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NEW DELHI: To protect homebuyers, often at the receiving end of realtor-friendly purchase agreements, the Supreme Court on Monday stepped in and sought the central government’s response to a bunch 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,” it said.
While entertaining PILs filed by Ashwini Kumar Upadhyay, Tarun Kumar Gera, Jim Thomson and Nagarjuna Reddy, the bench of Justices D Y Chandrachud and B V Nagarathna was quick to sympathise with homebuyers forced to sign an unequal agreement in the process of realising their dream of a roof overhead.
The court said a model builder/agent-buyer agreement was in the spirit of the Real Estate (Regulation and Development) Act (RERA), which would go a long way in protecting the homebuyers against exploitation and harassment at the hands of realtors. Appearing for the petitioners, senior advocates Vikas Singh, Menka Guruswamy, Anupam Lal Das and Arijit Prasad informed the court that under RERA, state governments are mandated to frame uniform/model builder-buyer agreements, but most are yet to complete the exercise even five years after the law came into force.
Singh and Guruswamy said under RERA, the Centre has an overarching responsibility to ensure home buyer interests were protected and hence, it be directed to frame a model agreement, which should incorporate clauses to force builders to compensate investors in case of delay in delivery of possession of flats, ensure protection from getting overcharged under heads like interest and late payment and penalise the builder if there were any deficiency in quality of construction.
Justice Chandrachud recalled a judgment authored by him relating to the West Bengal RERA. The SC had foiled the Trinamool Congress government’s attempt to run a parallel regime on regulating the real estate industry as the SC on May 4 quashed the West Bengal Housing Industry Regulation Act (WB-HIRA), 2017 as unconstitutional for being either a copy or in conflict with central legislation RERA, 2016. A bench of Justices D Y Chandrachud and M R Shah in a 190-page judgment had said, “The state law fits, virtually on all fours, with the footprints of the law enacted by Parliament. This is constitutionally impermissible. What the West Bengal legislature has attempted to achieve is to set up its parallel legislation involving a parallel regime.”
On Monday, Justices Chandrachud and Nagarathna said, “If there was no uniformity in the agreement, the powerful builders will force the buyers to sign a contract containing clauses that would leave the home buyers in an utterly vulnerable position.” The petitioners said that even after five years not a single state has framed ‘model builder-buyer agreement’ to infuse transparency and fair play that would help curb frauds and delays in completing the project by realtors and stop them from indulging in unfair practices.
“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,” it said.
While entertaining PILs filed by Ashwini Kumar Upadhyay, Tarun Kumar Gera, Jim Thomson and Nagarjuna Reddy, the bench of Justices D Y Chandrachud and B V Nagarathna was quick to sympathise with homebuyers forced to sign an unequal agreement in the process of realising their dream of a roof overhead.
The court said a model builder/agent-buyer agreement was in the spirit of the Real Estate (Regulation and Development) Act (RERA), which would go a long way in protecting the homebuyers against exploitation and harassment at the hands of realtors. Appearing for the petitioners, senior advocates Vikas Singh, Menka Guruswamy, Anupam Lal Das and Arijit Prasad informed the court that under RERA, state governments are mandated to frame uniform/model builder-buyer agreements, but most are yet to complete the exercise even five years after the law came into force.
Singh and Guruswamy said under RERA, the Centre has an overarching responsibility to ensure home buyer interests were protected and hence, it be directed to frame a model agreement, which should incorporate clauses to force builders to compensate investors in case of delay in delivery of possession of flats, ensure protection from getting overcharged under heads like interest and late payment and penalise the builder if there were any deficiency in quality of construction.
Justice Chandrachud recalled a judgment authored by him relating to the West Bengal RERA. The SC had foiled the Trinamool Congress government’s attempt to run a parallel regime on regulating the real estate industry as the SC on May 4 quashed the West Bengal Housing Industry Regulation Act (WB-HIRA), 2017 as unconstitutional for being either a copy or in conflict with central legislation RERA, 2016. A bench of Justices D Y Chandrachud and M R Shah in a 190-page judgment had said, “The state law fits, virtually on all fours, with the footprints of the law enacted by Parliament. This is constitutionally impermissible. What the West Bengal legislature has attempted to achieve is to set up its parallel legislation involving a parallel regime.”
On Monday, Justices Chandrachud and Nagarathna said, “If there was no uniformity in the agreement, the powerful builders will force the buyers to sign a contract containing clauses that would leave the home buyers in an utterly vulnerable position.” The petitioners said that even after five years not a single state has framed ‘model builder-buyer agreement’ to infuse transparency and fair play that would help curb frauds and delays in completing the project by realtors and stop them from indulging in unfair practices.
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