Economic, Commercial and Intellectual Property Laws · Real Estate Regulation and Development Law

Offences and Penalties under RERA 2016

Updated 11 October 2026 · Fact-checked

RERA 2016 punishes non-compliance with penalties linked to the estimated project cost, daily penalties for agents, and imprisonment for serious or continuing default by promoters. Companies are liable through the persons in charge. To answer, name the default, the person liable, the penalty, and the forum, then conclude.

Understand Offences, Penalties and Miscellaneous Provisions

RERA works by registration and disclosure. The penalty provisions give it teeth. Each major duty has a matching penalty: register the project, give true information, follow the Authority's orders, and (for agents) register and quote the registration number.

Penalties for promoters are mostly a percentage of the estimated cost of the real estate project. Non-registration carries the heaviest penalty. If the default continues, imprisonment can follow. Other breaches, such as giving false information or breaking other provisions, carry lower percentage penalties.

Real estate agents face penalties for acting without registration or breaching their duties. These are often a fixed amount per day of default, subject to a cap. Allottees also face penalties, for example for failing to comply with the Authority's orders or the Act's obligations.

Where the offender is a company, the Act follows the usual pattern. Every person in charge of, and responsible for, the conduct of the company's business is deemed guilty. That person can escape if they prove the offence happened without their knowledge or despite due diligence. Directors, managers and secretaries can be liable if the offence was committed with their consent or neglect.

The Act also has provisions on compounding of offences, overriding effect, and repeal and savings of earlier state laws. Learn them as short rules. Use the section numbers in your study material, since this page cites only the sections that are clear in the official text. The Authority also has power under section 38 to impose penalty or interest for contravention by promoters, allottees and agents.

Key rules to remember

Promoter penalty for non-registration: Penalty up to 10% of estimated cost of the real estate project; continuing default: imprisonment up to 3 years or further fine up to 10%, or both; Trigger is section 3(1): advertising, marketing, booking, selling or inviting purchase without registration. Confirm the figures in your study material.
Promoter penalty for false information or other breaches: Penalty up to 5% of estimated project cost; Lower tier than non-registration. Confirm the exact provisions in your material.
Agent penalty: Daily penalty during default, capped at a percentage of the cost of the plot, apartment or building; Trigger is acting without registration under section 9 or breaching agent duties. Revocation or suspension needs a hearing.
Offences by companies: Person in charge and responsible = deemed guilty; defence = no knowledge or due diligence; Directors, managers and secretaries are also liable if the offence was with their consent, connivance or neglect.
Authority's power to penalise: Section 38(1): penalty or interest for contravention by promoters, allottees and agents; Section 38(2): Authority follows natural justice and regulates its own procedure.
Registration exemption (section 3(2)(a)): Land ≤ 500 sq m OR apartments ≤ 8, inclusive of all phases; The appropriate Government may reduce the threshold. Each phase is a stand-alone project.

How to solve Offences, Penalties and Miscellaneous Provisions questions

Use this order for any penalty or offence question. It keeps the answer in ICSI style: provision, facts, conclusion.

1Identify the person: promoter, real estate agent, allottee or a company.
2Identify the default: non-registration, false information, breach of Authority's order, unregistered agent activity and so on.
3Check exemptions first if registration is in issue: 500 sq m or 8 apartments, completion certificate before the Act, or repair work with no marketing or sale (section 3(2)).
4State the provision breached, citing the section where you are certain (section 3 for projects, section 9 for agents, section 15 for transfer of promoter's rights).
5State the penalty tier and compute it on the estimated project cost if figures are given.
6If the company is the offender, name the persons deemed guilty and the defence available to them.
7Mention the forum and procedure: the Authority penalises (section 38), with natural justice and a hearing before revocation or suspension.
8Close with a clear conclusion on liability and the maximum penalty.

Quickest way: Who, what, how much

When to use it: For short-answer or 5-mark questions when time is tight.

Write who is liable and what default occurred in one line.
Write the penalty as a percentage or daily amount and any imprisonment for continuing default.
Add one line on company liability or on the hearing requirement.
End with a one-line conclusion.

