection, and IBC on insolvency resolution, the overlaps between the two can delay outcomes for homebuyers. In some cases, buyers’ claims raised under RERA become part of longer insolvency proceedings. Although the frameworks are meant to coexist, this intersection can slow down resolution timelines, which were intended to be more efficient under RERA,” he adds.
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