Free­bies are not im­pres­sive

Peo­ple ex­pect timely de­liv­ery, qual­ity con­struc­tion and a bal­anced builder-buyer agree­ment

HT Estates - - Front Page - Jee­van Prakash Sharma

Dussehra is here and tak­ing ad­van­tage of the fes­tive fer­vor, many builders have lined up free­bies such as LCD TV sets, Jew­ellery, cars, home ap­pli­ances etc to go with the sale of their apart­ments, hop­ing to lure peo­ple to in­vest. In the last cou­ple of years, how­ever, this mar­ket­ing gim­mick has ap­par­ently failed to im­press peo­ple.

To­day, al­most ev­ery real es­tate con­sumer - be it an end-user or an in­vestor - is of the view that the In­dian real es­tate com­pa­nies have failed to live up to their ex­pec­ta­tions. Buy­ers be­lieve that an LCD or tele­vi­sion can’t mo­ti­vate them to put in their hard-earned money into a project that’s not good enough.

They ex­pect timely de­liv­ery, qual­ity con­struc­tion, con­sumer-friendly ap­proach, clear ti­tle of the land and a bal­anced builder-buyer agree­ment so that they don’t feel vic­timised at the end of the day.

“To­day, the most com­mon com­plaint against any de­vel­oper is the de­lay in de­liv­ery of pos­ses­sion of flats. Many top real es­tate com­pa­nies of the coun­try have failed to live up to their com­mit­ments. A few who have de­liv­ered on time have com­pro­mised on qual­ity,” says Nitin Sax­ena, a con­sumer ac­tivist.

Vivek Singh, a se­nior con­sul­tant in a rep­utable In­dian com­pany who in­vests in real es­tate projects fre­quently, says that when a de­vel­oper launches a project, he usu­ally prom­ises that pos­ses­sion will be handed over in 36 months. “He takes the book­ing amount, which usu­ally ranges from R1 lakh to R15 lakh, de­pend­ing on the cost of the flat and then sits over it for al­most six months. His com­mit­ment to de­liver you a dream home in 36 months starts from the day you sign a builder-buyer agree­ment with him,” says Singh.

The de­vel­oper takes 90% of the money within one-and-ahalf to two years of singing the said agree­ment. It’s the most painful pe­riod for most buy­ers as they end up pay­ing for both EMIs as well as rent as their apart­ments are not com­plete. The de­vel­oper usu­ally never keeps his prom­ise to de­liver in three years and some­times even for five or six years.”

Amrit Kapoor, a Del­hibased busi­ness­man who bought an apart­ment worth R60 lakh in a pres­ti­gious project along the Noida Ex­press­way in 2007, says the de­vel­oper promised to de­liver the flat to him in 36 months but there’s been no sign of an apart­ment in five years.

“Buy­ers have no is­sues if a de­vel­oper says that he will de­liver the flat in five or six years and then take pay­ments ac­cord­ingly. But why do you com­mit to some­thing you can­not de­liver,” says Kapoor.

Lop­sided builder-buyer agree­ments are one of the big­gest prob­lems in the real es­tate in­dus­try. If a con­sumer de­lays EMIs he has to pay a fine at 18% rate of in­ter­est but if the de­vel­oper de­lays in giv­ing pos­ses­sion, he just gets away by pay­ing a penalty.

Ritu Shah, a Delhi-based fash­ion de­signer who has in­vested in a well-known town­ship in Noida, says that her builder-buyer agree­ment has a penalty clause say­ing that the de­vel­oper will have to pay penalty at the rate of R5 per square feet ev­ery month in case de­liv­ery is de­layed. “I have al­ready paid R24 lakh for an 850 sq ft flat, the to­tal cost of which is R30 lakh. The de­vel­oper is sup­posed to hand over pos­ses­sion by the end of De­cem­ber 2012 but there is no sign of the flat get­ting com­pleted on time. Con­sid­er­ing the builder’s ear­lier track record, I may not get pos­ses­sion for an­other two to three years. So af­ter De­cem­ber, the de­vel­oper will pay me R4020 ev­ery month for the de­lay while my EMI is R19,000,” says Shah.

In many cases even the han­dover of flats doesn’t mean the end of prob­lem. A whole lot of prob­lems con­front you once you move in. Satish Ku­mar, a busi­ness­man who lives in a multi-storeyed apart­ment in Ghaziabad, says “many de­vel­op­ers don’t take com­ple­tion cer­tifi­cates from the con­cerned au­thor­i­ties and buy­ers have to face huge prob­lems later.”

As per the build­ing by­laws, it’s manda­tory for ev­ery de­vel­oper to get a no-ob­jec­tion cer­tifi­cate from var­i­ous de­part­ments such as fire of­fi­cer and mu­nic­i­pal bod­ies etc.

“The le­gal po­si­tion is that a de­vel­oper can’t of­fer pos­ses­sion un­til he gets a com­ple­tion cer­tifi­cate for the project. Un­for­tu­nately, there have been hun­dreds of group hous­ing apart­ments in Delhi, Ghaziabad, Noida and Gur­gaon where pos­ses­sion has been given and peo­ple have moved in, but the com­ple­tion cer­tifi­cate for the build­ings have not been re­ceived,” says Sax­ena. Apart­ment own­ers in many cases can­not reg­is­ter the prop­er­ties in their name un­til a com­ple­tion cer­tifi­cate has been re­ceived.

“How can we sell the flat? Even if some­one wants to do it through gen­eral power of at­tor­ney, he/she will have to sell much be­low the on­go­ing mar­ket price be­cause the flat will be treated as unau­tho­rised or dis­puted,” says Pradeep Ku­mar, a Delhi High Court lawyer.

It’s nec­es­sary that buy­ers ask for com­ple­tion cer­tifi­cated be­cause this guar­an­tees the safety of the build­ings they have their apart­ments in. Cases of el­e­va­tors crash­ing and com­plaints of de­fec­tive fire-fight­ing equip­ment mean safety mea­sures have not been put in place.

When asked what res­i­dents would like their builders to give them dur­ing this fes­tive sea­son, Sachin Gupta, res­i­dent of a pre­mium res­i­den­tial lo­ca­tion on the Golf Course Road Ex­ten­sion in Gur­gaon, says the res­i­dents have many un­re­solved is­sues both­er­ing them and they want those sorted out.

IMAGESBAZAAR

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