Common mistakes in Offences, Penalties and Miscellaneous Provisions

Applying the penalty percentage to the sale price or to the allottee's payments instead of the estimated project cost.
Students mix up promoter penalties with allottee-side amounts.
Fix: For promoter penalties, use the estimated cost of the real estate project.
Treating every project as needing registration.
Section 3(1) is remembered, but the exemptions in section 3(2) are forgotten.
Fix: Always test the 500 sq m / 8 apartments limit, completion certificate and repair-only exemptions first.
Saying a company is liable only as an entity and ignoring persons in charge.
The deemed-guilt rule is skipped.
Fix: Mention the persons responsible for the business, and the defence of no knowledge or due diligence.
Forgetting that each phase is a separate project.
Students treat the whole development as one project.
Fix: Under the Explanation to section 3, each phase needs separate registration.
Saying the Authority can revoke an agent's registration without a hearing.
Focus on the power, not the proviso.
Fix: Section 9(7) requires an opportunity of being heard before revocation or suspension.
Mixing up Authority, Tribunal and Court functions.
All three appear in the penalty chapter.
Fix: Authority: registers, regulates, penalises (sections 34 and 38). Appeals go to the Appellate Tribunal. Offences are tried by courts.

Worked examples

Example 1

Shreeji Realty Pvt Ltd starts advertising and booking flats in a 120-apartment project in Pune without registering it. The estimated project cost is ₹40,00,00,000. Discuss liability.

Show the solution

Provision: section 3(1) bars a promoter from advertising, marketing, booking, selling or inviting persons to purchase without registration.
Exemptions: the project has 120 apartments, so it exceeds the 8-apartment limit in section 3(2)(a). No other exemption applies on the facts.
Penalty: for non-registration, the penalty can extend up to 10% of the estimated project cost. 10% of ₹40,00,00,000 = ₹4,00,00,000.
Continuing default: if the default continues, imprisonment up to 3 years or a further fine up to 10%, or both, can apply.
Company: persons in charge of and responsible for the business are deemed guilty, unless they prove lack of knowledge or due diligence.

Answer: Shreeji Realty has breached section 3(1). The penalty can go up to ₹4,00,00,000, and continued default can attract imprisonment or a further fine. The responsible persons are also liable unless they prove the defence.

Example 2

Anand Builders is developing 6 apartments on 400 sq m of land in a single phase and wants to start marketing. Must it register the project? Does the position change if the State reduces the threshold?

Show the solution

Provision: section 3(2)(a) exempts a project where land does not exceed 500 sq m or apartments do not exceed 8, inclusive of all phases.
Facts: 400 sq m is within 500 sq m, and 6 apartments is within 8. Either limit alone suffices.
Result: no registration is needed, so non-registration penalties do not arise.
Proviso: the appropriate Government may reduce the threshold below 500 sq m or 8 apartments.
If the State has lowered the limits below these figures, the exemption would not cover this project, and registration would be required before marketing.

Answer: Under the Act's thresholds, Anand Builders needs no registration. If the State has reduced the threshold below the project's size, it must register, and marketing without registration would attract the penalties.

Exam tips

Link each penalty to its trigger section: section 3 for projects, section 9 for agents, section 15 for transfer of promoter rights.
Always give the base on which the penalty is calculated, the estimated project cost, and show the arithmetic if figures are given.
For company offences, write the deemed-guilty rule and the defence in two lines.
Check the latest study material for exact penalty section numbers, compounding and repeal provisions, and quote them only if you are sure.
Finish every answer with a clear conclusion as ICSI expects.

Practice questions from Real Estate Regulation and Development Law

Offences, Penalties and Miscellaneous Provisions in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Offences, Penalties and Miscellaneous Provisions: frequently asked questions

What is the RERA penalty for non-registration of a project?

A promoter who sells or markets a project without registration faces a penalty of up to 10% of the estimated project cost. Continuing default can lead to imprisonment up to 3 years or a further fine, or both. Check the exact provision in your study material.

Who is liable when a company commits an offence under RERA?

Every person in charge of and responsible for the company's business at the time is deemed guilty. They can escape liability by proving the offence occurred without their knowledge or that they used due diligence. Directors or officers are liable if the offence arose from their consent or neglect.

Can a real estate agent's registration be cancelled?

Yes. Under section 9(7), the Authority may revoke or suspend registration for breach of conditions or for registration obtained by misrepresentation or fraud. It must first give the agent an opportunity of being heard.

How should I study the repeal and savings provisions of RERA?

Learn them as short rules: the Act has overriding effect, and earlier state laws on the subject are dealt with through repeal and savings. Use your study material for exact section numbers and wording. Keep your answer short and factual.