Forum for People’s Collective Efforts (FPCE) Calls for Stricter Regulations on Real Estate Advertising

The Forum for People’s Collective Efforts (FPCE), a national advocacy group representing homebuyers, has urged the Ministry of Consumer Affairs to address the issue of misleading advertisements in the real estate sector. The group has emphasized the need for stricter guidelines and stronger penalties to protect homebuyers and deter non-compliant practices by developers.

FPCE has highlighted concerns about deceptive advertisements, citing findings from a recent report by the Advertising Standards Council of India (ASCI). According to the report, 34% of real estate advertisements in Maharashtra between April and September violated advertising norms. FPCE believes this issue is not limited to Maharashtra but is prevalent across the country. The group asserts that such advertisements often serve as a gateway for developers to exploit homebuyers, many of whom invest their life savings in real estate projects.

The Consumer Protection Act, 2019, provides a framework for addressing such grievances, but FPCE argues that existing measures are insufficient. The group has pointed out that deceptive advertising practices undermine trust and transparency in the real estate market, leaving buyers vulnerable.

The FPCE has criticized the penalties imposed by the Maharashtra Real Estate Regulatory Authority (MahaRERA) on developers found guilty of advertising violations. The ASCI report identified 628 misleading real estate advertisements in Maharashtra, but the average fine imposed on developers ranged between Rs 14,000 and Rs 15,000. According to FPCE, these minimal penalties fail to act as a deterrent, allowing developers to continue violating advertising norms with little consequence.

FPCE has called for more substantial penalties to ensure accountability. The group contends that higher fines would discourage developers from engaging in misleading practices and encourage compliance with advertising standards.

The FPCE has proposed several measures to address the issue of misleading advertisements in the real estate sector. These include:

• Exit Options for Homebuyers: Allowing homebuyers deceived by false advertisements to exit projects and receive refunds with interest.
• Compensation for Misrepresentation: Enforcing significant compensation for buyers who suffer due to misleading claims.
• Enhanced Advertisement Review Standards: Expanding the scope of advertising review mechanisms to identify and address deceptive practices from a consumer perspective.

The group has also emphasized the need for sector-specific regulations to ensure uniformity in advertising standards across states. FPCE believes that such measures would strengthen consumer protection and restore confidence in the real estate market.

While acknowledging recent progress, such as the partnership between ASCI and MahaRERA, FPCE has stressed the need for a nationwide approach to address misleading advertisements. The group has highlighted the lack of effective consumer restitution mechanisms, noting that buyers currently have limited options to recover their investments or seek compensation for false promotions.

FPCE’s recommendations aim to create a robust framework that holds developers accountable for their advertising practices. The group has urged the Ministry of Consumer Affairs to prioritize the issue and implement regulations that protect homebuyers and promote transparency in the real estate sector.

By addressing these concerns, FPCE hopes to ensure that homebuyers are safeguarded against deceptive practices, enabling them to make informed decisions and secure their investments in a fair and transparent real estate market