UPRERA Acts Against Defaulting Builders to Safeguard Homebuyers

The UP RERA body had made notified changes to the 11th amendment of the Uttar Pradesh Real Estate Regulatory Authority (General) Regulations, 2019. This is a move to improve transparency and accountability in the real estate sector in the state of Uttar Pradesh. The new provision that the body has introduced is an extension to the real estate agents registered under RERA, as well as the promoter rules as set already. This revised compliance norm of revising financial reporting norms for promoters is a strong step towards consumer protection.

This amendment was announced earlier this month, which addresses the gap in the existing framework. While the Real Estate (Regulations and Development) Act, 2016, stated and required promoters to report their quarterly progress, no such rule has existed for the real estate agents. By exercising the powers with the RERA body, they have now made a compulsion to periodic disclosure necessary for the agents, with no exceptions.

As per the revised regulations, real estate agents will now have to maintain detailed records of their activities in the market. This includes cash books, journals, ledgers, and customer registers in the formats stated by the regulatory body. The records must be diligently maintained for a minimum of five years from the date of project completion or execution of the sale or lease deed, depending on the case. These documents are to be the basis of investigation by the authority or authorities' officials during inquiries.

As a step further to boost transparency, UPRERA had introduced a quarterly disclosure earlier this month. Every registered real estate agent is required to upload details of customer-related transactions during each quarter on the website of the authority within 15 days of the quarter ending. Real estate agents are also required to provide information regarding employees who are associated with the agency. As a way to ensure compliance, UPRERA has set a late fee of Rs 25,000 for failure to submit quarterly reports within the given time.

What Is The Update?

The UPRERA Body has flagged 76 real estate projects whose promoters have not uploaded their annual audit report for the financial year of 2024-25 on the authority's online portal. Under the amended act, the promoters are required to share the details of their project accounts.

The regulatory body has also clarified that project audits must be conducted by an independent external body, which will be appointed by the promoter. This would ensure that the audit is fair and unbiased, closing all loopholes in the system.

In the latest press release by the UPRERA body, several high-value projects have been flagged for failure in disclosure. The RERA body has issued strict directions to all such promoters to necessarily upload the annual audit reports within 15 days, with payment of prescribed late fees, failing which causes a penalty of up to 5 per cent of the cost of the project may be imposed by the Authority. Show cause notices to this effect have been sent to all such promoters.

“Timely submission of annual audit reports is a fundamental responsibility of every promoter under RERA. Independent audit and accurate reporting strengthen transparency and build confidence among homebuyers. UPRERA will continue to ensure strict compliance with these provisions so that the interests of allottees remain protected and the real estate sector of the state develops with greater accountability and trust,” says Sanjay Bhoosreddy, Chairman, UPRERA.

Alongside these steps, the authority has also revised provisions related to the Chartered Accountant certifications and financial reporting formats provided to promoters. These changes are intended to bring uniformity and accuracy in project-related financial disclosures, which also improve regulatory monitoring systems and safeguard the interests of homebuyers and investors.

UPRERA Chairman Sanjay R. Bhoosreddy has said that the amendments were introduced to strengthen transparency, accountability, and professionalism in the diverse and dense segment of the sector.