The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced to bring transparency, accountability, and efficiency to the real estate sector in India. While RERA benefits homebuyers by ensuring fair practices, it also imposes strict regulations on builders and agents. Non-compliance with RERA guidelines can lead to severe penalties. Here’s what real estate developers and agents need to know about RERA penalties.

1. Penalties for Developers

a) Failure to Register the Project

• Builders must register their projects under RERA before advertising, selling, or booking units.
• Penalty: Up to 10% of the project’s estimated cost.
• Further Non-Compliance: Continuous violation may lead to an additional fine of up to 10% of the project’s cost or imprisonment for up to 3 years, or both.

b) False Information or Misrepresentation

• Any misinformation provided during project registration can result in severe consequences.
• Penalty: Up to 5% of the project’s estimated cost.

c) Non-Adherence to Approved Plans and Delays

• Developers must follow the approved plans and promised timelines.
• Penalty: A daily fine that can extend up to 5% of the project’s estimated cost.

d) Failure to Comply with RERA Orders

• If a builder disregards a decision passed by the regulatory authority or appellate tribunal, stricter penalties apply.
• Penalty: Imprisonment of up to 3 years or a fine of up to 10% of the project cost, or both.

2. Penalties for Real Estate Agents

a) Failure to Register as an Agent

• Agents must register with RERA to conduct business legally.
• Penalty: A fine of ?10,000 per day, up to 5% of the property’s transaction value.

b) Misleading Advertisements or False Promotions

• Providing misleading information to buyers can lead to penalties.
• Penalty: Up to 5% of the transaction value.

c) Non-Compliance with RERA Orders

• Disobeying RERA authority decisions can lead to serious consequences.
• Penalty: Up to 1 year of imprisonment or a fine per day of violation.

3. How to Avoid RERA Penalties?

• Register projects and agents on the RERA website before conducting any business.
• Ensure accurate and transparent documentation with buyers.
• Adhere to promised timelines and approved plans.
• Respond promptly to RERA notices and orders.
• Maintain a separate escrow account for project funds to prevent financial mismanagement.

4. Conclusion

RERA compliance is not just a legal obligation but also a mark of credibility in the real estate industry. By understanding and following RERA regulations, builders and agents can avoid penalties, build trust with buyers, and ensure smooth business operations.