Indian govt eyes model realty contract

Indian government plans to develop a model contract for real estate transactions in order to standardize sale agreements, narrow expectation gaps, and boost transparency, allowing consumers to make informed decisions.

Indian government plans to develop a model contract for real estate transactions in order to standardize sale agreements, narrow expectation gaps, and boost transparency, allowing consumers to make informed decisions, Union consumer affairs secretary Rohit Kumar Singh has said.

In addition to streamlining real estate transactions, the model contract is expected to lessen the burden on Indian consumer courts, where approximately 550,000 cases are pending—many of them linked to the country’s real estate sector.

Singh said: “We have decided to create a model framework of engagement between the seller and the buyer, considering the agreement between the builder and the buyer is not standardized in India."

The move aims to protect consumers who are investing their life’s savings in homes, especially under-construction ones while reducing grey areas in the sale agreement so that fewer disputes end up in consumer courts. This model contract will be a “preventive measure, not curative, and it will make sure that the buyer is not taken for a ride", Singh further said.

The proposed template will include checklists for consumers to compare against developer contracts, ensuring transparency and promoting informed purchases. The consumer affairs ministry also wants homebuyers to examine the sale agreement critically before signing it.

Singh added that market competition could encourage developers to adopt the government’s template, offering additional comfort to buyers. The decision follows a round table discussion in Maharashtra late last month involving central and state officials, Real Estate Regulation and Development Act (Rera) authorities, judges, and real estate developers and activists.