The recently amended Real Estate (Regulation and Development) Act 2016 (RERA) has altered the implications on homebuyers if they do not adhere to orders of the real estate appellate tribunals. This alteration takes away the facility of the imprisonment for such defaulters and substituted with fines.
The amendment was made through Jan Vishwas (Amendment of Provisions) Act, 2026 and a letter about the change was issued by the Ministry of Housing and Urban Affairs on 7 th May 2026.
This is part of the government's attempt to decriminalise certain offences as well as avoid imprisonment for regulatory defaults.
However, the amendment should not be interpreted as a dilution of RERA as a whole. The change is limited to the penalty applicable to an allottee who fails to comply with an order of the Real Estate Appellate Tribunal. RERA continues to impose separate obligations and penalties on promoters, real estate agents and allottees. Therefore, the amendment changes the nature of the penalty in a specific case, rather than weakening the overall regulatory framework governing homebuyers and builders.
What has changed for homebuyers:?
If the earlier provision was there an allottee who does not comply with an order of a real estate appellate tribunal may be imprisoned for a term which may extend up to one year or may be subjected to imposition of a fine.
This now eliminates any criminal responsibility and substitutes incarceration for fine. This would mark a shift in enforcement for homebuyers.
A buyer who is unable to comply with the order due to financial hardship or disagreement over the meaning of the order would not be exposed to the prospect of prison under this section.
Agents cited in the report have responded positively to the proposal, warning that clamping down with criminal sanctions may clog up the system with false claims.
For some homebuyers, RERA disputes may arise over delayed possession, refunds, interest, compensation, and other contractual or regulatory obligations. Complying with an order of an appellate tribunal can also be financially challenging, particularly for individual buyers.Replacing imprisonment with a fine This way offers for an alternative form of enforcement without creating the risk of jail.
Why the Amendment Matters?
The change also reflects the government's wider decriminalisation approach to business and regulatory laws.
Criminal proceedings can take considerable time and may add another layer to disputes that are already being handled by regulatory authorities and tribunals. Financial penalties, by comparison, can provide regulators with another mechanism to enforce compliance.
Real estate consultants noted that criminal provisions can prolong litigation, whereas civil penalties can be easier to enforce. For the real estate sector, faster enforcement is particularly relevant because disputes between buyers and developers can remain unresolved for extended periods.
The amendment could therefore help reduce the legal pressure associated with minor or procedural non-compliance while retaining an enforcement mechanism.
But What About Builders and Promoters?
The amendment is mainly focused on the situation where an allottee fails to comply with a decision made by an appellate tribunal. This should under no circumstances be regarded to be a complete relief from criminal liability being developers or promoters are concerned.
Builders/promoters are still responsible for and penalized as per the rules framed in the Act for any infractions which are mentioned under various provisions of it. Homebuyers vs Promoters: It helps to draw the line since the homebuyer and promoter have completely disparate roles and responsibilities. While the homebuyer typically purchases property as an individual, the promoter is responsible for development registration disclosure, execution and compliance of various governmental regulations of the project.
This way, the amendment does not change a general rule that under RERA everyone's criminal penalties such as imprisonment had been entirely withdrawn for that purpose.
The Accountability Question
While homebuyers have largely welcomed the change, the amendment has also raised a question about whether monetary penalties will provide sufficient deterrence.
The possibility of imprisonment previously gave considerable weight to tribunal orders. Removing that possibility could create concerns if the financial penalty is too low compared with the amount involved in a dispute.
For example, if a party deliberately refuses to comply with an order because the financial benefit of non-compliance exceeds the penalty, the enforcement mechanism may lose effectiveness.
This is why the level and application of monetary penalties will matter.
A penalty needs to be meaningful enough to encourage compliance while avoiding disproportionate punishment for genuine cases of inability or misunderstanding.
Relief for Genuine Buyers
For genuine homebuyers, the amendment can provide some relief.
Buying a home is generally a major financial commitment. A buyer involved in a dispute may already be dealing with loan repayments, rent, project delays or financial uncertainty.
The earlier possibility of imprisonment for failure to comply with an appellate tribunal order could add another layer of pressure.
The replacement with monetary penalties recognises that not every instance of non-compliance necessarily represents deliberate defiance.
There can be circumstances involving financial constraints, differences in interpretation of an order or difficulties in arranging payment within the prescribed period.
The new approach provides regulators with the ability to impose financial consequences without automatically converting the matter into a criminal liability involving imprisonment.
Could It Affect RERA Enforcement?
The effectiveness of the amendment will ultimately depend on how monetary penalties are implemented.
If penalties are proportionate and consistently enforced, they can encourage compliance while reducing the criminalisation of regulatory disputes.
However, repeated or deliberate violations may require closer monitoring.
Homebuyer representatives and real estate professionals have therefore emphasised the need for regulators to distinguish between genuine inability to comply and wilful non-compliance.
A first-time buyer facing financial hardship is different from a party repeatedly ignoring regulatory orders.
What Homebuyers Should Understand
Homebuyers should not assume that the amendment removes their responsibility to comply with RERA orders.
The change concerns the nature of the consequence, not the underlying obligation.
If an appellate tribunal issues an order, the concerned party is still expected to comply. Failure to do so can result in monetary consequences under the amended framework.
Buyers involved in RERA proceedings should therefore continue to monitor tribunal orders, understand the applicable deadlines and seek appropriate legal advice when compliance is difficult.
What Builders Should Take Away
For developers and promoters, the amendment should not be viewed as a relaxation of RERA compliance requirements.
The broader RERA framework continues to impose obligations relating to project registration, disclosures, possession, financial discipline, buyer rights and regulatory compliance.
The change primarily removes imprisonment in the specified case involving an allottee's failure to comply with an appellate tribunal order.
Therefore, builders should continue to treat RERA compliance as a core legal requirement rather than assuming that the decriminalisation measures reduce their responsibilities.
A Move to Monetary Compliance
Under the amendments there will be a shift from criminal to monetary enforcement in the given provision of the RERA.
First, it will help prospective homeowners reduce their anxiety about enforcing a tribunal-made decision while it will provide a mechanism allowing regulatory authorities to carry out their decisions without imprisonment threats. Yet, the effectiveness of this change will depend on holding all sides responsible.
Once the amount and mode of the financial sanctions are decided and properly enforced, the change introduced in the amendment should lead to a much more user-friendly environment in case of disputes for homebuyers, while the risk tied to non-compliance will still remain.
In simple terms, the amendment means that homebuyers who fail to comply with an appellate tribunal order will no longer face imprisonment, but they remain obligated to comply with the order, while the penalties applicable to builders and promoters under RERA remain unchanged.
