Real Estate (Regulation and Development) Act, 2016 | Chapter VIII

Section 65 of RERA: Penalty for Failure to Comply with Orders of Authority by Real Estate Agent

Section 65 of the Real Estate (Regulation and Development) Act, 2016 (RERA) provides for a monetary penalty where a real estate agent fails to comply with, or contravenes, an order or direction issued by the Real Estate Regulatory Authority. The penalty applies for each day the default continues, subject to the statutory cumulative limit.

At a glance: A real estate agent may face a daily penalty for continued non-compliance with an Authority order or direction. The total penalty may extend to 5% of the estimated cost of the relevant plot, apartment or building whose sale or purchase the agent facilitated, as determined by the Authority. The limit is not necessarily 5% of the entire project's cost.

Text of Section 65 - Penalty for failure to comply with orders of Authority by real estate agent

If any real estate agent, 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 plot, apartment or building, as the case may be, of the real estate project, for which the sale or purchase has been facilitated and as determined by the Authority.

Meaning and scope of Section 65

A real estate agent is defined under Section 2(zm) and broadly includes a person who negotiates or acts on behalf of another person in a transfer of a plot, apartment or building in a real estate project and receives remuneration, fees or charges. The term includes property dealers, brokers and middlemen within the statutory definition.

The Authority means the Real Estate Regulatory Authority established under Section 20. Section 65 concerns non-compliance with its orders or directions, rather than every independent breach of RERA.

When is the penalty attracted?

The person concerned is a real estate agent covered by the Act.
The Regulatory Authority has issued an applicable order or direction.
The agent has failed to comply with, or has contravened, that order or direction.
The default continues for one or more days, giving rise to potential daily penalties within the statutory ceiling.

How is the maximum penalty calculated?

Section 65 sets a cumulative maximum of 5% of the estimated cost of the plot, apartment or building for which the agent facilitated the sale or purchase, as determined by the Authority. It does not prescribe a uniform fixed penalty for each day.

For illustration, if the Authority determines the relevant apartment's estimated cost at Rs. 80,00,000, the cumulative penalty ceiling under Section 65 would be Rs. 4,00,000. This is only an illustration; the actual amount depends on the Authority's decision and the facts.

Difference between Sections 62, 65 and 66

Section 62 addresses contraventions by real estate agents relating to registration under Section 9 and functions under Section 10. Section 65 deals specifically with disobedience of the Regulatory Authority's orders or directions. Section 66 deals with failure by a real estate agent to comply with orders, decisions or directions of the Appellate Tribunal, and provides different consequences.

Orders, appeals and compliance

Section 43 provides for the Real Estate Appellate Tribunal. Under Section 44, an aggrieved person may appeal an Authority's order or direction to the Appellate Tribunal, generally within 60 days of receiving a copy, subject to the statutory provisions on delayed appeals. A real estate agent appealing against an order imposing a penalty must satisfy the applicable pre-deposit requirement under the proviso to Section 43(5).

Agents should preserve the Authority's order, proof of receipt, records of compliance, correspondence and relevant project transaction documents. Filing an appeal should not automatically be treated as a stay; any stay or modification should be verified from the competent forum's order.

Official RERA resources

For the governing statutory text and updates, consult the India Code official legislation portal and the Ministry of Housing and Urban Affairs. For individual orders, project information, rules and filing procedures, refer to the competent State or Union Territory RERA Authority's official portal.

Conclusion

Section 65 strengthens enforcement of RERA orders against real estate agents through a continuing daily monetary penalty, capped at 5% of the estimated cost of the relevant property transaction. The operative order, period of default, applicable state rules and any appellate relief should be examined in each case.