Govt to set up panel to work on model builder-buyer agreement: Official

The government has decided to set up a committee to work on a model buyer agreement to help streamline the homebuying process and protect consumers from potential abuses, among others, a top government official said on Tuesday.

The committee that will draw members from judges, national and state consumer commissions, various consumer bodies, lawyers as well as from the Ministry of Consumer Affairs, is expected to be in place within the next three months, Consumer Affairs Ministry Secretary Rohit Kumar Singh told reporters here.

The official earlier addressed a round table conference on 'How to Effectively Redress the Grievances Pertaining to Real Estate Sector', in the city, hosted by the Department of Consumer Affairs, in association with the Government of Maharashtra.

The problem (dispute between the home buyers and the developer) could be resolved quite to an extent if the contract between a builder and a buyer is standardised and uniformity is brought about.

It should be a unique document, applicable across the country, then maybe it can solve the problem to some extent, Singh said.

"So we have decided to form a committee and a model agreement document between the buyer and the seller, who is the builder, Singh said.

"We will develop this model agreement, of course, in consultation with all stakeholders (and) then we will submit it to the supreme court and send it to all the states, he said.

He said that the Supreme Court also has a directive that there should be a model agreement for across the country and added that some states already have such a document in place.

According to Singh, over 5.5 lakh cases are pending across various consumer courts in the country, with over 54,000 cases specific to the housing sector alone.

This backlog of cases highlights the importance of providing speedy justice and streamlining the process for homebuyers, according to the ministry.

Delay in delivery of possession of property to homebuyers, no compensation for delay in possession to homebuyers, biased, one-sided, and unfair builder-buyer agreements, amenities not provided to homebuyers as per the agreement and misleading advertisements by developers and influencers for luring homebuyers were identified as the key problems for the homebuyers.

The consumer affairs department also has called a meeting with top 50 influencers in Mumbai on Wednesday to discuss the issue of misleading advertisement, Singh said.

Sending the draft agreement to buyers before execution, clearly mentioning permissions and sanctions obtained from competent authorities on the first page of the agreement and prohibiting builders from launching projects before obtaining all necessary permissions and sanctions, among others, were some of the key suggestions made during the conference, according to the ministry.