India’s real estate sector needs a regulatory framework that protects homebuyers while ensuring that responsible developers are not penalised for circumstances beyond their control, according to an industry perspective calling for the next phase of the Real Estate (Regulation and Development) Act (RERA) to focus on balanced accountability, transparency and time-bound approvals.
Introduced to bring greater transparency, accountability and discipline to the real estate sector, RERA has played an important role in addressing concerns around delayed possession, project disclosures and developer commitments. However, as the industry gains experience with the regulatory framework, questions are emerging over whether accountability should extend beyond developers to other stakeholders involved in the execution of real estate projects.
“RERA rightly made developers accountable. Now the approving authorities need to be accountable too. Fair rules for every party will protect buyers better than one-sided rules ever can,” CEO Yogesh Dhanuka states.
A real estate project typically involves multiple stakeholders, including government departments, municipal bodies, utility providers, financial institutions and environmental authorities. Delays in approvals, statutory clearances, utility connections or court proceedings can affect project timelines even when developers have completed their responsibilities.
Accountability Must Extend Across the Project Lifecycle
The industry view emphasises that developers should face consequences for delays arising from inadequate planning, financial mismanagement, poor execution or failure to honour commitments. However, delays attributable to external agencies should be assessed separately through a transparent and independent mechanism.
“Real estate development is a multi-agency process. A developer may be ready to deliver a project, but approvals, utility connections or other statutory clearances can lie beyond their control. Accountability must extend to every stakeholder in the chain, so that homebuyers are protected without penalising developers for delays they could not prevent,” Dhanuka Infra Realty Ltd CEO states.
Such an approach, it argues, would help distinguish between genuine developer defaults and delays caused by circumstances outside their reasonable control. It would also ensure that homebuyers receive appropriate protection without placing the entire burden of a multi-agency process on a single stakeholder.
Transparency Without Compromising Commercial Confidentiality
Another area identified for reconsideration is the extent of commercial information disclosed publicly under the regulatory framework.
Access to information on land titles, statutory approvals, construction progress, possession timelines and project-related commitments is essential for buyers to make informed decisions. However, the industry view suggests that disclosure requirements should distinguish between information necessary for consumer protection and sensitive commercial information that may not directly influence a buyer’s decision.
“Transparency is essential to building trust with homebuyers, but transparency should not mean that every commercial detail or engineering decision becomes public information. Buyers need clear information about approvals, project progress and delivery commitments. Detailed cost structures and proprietary designs, however, deserve reasonable safeguards against misuse,” Yogesh Dhanuka states.
The proposed approach would retain regulatory access to detailed project information while considering whether public disclosures could be limited to relevant summaries in certain areas. The objective would be to maintain accountability without unnecessarily exposing pricing strategies, project margins, inventory-related information or proprietary technical details.
Escrow Rules and Construction Cash Flow
The industry perspective also highlights the practical implications of RERA’s requirement that developers deposit 70% of the amounts realised from homebuyers into a separate account for land and construction costs.
While the provision is intended to safeguard buyer funds and prevent their diversion to unrelated projects, the timing of withdrawals can create operational challenges, particularly when developers need to make advance payments to suppliers for construction materials.
“The intent behind ring-fencing 70 per cent of homebuyer collections is understandable and important. The practical challenge arises when developers must pay advances to suppliers for essential construction materials while withdrawals remain linked to certified work completed. A project-sensitive mechanism that safeguards buyer funds while accommodating genuine supplier advances could improve execution without compromising financial discipline,” the CEO of Dhanuka Infra Realty Ltd. states.
A more flexible, appropriately monitored mechanism could help address legitimate procurement requirements while retaining safeguards against the misuse of homebuyer funds.
A More Predictable Regulatory Framework
The broader recommendation is to refine RERA’s implementation rather than dilute its core objectives. Proportionate compliance requirements, balanced appeal mechanisms and time-bound approvals could help improve predictability for both buyers and developers.
“Protecting homebuyers and enabling responsible real estate development are not competing objectives. Developers who default must face consequences, but the regulatory framework should also provide proportionate compliance, balanced appeal mechanisms and time-bound approvals. A fair and predictable system will strengthen buyer confidence while allowing genuine developers to deliver projects more efficiently,” Yogesh Dhanuka adds.
As India’s housing market evolves, the next phase of RERA could focus on ensuring that responsibility follows control, disclosures remain meaningful and regulatory processes account for the practical realities of construction.
The central objective, Yogesh Dhanuka concludes, should be a system that protects homebuyers, holds defaulting developers accountable and enables responsible businesses to complete projects efficiently. A balanced framework could strengthen trust across the sector while supporting more predictable and sustainable real estate development.
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