Model builder buyer agreement to protect home buyers soon, Centre to Supreme Court

New Delhi: The Centre has told the Supreme Court that it would develop a model builder buyer for sale containing 'core' clauses in consonance with the mandatory provisions of the Real Estate (Regulation and Development) Act 2016, for the protection of home buyers.

A bench of Justices D.Y. Chandrachud and Hima Kohli noted the suggestion brought on record by Additional Solicitor General Aishwarya Bhati, representing the Centre, and advocate Devashish Bharuka, who is amicus curiae in the matter.

In its order, the apex court noted the ASG and the amicus curiae, have suggested the following road map: "(i) Based upon the responses, the Central Government along with the amicus curiae would prepare a model agreement for sale containing - Part A: 'Core' clauses in consonance with the mandatory provisions of the Real Estate (Regulation and Development) Act 2016, for the protection of the home buyers. These clauses cannot be altered by any State/UT and must necessarily be a part of every agreement for sale."

The bench noted that the model agreement for sale would be submitted for consideration and for its approval. "The states/UTs shall then incorporate in the agreement for sale. Part B: Additional clauses based on individual needs and exigencies of each State/UT as permissible within the scheme of the 2016 Act. However, these clauses must not be contrary to or dilute in any manner the clauses in Part 'A'," it said.

The Centre's response came on a plea filed by advocate Ashwini Upadhyay seeking a direction to protect home buyers from exploitative practices adopted by the real estate developers. The plea sought a direction to the Centre to frame model builder-buyer and agent-buyer agreements to ensure uniformity across the country.

The apex court noted that 11 state governments have not filed their replies in the matter, while 13 states and two Union Territories have filed their responses so far. Responses from Andhra Pradesh, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra, Manipur, Mizoram, Odisha, Uttar Pradesh, and West Bengal are awaited.

"The states which have not filed their responses shall do so positively within a period of four weeks from today, failing which the Principal Secretaries of the State Government in the Ministry of Urban Development/Affairs shall personally remain present before this court on the next date of hearing to explain as to why they should not be proceeded with under the coercive arm of law," said the apex court.

It added that the copy of the present order shall be communicated by the Secretary in the Ministry of Housing and Urban Affairs to their counterparts in the above 11 states which are yet to submit their responses.

The top court has scheduled the matter for further hearing on November 28.