FPCE urges government to establish guidelines to curb unfair practices in real estate sector

FPCE urges government to establish guidelines to curb unfair practices in real estate sector

FPCE calls for specific rules under the Consumer Protection Act to safeguard homebuyers from misleading ads, unfair contracts, and delayed projects, highlighting the need for stronger enforcement

The Forum For People's Collective Efforts (FPCE) has urged the Ministry of Consumer Affairs to frame specific guidelines to address widespread malpractices in the Indian real estate sector. In a letter to Consumer Affairs Secretary Nidhi Khare, FPCE President Abhay Upadhyay requested the government issue real estate-specific guidelines under the Consumer Protection Act 2019 to prevent developers from exploiting homebuyers.

Upadhyay noted that real estate complaints make up around 10% of cases filed in consumer forums, with more than 50,000 pending as of July 2024. Given the high-value transactions involved, these complaints represent a significant portion of the unresolved issues.

The association highlighted key malpractices, including misleading advertisements that misrepresent projects, unfulfilled promises of amenities, and indefinite project delays that burden homebuyers. Upadhyay stressed that information provided in advertisements and brochures should be binding, rejecting disclaimers that attempt to exclude such representations from legal obligations.

FPCE also called out unfair contracts that require homebuyers to pay 10% of the total amount upfront without knowing the full terms of the agreement. To address this, the association suggested that homebuyers should receive a draft agreement for sale at the time of booking. Additionally, Upadhyay urged the inclusion of an exit clause allowing homebuyers to cancel bookings within three months and receive a refund within 15 days, or within one month if cancelled later, with interest. Currently, builders often forfeit the entire booking amount without offering any such flexibility.

FPCE also criticized the practice of developers demanding full payment at the time of possession despite incomplete amenities and common areas. The association proposed that no more than 80% of the payment be required until all facilities are ready and handed over to resident welfare associations.

In the letter, Upadhyay expressed disappointment with the implementation of RERA (Real Estate Regulation and Development Act), claiming that the law had failed to fully protect consumers since its enactment seven years ago. The association urged the ministry to take swift action and sought a meeting with the consumer affairs secretary to discuss these issues in greater detail.

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