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Penalty for Promoter for Not Following RERA Order – Easy & Simplified

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  • Post last modified:November 27, 2022
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Penalty for Promoter for Not Following RERA Order: Any allottee can file a complaint in the RERA Court against a promoter/builder. The Authority may favour the allottee or dismiss the case. If the Authority favours Allottee, he may be awarded compensation, delay possession and interest, etc. via an order.

In the above scenario, the promoter or builder must follow the RERA order in the interest of justice. But seldom do these builders follow the order.

In this article, I have discussed the RERA Penalty for Promoter for not following RERA Order and RERA penalty for delay in possession.

Meaning of a RERA Case

A RERA Case is a legal suit or a complaint filed in the RERA Court, Tribunal, High Court or Apex Court. Any aggrieved person can file it. However, this case must be related to the RERA Act.

People who can file a RERA Case

The RERA Act 2016 has prescribed persons who can file a complaint in the RERA Court. Below people are eligible for filling a RERA Case-

  1. An individual;
  2. a Hindu undivided family;
  3. a company;
  4. a firm under the Indian Partnership Act, 1932 or the Limited Liability Partnership Act, 2008, as the case may be;
  5. a competent authority;
  6. an association of persons or a body of individuals whether incorporated or not;
  7. a cooperative society registered under any law relating to cooperative societies;
  8. any such other entity as the appropriate Government may, by notification, specify on this behalf.
Who can file a RERA Case? RERA QnA

Reasons for a Promoter not following a RERA Order

There can be multiple reasons a builder or promoter does not follow a RERA order. These are stated below-

  • The RERA Authority is not strict towards the actions of a promoter,
  • Red Tape, Bureaucracy and Bribery at the local levels,
  • Legal Burden or Document Burden at the local level,
  • The negligent attitude of the promoter,
  • Delay caused by the promoter in the project was unintentional & he is trying to compensate the allottee personally,
  • The Higher Court has put the stay on the RERA order till further instructions,
  • The promoter wants to challenge or has challenged the order in the Higher Court of law,
  • The promoter has applied for rectification of the order in the RERA Court.

Meaning of RERA Penalty and its Importance

RERA Penalty is a type of punishment imposed by the RERA Authority either on the promoter, allottee, agent or any other person. This punishment requires the guilty to pay a fine to the RERA Authority for violating the legal provisions under the RERA Act 2016.

Penalty for Promoter for Not Following RERA Order

Importance of the RERA Penalty

There are 5-Pointer importance of the RERA Penalty-

  1. Prevents the fraudulent behaviour of the builder, developer, promoter and real estate agent.
  2. It also helps to correct the behaviour of an allottee to pay the justified amounts or to get the registry done timely.
  3. Promotes the morale of the real estate industry.
  4. Acts as a restraint for malpractices in the real estate industry.
  5. Sends a virtuous message to the society upholding the law in the State.
importance-of-the-RERA-Penalty-RERA-QnA

RERA Penalty for Promoter for not Following RERA Order

The RERA Law has come into force from the year 2017. Yet most developers, promoters, builders, real estate agents or brokers continue not obeying the RERA order passed against them.

under construction site Penalty for Promoter for not Following RERA Order

Such orders differ in various respects. E.g., an order passed to pay compensation, delay interest, possession, execute the sale deed or agreement, etc.

When a developer or promoter chooses not to comply with the RERA Order or delays in possession or refund, he is punishable with FINE every day. This penalty may cumulate and extend up to 5% of the estimated cost of his real estate project.

Section 63 of the RERA Act 2016

Below is an excerpt of Section 63 from the RERA Act. It specifies the penalty for promoter for not following RERA order –

“If any promoter, who fails to comply with, or contravenes any of the orders or directions of the Authority, he shall be liable to a penalty for every day during which such default continues, which may cumulatively extend up to five per cent., of the estimated cost of the real estate project as determined by the Authority.”

Do you Know?

There is no minimum penalty for promoter for not following RERA order. The fine may extend up to 5% of the project cost.

Conclusion

It may be easy to win the case in the RERA Court, but the actual legal hindrance arises after the RERA Court passes the Final Order.

But there is also a solution if the promoter, developer or agent chooses not to follow the order.

Any allottee can approach the RERA Court or Authority for RERA Order execution. When he files the RERA Execution, the Authority decides and compels the developer, promoter or agent to comply with the order passed by RERA and may order the Penalty for Promoter for not following RERA Order.

Uttar Pradesh RERA has a similar order execution process. Read more about the UPRERA Order Execution here.

If you have questions or queries, you can connect with our experts via the CHAT button below. OR you can type in your query in the comment section. Your Questions and Our Expert Answer!

Frequently Asked Questions

  1. What if the RERA order is not followed?

    If the RERA order is not followed, the complainant can apply for Order Execution in the RERA Authority. The respondent or the opposite party may be penalized for not complying with the RERA order.
    The above article deals with the Penalty for Promoter for not Following RERA Order. Read more about the RERA Penalty here.

  2. What is a penalty in RERA Act?

    A RERA Penalty is a mode of punishment described under the RERA Act 2016. Chapter 8 of the RERA Act defines such penalties.
    Click here to read more about the RERA Offences and Penalties.

  3. Can the RERA order be challenged?

    Yes, any losing party can challenge the RERA Order in a higher court of law. This Higher court may be Appellate Tribunal, High Court, or Supreme Court.
    Read here to know more about how to challenge a RERA order.

  4. Does RERA apply retrospectively?

    The Honourable Supreme Court in Newtech Promoters Vs. Union of India has held that RERA does not apply retrospectively. It is retroactive in nature. Projects already completed or to which a competent authority grants a completion certificate is not under its fold. At the same time, it will apply after getting the ongoing projects and future projects registered.
    Read more about the Newtech Promoters Vs Union of India here.

  5. Is RERA covered under RTI?

    Yes, the Right to Information or RTI covers all aspects of RERA. You can file an online RTI to find out about the real estate facts, case information, etc. The respective RERA Authority has to file the answer to the RTI within 30 days.
    Are you having trouble filing the online RTI? Get connected to our professionals and file the RTI today!

  6. How do I raise a complaint with RERA?

    You can raise a complaint with RERA by filling it with your respective RERA Authority. To file the RERA complaint, follow the below steps-
    1. Visit the State RERA website.
    2. Click on the RERA Complaint registration section.
    3. File the online or offline complaint by following the instructions.
    4. Done!
    It is easy to get confused while filing a RERA complaint. You can also contact our RERA experts to file a RERA case.

This Post Has 2 Comments

  1. Anil Sood

    Sir,
    I won the case with punjab Rera and execution application was also filed with Adjudicating Officer.

    What is the next step because AO says he can’t penalise the builder for not following the order.

    If you can suggest some way.

    regards

  2. Yash Keshari

    An alternative step is to lodge a case in the Punjab Real Estate Appellate Tribunal or High Court against AO Punjab RERA. Make sure that you attach the written/recorded statement of AO while filling the case.

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