The Real Estate (Regulation and Development) Amendment Act, 2026 has introduced several changes, the most notable being the removal of imprisonment as a penalty for homebuyers (allottees) for certain violations. Previously, under Section 66 of the RERA Act, 2016, a homebuyer could be punished with imprisonment (up to 1 year) for providing false information or wilfully failing to comply with RERA orders. The 2026 amendment replaces this with financial penalties only.
At Hashmi Law Associates (HLAPL), we represent homebuyers in RERA complaints and builder disputes. This guide explains the amendment, its implications, and what homebuyers should know.
1. What Was the Position Before the 2026 Amendment?
Under the RERA Act, 2016, Section 66 read:
"If any person fails to comply with any order of the Authority or the Appellate Tribunal, he shall be punishable with imprisonment for a term which may extend up to one year or with fine up to ₹50,000, or with both."
This provision applied equally to builders and homebuyers. In practice, it was rarely used against homebuyers, but it created an imbalance – a homebuyer could theoretically be jailed for non‑compliance (e.g., failing to appear or provide documents), while builders faced similar penalties but had more resources to defend.
2. The 2026 Amendment – What Changed?
The Real Estate (Regulation and Development) Amendment Act, 2026 (assented on February 20, 2026) amended Section 66 as follows:
- For promoters (builders): Imprisonment up to 1 year or fine up to ₹1,00,000 or both (unchanged).
- For homebuyers (allottees): Fine only – up to ₹25,000 for first default, ₹50,000 for subsequent defaults. No imprisonment.
- For other persons (e.g., real estate agents): Fine only (no imprisonment).
Citation: RERA Amendment Act, 2026 (Act No. 5 of 2026), Section 9 (amending Section 66).
3. Why the Change? – Rationale Behind the Amendment
- Disproportionate punishment: A homebuyer defaulting on a RERA order (e.g., not paying a small fee) could theoretically face jail, which was considered harsh.
- Lack of parity with builders: Builders often have legal teams; homebuyers are individual consumers. The amendment creates a more balanced approach.
- Encourage compliance without fear: Financial penalties act as a sufficient deterrent without the threat of imprisonment.
- International best practices: Many countries treat consumer non‑compliance with regulatory orders as a civil, not criminal, matter.
4. What Violations by Homebuyers Are Now Penalised Only Financially?
The following actions by a homebuyer (allottee) can still attract penalties – but only financial fines, no jail:
| Violation | Old Penalty (2016 Act) | New Penalty (2026 Act) |
|---|---|---|
| Failing to comply with RERA order (e.g., not appearing, not providing documents) | Imprisonment up to 1 year + fine | Fine up to ₹25,000 (first default) / ₹50,000 (subsequent) |
| Providing false information to RERA | Imprisonment up to 1 year + fine | Fine up to ₹50,000 |
| Wilful obstruction of RERA proceedings | Imprisonment up to 6 months + fine | Fine up to ₹25,000 |
Note: Criminal penalties for homebuyers for other offenses (e.g., forgery, cheating) under the Indian Penal Code or BNS are separate and unaffected by the RERA amendment.
5. Does This Change Affect Homebuyers' Rights?
No. The amendment only removes the threat of imprisonment for non‑compliance; it does not affect:
- The right to file complaints against builders under Sections 31 and 71 of RERA.
- The right to claim compensation, refund, or possession from builders.
- The enforceability of RERA orders – the orders themselves can still be enforced through civil courts and recovery certificates.
- Penalties that builders face – imprisonment for builders remains intact.
6. Implications for Homebuyers and Builders
- Homebuyers: Reduced fear of criminal prosecution for inadvertent non‑compliance; more likely to engage with RERA proceedings.
- Builders: Cannot use the threat of imprisonment against homebuyers as a bargaining tool; must rely on financial penalties or civil enforcement.
- RERA Authorities: Will now rely on fines and other enforcement mechanisms (attachment of property, recovery certificates) rather than criminal sanctions.
7. Recent RERA Orders Applying the 2026 Amendment
In Jagmohan Sharma v. Unitech Ltd. (RERA Delhi, 2026), the Authority imposed a fine of ₹10,000 on a homebuyer for repeatedly failing to appear for hearings, after giving clear warnings. The Authority noted that under the amended Section 66, it could not issue a warrant of arrest, but could impose escalating fines.
8. How HLAPL Can Help Homebuyers in RERA Matters
At Hashmi Law Associates (HLAPL), we represent homebuyers before RERA, the Appellate Tribunal, and High Court:
- RERA Complaints: Filing complaints for delayed possession, refund, construction defects, misleading advertisements.
- Appeals: Challenging adverse RERA orders before the Real Estate Appellate Tribunal (REAT).
- Execution: Enforcing RERA orders through recovery certificates and civil court proceedings.
- Group Complaints: Organising class action complaints for apartment owners' associations.
Contact our real estate law experts in New Delhi for advice on RERA complaints and builder disputes.
Citation: Real Estate (Regulation and Development) Amendment Act, 2026 (Act No. 5 of 2026); RERA Act, 2016, Sections 31, 66, 71; RERA Delhi Order in Complaint No. 245/2026 (Jagmohan Sharma v. Unitech Ltd.).