SC remarks may catalyse strengthening of Rera, real estate industry | Industry News

The Supreme Court’s (SC’s) recent pronouncements on the Real Estate Regulatory Authority (Rera) are expected to impact the real estate industry by shifting the focus from the strength of the law to the severity of enforcement, experts say.

The apex court on Thursday slammed the functioning of Reras in various states, stating that they had done little “other than facilitating defaults by builders” and suggested that it might be “better to abolish this institution”.

The clarifications are expected to lead to tighter oversight by regulators, faster decision-making and more uniform application of rules, thus raising compliance standards overall. In the near term, this could increase pressure on smaller or non-compliant developers while also benefiting well-capitalized and governance-focused players.

Anarock chairman Anuj Puri said: “SC’s announcement could push for tighter enforcement of rules across states, with stronger monitoring of project timelines and escrow accounts. It could also put pressure on regulators to reduce the backlog of cases, thus becoming implementation-oriented rather than just on paper. With stricter enforcement, we may once again see smaller defaulting developers exiting the market. Developers may also be forced to focus on faster delivery of projects and further enhancing transparency.”

Vikas Bhasin, Managing Director, Saya Group, said: “The SC’s remarks can act as a catalyst for further strengthening the regulatory framework. Positive and practical changes, along with more uniform enforcement, will boost investor confidence and promote responsible growth.”

For developers, the potential transition means a sharper focus on governance, capital discipline and timely execution, said Bhavik Bhandari, chief operating officer of Ashwin Sheth Group.

Since its launch eight years ago, more than 99,203 projects and 1,12,051 real estate agents across states have registered with Rera, according to data from the Ministry of Housing and Urban Affairs (MoHUA). Maharashtra has the highest share of registered projects under Rera with 50,487 projects, followed by Gujarat with 7,515 registered projects.

Abhay Upadhyay, Chairman of MoHUA, Rera People’s Collective Efforts Forum and member of the Central Advisory Council, emphasized that the SC was not criticizing the Rera law but the way it was implemented and the Rera institution. “The law is strong. The problem is implementation. Authorities cannot claim helplessness. They have powers under the law, they must use it,” he added.

While industry experts predicted an optimistic outlook, they also underlined the scope for improvement. Aarti Harbhajanka, founder and managing director of Primus Partners India, believes that going forward, rather than rethinking the core purpose of Rera, the focus should be on strengthening and streamlining the app.

Upadhyay added that repeated blanket statements will not fix the system unless responsibility is addressed. Authorities impose fines ranging from Rs 10,000 to Rs 15,000, making non-compliance cheaper than compliance. Sending reminders instead of punishment is contrary to the purpose of the regulation. ‘Rera-registered’ has become a marketing line, not a guarantee of compatibility.

“There is a need to consider targeted amendments to the Act, particularly to create stronger mechanisms for the completion and revival of expired or stalled projects and to address other persistent implementation challenges. There is also an urgent need to operationalize Article 32 of the Act to enable Reras to actively propose measures on critical issues such as affordable housing and green housing,” he suggested.

While industry stakeholders criticize Rera, they believe that his contribution to the industry cannot be ignored. Heena Chheda, partner in the Economic Law Practice, said: “While the Supreme Court’s scathing criticism highlights a harsh reality, dismissing Rera as a complete failure is to ignore the massive structural correction in Indian real estate. By ring-fencing 70 percent of project receivables in escrow accounts and imposing a stringent carpet area standard, Rera has strangled systemic diversions of funds that once fueled decade-long delays and a culture of uncontrolled impunity.”

A report by Knight Frank says the implementation of Rera limits speculative pricing and helps the housing sector recover from the previous crisis by aligning house prices with market fundamentals. Improved affordability and stronger regulatory processes have boosted investor confidence; cumulative private capital inflow increased from $17.5 billion in 2011-2016 to $26 billion in 2017-2020.

There are visible positive impacts especially in Maharashtra, Karnataka, Uttar Pradesh, Madhya Pradesh and Haryana. As of February 9, 2026, 35 states/UTs have notified general rules (except Nagaland), while 27 states/UTs and two interim bodies have set up active Estate Appellate Tribunals. Puri noted that they have together destroyed more than 1.55 lakh cases, with Uttar Pradesh (52,047) leading, followed by Maharashtra (27,006), Haryana (16,531) and Karnataka (10,169).

But the next phase should focus on deepening effectiveness rather than simply ensuring compliance. According to Vivek Rathi, national research director at Knight Frank India, the framework is in place, but the results depend on consistent implementation across states and faster, more predictable dispute resolution.