What Is RERA’s Penalty Process?

Definition: The Real Estate (Regulation and Development) Act (RERA), 2016, was established to bring transparency, accountability, and fairness in the real estate sector. The penalty process under RERA is designed to ensure compliance with its provisions and punish violations.

RERA Penalty Process:

1. Non-Registration of Projects:

• Penalty: If a promoter fails to register a real estate project with the RERA authority, a penalty of up to 10% of the project’s estimated cost can be imposed.
• Further Action: If the promoter continues to not comply, they can face imprisonment of up to 3 years or an additional fine of up to 10% of the project’s cost.

2. Providing False Information:

• Penalty: If a promoter provides false or misleading information during registration, they can be penalized with a fine of up to 5% of the estimated project cost.

3. Violation of Project Timeline:

• Penalty: If a promoter fails to adhere to the committed timelines for project completion, they may face penalties and will be liable to pay compensation to buyers as per the agreement.

4. Non-Compliance with Orders:

• For Promoters: If a promoter does not comply with RERA orders, they can be fined up to 5% of the estimated project cost.
• For Allottees (Buyers): If a buyer fails to comply with RERA orders, they can face a penalty of up to 5% of the apartment or plot cost.
• For Real Estate Agents: If agents engage in unfair practices or fail to comply with RERA orders, they can be fined up to ₹10,000 per day, which can extend to 5% of the cost of the property involved.

5. Appeals and Adjudication:

• Real Estate Appellate Tribunal: If a party is dissatisfied with a RERA order, they can appeal to the Appellate Tribunal within 60 days. Failure to comply with the Tribunal's orders can result in imprisonment for up to 3 years or a fine, or both.

6. Compounding of Offenses:

• Process: Instead of imprisonment, some offenses under RERA can be settled by paying a fine, known as compounding. The fine is usually decided by the adjudicating authority based on the gravity of the offense.

Summary: RERA enforces strict penalties for non-compliance by promoters, buyers, and agents. Penalties include fines, imprisonment, or both for violations like non-registration of projects, providing false information, and failure to comply with orders. Promoters, buyers, and agents must comply with RERA’s regulations or face significant financial penalties or criminal action.