RERA Section 68 Rewritten: Home Buyers Lose the Jail Risk, Keep a 10% Penalty

When Parliament passed a law to cut down on needless criminal cases in 2026, home buyers were quietly among those who gained. A clause of the 2016 RERA law that allowed a prison sentence for a defaulting allottee now allows only a fine. Everything below explains how that happened, which dates matter, what builders and agents still risk, and how the change touches someone buying a home in Bangalore.

Who Section 68 Was Written For

The statute gives the name "allottee" to someone who has reserved or purchased a plot, flat or building in a promoter's project. Nearly all its penalty clauses target promoters and agents. Section 68 stands out because it is aimed at the buyer.

Until May 2026 it covered an allottee who did not comply with a direction of the appellate body for real estate disputes. The sentence could be a year behind bars, a fine for each day of non-compliance, or the two together. If daily fines were piled up, the total could reach a tenth of the property's value.

The Clause as It Reads Today

The rewrite came through the Jan Vishwas law of 2026, which is Act 8 of the year. A single law of this kind touches penalty clauses in a great many central statutes, replacing criminal punishment with money penalties where the default is minor or procedural. Serial number 70 in its Schedule is the RERA item.

The new section 68 says an allottee who does not heed a Tribunal direction owes a penalty that can run to 10% of the price paid for the property. Imprisonment has disappeared from the text. The percentage ceiling is as high as it ever was, so only the form of the sanction has changed.

A quick example makes the scale clear. For a home valued at Rs. 1 Crore, no penalty can go beyond Rs. 10 Lakhs, and the amount actually imposed turns on the order made in that case.

Dates in the Making of the Change

Parliament moved briskly. A Bill was tabled in the Lok Sabha on 27 March 2026, the House passed it there on 1 April, and the upper house agreed on 2 April. After the President signed on 7 April, the Gazette published the Act on 8 April.

A law like this has no single start date, because each ministry decides when its own items begin. For RERA, notification S.O. 2287(E) from the housing and urban affairs ministry fixed 7 May 2026. Some other items began later, including the central bank's Act in June.

An official summary released on 4 April 2026 shows how wide the exercise is. It lists 79 Acts under 23 ministries, with 784 provisions touched, of which 717 are decriminalised and 67 serve ease of living. The previous law of the same name, from 2023, had handled 42 Acts and 183 provisions.

Penalties for Promoters and Agents

The clauses addressed to builders and brokers have not been rewritten, so builders who disobey the Tribunal can still be jailed. Grouped by the size of the exposure, the main ones are these:

• Sections 60 and 61 (false details in a registration application, and any other breach by a promoter): a penalty of no more than 5% of the estimated cost each.
• Section 63 (ignoring a direction of the state regulator): a daily penalty that can build up to 5% of the estimated cost.
• Section 59 (running sales without having registered the project): 10% of the estimated cost at most, then for continued default up to three years' imprisonment, a further fine reaching 10%, or both.
• Section 64 (a promoter ignoring a Tribunal direction): up to three years' imprisonment, a daily fine totalling up to 10% of the cost, or both.
• Section 66 (an agent ignoring a Tribunal direction): up to a year behind bars, plus a daily fine reaching 10% of what the unit cost, or both.

The buyer-side companion, section 67, is untouched as well. An allottee who ignores an instruction from the state regulator pays at most 5% of the price paid for the home, and the clause has no prison term.

What It Means in Karnataka

A dispute here begins at K-RERA, and the state's Real Estate Appellate Tribunal hears appeals from its decisions. Buyers reach it as the appellant or as the respondent to a builder's appeal. Section 68 is relevant only at the end of the process, when a Tribunal direction to the buyer has gone unheeded.

These directions typically concern payment or taking possession. Section 19 requires an allottee to meet instalments as the agreement for sale sets out, along with a share of registration fees, taxes, bills for utilities and upkeep, plus interest on delays. A direction to clear such dues is the sort of order that the clause backs.

For a buyer who obeys, life goes on unchanged. For one deciding whether to appeal, a bad outcome can no longer lead to jail on this ground. The cost of ignoring an order is now money, with a ceiling that is known in advance.

Three Things the Amendment Does Not Do

The change is small in reach, and these reminders put it in context:

• A Tribunal order is still enforceable, because section 57 lets it be executed as a civil court decree and unpaid dues can be recovered.
• One-tenth of the price paid is big money for a home in Bangalore, and it is payable in addition to what the order requires.
• Builders' refunds, interest for delay and compensation due are recovered by the old procedure, so enforcement of the buyer's own order is no faster.

Appeals are unchanged too. Section 58 allows a challenge in the High Court, filed within 60 days after the order is received.

Follow-On Edits to the Rules

Section 70 allows offences punishable with imprisonment to be settled by compounding, meaning payment of an amount set out in the rules. The rules hold a table of those amounts. After the jail term went, section 68 no longer belonged in it.

The Centre has started with areas it governs. A notification dated 1 July 2026 amended the general rules covering Daman and Diu as well as the NCT of Delhi. Karnataka writes its own rules, so a matching edit would be made by a state notification.

Handling a Case Before the Authority or the Tribunal

Whether you are the one who filed or the one being proceeded against, a tidy file helps. Keep these in mind:

• Store the agreement for sale, all payment receipts and each demand letter, since unpaid instalments cause most orders against buyers.
• Look closely at the final directions in an order, which state what must be done and by what date.
• Act within the period fixed, or appeal before it runs out, because the penalty is for orders that are ignored.
• Take legal advice from someone who appears before the Tribunal ahead of any settlement or waiver.