representative image New Delhi: home buyers‘ Organization FPCE Has written to the Ministry of Consumer Affairs to frame specific guidelines for the Indian real estate sector to curb unfair trade practices and protect the interests of consumers.
Platform for collective efforts of people (FPCE) President Abhay Upadhyay has written a letter to Consumer Affairs Secretary Nidhi Khare, requesting her to issue “specific guidelines for the real estate sector”. Consumer Protection Act 2019 To curb the malpractices prevalent in this area and to protect the consumers of the area from being cheated by the developers.”
The association said that about 10 percent of the complaints of consumers in the real estate sector are included in the consumer forums constituted under the Consumer Protection Act 2019.
According to the government’s statement in the Lok Sabha, more than 50,000 such complaints are pending before consumer forums as of July 31, 2024.
In terms of value of such cases, it would be more than 10 per cent as the transactions in the real estate sector are of very high value.
“We are writing to bring to your attention that real estate developers are continuing their malpractices which are in gross violation of the provisions of the Consumer Protection Act 2019. We are highlighting some of the malpractices that must be eradicated at all costs to protect There is a need for home buyers,” Upadhyay said.
Referring to some of the irregularities in the realty sector, Upadhyay said there are a lot of misleading advertisements to lure customers.
“They (developers) come up with attractive pictorial depictions of their projects which bear no resemblance to the actual project,” he said.
In advertisements, builders promise to provide many facilities and amenities in their projects. The association said, however, in many cases, home buyers do not get the amenities they want when they take possession of their properties.
“It should also be noted with due concern that the project completion deadline is not adhered to and is extended indefinitely at the expense of home buyers,” Upadhyay said.
The information that the home buyer gets from the builder’s website or from the brochure downloaded from the builder’s website should be treated as an advertisement and a disclaimer should be given at the bottom of the brochure/website only saying that they are a part of the sale Are not. The President suggested that the documents should be discarded outright.
The association also pointed out unfair contracts in the real estate sector.
“The prevalent practice where home buyers generally pay 10 per cent of the total consideration amount as booking amount only on the basis of advertisement/brochure/website without knowing what will be the terms of the contract which they have to sign further That said, this is extremely unfair,” Upadhyay said.
Upadhyay said, home buyers should be given a copy of the draft agreement for sale at the time of booking so that they know on what terms they will buy their apartment.
Further, he said that currently there is no exit clause available for home buyers and hence if the booking is canceled later the builder forfeits the entire booking amount.
“We suggest that an exit clause be provided at the time of booking itself,” he said.
The association said the exit clause should mention that if the cancellation is made within 3 months, the developer will have to refund the entire money within 15 days of receiving such request.
“However, if the cancellation is made after 3 months, the developer must refund the amount paid by the home buyer, including interest, within one month.
“At present, builders are inserting several one-sided and restrictive clauses in the agreement of sale which is highly oppressive, grossly unfair, deeply unfair and also illegal under the provisions of the Consumer Protection Act 2019,” he said.
The association stressed that it is necessary to stop builders from charging extra money from home buyers on one pretext or the other.
Giving some examples, the association said that builders take full care while giving possession without completing the common areas and amenities.
“Your Ministry should formulate clear guidelines in this regard to ensure that home buyers should not pay more than 80 per cent of the total amount at the time of handover and the remaining amount should only be paid by the builder after all is ready and at the time of handover. “Complete common areas with all amenities and amenities in ready-to-use condition for resident welfare associations,” Upadhyay said.
“If the total area of the flat is found to be less, home buyers should pay a proportionately less amount.
“However, if the area is increased, no additional amount can be charged from the home buyer as the increase was not on demand or with the consent of the home buyer.
FPCE said the issues raised in the letter are some of the malpractices prevalent in the sector and are not an exhaustive list.
“We are sad to say that despite being fully functional for the last seven years, RERA has not achieved its desired objective,” Upadhyay said.
Urging the Ministry to protect the interests of consumers in the real estate sector, he said, the share of consumers in the real estate sector is much higher than the share of consumers in any other sector.
The association also sought a meeting with the Consumer Affairs Secretary to explain the issues in a little more detail and with live examples from the sector.
