Mumbai: Model builder-flat buyer agreement will bring in uniformity, say experts

Some experts are of the opinion that the state government should reconsider its plan to repeal MOFA. Representation pic

Property lawyers and Real Estate Regulatory Authority (RERA) practitioners have welcomed the Central government's move to bring about a model builder-flat buyer agreement with mandatory clauses that cannot be altered by states or the Union Territories. According to experts, this will bring much-required uniformity in the real estate sector across the country.

Maharashtra tops states in the implementation of the RERA Act and MahaRERA rules have been adopted by more than 20 states, but unfortunately, it is among the thirteen states that have not submitted their responses to the Supreme Court in this particular case. Experts feel this may be due to the political turmoil in the state, and the delay in the approval of the proposed Development Plan of Mumbai 2034.

Some experts feel that once the Maharashtra Ownership of Flats Act (MOFA) is repealed, flat buyers will not be able to initiate criminal action against errant developers, and therefore the state government should reconsider the repeal of the law.

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Two-part draft model

Ramesh Prabhu, founder chairman of MahaSEWA, said, "The proactive intervention of the Supreme Court in appointing Devashish Bharuka amicus curiae to draft the model agreement is a welcome move." "The apex court's recent rulings speak about the seriousness with which the apex court wants to implement the model agreement. As per RERA, rule-making powers are vested with the state government.

Though the states have prescribed model agreements, the promoters are given the liberty to include their own clauses, which is against the interest of allottees. Though the Centre advised the state governments to make the rules and model agreements as per the provisions of RERA, the latter were not serious about adopting them. Therefore, the apex court has intervened."

Prabhu stated that the amicus curiae appointed by the apex court has drafted the model agreement in two parts. "Part A will have mandatory clauses that cannot be changed by the promoter. These clauses will be provisions of RERA to protect the interest of allottees. Part B contains clauses which the promoter may change considering the local conditions of the states concerned. MahaRERA has recently issued a circular demanding a deviation report of the clauses that are in addition to the model agreement or which are changed compared to it. This has not served the required purpose. Once the allottee likes the project, they sign on the dotted line. The apex court, having understood the helplessness of the allottees, has taken this proactive step. The uniformity and standardization are one of the main purposes of RERA," he said.

Earlier drafts one-sided

Advocate Godfrey Pimenta of Watchdog Foundation said that instead of following the model draft agreement stipulated in Rule 10 of the Maharashtra Ownership Flats Rules, 1964, and Form No. V of the MOFA Rules, builders have their own drafts which are mostly one-sided and favour developers.

Relief to flat buyers

Advocate Vinod Sampat, founder and president of the Flat Users Residents Welfare Association, said, "The new model agreement will protect the overall interest of buyers. In my view, this will be a very good move and the tendency of the state governments to help builders will certainly get minimised."

Housing federation reacts

Advocate Shreeprasad Parab, expert director at State Housing Federation, said, "Before the enactment of RERA, the slogan of caution was ‘Let the buyer beware' and now, it has changed to ‘let the promoter beware'. Thus, the enactment of RERA is for regulation and promotion of the real estate sector and to ensure the sale of a plot, apartment or building, as the case may be, or the sale of a real estate project in an efficient and transparent manner and to protect the interest of consumers at large."