The Advertising Standards Council of India investigated 3,031 ads between April and September this year and of this, nearly 2,087 ads were found to be in violation of the law. Many of these misleading and illegal advertisements were from the real estate sector. In April, this year, Haryana Real Estate Regulatory Authority (HRERA), Gurgaon had imposed a penalty of Rs 50 lakh on a city-based real estate promoter as it observed that despite mandatory provisions under Section 11(2) and 13(1) of the Real Estate (Regulation and Development) Act 2016, the promoter did not describe the details in a proper manner in the advertisement, which is a punishable offence under the Section 61 of the Act.
In July, Maharashtra Real Estate Regulatory Authority (MahaRERA) initiated action against developers of 628 real estate projects for not displaying the RERA registration number and QR code in their adver- tisements and imposed a penalty of ?88.90 lakh on them. Last year, UPRERA had imposed a penalty of ?1 lakh each on five real estate developers for promoting and advertising their projects without RERA registra- tion number.
The pan-India home buyers’ organization has called upon the authorities to establish stricter guidelines and harsher penalties for violators developer to deter malpractices in a sector that is already plagued by mistrust. The Forum for People’s Collective Efforts (FPCE) said, “The ASCI has screened the advertise- ments on a very limited set of parameters as advised by MahaRERA. We have absolutely no doubt that if they had screened the advertisements from the point of view of consumers, they would have found 100% of the advertisements misleading.”
MISLEADING ADVERTISING
It is a frequent sight to see sale signboards on shop-fronts announcing ‘50% Off” only to find somewhere in corner written in small print “on selected items” or entering the store only to find out that there are hardly any items on sale.
But real estate is different. It is a high-ticket purchase and all the so-called Gimmicks or Bait and Switch advertising tricks are misleading to say the least and unethical at the most. There are is no denying that the real estate industry is a highly competitive space, with agents, brokers, and property developers constantly seeking new ways to attract buyers.
And in the race to be ahead of others, some of the untruthful facts served to the customer while adver- tising range from overstating size, over amplification of space or location to false claims on amenities and misleading images or photographic representa- tions of the project. What’s more with increasing use of digital tools and influencers, it has become even more easy to misinform the buyers and avoid the law.
If the pan India homebuyer’s association is to be believed, the advertisements reviewed on a very limited set of parameters by ASCI, were to be screened from the point of view of consumers, almost 100% of the advertisements would be flouting the law.
In India, the penalty for misleading real estate advertisements can be up to Rs 50 lakhs. The Central Authority, established by the Consumer Protection Act (CPB) of 2018, has the power to penalize and ban endorsers for one to three years.
However, experts are of the opinion that the penal- ties are too low to deter developers from continuing the practice. For instance, the average penalty for misleading advertisements by Maharashtra RERA is barely Rs 14,000-Rs 15,000 which is unlikely to deter violators.
The Homebuyers’ Protection Council of India (FPCE) has recommended that homebuyers who are deceived by false promotions should be allowed to exit the project with interest refunds.
WHAT THE LAW SAYS
First and foremost, as per RERA, the definition of advertisement in Section 2 (b) is stated as - “Adver- tisement” means any document described or issued as advertisement through any medium and includes any notice, circular or other documents or publicity in any form, informing persons about a real estate project, or offering for sale of a plot, building or apartment or inviting persons to purchase in any manner such plot, building or apartment or to make advances or deposits for such purposes.”
To make sure that the consumer readily gets complete and correct information, promoters must en- sure that in all types of advertisements and promotional materials of a project, the RERA registration number of the project, its unique QR code, RERA portal and details of Project Collection Account No. are mentioned prominently
RERA also gives explanation – ‘For the purposes of this clause, the term “unfair practice means” a practice which, for the purpose of promoting the sale or development of any real estate project adopts any unfair method or unfair or deceptive practice includincluding any statement, whether in writing or by visible representation which — falsely represents that the services are of a particular standard or grade; represents that the promoter has approval or affiliation which such promoter does not have; makes a false or misleading representation concerning the services and the publishing services that are not intended to be offered.”
THE PENALTIES
In India, the penalty for misleading real estate advertisements can be up to Rs 50 lakhs. The Central Authority, established by the Consumer Protection Act (CPB) of 2018, has the power to penalize and ban endorsers for one to three years.
However, experts are of the opinion that the penalties are too low to deter developers from continuing the practice. For instance, the average penalty for misleading advertisements by Maharashtra RERA is barely Rs 14,000-Rs 15,000 which is unlikely to deter violators.
The Homebuyers’ Protection Council of India (FPCE) has recommended that homebuyers who are de- ceived by false promotions should be allowed to exit the project with interest refunds.
