RERA: Supreme Court issues notice in plea for Model Builder Buyer Agreements to protect homebuyers

The Supreme Court on Monday issued notice in a petition seeking a direction to the Central government to frame a Model Builder Buyer Agreement to ensure transparency and to protect the interests of homebuyers as per the aims of the Real Estate (Regulation and Development) Act, 2016 [Aswhini Kumar Upadhyay v. Union of India]..The petition also sought framing of a Model Agent Buyer Agreement to ensure accountability towards customers and to avoid dishonest misappropriation of buyers' money by promoters and agents..Notice was issued today by a Bench of Justices DY Chandrachud, Vikram Nath and BV Nagarathna..During the hearing, the Bench queried,"Regarding this plea, under what provision and how will this model agreement be framed?"Senior Advocate Vikas Singh replied,"There is no mandatory language (under RERA). States may or may not frame the model Builder Buyer Agreement (BBA). There should be a model to be adopted by the states." Senior Advocate Menaka Guruswamy pointed out that as per Section 42A of RERA, the Centre is empowered to look into and frame rules on matters of implementation of policy..The Court further noted,"It's an important issue of consumer protection and the builder gets away by putting any clause...West Bengal had enacted an identical law like RERA, but we struck it down as it failed the test of repugnancy."Justice Chandrachud made it clear that the Court would only look into the aspect of a Model BBA, and would not go into the prayer seeking to compensate buyers for inordinate delays on the part of promoters, and to recover the money misappropriated by agents and promoters..The matter will be heard after four weeks..Filed by Advocate Ashwini Kumar Upadhyay, the plea said that the States were required to notify and enforce the RERA, but failed to do so within the due date of May 1, 2017."Even today, not a single State has framed 'Model Builder Buyer Agreement' 'Model Agent Buyer Agreement' to infuse transparency, ensure fair-play, reduce frauds and deliberate delays, restrain Builders Promoters and Agents from indulging into arbitrary unfair and restrictive trade practices and to protect the rights and interests of customers, in spirit of aims and objects of RERA Act 2016 and Articles 14, 15, 21," the petition stated..The plea further stated that wuyers lodge complaints but police doesn't register FIRs, citing arbitrary clauses of the agreement. "Builders issue revised delivery schedule again and again & adopt arbitrary unfair restrictive trade practices. All this amounts to criminal conspiracy, fraud, cheating, criminal breach of trust, dishonestly inducing delivery of property, dishonest misappropriation of property and violation of corporate laws," the petition said..On these grounds among others, Upadhyay sought directions to the Centre to frame a Model Builder Buyer Agreement and a Model Agent Buyer Agreement. Apart from this, he sought a direction to compensate homebuyers for inordinate delays on the part of promoters as well as recovery of money misappropriated by agents and promoters..[Read Order]