In a move aimed at safeguarding consumer rights, the Forum for People’s Collective Efforts (FPCE) has urged the Ministry of Consumer Affairs to establish stricter guidelines for the real estate sector. The group of homebuyers expressed concerns over widespread unfair trade practices and the inability of the Real Estate (Regulation and Development) Act (RERA) to meet its intended objectives since becoming fully functional.

Call for Urgent Reforms

In a letter addressed to Consumer Affairs Secretary Nidhi Khare, FPCE President Abhay Upadhyay stressed the immediate need for sector-specific guidelines to ensure that developers adhere to consumer protection standards. The FPCE called for a strict prohibition on builders making any changes to ongoing projects once sales have commenced and demanded that no flats be handed over to buyers without all amenities and common areas being fully completed and habitable.

“There is an urgent need to issue guidelines that no flats will be handed over without completing all the facilities and amenities, including common areas, which all should be in a habitable condition,” Upadhyay stated in the letter.

Protection Against Unfair Payment Demands

The FPCE also outlined measures to protect homebuyers from unfair financial demands by developers. According to their proposal, builders should not be allowed to demand more than 80% of the total payment from buyers before the final handover of fully completed properties, including all shared spaces and facilities. The remaining balance should only be requested once the resident welfare associations confirm that the amenities are ready to use.

Furthermore, the FPCE highlighted the need for transparency in agreements between buyers and builders, recommending that consumers receive a draft of the sale agreement at the time of booking. This would ensure that buyers are fully aware of the terms of their purchase. The group also raised concerns over the lack of exit clauses for homebuyers, which currently allows developers to forfeit the entire booking amount in the event of a cancellation.

RERA’s Shortcomings

Despite being in operation for seven years, RERA has faced criticism for its limited success in curbing malpractice in the real estate sector. Upadhyay lamented that the act has “not been able to achieve its desired objectives.” The FPCE’s letter to the ministry emphasized the urgent need for more robust oversight to ensure consumer protection and prevent builders from taking advantage of legal loopholes.

The letter also underscored the sheer volume of complaints filed by consumers in the real estate sector, with over 50,000 cases still pending before consumer forums as of July 2024. These complaints account for approximately 10% of the total grievances received under the Consumer Protection Act, according to government figures presented in the Lok Sabha.

A Plea for Accountability

FPCE’s appeal to the ministry called for a thorough crackdown on what it described as “blatant violations” of the Consumer Protection Act. The association highlighted several key malpractices within the industry, urging the government to take swift action to prevent further harm to homebuyers.

“The real estate developers are continuing with their malpractices which are in blatant violation of the provisions of the Consumer Protect Act 2019,” the letter stated.

As homebuyers across the country wait for action, the FPCE remains firm in its demand for comprehensive reforms to restore fairness and accountability in the real estate sector.