As the Real Estate (Regulation and Development) Act, 2016 (RERA), approaches its 10th anniversary, the Forum for People’s Collective Efforts (FPCE) has called for a comprehensive restructuring of the legislation, arguing that it has fallen short of adequately safeguarding homebuyers.
In a representation to Prime Minister Narendra Modi, FPCE president Abhay Upadhyay highlighted regulatory and institutional weaknesses that, according to the forum, have undermined the law’s effectiveness. It has proposed replacing the existing framework with a dedicated Real Estate Homebuyer Protection Act focused on developer accountability and faster grievance resolution.
Although RERA brought projects under a formal registration system, FPCE said this has not prevented buyers’ money from remaining tied up in unfinished developments.
Rs 12.44 lakh crore reportedly stuck in delayed projects
A 192-page FPCE report, titled RERA Extension Abuse: How Regulatory Failure Is Betraying India’s Homebuyers, estimates that Rs 12.44 lakh crore is locked in delayed housing projects across seven states, affecting approximately 27.6 lakh families. The assessment covers Haryana, Karnataka, Maharashtra, Uttar Pradesh, West Bengal, Tamil Nadu and Telangana, with the amount equivalent to nearly 3.8% of India’s annual GDP.
The forum cited concerns including alleged diversion of project funds, breaches of construction-linked payment schedules, repeated deadline extensions and possession being offered without mandatory occupancy certificates. It said the report had been submitted to the Union Housing and Urban Affairs Ministry but had not received formal acknowledgement.
Concerns over regulatory functioning
FPCE also referred to Supreme Court observations questioning the performance of RERA authorities. It cited a September 2024 Bench remark describing certain RERA benches as “rehabilitation centers for former bureaucrats who have frustrated the entire scheme of the Act”.
The forum further argued that RERA’s dual responsibility of promoting and regulating real estate creates a conflict of interest. It noted that building approvals and completion certificates remain under separate state agencies, complicating enforcement and relief for buyers.
Four proposed changes
FPCE has sought separation of promotion and regulation, replacement of RERA with a homebuyer-focused law, transfer of administrative control to the consumer affairs framework and stricter penalties for regulatory officials who fail to enforce orders.
The forum maintained that stronger accountability and effective consumer protection are necessary to rebuild homebuyer confidence and support sustainable growth in the property sector.
Source: Mid-day
