Offences and Penalties under RERA

Status as on-20/11/2021

INTRODUCTION

The Real Estate (Regulatory and Development) Act, 2016 is the first regulations in Real Estate Sector to regularize and aims to protect the home purchasers and also boosts the real estate investments. At one place, where the Act specifies the details rules and regulation for proper registration and transparency, the Act also prescribes penalty for different kind of offenses.

Offence-wise Penalties for Promoters

S.NO	OFFENCES	SECTION	PENALTY
1	Non-registration of a project	Section 59	10% of the estimated cost of real estate project
2	Not obeying orders or direction in connection with the above offence	Section 59	Imprisonment up to 3 years with an or without fine being 10% of the estimated cost of real estate project
3	Providing false information etc.	Section 60	5% of the estimated cost of real estate project
4	Other contravention	Section 60	5% of the estimated cost of real estate project
5	Contravention of any order of the RERA	Section 61	Penalty for every day of defaults which may cumulatively extend up to 5% of the estimated cost of real estate project
6	Contravention of the orders or direction of the appellate tribunal	Section 64	Imprisonment up to 3 years with or without fine which may cumulatively up to 5% of estimated cost of real estate project.

Offence-wise Penalties for Real Estate Agents

S.NO	OFFENCES	SECTIONS	PENALTY
1	Contravention of the applicable provisions of the Act	Section 62	Rs. 10,000 per day of defaults which may extend up to 5% of the cost of the property whose sale or purchase was facilitated by him
2	Contravention of the orders or direction of the RERA	Section 65	Penalty on a daily basis which may cumulatively extend up to 5% of the estimated cost of the property whose sale or purchase was facilitated by the agent
3	Contravention of the orders or direction of the appellate tribunal	Section 66	Imprisonment up to 1 year with without fine which may extend up to 10% of estimated cost of project.

Offence-wise Penalties for Allottees

S.NO.	OFFENCES	SECTIONS	PENALTY
1	Contravention of any order of the RERA	Section 67	Penalty for the period during which defaults continues which may cumulatively extend up to 5% of the apartment or building cost
2	Contravention of the orders or direction of the appellate tribunal	Section 68	Imprisonment up to 1 year with or without fine for every day during which such defaults continues, which may cumulatively extend up to 5% of the apartments or building cost.

State wise RERA implementations

STATE	IMPLEMENTATION STATUS	PENALTIES FOR NON-COMPLIANCE
Andhra pradesh	27 March 2017	Compounding of offence clause has been included to avoid imprisonment, 10% of project cost as penalty
Bihar	27 April 2017	Compounding of offence clause has been included to avoid imprisonment and kept 10% of project cost as the penalty.
Kerala	3 February 2016	Imprisonment for a term which may be extended up to three years, or with fine which may extend up to 10% of estimated cost of the real estate project, or both.
Madhya Pradesh	22 October 2016	Imprisonment for a term which may be extended up to three years, or with fine which may extend up to 10% of the approximate cost of the real estate project, or both.
Maharashtra	20 April 2017	Did not mention imprisonment penalties and also there is no clarity on monetary fines/penalties as the percentage of total real estate project cost. The fine imposed on builders is either double of the registration fees of Rs 2 lakh, whichever is higher if the provisions are not been followed up.
Rajasthan	1 May 2017	Compounding of offence clause has been added to avoid imprisonment, 10% of project cost as the penalty has been kept under. Initially real estate developers had to pay 2% of the project cost or 10 times the registration fee as the penalty, whichever was higher for the delay in process of registration As of now, the fines have been increased from 2% to 10%, and this rate is now current, since October 1st, 2017.
Uttar Pradesh	27 October 2016	Compounding of offence clause is included to avoid imprisonment term, 10% of project cost as penalty Deadline for real estate companies was set for 15 August 2017 but many companies have still not registered. Penalties were decided by the UP RERA authorities as: Registration between 16 – 31st Aug 2017 – Fine would be equivalent to 1% of the cost of the project. Registration between 1- 15th Sep 2017 – Fine would be equivalent to 5% of the cost of the project. Registration between 16-30th Sep 2017 – Fine would be equivalent to 10% of the cost of the project.
Odisha	25 February 2017	Compounding of offence clause which is included to avoid imprisonment, 10% of project cost as the penalty.

Conclusion-

The RERA Act is the best reform happened for the homebuyers. Because of such reform the buyers can freely invest in properties being fully protected and secured by law from all aspects. If in any situation a dispute arises, the offences, procedure and penalty is being clearly stated.

Disclaimer- The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinion before relying upon the article. For more information, please contact us at rera@centrik.in