The preamble of the Real Estate (Regulation And Development) Act, 2016 (hereinafter referred to as the “Act”) clearly articulates that the Act intends to protect the interests of the consumers in the real estate sector. The after-effects of the implementation of this Act is the requirement of timely completion and execution of plans, better transparency and accountability in all dealings that take place by making the necessary information easily accessible to the interested public, protecting the interest of the consumers, more importantly, the establishment of the Authorities under the Act.
Who can be penalized under the Act?
The Act contains various duties, responsibilities and functions of the:
- Promoter,
- Allottee and
- the Real Estate Agent.
Therefore, they are duly obligated to perform them. Failure to perform such obligations may lead to them being penalized.
Reasons for levy of penalty
- Delay in the possession and in certain cases, no delivery at all.
- Improper registration of the project or incorrect application for registration
- Misuse of funds allocated for project purposes
- False advertisements
- Non-compliance with Orders of Authority
- Non-compliance with Orders of the Appellate Tribunal
Procedure to appeal in case a party is aggrieved
Any person who is aggrieved by the decision/order of the authority or any adjudicating officer under the Act can file an appeal, provided that such an appeal states the ground of either fact or of law being the basis on which the said decision/order is challenged. If the aggrieved is not satisfied with the decision given out by RERA, he/ she can file an appeal with Real Estate Appellate Tribunal. If the party is not satisfied with this decision also, then he/ she has the remedy to file an Appeal before the High Court within 60 days from the Tribunal’s decision.
Some of the penalties included in the Act
Promoters:
- In case the promoter fails to register the said project or there is a breach committed by him/her, there will be a penalty imposed on him up to the extent of 10% of the estimated cost of the project.
- If any false information is provided by the promoter in the application for registration, the promoter can be held liable up to an extent of 5% of the estimated cost of real estate project.
- In instances where there is a non-compliance with the orders passed by the Appellate Tribunal, the promoter can be held liable for an imprisonment extending upto 3 years or with fine extending up to 10% of the estimated cost of the real estate project.
Real Estate Agents:
- If the real estate agents fail to comply with the orders of the Authority, they can be held liable to an extent of 5% of the estimated cost of the plot, apartment or building in which he has facilitated the sale or purchase which is applicable for each day the default continues.
- Even in the case of failure in complying with the orders given by the Tribunal, the penalty of imprisonment for a term extending up to a period of one year and/or fine which may extend up to 10% of the estimated cost of the plot, apartment or building in which he has facilitated the sale or purchase can be levied which is for each day during which the default continues.
Allottee
- If the allottee fails to comply with the orders given by the authority, he can be held liable to the extent of 5% of the cost of the plot, apartment or building cost.
- If the allottee fails to comply with the orders of the Tribunal, then he can be held liable for imprisonment for a term extending up to one year and/or fine up to the extent of 10% of the cost of the plot, apartment or building cost.
Conclusion
Unable to comply with the provisions of the Act attracts penalties. In practice, the penalties are enshrined in the Act to ensure the timely completion of the projects undertaken. With the help of this legislation, the allottees are assured that their investments are guarded against and in case of any disagreement or in case where legal recourse needs to be taken, such is ensured under the Act.
This blog is written by Janhavi Bajaj, a student of St. Joseph’s College of Law
References:
[1] The Real Estate (Regulation and Development) Act, 2016, No. 16, § 43.
[2] The Real Estate (Regulation and Development) Act, 2016, No. 16, § 59.
[3] The Real Estate (Regulation and Development) Act, 2016, No. 16, § 60.
[4] The Real Estate (Regulation and Development) Act, 2016, No. 16, § 64.
[5] The Real Estate (Regulation and Development) Act, 2016, No. 16, § 65.
[6] The Real Estate (Regulation and Development) Act, 2016, No. 16, § 66.
[7] The Real Estate (Regulation and Development) Act, 2016, No. 16, § 67.
[8] The Real Estate (Regulation and Development) Act, 2016, No. 16, § 68.
Author Bio
