Most of the promoters do not engage in the real estate sector without complying with registration of a real estate project.
The reason is the fear of the RERA Penalty under Section 59 of the RERA Act 2016.
But if any promoter continues without registration, he shall be liable to a Penalty for Non-Registration under RERA.
Let us find and understand about the RERA Penalty in this article.
Table of Contents
Section 59 -Penalty for Non-Registration under Section 3
Below is an excerpt of Section 59 of the RERA Act-
- If any promoter contravenes the provisions of section 3, he shall be liable to a penalty which may extend up to ten per cent of the estimated cost of the real estate project as determined by the Authority.
- If any promoter does not comply with the orders, decisions or directions issued under sub-section (1) or continues to violate the provisions of section 3, he shall be punishable with imprisonment for a term which may extend up to three years or with a fine which may extend up to a further ten per cent of the estimated cost of the real estate project, or with both.
Understanding RERA Penalty under Section 59 of the RERA Act
If any promoter continues without registration, he shall be liable to a Penalty for Non-Registration under RERA
This fine may extend up to 10% of the estimated costs of the real estate project and will be determined by the Real Estate Regulatory Authority.
Moreover, a promoter may continue to overlook the order or directions of the RERA regarding the fine. In this case, he shall be liable to be punished with-
Note– In the following cases below, a promotor does not need to register a project with RERA:
- Where the promoter has proposed to develop the land equal to or below 500 Square meters or develop the number of apartments equal to or than 8. The appropriate government may reduce the above limits.
- Where the promoter has received the Completion Certificate before the commencement of the RERA Act, 2016.
- Where the promoter is involved in the repair or renovation or re-development which does not involve advertising, selling, marketing, or new allotment of any plot, building, or apartment under the real estate project.
RERA Section 59 Cases
Here are the cases where the promoter is punished with penalty for non-registration under RERA.
|S.No.||Case Name||Deciding Authority||Judgement Held||View Judgement|
|1||M/s Geetanjali Aman Constructions and Others V/s Hrishikesh Ramesh ParanjPe and Others (2017)||Maharastra Real Estate Appellate Tribunal||Promoters shall register the project with|
MahaRERA Authority as per law within one month from the date of this order.
Promoters shall pay the penalty of Rs.30,10,000/- i.e. 10% of total estimated costs of the project as per certificate of C.A. i.e. Rs.3 Crores and 35 Lakhs approximately within one month from the date of this order.
Additional penalty of Rs.10,000/- per day till the project is registered is set aside.
Restraining the Promoters from selling, transferring any part of the project and collecting money from the Allottees till the project is registered is confirmed.
Frequently Asked Questions
What is RERA Registration?
RERA Registration is the legal process of admitting a promoter or a real estate agent to engage in a real estate project.
RERA Registration formalities are prescribed under Section 3 and 4 for the Promoter and Section 9 for the Real Estate Agent.
Without registering a real estate project, a promoter cannot invite investments from the allottees.
A person also cannot act as a real estate agent unless he applies for such in the RERA.
A promoter is selling me a flat/apartment/building without registering it under RERA. He promised me to register it after some time. Should I book that project?
The answer is a big NO!
No promoter is permitted to sell a flat/apartment/building or other projects without RERA Registration under Section of the RERA Act 2016.
The promoter is lying in this case. He will not return your money based on a verbal or written promise. Notify the RERA in your State about such illegal and fraud practices by the promoter.
Who is a promoter under RERA?
Promoter means nay person defined under Section 2(zk) of the RERA Act 2016.
As per Section 2(zk), promoter means-
(i) a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or
(ii) a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or
(iii) any development authority or any other public body in respect of allottees of–
(a) buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or
(b) plots owned by such authority or body or placed at their disposal by the Government, for the purpose of selling all or some of the apartments or plots; or
(iv) an apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its Members or in respect of the allottees of such apartments or buildings; or
(v) any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or
(vi) such other person who constructs any building or apartment for sale to the general public