UP RERA Warns Developers of up to 5% Project Cost Penalty for Handing over Incomplete Flats

In short

• In response to homebuyer complaints, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) has ordered developers to cease the delivery of incomplete apartments
• The directive warns that non-compliance could result in penalties of up to 5% of the project's total cost.
• UP-Rera emphasized that possession can only be granted for fully completed flats that meet all promised amenities

In response to complaints from homebuyers, UPRERA has directed real estate developers to stop delivering incomplete apartments, or bare shell units

Responding to complaints from homebuyers, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) has instructed all developers to halt the delivery of incomplete apartments or bare shell units forthwith and warned that this could invite penalties up to 5% of the overall cost of the real estate project.

Taking action on complaints from homebuyers, UPRERA has ordered all developers to immediately desist from delivering incomplete flats or shell units to homebuyers.

The order, dated May 8, stated that RERA specifically enunciates that possession can be only given after the entire completion of the apartment, all the facilities and amenities as promised are already in existence, and a registered sale or lease deed has been executed.

The directive, launched under Section 37 of the Rera Act, 2016, serves to shield fresh buyers from getting pushed to shell out money on bare-shell flats, an unlawful practice which the UP-Rera has called both illegal and blatant defiance of law, a Hindustan Times report said.

After receiving complaints from homebuyers, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) ordered all developers to stop delivering incomplete apartments, popularly known as 'canvas flats' or bare shell units, with immediate effect. The authority issued a warning that failure to comply with this order would attract penalties up to 5% of the cost of the entire real estate project.

The order also stipulates that "ready-to-move-in" flats are those in which all interior works  flooring, plumbing, electrical installations, fire safety, doors, windows, and other finishes  are done and in line with what is advertised in the brochure and approved plan. Rule 1.8(3) of the UP Agreement for Sale Rules, 2018, mandates that the quoted price should encompass land cost, construction charges, development fees, and promised amenities  any variation is default.