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TNRERA Issues Penalty Guidelines for Unregistered Plot/Flat Sales

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The Tamil Nadu Real Estate Regulatory Authority (TNRERA) has issued a new circular on November 13, 2024, detailing the penalty structure for developers selling plots and flats before registration with the authority. This move aims to enforce compliance with the provisions of the Real Estate (Regulation and Development) Act (RERA) and curb unregistered property transactions in the state. The penalty guidelines are applicable to a wide range of regions, including Greater Chennai Corporation (GCC) and surrounding municipalities and panchayats.

Penalty Structure for Unregistered Sales

The circular clarifies that a penalty will be levied for contravening the provisions of Section 3 of RERA, which mandates that no developer can advertise, market, or sell plots or flats without registering the project with TNRERA. The penalty structure outlined in the circular applies to various jurisdictions including Greater Chennai Corporation, adjacent municipalities, town panchayats, and other major corporations.

According to the circular, developers will face a penalty calculated as either:

This penalty structure is designed to enforce stricter adherence to the registration requirements and discourage developers from bypassing regulatory processes.

Impact of the New Guidelines

The new penalty structure is likely to have significant implications for developers operating in the listed regions. With the potential for substantial penalties, it serves as a strong deterrent against non-compliance with TNRERA registration requirements. The circular also aims to protect homebuyers by ensuring that only legally registered and compliant projects are marketed and sold.

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TNRERA’s initiative is expected to further strengthen the regulatory framework in Tamil Nadu, promoting transparency and accountability in the real estate market. The enforcement of these penalties will encourage developers to complete the mandatory registration process before engaging in sales or marketing activities.

Conclusion

The penalty guidelines issued by TNRERA on November 13, 2024, reflect a clear and firm approach to curbing the sale of unregistered plots and flats. By imposing financial penalties on non-compliant developers, the authority aims to ensure that real estate transactions are carried out in accordance with the provisions of RERA. Developers operating in Tamil Nadu, particularly in and around the Greater Chennai Corporation, must adhere to these regulations to avoid penalties and maintain legal compliance.

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