Homebuyers' group seeks govt action on misleading real estate ads

The Forum for People’s Collective Efforts, a national homebuyers’ advocacy group, has urged the Ministry of Consumer Affairs to tackle misleading advertisements in the real estate sector. The group has emphasised the need for specific guidelines to safeguard homebuyers and has proposed stricter penalties for developers found guilty of violations, as reported by Economic Times.

The Forum for People’s Collective Efforts (FPCE) has raised concerns over misleading real estate advertisements, citing a recent report from the Advertising Standards Council of India (ASCI). The report found that 34% of real estate ads in Maharashtra, analysed between April and September, violated advertising norms. FPCE emphasised that while the data is specific to Maharashtra, similar issues persist nationwide, warranting immediate action under the Consumer Protection Act, 2019. According to FPCE, deceptive ads often serve as the first step in exploiting homebuyers and misusing their life savings.

The FPCE has criticised the penalties imposed by the Maharashtra Real Estate Regulatory Authority (MahaRERA) on developers flagged for non-compliant advertisements. According to FPCE, the ASCI identified 628 misleading real estate ads, but the average penalty imposed on developers was just Rs 14,000–15,000. FPCE contends that these minimal fines fail to act as a deterrent, allowing developers to continue engaging in such practices without significant consequences.

The group has called on the Ministry of Consumer Affairs to introduce stringent, sector-specific regulations to address misleading real estate advertisements. The group’s recommendations include allowing homebuyers deceived by false promotions to exit projects with interest refunds, enforcing significant compensation for misrepresentation, and broadening advertisement review standards to identify deceptive practices from a consumer perspective.

The FPCE has raised concerns over the lack of consumer restitution mechanisms, emphasising that buyers misled by real estate advertisements currently have no recourse to recover their investments or seek compensation. While acknowledging progress through ASCI’s partnership with MahaRERA earlier this year, the organisation has urged for a nationwide approach to strengthen consumer protection, hold developers accountable, and safeguard homebuyers’ interests in the real estate sector.