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The Union government has proposed an amendment to the Real Estate (Regulation and Development) Act, 2016, removing the provision of up to one-year imprisonment for homebuyers who fail to comply with orders of the Real Estate Appellate Tribunal. Introduced through the Jan Vishwas (Amendment of Provisions) Bill, 2026 by Jitin Prasada, the change seeks to replace criminal penalties with financial penalties of up to 10 per cent of the property cost. The proposal aims to rationalise compliance provisions for allottees while retaining enforcement through monetary penalties. The amendment is part of broader efforts to improve ease of doing business and reduce criminal liabilities in regulatory frameworks.
The Union government has proposed amendments to the Real Estate (Regulation and Development) Act, 2016 in the past week, seeking to remove the provision of imprisonment for homebuyers who fail to comply with orders issued by the Real Estate Appellate Tribunal, replacing it with a financial penalty framework. Advertisement
The proposed change forms part of the Jan Vishwas (Amendment of Provisions) Bill, 2026, introduced in the Lok Sabha by Jitin Prasada. The amendment specifically targets Section 68 of the Act, which currently provides for penalties including imprisonment of up to one year and/or fines for allottees who fail to adhere to tribunal directives.
Under the revised provision, non-compliance by an allottee would attract a monetary penalty that may extend up to 10 per cent of the cost of the plot, apartment, or building. The amendment removes the criminal liability component, shifting enforcement towards financial deterrents.
At present, Section 68 of the Act mandates that violations of appellate tribunal orders can result in imprisonment for up to one year, along with a daily fine that may cumulatively reach up to 10 per cent of the project cost. These provisions have been in effect since the implementation of the Act in May 2017.
The Real Estate (Regulation and Development) Act, 2016 was enacted to improve transparency, accountability, and consumer protection in the real estate sector. It requires mandatory registration of real estate projects with the respective state or Union Territory regulatory authorities and establishes a framework for dispute resolution through adjudicating officers and appellate tribunals.
The proposed amendment reflects a broader policy approach aimed at decriminalising certain regulatory offences and reducing the compliance burden associated with criminal penalties. By replacing imprisonment with financial penalties, the government seeks to streamline enforcement while maintaining accountability for non-compliance.
The Bill also reiterates existing provisions under RERA that empower regulatory authorities to take over or facilitate completion of stalled projects in cases where registrations lapse or are revoked. In such situations, authorities, in consultation with the relevant government, may assign project completion to competent agencies or associations of allottees.
The proposed changes are expected to have implications for dispute resolution and compliance practices within the real estate sector, particularly in cases involving homebuyers and appellate tribunal orders. While the removal of imprisonment reduces criminal exposure for allottees, the retention of financial penalties ensures continued enforcement under the regulatory framework.
The amendment will be subject to parliamentary approval before being enacted, following which it is expected to modify the compliance landscape for stakeholders operating under the RERA framework.
Source - PTI
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