ADVERTISING LANDSCAPE IN INDIA
Advertising in India is a dynamic and multidimensional industry that gets further complex with nation’s diverse culture, languages, and economic background Social media platforms, search engine marketing, and influencer collaborations have become popular ways of adverting along with the traditional print ads.
When it comes to advertising laws in India, there are diverse regulatory bodies from Ministry of Information and Broadcasting, Advertising Standards Council of India (ASCI) and Consumer Affairs Department. These entities through certain regulations and legal directives on advertising intend to control the businesses to promote fair practices and ensure their campaigns are legally compliant for protecting consumers, maintaining fair competition, and preserving the integrity of the marketplace.
An advertisement’s claims must not only be accurate and not deceptive but, also be supported by evidence. The Consumer Protection Act, 2019, reinforces laws on false advertising, outlining strict penalties for misleading advertisements. Brands as advertisers must also respect intellectual property rights, avoid- ing the unauthorized use of trademarks, copyrighted material, or other proprietary content in advertisements.
THE REALITY CHECK
A simple look at many of the real estate advertisements, and it is no brainer that most of them are manipulative enough to attract gullible buyers. Digitally enhanced features, incorrect claims of project proximity to major transit points or major landmarks, unsubstantiated claims about the property or location, are just a few of the manipulations evident in the ads.
Now let’s look at the language - “Homes with 10X En- hanced Air Quality”; “Smart Homes”; “Strategic Lo- cation Advantage”; “Excellent Connectivity”; “Most Integrated Lifestyle”; “State-of-the-artamenities”; “Nature-Inspired Homes” are just a few of the unproven, exaggerated terms that are used in project advertise-
ments and brochures.
Other common, hard to define claims include, 80% open & green space, harmonious blend of sustainability and well-being, most competitively priced luxury devel- opments etc., that somehow remain out of the preview of regulations and are being used with impunity.
To top it all, in the age of social media, FB reels and insta stories, fake customers vouching for the property, adds to ultimate misleading of the homebuyers.
In nutshell, the regulatory bodies must declare mis- leading real estate ads, as serious an offence as unfair business practice or prejudicial contract in favor of the developer.
Afterall, a homebuyer pays the money first and waits for the product to be delivered in next 2-3 years or more. A Rs 14,000- 15,000 per day penalty on a wrong ad is not going to seriously dent the realty firms’ pockets. While, the homebuyers have already invested in the project with no recourse to exit, if the advertised claims are
found to be untrue.
No doubt, latest RERA regulations are ensuring that the advertisements are fair and truthful towards the real estate customers. The consumer protection laws too are now including the new mediums and plat- forms from anamorphic billboards to digital and social media platforms aiming to maintain ethical standards.
On their part, the advertising and marketing agencies have a tough task to balance creativity, inno- vation and ethical standard. However, the ultimate responsibility lies with the real estate sector leaders to maintain honesty and integrity in what the adver-
tise and what they deliver to the buyers.
False or misleading advertisements not only deceive consumers but also undermine the credibility of the marketplace. Indian real estate sector has a deep seeded bad reputation
and is trying hard to break the negative image. The overly exaggerated claims are practiced by majority of developers, big or small. Such misleading claims may be hard to prove legally but erode the buyer’s trust which is counter productive to the growth of the sector.
To sum up, by following advertising rules and regulations the real estate firms and other busi- nesses can ensure consumer trust, and positive sentiments towards the brand.
There are mandatory provisions under Sections 11(2) and 13(1) of the Real Estate (Regulation and Development) Act 2016 that the developer has to properly describe the details in the advertisement, and flouting these norms are punishable offence under the Section 61 of the RERA Act.
The Consumer Protection Act, 2019, introduced stringent provisions to protect consumers from unfair trade practices, including false or misleading advertisements. Additionally, Section 24 of the Act empowers the Central Consumer Protection Authority (CCPA) to regulate and monitor advertisements to ensure compliance with the provisions of the Act.
Section 420 of the Indian Penal Code can also be invoked that deals with the offense of cheat- ing and dishonestly inducing delivery of property, which may apply if advertisements deceive consumers into purchasing products or services based on false representations.
DISTURBING FACTS
As per Advertising Standards Council of India around 34% of the advertisements analyzed by it between April and September2024 from Maharashtra’s real estate sector were found to be in “direct violation of the law”.
Around 1,027 ads were reported as mislead- ing to the Maharashtra Real Estate Regu- latory Authority (MahaRERA) under its MoU with MahaRERA.
Greenwashing, too, seems to have emerged as another disturbing trend. As many as 99 of 100 ads reviewed were found to be making misleading green claims.
