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Himachal Pradesh Real Estate Regulatory Authority has imposed an interim penalty of INR 70 lakh on two residential projects in Solan—Chester Hill-2 and Chester Hill-4—for multiple regulatory and financial violations. The action follows complaints from homebuyers and allottees’ associations, citing irregularities in fund management, deviations from approved plans, and deficiencies in essential services. The authority also flagged improper formation of resident welfare associations and alleged unauthorised commercial activities. Audit findings revealed serious lapses, including inter-mixing of funds and absence of project-specific accounts. The regulator has directed promoters to deposit penalties within 30 days and submit certified disclosures, while further investigations have been initiated across departments to assess land use violations and ownership concerns.
Himachal Pradesh Real Estate Regulatory Authority has imposed an interim penalty of INR 70 lakh on two real estate projects—Chester Hill-2 and Chester Hill-4—located in Solan, following findings of multiple regulatory and financial violations. The penalty has been split equally between the two developments, with INR 35 lakh imposed on each project. Advertisement
The action follows a series of complaints filed by individual homebuyers as well as the Association of Allottees, raising concerns over irregularities in project execution and governance. Key issues highlighted included improper formation of resident welfare associations, non-compliance with sanctioned building plans, and deficiencies in the provision of essential services.
The regulator also took note of allegations related to unauthorised commercial and tourism activities, which were said to be in violation of provisions under the Himachal Pradesh Land Reforms and Tenancy Act. In response, the authority has referred multiple aspects of the case to various government departments for further investigation.
The Sub Divisional Magistrate has been tasked with conducting an enquiry into the broader complaints, while the Municipal Commissioner of Solan has been directed to submit revised sanctioned plans, site inspection reports, and details of any unauthorised construction. Additionally, the revenue department has been asked to examine land use compliance and take action against any violations, including unauthorised commercial utilisation.
Audit findings played a critical role in the regulator’s decision, with serious financial irregularities established on record. These included inter-mixing of project funds, failure to maintain separate bank accounts for individual projects, and absence of proper accounting practices. The lack of audited financial statements further raised concerns over transparency and accountability in fund utilisation.
In the case of Chester Hill-2, the authority observed that following the cancellation of a joint development agreement, financial transactions were routed through a non-RERA-compliant bank account. Significant portions of the funds could not be verified due to incomplete or missing financial records, adding to the gravity of the violations.
Highlighting the importance of financial discipline and regulatory compliance, the authority stated that the promoter had failed to maintain transparency in handling funds collected from allottees. Such lapses, it noted, undermine buyer confidence and violate the core principles of the real estate regulatory framework.
The promoters have been directed to deposit the penalty amount within 30 days into the designated authority fund. They have also been instructed to submit detailed disclosures, certified by a chartered accountant, covering fund utilisation, project status, and allottee-wise collections.
The matter is scheduled for further hearing in the coming weeks, as investigations continue across multiple departments to assess the full extent of regulatory breaches and determine subsequent actions.
Source - PTI
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