What are the penalties for non-compliance with the RERA Act?

The Real Estate (Regulation and Development) Act (RERA) provides for penalties and consequences for noncompliance with its provisions. These penalties are intended to deter builders and promoters from violating the Act and failing to fulfill their obligations towards home buyers. The specific penalties may vary across different states in India, as each state has its own rules and regulations under RERA. Here are some common penalties that can be imposed for noncompliance:

1. Monetary Penalties: RERA empowers the regulatory authority to impose monetary penalties on builders or promoters who fail to comply with the provisions of the Act. The penalties can be a percentage of the project cost or a fixed amount, depending on the nature and severity of the violation. The amount of the penalty may increase for each day the noncompliance continues.

2. Imprisonment: In certain cases, noncompliance with the RERA Act may result in imprisonment. Builders or promoters found guilty of serious offenses or deliberate violations of the Act can be liable for imprisonment. The duration of imprisonment may vary based on the nature and gravity of the offense.

3. Project Revocation: The RERA authority has the power to revoke the registration of a real estate project in cases of significant noncompliance. If a builder repeatedly fails to fulfill their obligations or indulges in fraudulent practices, the authority can cancel the project's registration, which prohibits the builder from continuing the project or marketing the units.

4. Interest Payment: In situations where a builder delays the project's completion beyond the agreedupon timeline, RERA mandates the payment of interest to home buyers. The interest rate is typically linked to the State Bank of India's highest marginal cost of lending rate (MCLR) and can be imposed on the builder for each day of delay.

5. Compensation to Home Buyers: RERA ensures that home buyers are adequately compensated for any loss or harm suffered due to noncompliance by the builder or promoter. The authority can order the builder to compensate the affected home buyers, which may include refunding the amount paid with interest, providing alternative accommodation, or other appropriate relief.

It's important to note that the specific penalties and consequences may vary from state to state, as each state has its own RERA rules and regulations. The penalties are designed to hold builders accountable, promote compliance, and protect the interests of home buyers in the real estate sector.

Home buyers who encounter noncompliance or violations of the RERA Act should report the matter to the respective state's RERA authority, which has the authority to investigate the complaint, impose penalties, and ensure redressal for the affected parties.