Penalties Under Rera

The Real Estate (Regulation and Development) Act, 2016 is a game-changer for the real estate industry set to bring about transparency and accountability. RERA Act is applicable for all apartment developments with over 8 units and plots development over 500 square meters. Any real estate project that falls under the ambit of the RERA Act must obtain

RERA registration. In this article, we look at penalties applicable under RERA Act for non-compliance in detail.

Promoter Penalties

A promoter is a person who is entrusted with the task of promoting the project, i.e., development and construction. A promoter has various responsibilities under the RERA Act and non-conformance could attract the following penalty.

Non-Registration of Project

A promoter is required to register a real-estate project before advertising and promoting the project. If a promoter commits a breach of conduct by not registering, he/she will be levied a penalty which may be as high as 10% of the estimated cost of the real-estate project. The exact fee will be as decided by the concerned Authority. Further, if the promoter fails to comply with this rule and continues to be unregistered, he/she will have to face imprisonment for up to three years, and/or remit a fine which could be as high as 20% of the estimated cost of the real estate project.

Incorrect Application for RERA Registration

If a promoter provides bogus information or contravenes the provisions of Section 4, which deals with application for registration of real-estate projects, he/she will be imposed with a penalty of up to 5% of the estimated cost of the real-estate project.

Non-Compliance with Orders of Authority

If any promoter fails to comply with or contravenes any of the orders or directions of the Authority, he/she will be levied with a penalty which can extend up to 5% of the estimated cost of the real estate project.

Non-Compliance with Orders of Appellate Tribunal

If any promoter fails to act in accordance with the orders, decisions or directions of the Appellate Tribunal, he/she will be imprisoned for tenure of 3 years and/or will be levied with a fine which can cumulatively extend up to 10% of the estimated cost of the real estate project.

Real-Estate Penalties

A “Real estate agent” is a person who acts on behalf of another person in a real-estate transaction, and is benefited with remuneration or fees for the service extended.

RERA registration for a real-estate agent must be obtained by any person who wishes to act as a real-estate agent in a transaction involving a project registered under RERA.

Non-Registration

A real-estate agent requires registration before commencement of duties. If a real-estate agent fails to register, he/she will be imposed with a penalty of Rs 10,000 for each day of default. It may cumulatively extend up to 5% of the cost of plot, apartment or buildings of the real-estate project.

Non-Compliance with Orders of Authority

If any real estate agent fails to comply with or contravenes any of the orders or directions of the Authority, he/she will be levied with a penalty that may cumulatively extend up to 5% of the estimated cost of the real-estate project. The penalty will be applicable for each day of default.

Non-Compliance with Orders of Appellate Tribunal

If a real estate agent fails to comply with or contravenes any of the orders, decisions or directions of the Appellate Tribunal, he/she will be imprisoned for a term that may extend up to one year and/or will be fined as high as 10% of the estimated cost of the project.

Homebuyer Penalties

homebuyer enjoys various rights under the RERA Act. At the same time, non-compliance by a homebuyer or allottee can attract penalty under the RERA Act.

Non-Compliance with Orders of Authority

If any allottee fails to comply with or contravenes any of the orders or directions of the Authority, he/she will be levied with a penalty that may cumulatively extend up to 5% of the estimated cost of the real-estate property.

Non-Compliance with Orders of Appellate Tribunal

If an allottee fails to comply with or contravenes any of the orders, decisions or directions of the Appellate Tribunal, he/she will be imprisoned for a term that may extend up to one year and/or will be fined as high as 10% of the estimated cost of the project.

Default by Companies

In case a default or offence is committed by the company, all persons at the helm of affairs of the Company (Managing Director, Directors & Officers) who was directly responsible for the default will be considered guilty and dealt accordingly.

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Frequently Asked Questions

Common questions about Penalties Under RERA for Real Estate Compliance.

RERA stands for the Real Estate (Regulation and Development) Act, 2016. It is applicable to all residential apartment developments with more than 8 units and plot developments exceeding 500 square meters. Any real estate project falling under RERA's purview must obtain RERA registration.

If a promoter fails to register a real estate project before advertising or promoting it, they can be penalized up to 10% of the project's estimated cost, as determined by the concerned Authority. Continued non-registration may result in imprisonment up to three years and/or a fine of up to 20% of the project's estimated cost.

If a promoter provides bogus information or contravenes the provisions related to the application for RERA registration, they may be penalized up to 5% of the real estate project's estimated cost.

A real estate agent who fails to register before commencing their duties can be penalized Rs. 10,000 for each day of default, cumulatively extending up to 5% of the cost of the plot, apartment, or buildings in the real estate project.

Yes, if a homebuyer or allottee fails to comply with or contravenes any orders or directions of the Authority or Appellate Tribunal, they can be penalized up to 5% or 10% of the estimated cost of the real estate property or project, respectively, or face imprisonment for up to one year.

If a promoter, real estate agent, or allottee fails to comply with or contravenes any orders or directions of the RERA Authority, they can be penalized up to 5% of the estimated cost of the real estate project or property.

If a promoter, real estate agent, or allottee fails to comply with or contravenes any orders, decisions, or directions of the RERA Appellate Tribunal, they can face imprisonment for up to three years (for promoters) or one year (for real estate agents and allottees), and/or a fine of up to 10% of the estimated project cost.

In case a default or offense is committed by a company, all persons at the helm of affairs of the company (Managing Director, Directors & Officers) who were directly responsible for the default will be considered guilty and dealt with accordingly.

RERA aims to bring transparency and accountability in the real estate industry by imposing strict penalties for non-compliance, such as non-registration of projects, providing false information, and disobeying orders from the Authority or Appellate Tribunal. This encourages promoters, agents, and buyers to follow the regulations.

RERA registration for real estate projects is mandatory to ensure that the project complies with the Act's provisions and maintains transparency in its dealings with homebuyers. Registration helps protect the interests of buyers and promotes accountability among developers and agents involved in the project.