Standard pan-India builder-buyer agreement

The Supreme Court stepped in to protect home buyers and sought-after the central government’s feedback to a pack of PILs seeking a standard pan-India builder-buyer or agent-buyer model agreement. 

“This is an important issue in relation to consumer protection. Without a standard/model agreement, the builder can put any clause in the agreement which could be detrimental to the interest of the home buyers,” said the official. 

Justices Chandrachud and Nagarathna also said that, “If there was no uniformity within the settlement, the highly effective builders will drive the consumers to sign a contract containing clauses that would leave the house consumers in a completely weak place.”  

The PILs filed by Ashwini Kumar Upadhyay, Tarun Kumar Gera, Jim Thomson and Nagarjuna Reddy, headed by the bench of Justices D Y Chandrachud and B V Nagarathna took a quick decision to sympathise with homebuyers which were forced to sign an unequal agreement in the process of realising their dream of a roof overhead. 

The petitioners informed that even after 5 years not a single state has framed ‘mannequin builder-buyer settlement’ to instill transparency and delays in finishing projects by real estate in order to stop them from indulging in unfair practices. 

The court said the real estate builder/agent-buyer agreement was drafted under the Real Estate (Regulation and Development) Act (RERA), which is a long journey ahead in protecting the homebuyers against exploitation and harassment at the hands of real estate developers.  

The court said that under RERA, state governments are authorized to structure uniform/model builder-buyer agreements and yet to complete a five years plan after the law came into force. 

Justice Chandrachud also quoted a judgment given by West Bengal RERA that Trinamool Congress authorities’s try and run a parallel regime on regulating the actual property business under the West Bengal Housing Business Regulation Act (WB-HIRA), 2017 as illegal for being both a copy or in battle with central laws RERA, 2016.  

A bench headed by Justices D Y Chandrachud and M R Shah in a 190-page judgment had declared, “The state regulation matches, just about on all fours, with the footprints of the regulation enacted by Parliament. That is constitutionally impermissible. What the West Bengal legislature has tried to attain is to arrange its parallel laws involving a parallel regime.”