Over the weekend I watched a new series called "No Good Dead" on Netflix. It's a funny story about a couple trying to sell a house with a questionable past. Watching the homeowners in the show fret about lying to their buyers made me wonder about landlords and sellers closer to home. In India, unlike abroad, sellers are under no compulsion to disclose information to a potential buyer or tenant. In fact, many buyers will tell you that getting information from a seller or broker is akin to pulling teeth from a crocodile's mouth. If so, how can a buyer protect his interests and ensure he is not being duped?

In India, the concept of full disclosure is lost on many. When it comes to real estate even more so. What does it mean and why is it so important? Full disclosure in business refers to the expectation that both engaging parties will disclose all relevant information concerning the investment before concluding the deal. In Real Estate, this means a seller should typically disclose all vital information concerning the property to during the listing itself. In developed countries, this is well understood.

For example, in America, sellers are required by law to produce a disclosure form. The details of the form vary from state to state, but the general consensus is that any and all relevant information that might impact the value of the property must be shared. This information can vary from the presence of mould and structural defects to deaths or crimes committed within the property. A realtor and seller are both held legally responsible should it later come to light that they had wilfully hidden information or lied about certain facts. Even in the case of as-is sales, where the seller does not take responsibility for any repairs before the final sale, the property must meet certain state and federal disclosure standards.

In 2016 the central government of India introduced the Real Estate (Regulatory and Development) Act with the aim of regulating and regularising the real estate industry while protecting buyers' interests. According to an official press release, as of March 2023, all states and union territories other than Nagaland have implemented the RERA Act. Having said that, implementation and awareness of the information available continues to be poor.

The RERA Act mandates a builder to disclose all relevant information about a project in a timely fashion. Information to be uploaded includes details about the flat, common amenities, available inventory, and construction status. In addition to this, the name of details of the all official engaged brokers are mentioned, along with the builder's credentials and past experience. The builder is also obligated to display information about any current litigations and encumbrances attached to the project and upload all procured certificates and approvals.

Even with this information available for free, buyers struggle to ascertain the authenticity and legality of a project before making an investment. This could be on account of not being able to understand how to extract relevant information or comprehend the contents of the downloaded documents. In the case of re-sale, which is currently not covered under the RERA Act, the situation is even more dire. It is common to encounter sellers who refuse to share vital information such as copy of the title report or encumbrances beforehand. A broker in India acts more as a middleman than an aide to the buyer or seller, making challenging for a buyer to get correct guidance or be assured of the information provided by the seller.

Full discourse is integral to any investment. Wilfully withholding information is illegal and immoral and should be avoided at all costs. In the case of real estate, a seller must take on the onus of providing all the requisite information truthfully and in good faith. A broker must collect this information beforehand and have it handy for interested buyers. Further, he must up-skill himself to provide proper guidance and accountability for the information provided by the seller. A buyer should be exposed to all potential shortcomings and risks at the very beginning itself.

As buyers, we must become smarter and more vigilant. We must adopt practices from the West that will help us protect our investment. It should become common to demand accountability from the broker and accurate information from the seller. When the demand is overwhelming, the supply will have to follow. As the central and state governments work towards regulating the industry, we too as stakeholders must do our part.