What Happens If a Builder Is Not Registered in RERA?
Consequences If a Builder Is Not Registered in RERA
1. Illegal to Market or Sell the Project
Without RERA registration, the builder cannot legally advertise, sell, or book any units in the project.
Any agreements or sales made without registration are considered invalid and void under the law.
2. Penalties and Fines
The builder can be fined up to 10% of the project cost for non-registration.
For continuing offenses, the builder can face further fines up to 5,000 INR per day until registration is obtained.
3. Criminal Liability
Non-compliance can attract imprisonment up to 3 years, or both imprisonment and fines.
This is to deter illegal real estate activities and protect buyers.
4. No Legal Protection for Buyers
Buyers in unregistered projects have no protection or rights under RERA.
If the project delays or the builder defaults, buyers cannot approach RERA authorities for grievance redressal.
5. Difficulty in Accessing Finance
Banks and financial institutions typically do not provide loans or funding for unregistered projects.
This impacts the builder’s ability to finance the project and causes project delays.
6. Loss of Credibility and Reputation
Builders operating without registration risk losing trust among customers and investors.
May face blacklisting or legal action from government authorities.
7. Potential Legal Action by Authorities
RERA authorities or state governments can initiate legal proceedings against the builder.
May include stopping construction or sealing the project site.
Summary Table: Consequences of Not Registering under RERA
| Consequence | Details |
|---|---|
| ❌ Illegal Sale and Marketing | Cannot advertise or sell units; agreements without registration are invalid. |
| 💸 Heavy Fines | Up to 10% of project cost plus daily fines for continuing default. |
| 🚨 Criminal Penalties | Imprisonment up to 3 years and/or fines. |
| ⚠️ No Buyer Protection | Buyers have no legal recourse under RERA for grievances. |
| 🏦 Financing Issues | Banks reluctant to fund unregistered projects. |
| 🔒 Government Action | Project may be stopped or sealed by authorities. |
| 🔻 Reputation Damage | Loss of trust and credibility among buyers and investors. |
In brief:
Not registering under RERA exposes builders to legal risks, financial penalties, and loss of business credibility — while buyers lose vital protections. Do write to us if you need any further assistance.
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