National-level builder-buyer agreements for realty to be a reality soon

In a hint that uniform national-level builder-buyer agreements in India may be made public soon, the Centre on Monday said that it has submitted a model of it to the Supreme Court for its approval.

In a hearing in the apex court, a bench presided over by Chief Justice of India DY Chandrachud said that the buyers are being "defrauded" by the builders and that there has to be some "uniformity" in these agreements.

To this, the Centre said that it has developed a model agreement with the Confederation of Real Estate Developers' Associations of India (Credai) and various state governments and has submitted it for approval.

 

Santosh Kumar, vice chairman of Anarock Group, said that while RERA in respective states has been actively resolving consumer grievances, buyers often struggle to get their homes as promised in terms of amenities, features, open spaces, etc., on time.

"Uniformity in the builder-buyer agreement will help remove ambiguity and confusion across projects and states," he said.

Another industry expert, who did not wish to be named, said that this becomes more important given the rising cases of late and non-delivery by the builders.

"Every now and then we keep hearing such cases. It is really high in Gurugram and Noida," he said.

Currently, different state RERA authorities use rules from the act to make such agreements. But the implementation changes from state to state. There is no such national-level model agreement that can be followed.

In 2022, the Centre had told the Supreme Court that it would develop such a uniform agreement incorporating the "core" clauses in accordance with the mandatory provisions of the Real Estate (Regulation and Development) Act 2016, for the protection of home buyers.

The court had then said that states and union territories must "necessarily" be a part of every agreement.

This was announced in the hearing of a public interest litigation (PIL) filed by advocate Ashwini Upadhyay in 2020, seeking a direction to protect home buyers from "exploitative practices" adopted by the real estate developers. He said several promises related to amenities, made by the builders at the time of the booking, are also not delivered later.

The plea sought a direction to the Centre to frame model builder-buyer and agent-buyer agreements to ensure uniformity across the country.

After that, the apex court issued notices to the Centre, states, and union territories, along with the Law Commission, to work on it. Sections 41 and 42 of RERA mandate the central advisory council to recommend the framing of standard agreements to prevent the exploitation of buyers.