If you’ve ever wondered, “What if the builder doesn’t follow RERA rules? What happens to them?” — this guide breaks down every penalty in simple language so buyers know exactly what protection they have.

Let’s get into it.

What Counts as a RERA Violation?

A builder violates RERA if they do things like:

        1.Not registering the project on the RERA website

        2.Giving false information in the RERA registration

        3.Not updating quarterly progress

        4.Delaying possession without valid reason

        5.Changing layout/design without buyer consent

        6.Misusing funds collected from buyers

        7.Not keeping 70% money in project escrow

        8.Charging for non-carpet area

        9.Not handing over promised amenities

        10.Not executing the sale agreement on time

Each of these triggers specific penalties

Penalties for RERA Violations (Full Breakdown).

1) Not Registering the Project With RERA

Penalty: Up to 10% of the total project cost
If still not complying → additional 3 years imprisonment or further fine.

Example: If project cost is Rs 200 crore → penalty can be Rs 20 crore.

2) Providing False Information During Registration

Penalty: Up to 5% of project cost.

Builders cannot hide land disputes, approvals, timelines, etc.

3) Not Updating Quarterly Progress (QPR)

Builders must update work progress, financials, bookings every quarter.

Penalty: Daily fine, capped at up to 5% of project cost.

4) Delayed Possession

If the builder delays the project without valid cause:

You are entitled to:

        1.Refund + interest, or

        2.Interest for every month of delay, if you choose to stay in project

Builders may also face:

       1.Daily fines

       2.Compensation orders

       3.Blacklisting of builder in extreme cases.

5) Unauthorized Layout / Structural Changes

Changing carpet area, tower plan, amenities, etc. without 2/3rd buyer consent is illegal.

Penalty: Up to 5% of project cost + buyer compensation.

Buyers can also ask for:

       1.Refund

       2.Interest

       3.Restoration to original plan

6) Misuse of Buyer Funds (Escrow Violation)

Builders must keep 70% of collections in a separate project escrow.

If they divert funds →
Penalty: Up to 10% of project cost + possible imprisonment.

7) Not Following RERA Orders

If the builder ignores RERA Authority orders:

Penalty: Daily fines up to 5% of project cost.

If they violate Appellate Tribunal orders:
Penalty: Up to 3 years imprisonment, or fines, or both.

8) Poor Construction Quality

If quality issues arise within 5 years of possession, the builder must fix them within 30 days.

If not:

       1.Buyers can claim full compensation

       2.Builder may face additional penalties under section 7 & 8

9) Can RERA Deregister the Project?

Yes.
If violations are serious and repeated, RERA can:

       1.Cancel project registration

       2.Freeze the bank accounts

       3.Stop sales and marketing

       4.Hand over project to another agency/authority for completion

This is the strongest action.

10) What Buyers Can Claim Under RERA

Depending on the violation, buyers can claim:

        1.Full refund + interest

        2.Interest for every month of delay

        3.Compensation for mental harassment

        4.Compensation for additional rent/EMI

        5.Cost of litigation

        6.Repair or replacement for quality defects

11)How to Take Action if Your Builder Violates RERA

       1.Check your project page on your state’s RERA website.

       2.Collect proof (brochure, agreement, emails, photos, etc.)

       3.File an online complaint on RERA portal.

       4.Attend hearing — most cases resolve in 60–120 days.

       5.Enforcement happens through RERA Authority + Appellate Tribunal.

Final Word

RERA has made sure builders can’t get away with “chalta hai” attitudes anymore.
The penalties are huge, the timelines are strict, and the buyer has full power to claim compensation.