UP RERA has come out with firm advisory urging prospective purchasers of residential properties to refrain from succumbing to such deceptive practices as assured return schemes and fixed rental income before occupation. It was emphasized that these schemes, which are commonly employed as marketing gimmicks by real estate companies, have no legal standing unless they are incorporated within the provisions of agreements duly approved by RERA.
In recent instances, the body has highlighted that certain promoters still try to entice consumers with highly alluring yet fraudulent schemes such as subvention schemes, pre-EMI payment schemes until possession, buy-back options, lease assurances, and investment schemes offering fixed returns. In order to add to their allure, promoters may offer additional incentives in the form of gold coins, vehicles, or even free overseas tours.
“No Legal Sanctity Without Proper Agreement”
It was observed by UP RERA that such projects give a perception of financial security among the consumers. The guarantee of certain returns gives an impression that it is safe to invest, however, there is nothing legally binding on the developers to do so.
As the authority stated, “Offers like ‘assured returns’ or ‘fixed rental income till completion’ do not have legal sanctity unless explicitly provided for within RERA compliant agreements and approved formats,” as per HT. This means that unless such clauses are clearly written into the official contract, buyers have little legal recourse if the developer fails to deliver.
Strict Measures Against Deceptive Advertisements
As per the Real Estate (Regulation and Development) Act of 2016, the regulator stated that any misleading advertisement or promises amount to a legal violation. UP RERA noted that it had all the powers to act strictly on developers indulging in any form of deceitful marketing.
According to the authority, “Strict action can be taken against promoters who issue deceptive advertisements or make promises that are not part of the legally approved agreement.” Such actions may include penalties, fines, or other punitive measures depending on the severity of the violation.
Key Advice for Homebuyers
UP RERA has requested house buyers to be careful while investing in any property. It listed some important tips that could be considered to protect themselves from fraudulent developers. These include:
Confirm if the property is registered under UP RERA
- Find information regarding the property including its location, approvals, and deadlines on the official website
- Study the agreement between buyers and builders thoroughly
- It should be easy to understand and must be prepared according to the guidelines
- Transfer money using banking procedures to the accounts of the projects
The organization also warned the buyers not to fall for promises made verbally by the developers or brokers. Promotional material can offer a lot of information about the project’s features. However, they do not provide any legal safeguards.
Do Not Book Properties Based on Advertisements
One more important caution provided by UP RERA is that property bookings should not be made just based on advertisements or marketing activities. The aim of such advertisements might be to draw the buyer’s attention; however, these do not necessarily depict the status of the project from the point of view of its legality and finances.
In particular, buyers were warned not to pay money for anything, believe verbal agreements, invest in unregistered projects, and consider schemes offering guaranteed returns or gifts as these may result in losses.
“Stay Alert to Safeguard Investments”
Reinforcing the advisory, UP RERA chairman Sanjay Bhoosreddy said, “Homebuyers should remain cautious of promotional offers like assured returns or fixed rental income, as these are often not legally enforceable under RERA. Buyers must rely only on verified information available on the UPRERA portal and ensure that all transactions and agreements comply with prescribed norms.”
He further emphasized that the authority is actively monitoring the sector and will take strict action against any promoter found violating the provisions of the Act.
As competition in the real estate business increases, the use of creative marketing strategies by developers is becoming more common. Nevertheless, the advisories issued by UP RERA remind us that not all offers are always as safe as they seem.
To be sure, homebuyers should stick to facts. Promising offers could mean higher profits; however, if they are not backed up legally, they could spell trouble for buyers in the long run.
Image source- moneycontrol.com
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