This directive follows the regulator’s observation of widespread non-compliance by promoters, raising serious concerns about transparency and accountability within the real estate sector.

During a recent review meeting, HRera highlighted that numerous promoters had failed to submit these mandatory reports, despite being issued repeated reminders.

Consequently, the authority has begun issuing show-cause notices to defaulting promoters. These notices stipulate a strict deadline for compliance and warn that failure to adhere will result in substantial financial penalties.

In its official order, HRera stressed that failing to file annual reports constitutes a significant breach of the Real Estate (Regulation and Development) Act, 2016 (RERA Act).

Promoters who do not comply within 30 days of receiving the notice will face an initial penalty of ₹5 lakh. Additionally, for non-compliance extending beyond 60 days, an incremental penalty of ₹10,000 per day will be imposed.

The submission of annual reports is a vital obligation under Section 4(2)(l)(d) of the RERA Act. Promoters are required to ensure their project accounts are audited by a certified chartered accountant within six months after the conclusion of each financial year.

This audit must confirm that funds collected for a project are used solely for its intended purpose and that withdrawals correspond accurately to the project’s progress.

HRera has further cautioned that any promoter who provides false information or violates the provisions of Section 4 may face penalties of up to 5% of the estimated project cost, as outlined in Section 60 of the Act.

This measure underscores the critical importance of upholding financial integrity in real estate projects.
The regulator has reiterated that these steps are designed to enhance transparency and accountability within the industry.

Promoters are strongly urged to comply with these statutory requirements promptly to avoid facing severe financial and legal consequences.

HRera’s strict stance reflects its dedication to protecting homebuyers’ interests and ensuring that project funds are managed responsibly. Through these actions, the authority aims to reinforce trust and ethical practices in the real estate sector.

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The Real Estate (Regulation & Development) Act, 2016, commonly referred to as RERA, was enacted to bring significant reforms to India’s real estate sector.

The primary aim of RERA is to promote greater transparency, citizen-centricity, accountability, and financial discipline, thus empowering home buyers and stimulating the economy.

The survey noted that all states and Union Territories have notified rules under RERA, except Nagaland, which is currently in the process of doing so. As of July 1, 2024, more than 1,30,186 real estate projects and 88,461 real estate agents have been registered under RERA.

“RERA provides for the establishment of a fast-track dispute resolution mechanism for the settlement of disputes. As of July 1, 2024, 32 states and Union Territories have established the Real Estate Regulatory Authority, and 1,24,947 complaints have already been resolved,” the survey reported.

RERA mandates an ‘Agreement to Sale’ at the time of registration and requires two-thirds consent from allottees/homebuyers for any layout changes. The law also includes provisions for refunds, compensation, and penalties for all stakeholders in case of obligation breaches.

“Before RERA was enacted, there were numerous instances of builders failing to deliver flats or homes despite full payments from homebuyers. To address this issue, RERA mandates that 70 percent of funds collected from homebuyers for a project must be maintained in a separate bank account dedicated to project construction and land costs,” the survey explained.

RERA also requires developers and project promoters to disclose all necessary information about projects, including permissions obtained from authorities, date of launch, promised date of delivery, project specifications, and amenities.

Furthermore, the interests of homebuyers are protected as only projects (above 500 square meters and above eight apartments) registered with RERA can be launched, thus preventing any misrepresentation or false promises by developers, the survey stated.

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