NEW DELHI: Consumer affairs ministry on Tuesday suggested that real estate developers and builders should provide the “exit clause” in the builder-buyer agreement, which must be valid till they get the occupation certificate (OC) or completion certificate (CC) and offer possession. Delay in giving possession is the biggest reason for litigation in consumer commissions, which accounts for nearly 45% of the cases filed so far.
The ministry made these suggestions at the first round table conference on effective redressal of grievances pertaining to the real estate sector, which was attended by regulators and other stakeholders. It suggested that the draft agreements should be shared with buyers and these must contain declarations regarding no dues from any authority or banks and all necessary legal sanctions and approvals from competent authorities.
Union consumer affairs secretary Rohit Kumar Singh said the problem begins soon after the builders put misleading advertisements about the location. “The buyers come to know about the reality after 2-3 years,” he said. The ministry said the Central Consumer Protection Authority (CCPA) will crack down on both builders and celebrity endorsers for such misleading advertisements.
Singh said the issues that are plaguing the sector include the capacity of builders and delay in giving possession. “There was a consensus that there should be a standardised builder-buyer agreement and hence a committee will be formed with representatives from national and state consumer commissions, RERA, representatives from consumer affairs ministry, Insolvency and Bankruptcy Board, consumer organisations and builders,” he said. The secretary said they are hopeful of the committee coming up with a “template” for agreement and it would be shared with stakeholders and will be submitted to the Supreme Court.
“It was brought to our notice that there are two authorities under RERA — one for adjudication and another for execution — and people need to approach both. We will take up the issue with the ministry concerned to address it so that buyers get quick relief,” he said.
CCPA chief commissioner and additional consumer affairs secretary Nidhi Khare said there was a suggestion from Maharashtra RERA on the need to check the details of projects and builders before registering them and the builders must give update of their quarterly returns with regard to the projects so that consumers get exact details of the progress and funds.
According to the ministry, Maharashtra has the maximum number of pending cases (6,436) before state commissions, followed by Delhi (2,912) and West Bengal (1,860).
In an official release, the ministry said the regulatory measures proposed for the real estate sector included correct project registration and disclosure of project irregularities to consumers.
The ministry made these suggestions at the first round table conference on effective redressal of grievances pertaining to the real estate sector, which was attended by regulators and other stakeholders. It suggested that the draft agreements should be shared with buyers and these must contain declarations regarding no dues from any authority or banks and all necessary legal sanctions and approvals from competent authorities.
Union consumer affairs secretary Rohit Kumar Singh said the problem begins soon after the builders put misleading advertisements about the location. “The buyers come to know about the reality after 2-3 years,” he said. The ministry said the Central Consumer Protection Authority (CCPA) will crack down on both builders and celebrity endorsers for such misleading advertisements.
Singh said the issues that are plaguing the sector include the capacity of builders and delay in giving possession. “There was a consensus that there should be a standardised builder-buyer agreement and hence a committee will be formed with representatives from national and state consumer commissions, RERA, representatives from consumer affairs ministry, Insolvency and Bankruptcy Board, consumer organisations and builders,” he said. The secretary said they are hopeful of the committee coming up with a “template” for agreement and it would be shared with stakeholders and will be submitted to the Supreme Court.
“It was brought to our notice that there are two authorities under RERA — one for adjudication and another for execution — and people need to approach both. We will take up the issue with the ministry concerned to address it so that buyers get quick relief,” he said.
CCPA chief commissioner and additional consumer affairs secretary Nidhi Khare said there was a suggestion from Maharashtra RERA on the need to check the details of projects and builders before registering them and the builders must give update of their quarterly returns with regard to the projects so that consumers get exact details of the progress and funds.
According to the ministry, Maharashtra has the maximum number of pending cases (6,436) before state commissions, followed by Delhi (2,912) and West Bengal (1,860).
In an official release, the ministry said the regulatory measures proposed for the real estate sector included correct project registration and disclosure of project irregularities to consumers.