Status as on- 17/05/2021
The Real Estate (Regulation and Development) Act of 2016 is a game-changer in the real estate sector, bringing transparency and accountability to the industry. RERA registration is required for any real estate project that comes under the RERA Act’s scope. In this article, we take a closer look at the penalties for non-compliance under the RERA Act.
Penalties for Builder/Promoter
A promoter is an individual tasked with promoting a project, such as its development and construction. Under the RERA Act, a promoter has a number of obligations, and non-compliance can result in the following penalties. (Sections – 59, 60, 61, 64).
If a promoter violates the code of ethics by failing to file, he or she will face a penalty of up to 10% of the total cost of the real estate project. The exact fee will be as decided by the concerned Authority.
If the promoter does not comply with the said rule and continues to be unregistered, he or she can be sentenced to up to three years in jail and/or pay a fine of up to 20% of the approximate cost of the real estate project.
If a promoter gives false information or violates the provisions of Section 4, which deals with real-estate project registration applications, he or she will face a penalty of up to 5% of the total cost of the project.
If a promoter fails to comply with or violates any of the Authority’s orders or directives, he or she will be fined up to 5% of the total cost of the real estate project.
If a promoter fails to follow the Appellate Tribunal’s instructions, rulings, or directives, he or she will be jailed for three years and/or fined up to 10% of the total cost of the real estate project.
Penalties for Real Estate Agents
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. (Penalties under Sections 62, 65, 66).
Contravention of the applicable provisions of the Act – Rs. 10,000 per day of defaults which may extend up to 5% of the cost of the property.
Contravention of the orders or direction of the RERA- 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.
Contravention of the orders or direction of Appellate Tribunal- Imprisonment up to 1 year with without fine which may extend up to 10% of estimated cost of project.
Penalties for Allottees/Homebuyers
Contravention of any order of the RERA – Penalty for the period during which defaults continues which may cumulatively extend up to 5% of the apartment or building cost.
Contravention of the orders or direction of appellate tribunal – Imprisonment up to 1 year with or without fine for every day during which such defaults continue, which may cumulatively extend up to 5% of the apartments or be building cost.
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 email@example.com