In a major relief for homebuyers across India, the Ministry of Housing and Urban Affairs (MoHUA) has enforced the amendment to Section 68 of the Real Estate (Regulation and Development) Act, 2016 (RERA) with effect from 7 May 2026. The change, introduced through the Jan Vishwas (Amendment of Provisions) Act, 2026, completely removes the provision for imprisonment of allottees (homebuyers) who fail to comply with orders of the Real Estate Appellate Tribunal.
The amendment marks a significant shift from criminal prosecution to civil monetary penalties, aligning with the government’s ongoing “trust-based governance” and “ease of living” agenda under the Jan Vishwas series of reforms.
What Has Changed? Old vs New Section 68
Original Provision (pre-7 May 2026): If any allottee who fails to comply with, or contravenes any of the orders or directions of the Authority or the Appellate Tribunal, as the case may be, he shall be punishable with imprisonment up to one year or with fine which may extend to ten per cent of the cost of the plot, apartment or building, as the case may be, or with both.
New Provision (post-amendment): “Penalty for failure to comply with orders of Appellate Tribunal by allottee.—If any allottee who 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 penalty, which may extend up to ten per cent of the plot, apartment or building cost, as the case may be.”
Key changes:
- Imprisonment clause deleted entirely – No more risk of arrest or criminal trial in a Magistrate court for non-compliance by homebuyers.
- Purely monetary penalty – Up to 10% of the property cost remains the maximum limit.
- Administrative adjudication – Penalties will now be imposed by a designated adjudicating officer (a senior RERA official notified by the State/UT Government) after giving the allottee a reasonable opportunity of being heard.
- Fast-track appeal – Aggrieved allottees can appeal to a higher-ranking officer within 30 days; the appeal must be disposed of within 60 days.
- Recovery mechanism – Unpaid penalties will be recovered as arrears of land revenue.
Why This Matters for Homebuyers
Until now, even technical or inadvertent non-compliance with Appellate Tribunal orders could expose homebuyers to criminal proceedings, police involvement, and the stigma of a criminal case. This was widely criticised as disproportionate, especially since most disputes arise from contractual or regulatory issues rather than deliberate wrongdoing.
The new regime “derisks” homebuyers from jail while retaining a strong financial deterrent. Industry experts note that the 10% penalty is still substantial — for a ₹1 crore apartment, it could mean up to ₹10 lakh — ensuring accountability without criminalisation.
Promoters and developers, however, continue to face the original (and often stricter) penalties under other sections of RERA, including potential imprisonment for serious violations. The amendment applies only to allottees, not to builders.
Broader Context of Jan Vishwas Reforms
The Jan Vishwas (Amendment of Provisions) Act, 2026 is the latest and most expansive in the series. It decriminalises or rationalises over 700 minor offences across nearly 80 central laws. The RERA amendment was one of the flagship real-estate specific changes highlighted when the Bill was introduced in Lok Sabha on 27 March 2026. It was passed by both Houses within days and received presidential assent shortly after.
MoHUA’s notification dated 7 May 2026 has brought the RERA provisions into immediate effect. State Real Estate Regulatory Authorities (RERAs) are now required to update their procedures, notify adjudicating officers, and align rules accordingly.
Reactions and Implications
Real estate lawyers and homebuyer forums have welcomed the move as “long overdue” and “buyer-friendly.” A senior advocate practising before the Real Estate Appellate Tribunal told reporters, “This removes unnecessary fear and criminal litigation from what are essentially regulatory disputes. It will also reduce the burden on already overburdened tribunals and courts.”
Developers’ associations have noted that while the change benefits allottees, it does not dilute enforcement against errant promoters. Some analysts, however, caution that effective implementation will depend on how quickly states notify adjudicating officers and train them.
What Homebuyers Should Know Now
- Existing cases filed before 7 May 2026 under the old Section 68 will be governed by the law prevailing at the time.
- Going forward, any fresh non-compliance with Appellate Tribunal orders will attract only the new penalty regime.
- Homebuyers are still fully bound by RERA obligations — the amendment only changes the nature of punishment for non-compliance with tribunal directions.
This reform is being seen as yet another step towards making India’s real estate sector more predictable, less adversarial, and genuinely buyer-centric.
The era of sending homebuyers to jail for RERA non-compliance is officially over.
Also Read: Homebuyers Can Challenge Only Unfavourable RERA Parts & Recover Simultaneously
