Unfair practice in RERA: Misleading Real Estate Advertisements

calendar23 Jul, 2020
timeReading Time: 4 Minutes
Real Estate Advertisements

RERA was enacted for the regulation and promotion of the real estate sector. Further, to ensure the sale of plot, apartment, or building, as the case may be, or sale of real estate project, efficiently and transparently, and to protect consumers’ interest in the real estate sector. However, there are some misleading real estate advertisements made by an unfair trade practice regulated by RERA.

The term “unfair practice means” a practice that, promote the sale or development of any real estate project adopts any unfair method or deceptive practice including any of the following practices, namely:-

Unfair Practice under RERA

The Definition of the advertisement reads in Section 2 (b)

The “advertisement” means a “document described or issued as an advertisement by any medium and includes any notice, circular or other documents or publicity in any form, informing persons about the real estate project, or offering for sale of a plot, building or apartment or inviting persons to purchase in any manner such plot, apartment or building or to make advances or deposits for such purposes.”

Read our article:Guide: Duties of Promoter under RERA

Misleading real estate advertisements

The Misleading real estate advertisement has the following Consequences. Those are as follows:-

Revocation of Registration granted under RERA

(1) The Authority can on receipt of a RERA complaint or suo motu in this behalf or on the recommendation of the competent Authority, revoke the registration granted under section 5, after being satisfied that-

  • The promoter makes it default in doing anything required by or under the Act or rules and regulations made thereunder.
  • The promoter violates the terms or conditions of the approval given by a competent authority.
  • The promoter if gets involved in any type of unfair practice or irregularities.
  • The promoter indulges in any of the fraudulent practices.

(2) The RERA registration granted to a promoter under section 5 must not be revoked, unless the Authority has given to the promoter not less than thirty days notice, in writing, stating the grounds on which it is proposed to revoke the registration, and has considered the promoter shows any cause within a period of that notice against the proposed revocation.

(3) The Authority can instead of revoking the registration under sub-section (1) permit it to remain in force subject to further terms and conditions as it thinks fit to impose in the interest of the allottees, and any such terms and conditions so imposed must be binding upon the promoter.

 (4) The Authority, upon revocation of the registration-

  • Must debar the promoter from accessing its website in relation to that project, specify his name in the list of defaulters, display his photograph on its website, and inform the other Real Estate Regulatory Authority in other States and Union territories about such revocation or registration;
  • Must facilitate the remaining development works to be carried out as per the provisions of section 8
  • Must direct the bank holding the project bank account, specified under sub-clause (D) of clause (I) of sub-section (2) of section 4, to freeze the account. Further, necessary actions would be taken, including consequent de-freezing of the said account, towards facilitating the remaining development works as per the provisions of section 8.
  • Can protect the interest of allottees or, in the public interest, issue such directions as it may deem necessary.

Obligations of promoter

  • The real estate advertisements and prospectus issued or published by a promoter must mention the website address of the Authority prominently, wherein all details of the registered project have been entered and include the registration number obtained from the Authority and such other matters incidental to it.
  • Where the person makes an advance or a deposit based on the information contained in the notice, advertisement or prospectus, or based on any model apartment, building or plot, as a case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he must be compensated by a promoter in the manner as provided under the Act.
  • Provided that if any person affected by such incorrect, false statement contained in the notice, real estate advertisements or prospectus, or the model apartment, plot or building, intends to withdraw from the proposed project, he must be returned his entire investment along with interest at such rate as has been prescribed and compensation given in the manner provided under the Act.

Advertising Standards Council of India – ASCI

Another important body is the Advertising Standards Council of India (ASCI), established in 1985[1], a voluntary self-regulatory organization of India’s advertising industry. It is the non-Government body. ASCUS has been adopted as a Code for Self-Regulation in Advertising, which is a Self-Regulatory organization.

It has the commitment to honest Advertising and to fair competition in the market-place. It stands for protecting the legitimate interests of consumers and all concerned with Advertising – Advertisers, Advertising Agencies, Media, and others who help in the creation or placement of advertisements. This was forced before RERA implemented and also operates now.

The purpose of a Code is to control advertisements’ content, not to hamper the sale of products which can be found offensive, for whatever reason, by some people. Provided, that advertisements for such products are not themselves offensive, there will normally be no ground for objection to them in terms of this Code.


The legal system that was once considered as time trapped in terms of relief, and the buyers were left at the lurch of builders, has been sea changed. The new law and interplay with existing frameworks allow buyers to mend the willful disobedient builders and get them to the task. These measures against misleading real estate advertisements have now enshrined new hopes and faith in the real estate sector. CorpBiz will be happy to serve you if you are in middle of any issues of RERA and its registration aspects. We have in-depth and practical experience in dealing with various issues and RERA litigation before different RERA authority.

Read our article:Penalties under RERA on Builders and Agents

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