Centre to Frame Model Pacts to Protect Real Estate Customers

Centre to Frame Model Pacts to Protect Realestate Builders & Agent Buyers

In line with the RERA (Real Estate Regulatory Authority) Act 2016, a PIL (Public Interest Litigation) was filed in the Supreme Court asking directions from the Centre to frame model pacts for builders and agent buyers to protect customers and introduce transparency in the real estate sector.

PIL in SC to Protect Real Estate Customers 

The plea put forward by lawyer and BJP leader Ashwini Kumar Upadhyay has also sought guidelines for all states to enact the "Model Builder Buyer Agreement" and "Model Agent Buyer Agreement" and to take measures to protect customers from mental, physical and financial damage.

In violation of Articles 14, 15, 21 of the Constitution, promoters, builders and agents use manifestly unfair, one-sided agreements that do not put customers on an equal footing with them. There have been several reports of intentional undue delays in handing over custody and complaints from consumers, but police do not report FIRs, citing the agreement's arbitrary clauses.

Builders regularly issue revised delivery schedules and follow unreasonably, unfair trade-restrictive practises. All of this amounts to criminal conspiracy, theft, stealing, criminal breach of confidence, dishonestly inducing property delivery, dishonest misappropriation of property, and violation of corporate laws, said the petition, filed by lawyer Ashwani Kumar Dubey.

Real estate buyers are not only suffering from mental and financial damage, but also from deliberate violation of their right to life and wellbeing due to deliberate unreasonable delays in possession. The PIL argued that many developers across the country still follow a common practice of pre-launching a project without obtaining the authorities required approvals for the project, and declaring it a soft launch or pre-launch, etc., thus openly violating the law, but no action against any builder has been taken to date.

It must be confirmed that registration of project with the regulatory authority was compulsory before it was launched for sale, and the basic pre-requisite for registration is that the developer must have all the required approvals. The plea also sought directions to compensate the buyers for losses caused by Promoters-Builders due to unreasonable delays and to recover their cash.

Thus the buyer will be secured as the project is ring-closed from the concepts of non-approvals or delays in permits, which are one of the key causes of the project delay.

By: Shailaja K