New Delhi, March 27 In a relief for homebuyers, the Centre has proposed to remove the existing provision of a maximum one-year imprisonment for an allottee who fails to comply with orders from the Real Estate Appellate Tribunal.
The amendment seeks to replace Section 68 of the Real Estate (Regulation and Development) Act, 2016, under which such an allottee would be liable to a penalty, which could extend up to ten per cent of the plot, apartment, or building cost.
This is part of the Jan Vishwas (Amendment of Provisions) Bill, 2026, which was introduced by Minister of State for Commerce and Industry Jitin Prasada in the Lok Sabha on Friday.
"Penalty for failure to comply with orders of the Appellate Tribunal by the allottee - If any allottee fails to comply with, or contravenes any of the orders or directions of the Appellate Tribunal, as the case may be, he shall be liable to a penalty, which may extend up to ten per cent of the plot, apartment or building cost, as the case may be," the Bill stated.
Under the existing Section 68 of the Real Estate (Regulation and Development) Act, 2016, penalties are mandated for allottees who fail to comply with orders from the Appellate Tribunal.
Violators may face up to one year imprisonment and/or a daily fine, cumulatively up to 10 per cent of the project's cost, effective from May 1, 2017.
In order to protect the interests of homebuyers and to ensure transparency and accountability in the Real Estate Sector, the Parliament enacted the Real Estate (Regulation and Development) Act, 2016 [RERA].
Under the provisions of RERA, real estate projects are required to be registered with the Real Estate Regulatory Authority of the state/Union Territory (UT) concerned.
Furthermore, upon the lapse or revocation of the registration under RERA, the Regulatory Authority, in consultation with the appropriate government, is empowered to take action for carrying out the remaining development works of the project by the competent authority or by the association of allottees or in any other manner, as may be determined by the Authority.