RERA

Penalties under RERA on Builders and Agents

calendar10 Jul, 2020
timeReading Time: 4 Minutes
Penalties under RERA

Earlier builders or agents were indulged in unfair methods to gain the approval of the government to take the land, but now they do not seek any unfair methods as a lot more customers complain about the builders as they change the originally approved plans or about any gap between promise and reality. Especially when this comes to the quality of construction or late deliveries, the customers can lodge a RERA complaint against them. There are so many penalties under RERA which assure that builders or agents no longer play with the end-users or the investors.

What are the Penalties under RERA on Builder?

The following penalties under RERA are applicable on a builder or Promoter on non-compliance of any of the RERA laws or rules[1].

Those are as follows:-

Penalties under RERA on Builder

Non-registration of the Real Estate Project

As per Section 59, a builder cannot book, sell, promote, or advertise a real estate property before having RERA registration. It is mandatory for the Promoter to register a project with authority. If the Promoter fails to do the same and does not get the registration, he must be liable to a penalty up to 10% of the estimated cost of the real estate project.

If any promoter consistently defaults or does not complies with the orders, decisions or direction to get registration or continues to violate any provisions under section 3, he must be punishable with imprisonment for a term which can be extended up to 3 years or with fine which can be extended up to 20% of the estimated cost of the real estate project, or with both as determined by the authority.

Incorrect RERA Registration Application

As per Section 60, if a promoter defaults as regards matters covered under Section 4, i.e., provides false information for application for registration of the project under RERA. He must be liable to the penalty up to 5% of the estimated cost of the real estate project, as determined by an authority.

Violation of Any Other Provision under RERA Act

As per Section 61, if a promoter defaults with any other provision of the Act or Rules and Regulations made thereunder, he must be liable to a penalty that can be extended maximum upto 5% of the estimated cost of a real estate project as determined by an authority.

Non-Compliance of an order by Promoter

As per Section 63, If any promoter fails to comply with or contravenes any of the orders or directions of the authority, he must be liable to a penalty for every day during which such default continues, which can be cumulatively extended up to 5% of the estimated cost of a real estate project as determined by an authority.

Non-Compliance with Orders of the Appellate Tribunal

As per Section 64, If any promoter fails to comply with, or contravenes with any orders, or directions of the Appellate Tribunal, he must be punishable with imprisonment for a term which can be extended up to 3 years or with a fine for every day during which such default continues which can be cumulatively extended up to 10% of the estimated cost of a real estate project, or with both.

Read our article:Guide on Permissible expenses can be charged to RERA Account

What are the Penalties on Real Estate Agent under RERA?

The following penalties are applicable over an agent for non-violation of any of the RERA laws or rules:

Non-Registration and Contravention of Order by a Real Estate Agent

As per Section 62, under the Act, it is obligatory for the real estate agent to register himself with authority, and the real estate agent fails to do the same, he must be liable to the penalty of up to Rs 10,000 for every day till when such default continues, which can be cumulatively extended up to 5% of the cost of the plot or apartment, for which the sale has been facilitated by as determined by the authority.

Non-Compliance with Orders by Real Estate Agent

As per Section 65, if any real estate agent fails to comply with, or contravenes any of the orders or any directions of authority, he must be liable to the penalty for every day during such default continues, which can be cumulatively extended up to 5% of the estimated cost of the apartment, plot, or building, of a real estate project, for which  sale or purchase has been facilitated.

Non Compliance with Appellate Tribunal Orders by the Real Estate Agent

As per Section 66, in case real estate agent fails to comply with, or contravenes directions of the Appellate Tribunal, he must be punishable with imprisonment for a term which can be extended up to 1 year or with a fine penalty for each day during such default continues, which can be cumulatively extended up to 10% of the estimated cost of an apartment, plot or building, of a real estate project, for which the sale or purchase has been facilitated, or both.

Conclusion

RERA has ensured that the intermediary and the developer, has equal responsibility and accountability. It is not just the case of financial damage, but also the case of criminal damages and provide imprisonment in case of any fraud. With penalties under RERA, a home buyer has more power than the authority, and that is why the buyer must be fully aware of the advantages which they have. For the builders and the agents, it is an opportunity to show their work and thus give a better and transparent service.     

Read our article:Guide: Duties of Promoter under RERA

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