The Forum for People's Collective Efforts (FPCE) has appealed to the Consumer Affairs Ministry for the implementation of specific guidelines to combat unfair practices in the Indian real estate sector and safeguard consumer rights. FPCE President Abhay Upadhyay highlighted the ongoing issues such as misleading advertisements and one-sided contracts that breach the Consumer Protection Act of 2019. He urged that homebuyers receive draft agreements at the time of booking and suggested the inclusion of an exit clause for cancellations. The FPCE noted that current regulations are inadequate, as RERA has failed to fulfil its intended goals, and they requested a meeting with the consumer affairs secretary for further clarification.
The Forum for People's Collective Efforts (FPCE) has called on the consumer affairs ministry to issue guidelines addressing unfair trade practices in the Indian real estate sector. FPCE President Abhay Upadhyay wrote to Consumer Affairs Secretary Nidhi Khare, urging for sector-specific regulations under the Consumer Protection Act of 2019 to protect homebuyers from deceptive practices by developers.
Speaking to reporters at PTI, Upadhyay highlighted the prevalence of malpractices in the real estate industry, noting that approximately 10 percent of complaints to consumer forums come from this sector. As of July 31, 2024, over 50,000 real estate complaints were pending in consumer forums. Given the high monetary value of real estate transactions, the financial impact is likely greater than 10 percent.
The FPCE emphasised that misleading advertising remains a major issue, with developers often promoting projects through attractive but inaccurate visual representations. Many buyers are promised amenities and facilities that are not delivered when they take possession of their properties. Additionally, project completion deadlines are frequently extended indefinitely, further disadvantaging homebuyers.
The association argued that the information presented in brochures and on developers' websites should be treated as advertisements and disclaimers that downplay the significance of this information should be disregarded. It also raised concerns about unfair contracts, where homebuyers are required to pay 10 percent of the total cost based solely on advertisements, without being fully aware of the contractual terms. FPCE suggested that buyers should receive a copy of the draft sale agreement at the time of booking to better understand the purchase terms.
Upadhyay also called for the inclusion of an exit clause in contracts, allowing buyers to cancel their bookings with a full refund if done within three months. If cancelled later, the builder should refund the amount with interest. He further criticized the one-sided terms in sale agreements, which he described as unreasonable and illegal under the Consumer Protection Act of 2019.
FPCE urged the ministry to create guidelines that would prevent builders from demanding more than 80 percent of the total consideration at handover unless all common areas and amenities are completed. The association also stressed that homebuyers should not be charged for any increase in the flat's area beyond what was agreed.
In light of the ongoing challenges faced by homebuyers in the real estate sector, the FPCE's call for specific guidelines reflects a pressing need for regulatory reforms. The issues highlighted by Upadhyay reveal a landscape rife with malpractices that compromise consumer trust and financial security. By advocating for clearer contracts, fair payment structures, and consumer protection measures, the FPCE aims to create a more equitable environment for homebuyers. Addressing these concerns through comprehensive guidelines could significantly enhance the integrity of the real estate market, ultimately ensuring that consumer rights are upheld and protected in this vital sector.
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