Homebuyers' Body Demands Stricter Regulations to Stop Misleading Real Estate Ads

A national homebuyers' body has approached the Ministry of Consumer Affairs, urging the implementation of stricter regulations to address misleading advertisements in the real estate sector.

Findings reveal that 34% of property advertisements from Maharashtra, analyzed between April and September, were in violation of legal norms, highlighting the urgent need for reform.

Collaborative Efforts in Maharashtra

Earlier this year, the Advertising Standards Council of India (ASCI) partnered with the Maharashtra Real Estate Regulatory Authority (MahaRERA) to address the issue. Despite the collaboration, minimal penalties averaging ₹14,000 to ₹15,000 per violation have proven ineffective in deterring developers from engaging in deceptive practices.

Misleading Ads: A Widespread and Systematic Concern

The homebuyers' association emphasized that deceptive ads are a nationwide issue and often serve as the first step in a process to exploit buyers' life savings. It highlighted that a more comprehensive review of advertisements would likely uncover even higher rates of violations across the country.

Minimal Impact of Current Penalties

ASCI flagged 628 non-compliant ads to MahaRERA, with 59% resulting in either modifications or withdrawals. However, these changes have not translated into meaningful relief for affected buyers. Consumers misled by such ads face significant challenges in withdrawing investments or claiming compensation for misrepresentation.

A Call for Stricter Regulations

The homebuyers' body has called for sector-specific advertising guidelines under the Consumer Protection Act, 2019, with a focus on stricter penalties and consumer restitution. It has also expressed disappointment over the lack of emphasis on protecting homebuyers from misleading practices and ensuring accountability from developers.