Developers exploit weak penalties, misleading flat buyers with false claims
MahaRERA criticised for lax action against false advertising.. Representational pic/iStock
The Forum for People’s Collective Efforts (FPCE), a consumer rights body, has raised serious concerns about misleading real estate advertisements in Maharashtra.
In a letter to the Secretary of Consumer Affairs, Union Government, the forum criticised MahaRERA’s inaction against errant developers who deceive flat buyers through false advertising.
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The forum relied on the Advertising Standards Council of India (ASCI)’s half-yearly report (April–September 2024) to highlight the issue. Of 2115 real estate ads screened in Maharashtra, 1027 were found misleading and in violation of the RERA Act. MahaRERA signed an MoU with ASCI in February 2024 to monitor misleading ads and protect flat buyers, but its lack of substantial penalties has raised concerns.
ASCI’s report stated, “From 2115 real estate ads screened, 1027 were flagged for potential violations of MahaRERA regulations. While 59 per cent of advertisers complied by modifying or withdrawing ads, 628 developers were penalised, with fines totalling Rs 88.90 lakh.”
‘Reprimand errant builders’
Advocate Anil Dsouza, hon. secretary, MahaRERA Bar Association
Despite clear guidelines, promoters continue to flout rules on advertising and marketing, leading to confusion and misrepresentation.
Advocate Anil Dsouza, hon. secretary of the MahaRERA Bar Association, said, “ASCI and MahaRERA are doing their best, but stricter penalties are needed for misleading advertisements.” The first suo-motu case by MahaRERA involved an unregistered agent from Chembur advertising unregistered projects.
“Honest advertisements reduce litigation and foster trust between promoters and buyers. MahaRERA and ASCI must be more vigilant to ensure clean practices,” said Dsouza.
He also called for tougher interactions with CREDAI-MCHI, NAREDCO, and industry SROs to ensure compliance and establish stricter regulations, stressing, “Honest advertisements are not optional but an obligation.”
‘Meagre fines exploited’
Abhay Upadhyay, president, FPCE
Abhay Upadhyay, president (FPCE), said, “ASCI has reviewed advertisements based only on MahaRERA’s limited instructions. However, from a consumer’s perspective, these ads often mislead. Images rarely match the actual project, QR codes often fail to provide accurate details of facilities and amenities, and there’s typically a disclaimer allowing management to change project details, violating RERA rules that prohibit such changes after sales begin.
“Builders exploit this situation as penalties are negligible,” said Upadhyay. “With a fine of R15,000-20,000 on average (MahaRERA collected R88.90 lakh from 628 developers, averaging R14,156 per project), they trap hundreds of buyers with misleading ads. Homebuyers suffer, while MahaRERA indirectly supports this by imposing token penalties.” Upadhyay confirmed he received no response to his concerns.
1027
Total no. of ads found to be misleading
‘Making a mockery’
Ramesh Prabhu, founder chairman, MahaSEWA
Ramesh Prabhu, founder chairman of Maharashtra Societies Welfare Association (MahaSEWA) said, “Once ASCI, being a regulator, refers a particular real estate advertisement with discrepancies to MahaRERA, it becomes MahaRERA’s responsibility to issue show-cause notices to such promoters under Section 12 of the Real Estate (Regulation and Development) Act, 2016. MahaRERA should initiate legal proceedings against promoters engaging in unfair trade practices and consider cancelling project registrations instead of merely imposing negligible fines of R14,000 to R15,000, which makes a mockery of customer protection.” He further suggested MahaRERA should publish details of such misleading advertisements on its official website to help flat buyers make informed decisions.
Highlights of ASCI Report (Apr-Sept 2024)
4016 complaints addressed
3031 ads reviewed
for potential code violations
98% required modifications
53% withdrawn/modified without contest
90% cases flagged via proactive monitoring
18 days average case resolution time
2087 digital media ads violated laws
1027 breached MahaRERA Act
890 promoted illegal betting/gambling
156 violated Drugs & Magic Remedies Act
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