Home buyers’ agitation hits Noida
With their life savings stuck in unfinished flats, buyers are desperately taking to new forms of protest to draw the govt’s attention to their woes, writes Shakya Mitra
Last week, some 150 people who had bought homes in Sector 107 in Noida got together and planted trees, organised cricket matches and sent out messages on the social media. It had all the trappings of a picnic but actually was a protest: the men, women and children were demonstrating against the long delay in the delivery of the flats they had bought here
In January, these flat buyers had protested in front of the Noida Authority’s office. They had organised a street play and left toy houses at the gates as a mark of protest. The protests may have been Gandhian but their charges were serious.
They were agitating because the future of the 5,000 or so flats coming up in the sector was in limbo. During 2010-11, builders had launched a slew of residential projects here. The farmers, whose land had been acquired by the Noida Authority, challenged the acquisition, first in the Allahabad High Court and then in the Supreme Court.
In August 2013, the Supreme Court cancelled the land acquisition. The builders put up a review petition and the construction continued unabated. The Supreme Court referred their petition to the Allahabad High Court which ordered status quo in June 2014.
Since then, the hapless buyers have seen their life’s savings stuck in these projects: Sunworld Vanalika, Amrapali Heartbeat City, Sharanam Great Value and 3C’s Lotus 300.
The social media is abuzz with their angst and grievances. “More than 4,000 crores of public money is at stake. The fraud is clearly on the part of Noida Authority which has fraudulently auctioned disputed land to builders and given permission to sell flats,” says one Facebook post addressed to the president of India.
Adds Puneet Parashar, the general secretary of the Sector 107 Home Buyers Group: “Buyers were expected to get possession by 2013-14, having put in 70-95 per cent of the money.” According to him, the group had sent a petition to Akhilesh Yadav, the chief minister of Uttar Pradesh in the early weeks of May, while some of the group’s members have met him as well. Parashar claims that Yadav has assured them full support.
An email sent to the Noida Authority did not elicit any response. Vidur Bharadwaj, director of 3C, says: “We were not aware of the Supreme Court notification regarding the land being quashed. The moment we were told to stop construction we stopped it.” Anil Sharma of Amrapali could not be reached on his mobile phone.
From boom to bust
The biggest protest group is the Noida Extension Flat Owners’ Welfare Association that caters to Greater Noida. The group, which started in 2012, now has more than 10,000 members
Noida and Greater Noida were boom towns till a few years ago. The Uttar Pradesh government, after the 2008 slowdown, opened the floodgates for real estate development by stipulating that builders need to pay only 10 per cent of the land cost upfront — the rest could come in installments over seven years.
With entry barriers thus lowered, builders fell over each other to launch housing projects. By a conservative estimate, over 100,000 flats were initiated. So long as there were buyers, the cash flows of the builders were strong, which helped them launch more and more projects.
Soon, as was only to be expected, the supply had galloped ahead of the demand and there was a glut in the market. As the economic slowdown intensified, interest rates climbed and the government began to crack down on black money in real estate, fresh sales stopped. That disrupted the cash flows of the builders who had spread themselves thin over several investments. Now, they had no money to complete the projects. The home buyers landed in a soup.
With no succour from any quarter, as the sector remained unregulated, buyers were left with no option but to agitate. These men and women are active on social media, have got organised and, in some cases, have even dragged the builder to the courts.
They have already notched up some victories, the most notable of which came in 2014 when the Allahabad High Court ordered the demolition of two residential high-rises in Supertech Emerald Court in Noida.
The Residents’ Welfare Association of Emerald Court had filed a petition in the court that the builder had raised the towers from 24 floors to 40 floors “without maintaining the mandatory distance of 16 metres from the adjoining block”, which had made it unsafe and also blocked air and light.
Supertech, the builder, however, said that all relevant permissions from the Noida Authority were taken and challenged the verdict in a higher court. The Allahabad High Court’s decision was upheld by the Supreme Court.
“We went ahead with the construction of the 40-floor tower only after taking the approval of IIT Roorkee. It even had the clearance of the Noida Authority,” Supertech Chairman & Managing Director RK Arora says.
The biggest project coming up in the area is Wish Town from the strapped-forcash Jaypee group. Thanks to the oversupply, the secondary market in its flats has more or less vanished. Thus, those who had bought flats here have no option but to wait for Jaypee to complete the projects.
But Jaypee is in the midst of a severe financial crunch, which means there is no way out for the buyers. It has sold a string of its non-realty assets in order to ease the debt burden, but the gains are yet to percolate to the home buyers.
There was a protest outside the Jaypee office three weeks back, according to Shantanu Das who had booked a flat at Kosmos, one of the projects within Wish Town. However, the gates were closed and the protesters weren’t allowed to go inside.
Das says a signature campaign against the builder has been initiated by home buyers, and letters asking for help have been sent to Akhilesh Yadav in Lucknow and even to Prime Minister Narendra Modi in New Delhi.
Wish Town now has a registered association, according to Das. It is going for litigation to the National Consumer Forum. Out of 35,000 buyers, 5,000 have so far got possession letters.
In May, the Jaypee group released a statement: “As is known, there are delays in the handover of apartments. The company is making full throttle efforts despite the downturn in the economy to meet all its obligations, including completing all the remaining units.”
Broken promises
Manoj Gaur, managing director of Gaursons India, who is president (NCR), Confederation of Real Estate Developers Association of India, says, “The problem with Noida and Greater Noida was about numbers and the massive amount of work going on there. There are teething issues everywhere, but over the past six months there has been an improvement.”
Speaking on how the trust between developers and buyers has been damaged, Gaur says: “We have told the developers to speed up delivery and improve interaction with buyers. Wherever necessary, flats will be offered in phases.”
An NRI investor at Amrapali Golf Homes in Noida Extension (where there were protests in April) which has 4,2004,500 flats, says, “I have made 100 per cent payment, having bought my flat in April 2010, and was promised possession in August 2013. The Noida Authority gave a 10month grace period to the builder but despite that the flat is still not ready.”
While he has been told that his flat should be ready within the next six months, Kumar does not expect anything to happen till 2018. Along with other aggrieved buyers, he is planning to go to the consumer court. “The main reason for us going to court is that whenever we visit the site to see how much progress has taken place, we see no work going on,” says he.
It is worth noting that, earlier in the year, the social media onslaught launched by the harried buyers of Amrapali Sapphire had forced Mahendra Singh Dhoni to resign as the brand ambassador of the builder. Buyers wanted the cricketer to either get Amrapali to complete the project or dissociate himself from the builder.
Undoubtedly, the biggest protest group in this part of the National Capital Region is the Noida Extension Flat Owners’ Welfare Association that caters to Greater Noida. The group, which started in 2012, now has more than 10,000 members.
Sumit Saxena, a member of its core team says: “Ever since this association was started, builders have become more careful. But what has made an even stronger impact has been the activism that has started taking place on Facebook (it has 10,047 members). With information spreading through its members, it has kept the builders on their toes.”
Delhi-based consumer lawyer Vivek Chib, who has managed to get over 30 of his clients a decree in their favour, admits that the situation is bad for the buyers. With the introduction of the Real Estate Regulation Act, things might get better in the future, but Chib says that at some point in the future, the government will have to intervene.