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

Section 67 of RERA 2016: Penalty for Failure to Comply with Orders of Authority by Allottee

Section 67 of the Real Estate (Regulation and Development) Act, 2016 (RERA) prescribes a monetary penalty where an allottee fails to comply with or contravenes an order, decision or direction of the Real Estate Regulatory Authority. The penalty relates to the period of continuing default and is subject to a cumulative statutory ceiling.

Key provision: The cumulative penalty may extend to 5% of the cost of the plot, apartment or building, as applicable, determined by the Authority. Section 67 does not itself prescribe imprisonment.

Text of Section 67 - Penalty for failure to comply with orders of Authority by allottee

If any allottee, who fails to comply with, or contravenes any of the orders, decisions or directions of the Authority he shall be liable to a penalty for the period during which such default continues, which may cumulatively extend up to five per cent. of the plot, apartment or building cost, as the case may be, as determined by the Authority.

Source: Official text of the RERA Act, 2016 - India Code (PDF).

Meaning of allottee and Authority under RERA

Allottee (Section 2(d)): A person to whom a plot, apartment or building has been allotted, sold (freehold or leasehold) or otherwise transferred by the promoter. This includes a subsequent purchaser or transferee but excludes a person occupying the property merely on rent.

Authority (Section 2(i)): The Real Estate Regulatory Authority established under Section 20(1) of the Act. Under Section 37, its directions issued for carrying out its statutory functions are binding on the concerned promoters, allottees and real estate agents.

When does Section 67 apply?

The provision applies where an allottee does not comply with, or acts contrary to, an order, decision or direction of the competent Regulatory Authority. The nature of the required compliance and the period of default depend on the actual order and facts of the case. It is important to distinguish an Authority order from an order of the Real Estate Appellate Tribunal, which is addressed separately under Section 68.

How is the penalty calculated?

The penalty is linked to the duration of the continuing default. The aggregate cannot exceed 5% of the plot, apartment or building cost, as applicable, as determined by the Authority. This percentage is a maximum ceiling, not an automatic fixed penalty in every case. For illustration, if the relevant unit cost determined by the Authority is Rs. 50,00,000, the statutory ceiling would be Rs. 2,50,000; the actual penalty may be lower.

Procedure, compliance and recovery

Under Section 38(1), the Authority has powers to impose penalties or interest for contraventions of statutory obligations. Section 38(2) requires the Authority to follow principles of natural justice. An allottee facing proceedings should examine the order, respond to notices, place relevant proof of compliance on record and observe any applicable procedural deadlines.

Section 40 deals with recovery of unpaid interest, penalty or compensation, including recovery in the prescribed manner as arrears of land revenue. Appeals against eligible Authority orders are governed by Section 44, subject to the Act's requirements and limitation provisions.

Section 67 and Section 68 - Difference

Section 67 concerns an allottee's failure to comply with orders, decisions or directions of the Regulatory Authority, with a cumulative penalty ceiling of 5%. Section 68 concerns non-compliance with the Appellate Tribunal and has separate consequences. The applicable current text should be checked before relying on Section 68, including amendments and commencement provisions.

Official legal resources

Additional related provisions

The following links to other provisions from the original page are retained for navigation and reference.

This article describes the central legislation. Applicable State or Union Territory rules, regulations, notifications and specific Authority orders should also be checked.