‘Scams one af­ter an­other’

HT Estates - - NEWS -

The buoy­ant rise in the real es­tate mar­ket in 15 -20 years is an out­come of our greed and black money and has got noth­ing to do with the hous­ing prob­lem. We have more in­vestors than home­buy­ers to­day. Some of the stan­dard in­dus­try prac­tices have made us be­lieve that there is com­plete law­less- ness with re­gard to reg­u­la­tion of real es­tate. There are scams one af­ter an­other.

The first is the land acquisition scam. This is the stage where builders strengthen their pa­tron­age of politi­cians (mostly with the chief min­is­ters of states). No­ti­fi­ca­tion leads to threat of acquisition. Threat leads to de­vel­op­ers mov­ing in with cash deals and of­fer­ing more than the gov­ern­ment com­pen­sa­tion. Af­ter the de­vel­oper has ac­quired all the land, no­ti­fi­ca­tion is taken back. Then comes the su­per area scam. At the time of launch de­vel­op­ers sell an area which is far in ex­cess of what is sanc­tioned by the au­thor­i­ties.

De­vel­op­ers have de­vised a stan­dard one-sided buyer’s agree­ment that con­tem­plates that they can sell com­mon ar­eas like park­ing area, com­mu­nity cen­ter, schools, shops, EWS and ser­vice per­son­nel apart­ments and also re­tain rights over the en­tire open land and maintenance of the com­plex. They bribe to in­crease the FAR and con­tinue to build more in the open land of com­plexes for decades.

The terms and con­di­tions con­cern­ing grant of li­censes has re­mained just an aca­demic ex­er­cise. De­vel­op­ers should make only 15% profit, main­tain a sep­a­rate ac­count of each project in a sched­uled bank and de­posit 30% of the amount re­ceived from each apart­ment owner within 10 days. They should con­struct schools, com­mu­nity build­ings at its cost and pay for the maintenance of the com­mon ar­eas and fa­cil­i­ties un­til it is handed over to the owners’ as­so­ci­a­tion. De­vel­op­ers fol­low none of th­ese and ex­pect ev­ery pos­si­ble sup­port from the au­thor­i­ties to help them make more money.

As per the law only the dwelling unit (car­pet area + walls) can be reg­is­tered but builders are get­ting su­per area reg­is­tered that al­lows in­vestors/spec­u­la­tors to make huge prof­its out of thin air. Builders reg­is­ter a so­ci­ety with their own em­ploy­ees as the so­ci­ety of owners of the com­plex and il­le­gally file a dec­la­ra­tion with­out con­sent of apart­ment owners.

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