Offences, Penalties and Adjudication under RERA
Offences, Penalties, and Adjudication under RERA
1. Introduction
The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted to protect homebuyers, promote transparency in real estate transactions, and regulate the real estate sector.
RERA provides for specific offences and penalties for developers, real estate agents, and promoters.
Adjudication is carried out by the Real Estate Regulatory Authority (RERA Authority) and Adjudicating Officers.
2. Offences under RERA
The Act criminalizes certain actions by promoters, real estate agents, and developers:
| Offence | Provision | Explanation |
|---|---|---|
| Non-registration of project | Section 3(1) | Promoter must register project with RERA before advertising or selling. Non-registration is an offence. |
| Misrepresentation / False information | Section 4, Section 11 | Promoter providing false information about land title, project details, or approvals. |
| Failure to comply with RERA orders | Section 59(1) | Promoter or agent failing to follow RERA Authority orders is punishable. |
| Deceptive advertisement or marketing | Section 12(1) | Promoting unregistered projects or misrepresenting project status. |
| Fraudulent transfers | Section 17 | Sale of land or units without proper approvals or encumbered titles. |
| Non-refund of advances / deposit | Section 18 | Promoter fails to return money or interest in case of default or project delay. |
3. Penalties under RERA
a) For Promoters
Non-registration of project: Penalty up to 10% of project cost (Section 59).
Providing false information / misrepresentation: Penalty up to 5% of project cost.
Non-compliance with RERA orders: Penalty up to ₹10,000 per day until compliance.
b) For Real Estate Agents
Operating without registration: Penalty up to ₹10,000 per day until registered (Section 59).
Deceptive practices: Fine up to 5% of project cost or transaction value.
c) For Buyers / Other Parties
Filing false complaints: Penalty for frivolous or malicious complaints may be imposed by RERA authority.
4. Adjudication under RERA
Real Estate Regulatory Authority (RERA Authority)
Primary body for complaints, grievances, and adjudication of disputes between promoters, agents, and buyers.
Powers include investigation, orders for refunds, interest, or compensation.
Appellate Tribunal
Section 44: Appeals against RERA Authority orders can be made to Real Estate Appellate Tribunal within 60 days.
Civil Court / Criminal Court
For criminal offences like fraud, prosecution can be initiated under RERA (Section 63).
Courts may impose penalties, imprisonment, or both for severe violations.
5. Key Case Laws
K. P. Suresh v. Maha RERA
Issue: Promoter delayed project completion, failed to refund buyer’s money.
Held: MahaRERA directed refund with interest and imposed penalty for non-compliance.
Lodha Developers v. Buyer (2021, Maharashtra)
Promoter advertised project without registration.
Held: Penalty imposed 10% of project cost under Section 59; promoter barred from advertising unregistered projects.
Siddharth Vardhan v. Haryana RERA
Issue: Promoter provided misleading floor plans and approvals.
Held: Promoter penalized 5% of project cost; buyer entitled to compensation.
PVR Ltd. v. Delhi RERA
Issue: Real estate agent misrepresented project timelines.
Held: Agent fined per day until rectification and suspended registration until compliance.
6. Important Principles
Strict Liability
Promoters and agents are strictly liable for misrepresentation, delay, or non-compliance.
Compensation to Buyers
RERA ensures buyers are refunded with interest, even before criminal penalties are imposed.
Timely Adjudication
RERA Authority and Appellate Tribunal have specific time frames to adjudicate complaints.
Transparency
All projects must be registered; details like floor plans, approvals, and timelines must be uploaded on RERA portal.
7. Illustrations / Examples
Unregistered Project
Promoter advertises 50 apartments before RERA registration.
Penalty = 10% of project cost, promoter barred from selling.
Delay in Delivery
Project delayed by 2 years; promoter fails to refund buyer.
RERA Authority orders refund + 10% annual interest and fines promoter.
Misrepresentation by Agent
Agent claims amenities that do not exist.
Penalty = daily fine until rectification + suspension of registration.
8. Key Takeaways for Exams
| Section | Key Point |
|---|---|
| 3, 11, 12 | Mandatory registration; no false claims or misrepresentation |
| 17, 18 | Refunds and interest to buyers; obligation of promoters |
| 59 | Penalties for non-registration, misrepresentation, or non-compliance |
| 44 | Appellate Tribunal for appeals |
| 63 | Criminal liability for serious violations |
Always mention Section 59 for penalties.
Emphasize protection of buyers, strict liability of promoters, and judicial oversight.
Illustrate with refund, interest, and penalties cases.
9. Conclusion
RERA provides a robust framework for protecting homebuyers, ensuring transparency in real estate transactions.
Offences include non-registration, misrepresentation, and delay in delivery.
Penalties are financial (project cost %), daily fines, and/or imprisonment.
Adjudication is handled by RERA Authority, with appeals to Appellate Tribunal, and courts may intervene in serious offences.
Key principle: Buyer protection + accountability of promoters and agents.
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