A decade into the Real Estate (Regulation and Development) Act (RERA), a new report reveals that homebuyers still face significant challenges with stalled projects and low compensation recovery. Despite legal reforms, issues like automatic project extensions and weak enforcement remain hurdles. For prospective buyers, understanding these systemic risks is now a crucial part of property due diligence.
A decade after the introduction of the Real Estate (Regulation and Development) Act, 2016, the promise of a secure property market remains a work in progress for many Indian homebuyers. While the law was designed to fix the power imbalance between developers and buyers, a 2026 report from the Forum for People’s Collective Efforts (FPCE) highlights that structural issues continue to leave property owners vulnerable to project delays and financial losses.
The central issue identified in the report is how regulatory bodies handle project timelines. Under various sections of the Act, regulators frequently grant project extensions to developers. The concern raised by the FPCE is that these decisions are often made through direct communication between the regulator and the builder, without consulting the people who have invested their life savings in the project. When a project is delayed, this process often results in the developer receiving more time to finish the work, while the buyer is left waiting for possession without any immediate financial relief.
Even when buyers manage to secure favorable orders for compensation under Section 18 of the Act, the path to recovering funds remains difficult. The enforcement of these orders is often weak, forcing buyers to engage in long-term legal battles to get their money back. Data from January 2026 offers a sobering look at this reality; in Karnataka, for instance, only about 9.8% of the money owed to homebuyers through Revenue Recovery Certificates had been successfully recovered. This gap between a legal order and actual payment highlights the persistent difficulty in holding developers accountable.
The financial pressure on homebuyers is further increased by a disconnect between construction progress and payment calls. The report notes that developers often continue to demand payments even when construction work on the ground has significantly slowed or stopped. This leaves buyers in a position where they have paid a large portion of the property value, yet the physical progress remains stagnant.
To address these gaps, the government has been pushing for 'RERA 2.0' reforms in 2026. These updates aim to increase transparency by requiring mandatory digital progress reports from professionals like architects, engineers, and accountants. Additionally, the rules surrounding the 70% escrow account—which is meant to ensure that money collected from buyers is used only for that specific project—are being reinforced. However, external factors continue to impact the sector, such as a recent Ministry of Housing and Urban Affairs advisory that allowed for a four-month registration extension for projects affected by supply chain disruptions due to the West Asia conflict.
For potential homebuyers, the decade-long track record of RERA serves as a reminder that legal protections do not eliminate the need for personal due diligence. Tracking the status of a developer’s digital progress reports and verifying the health of the project's escrow account are becoming as important as checking the property location itself. The market currently remains in a phase where, despite improved regulations, the responsibility of monitoring project execution and financial health continues to rest heavily on the buyer.