Penalties Under RERA for Non Compliance

penalties-under-rera-for-non-compliance
May 11, 2017 Share

As RERA Act (Real Estate Regulation and Development ) has been implemented since 1 may 2017, it has been the topic of discussion since then.  Delay in possession of their homes has been the biggest concern for homebuyers as there was no regulator and no laws. Each state and UT will have their own Regulatory Authority which will frame regulations and rules as per the act.

Penalties under RERA in Maharashtra State

The penalty charges for a developer who do not register their projects under RERA Act (Real Estate Regulation & Development ) for Maharashtra has been doubled by the Maharashtra Real Estate Regulatory Authority (Maha RERA) between  September  1 to September  30. A penalty of Rs 2 lakh or amount equivalent to double the registration fee, whichever is higher, would be levied on applications received during this period. Maharashtra state received over 2200 application for registration of ongoing project until August 31. Post 1st September 54 application has been submitted for RERA registration.

Non-compliance with the original RERA Act could amount up to three years of imprisonment. But, most states have diluted and modified the penalties with less extreme punishments.

Penalties under RERA in Karnataka State

The Karnataka State Authorities have decided to levy Rs 10,000 per day for builders until they comply. If the builder does not register under RERA and is found doing marketing for the project will be slapped with heavy fines extending from 5% to 10% of total estimated cost or imprisonment or both as per the discretion of the authorities.  

Any project registered after August 31st will be fined penalty as high as registration amount of the project, which can vary from Rs 50,000 to Rs 10 Lakh based on the cost of the project.

      Penalties under RERA in Goa State

The Goa government has provided three-monthhs extension to builders to register ongoing projects under RERA.

Penalties under RERA in Telangana State

The Telangana government is also considering an extension to help builders and agents avoid penalties.

      Penalties under RERA in Uttar Pradesh State

  • Registration between 16 - 31st Aug 2017 - Fine equivalent to 1% of the cost of the project.
  • Registration between 1- 15th Sep 2017 - Fine equivalent to 5% of the cost of the project.
  • Registration between 16-30th Sep 2017 - Fine equivalent to 10% of the cost of the project.

Penalties under RERA in Rajasthan State

Until September 30th, developers had to pay 2%of the project cost or 10 times the registration fee as the penalty, whichever is higher. Since October 1st the fine has been raised from 2% to 10%.

Penalties under RERA in Gujarat State

Until September 30th no fines were imposed by local RERA authorities. Post-October 1st, Gujarat RERA Authorities  have been penalising developer a fine equal to the registration fees and this would be charged for projects registered between Oct 1 and Oct 31,2017.

Penalties under RERA in Gujarat State

The Kerala government has revoked the(Regulation and Development) Act (KRERA) on account of not safeguarding the interests of homebuyers.

Provisions under RERA which would be liabilities for promoters:

  • If a title of the land is defective
  • If the promoter fails to complete or is not able to give possession
  • If there is any false information to allottee in relation to sanctioned plan or in adherence to sanctioned plan
  • If promoter does not provide the information of sanctioned plan, stage wise time schedule of completion of project
  • In case project is assigned to third party without prior written consent
  • If promoter fails to refund the amount within 6 months from the termination of sale agreement in dispute due to defect in the apartment

Provisions made under RERA in the beginning if the promoter is does not comply with rules and regulations he can penalised in below manner:

  • If any promoter contravenes the provisions of registration -liable to penalty up to 10% of the estimated cost of project as determined by the Authority.
  • If any promoter does not comply with the orders, decisions or directions issued or violate the provisions of registration -punishable with imprisonment up to 3 years or with fine up to 10% of the estimated cost of the project, or with both.
  • If any promoter provides false information or contravenes the provisions of registration of real estate projects -penalty of 5% of the estimated cost of the project.
  • If any promoter contravenes any other provisions of the Real Estate Act -penalty up to 5% of the estimated cost of the project as determined by the Authority

 

Under MahaRERA rules fine payable for compounding of offence which are notified.

Offence under sub section (2) of section 59 - If promoter fails to comply with orders decision regarding registration of the real estate project then he has to pay 5% of the estimated cost of the real estate project which may extend up to 10%.

Offence under section 64  - Where a promoter fails to comply with orders/ direction of REAT - fine of 5 % of the estimated cost of the real estate project which may extend up to 10%.

Offence under section 66 - Where real estate agent fails to comply with orders/ direction of REAT - 5% of the estimated cost of the plot, apartment or building, of the real estate project, for which the sale or purchase has been facilitated, which may extend up to 10%.

Offence under section 68- Where allottee fails to comply orders / directions of REAT - 5 % of the estimated cost of the plot, apartment or building, which can be extended up to 10%.

 

 

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