NEW DELHI: In a significant development for homebuyers, the Centre has proposed the removal of the existing penalty of up to one year of imprisonment for allottees who do not comply with orders from the Real Estate Appellate Tribunal.
The proposed amendment aims to revise Section 68 of the Real Estate (Regulation and Development) Act, 2016, stating that defaulters could face a financial penalty of up to ten percent of the property cost, which includes plots, apartments, or buildings.
This change is part of the Jan Vishwas (Amendment of Provisions) Bill, 2026, recently introduced in the Lok Sabha by Minister of State for Commerce and Industry, Jitin Prasada.
The Bill notes, “If any allottee fails to comply with, or contravenes any of the orders or directions of the Appellate Tribunal, he shall be liable to a penalty, which may extend up to ten percent of the plot, apartment, or building cost, as applicable.”
The current Section 68 mandates penalties for allottees who do not adhere to Appellate Tribunal orders, including a potential one-year imprisonment and/or a daily fine totaling up to 10 percent of the project’s cost, a measure that has been in effect since May 1, 2017.
The Real Estate (Regulation and Development) Act, 2016 (RERA), was enacted to safeguard homebuyers’ interests while promoting transparency and accountability in the real estate sector.
Under RERA regulations, real estate projects must be registered with the relevant Real Estate Regulatory Authority at the state or Union Territory level. Additionally, in cases of registration lapses or revocations under RERA, the Regulatory Authority, in coordination with the concerned government, has the authority to take necessary actions to ensure that remaining development work is completed, either by the competent authority or an association of allottees, as deemed appropriate by the Authority.
