The Supreme Court of India ordered the union government to frame pan India model builder-buyer agreement.

The Supreme Court on Monday issued a notice to the Centre, asking it to frame model agreements for the builder-buyer and the agent-buyer deals to bring in more transparency in the real estate sector. The model agreements must conform with the Real Estate (Regulation and Development) Act, 2016 to ensure protection for consumers, the apex court said. Homebuyers mostly complain that the promises made by builders during buying a home are not being fulfilled. In most of the cases homebuyers stay quiet as they sign the agreement document without studying it or even if they study it, the terms used in the agreement are difficult to understand. A uniform builder-buyer agreement is required to be framed by the Centre to protect the interests of lakhs of homebuyers, a Supreme Court bench led by Justice DY Chandrachud said. Senior advocate Vikas Singh, appearing for petitioner advocate Ashwini Upadhyay, said there should be a model agreement prepared by the Centre as some states have it and some don’t, and there is no uniformity in those agreements.

Singh said that in states which have model agreements, builders try to influence the conditions to be incorporated, and hence, the Centre should frame it and directions be issued to all the states and Union Territories to implement the model agreement. Senior advocate Maneka Guruswamy, appearing for a group of home buyers, said that they are also seeking the implementation of the model agreement to safeguard the interest of consumers. The bench said that it is an interesting matter as it has earlier dealt with Real Estate Regulations Act and knows its importance. This is a very welcome step by the Supreme Court. As making the builder-buyer agreement rules is entrusted to states, there have been several instances of inconsistencies in the rules by different states vis-a-vis the real estate law. A uniform rule will bring more relief to homebuyers,” said Abhay Upadhyay of Forum for People's Collective Efforts (FPCE), a group that campaigned for the enactment of RERA.

The court sought a reply from the Union government in the matter. The petitioners submitted that a model agreement was required to ensure transparency, and fairness and to restrain builders and agents from indulging in unfair and restrictive trade practices. Passing the order, the bench said the plea raised the grievance that in the absence of model agreement, flat purchasers are left at the mercy of developers, regarding the terms and conditions.   As a result, India's top court has taken cognizance of this and has emphasized making a uniform builder home buyer agreement in the country. The Supreme Court has also asked the Central Government on its applicability in 4 weeks.