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Updated on: Monday, October 04, 2021, 03:31 PM IST

FPJ Legal: Need for 'model builder agreement' to protect flat buyers, says Supreme Court; issues notice to Centre

An under construction building | Pic for representation

An under construction building | Pic for representation

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New Delhi: The Supreme Court on Monday issued a notice to the Centre to frame a "model builder agreement" and agent-buyer agreement in the real estate sector. The order came after a plea sought direction to infuse transparency and fairness, restraining builders and agents from indulging into unfair and restrictive trade practices.

A bench comprising justices D Y Chandrachud and B V Nagarathna said: "This is an important issue on the protection of buyers". It further added, "often (this issue) is put on back foot by clauses in agreements made by builders".

The bench noted that a uniform builder-buyer agreement is required to be framed by the Centre to protect the interests of lakhs of home buyers. It observed the plea raises the grievance that in the absence of model agreement, flat purchasers are left at the mercy of developers regarding the terms and conditions.

The bench pointed out once the model buyer-builder agreement is framed by the Centre, then it may direct the state governments to follow it. It further emphasized that it is an important issue of consumer protection and often builders get away by putting any clause. "This purpose has to be achieved in the country", it observed.

The Supreme Court was hearing a plea filed by advocate Ashwini Upadhyay, who was represented by senior advocate Vikas Singh. During the hearing, Singh submitted that the Centre should give guidance at least, and emphasized on the importance of a model builder-buyer agreement.

Earlier, the Supreme Court had directed the Centre to come out with proper guidelines within two weeks to blacklist builders, contractors and architects found to have constructed buildings against sanctioned plans.

In a ruling in August 2021, the top court had directed Supertech to refund all amounts to the buyers of the apartments in twin towers within two months with interest with 12 per cent per annum. The top court also directed the builder to pay a cost of Rs 2 crore to the Resident Welfare Association.

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Published on: Monday, October 04, 2021, 03:31 PM IST
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