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Govt proposes panel of consumer forum, RERA to address realty issues

Consumer affairs dept also suggests exit clause for buyers in all agreements, valid until the builder obtains occupancy certificate or completion certificate, and offers possession

Home bu­yers have been leaning towards completed inventory and developers with a track record of on-time as well as quality project completion.

Pratigya Yadav New Delhi

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The government on Tuesday proposed to form a committee of members of the national commission, state consumer commissions, real estate regulatory authority (RERA), Insolvency and Bankruptcy Board of India (IBBI) and department of consumer affairs to effectively deal with issues in the real estate sector.

The proposal was brought forward in Mumbai at a round table conference organised by the department of consumer affairs and the Maharashtra government to redress consumer grievances.

During the deliberations, the department proposed a few measures such as the formation of the committee, sending the draft agreement to buyers before execution, and including an exit clause for homebuyers in all agreements, valid until the occupancy certificate (OC) or completion certificate (CC) is obtained and possession is offered by the builders.

The department also suggested that builders clearly mention permissions and sanctions obtained from competent authorities on the first page of the agreement.

It said builders should be barred from launching projects before obtaining necessary permissions and sanctions.

Rohit Kumar Singh, secretary, consumer affairs department, highlighted the staggering number of pending cases in the housing sector at different consumer commissions.

"Out of over 550,000 cases currently awaiting resolution, over 54,000 are related to the housing sector. This backlog of cases highlights the importance of providing speedy justice and streamlining the process for homebuyers," Singh said.

To address these challenges, the secretary suggested implementing a simple, model buyer agreement that could help streamline the home-buying process and protect the consumer.

Singh said this agreement could help reduce disputes between homebuyers and builders and ensure consumers have access to effective, speedy, hassle-free, and inexpensive grievance redressal mechanisms.

In order to enhance transparency and consumer protection, recommendations were also made to improve the builder-buyer agreement, including disclosing additional charges, outlining issue redressal processes, ensuring legal compliance by developers and implementing initiatives to resolve minor issues through phone calls.

During the conference, key problems faced by homebuyers were identified. These included delay in handing over possession of property to homebuyers, no compensation for delays, biased and one-sided builder-buyer agreements, misleading advertisements by developers and influencers and non-adherence to the model builder-buyer agreement proposed by RERA.

During the conference, NCDRC member Binoy Kumar underscored the importance of the builder-buyer agreement as the fundamental document governing transactions in the real estate sector. He suggested that the buyer agreement be made more efficient and in line with Supreme Court orders, which would subsequently reduce the number of cases filed by homebuyers.

Insights were also provided on misleading ads in the real estate sector, emphasising the need for enhanced transparency between buyers and developers to avoid future legal disputes.

The department can also take strong action against unfair and misleading ads by developers and endorsers, it said in a statement.

The department will work with other relevant authorities to effectively implement the proposed measures, monitor their impact on the real estate sector, and make adjustments as needed.

It will also maintain an open dialogue with stakeholders and the public, keeping them informed about the progress in addressing real estate issues at consumer commissions and seeking their feedback for continuous improvement.

A diverse group of stakeholders participated in the conference, such as government officials,  the chairmen of RERA, Delhi and Maharashtra, and officials from MoHUA and IBBI.

Legal experts, industry leaders, and consumer rights activists also participated in the roundtable.

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First Published: Apr 18 2023 | 7:24 PM IST

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