Himachal Pradesh RERA Imposes Rs 70 Lakh Penalty on Chester Hill Projects in Solan

Himachal Pradesh Real Estate Regulatory Authority (RERA) has imposed an interim penalty of Rs 70 lakh on Chester Hill-2 and Chester Hill-4 real estate projects in Solan. The penalty, Rs 35 lakh each for the two projects, was imposed for various violations of the HP RERA regulations.

The penalties were imposed under two separate orders for 'proven' violations of relevant sections of HP RERA. The copies of the orders were made available recently. The complaints pertained to irregular formation of resident welfare associations, improper maintenance of accounts of money received from allottees, and deficiencies in essential services.

RERA forwarded multiple complaints from individual buyers and the Association of Allottees to the Sub Divisional Magistrate (SDM) for further inquiry. These complaints included unauthorized commercial and tourism activities in violation of Section 118 of the HP Land Reforms and Tenancy Act, deviations from sanctioned plans, and handing over possession without an Occupancy Certificate.

RERA directed the Solan Municipal Commissioner to submit revised sanctioned plans, site inspection reports, and details of unauthorized construction. The revenue department was instructed to furnish reports regarding violations of Section 118 of the Land and Tenancy Act, permitted land use, and actions against unauthorized commercial use. Additionally, the Deputy Commissioner Solan was asked to submit reports on pending inquiries, alleged benami transactions, and land ownership irregularities.

Audit findings revealed serious financial irregularities such as inter-mixing of funds, non-maintenance of a separate project-specific account, absence of proper project-wise accounting, and non-availability of audited financial statements. HP RERA observed that the promoter failed to maintain transparency in fund utilization.

In Chester Hills-2, the Authority found that post-cancellation of the Joint Development Agreement (JDA), all receipts and payments were routed through a non-RERA bank account. Significant portions of funds remained unverified due to missing records.

HP RERA has ordered the promoters to deposit the penalty within 30 days into the designated Authority fund and submit detailed, chartered accountant-certified disclosures regarding fund utilization, project status, and allottee-wise collections. The matter will come up for hearing on June 5, 2026.

This decision by HP RERA underscores the importance of compliance with regulatory norms in the real estate sector, ensuring transparency and accountability in the development and management of residential projects.