The apex court said that it would help protect home/flat buyers from being exploited by builders.
“Uniform builder-buyer agreement is require to be framed by Centre to protect interests of lakhs of home buyers,” the Supreme Court said.
“This is an important issue on protection of buyers, often put on back foot by clauses in agreements made by builders,” a bench led by Justice D Y Chandrachud said.
Interestingly, Justice Chandrachud said that once the model buyer-builder agreement is framed by the Centre, the SC would direct the states to follow it.
The court was responding to a public interest litigation (PIL) seeking direction to the Centre to frame model pacts for builders and agent buyers to protect customers and bring in transparency in the realty sector in tune with the RERA Act, 2016.
The PIL by advocate and BJP leader Ashwini Upadhyay has also sought a direction to all states to enforce ‘Model Builder Buyer Agreement’ and ‘Model Agent Buyer Agreement’ and to take steps to avoid “mental, physical and financial injury” to customers.
The housing ministry had earlier come out with a model builder-buyer agreement for housing projects, but none of the state had adopted it. The model agreement was aimed at protecting the buyers and the interest of delayed payment and ala for delayed possession was uniform.
“Promoters, builders and agents use manifestly arbitrary one-sided agreements that do not place customers at an equal platform with them, which offends Articles 14, 15, 21 of the Constitution. There have been many cases of deliberate inordinate delays in handing over possession and customers lodge complaints but the police don’t register FIRs, citing arbitrary clauses of the agreement.
“Builders issue revised delivery schedule again and again and adopt arbitrary unfair restrictive trade practices. All this amounts to criminal conspiracy, fraud, cheating, criminal breach of trust, dishonestly inducing delivery of the property, dishonest misappropriation of property and violation of corporate laws,” said the plea.
Due to deliberate excessive delays in possession, real estate customers are not only suffering from mental and financial injury but also a brazen violation of their right to life and livelihood, stated the PIL filed through advocate Ashwani Kumar Dubey.
It contended that many developers across the country still follow a common practice of pre-launching a project without securing requisite approvals from the authorities and term it “soft launch” or “pre-launch”, thus openly violating the law, but no action has been taken against any builder till date.
“It is necessary to state that registration of the project with the regulatory authority has been mandatory before it is launched for sale and for registration the basic pre-requisite is that the developer must have all the requisite approvals.
“Thus the buyer is protected as the project is ring-fenced from the vagaries of non-approvals or delays in approvals which are one of the major causes of delay for the project,” the plea said.
It has also sought directions to compensate the buyers for losses incurred due to inordinate delays on the part of Promoters-Builders and to recover their money.