Hamara Cash, Builders Ka Aish: Flat-Buyers' Rage This Summer

Published: May 25, 2016 07:53 IST
With an unsteady voice, Surinder Pal Bhatia, 74, vented his absolute hopelessness on the NDTV Property Show: "Help me please to accomplish the last desire of my life - to breathe (my) last in my own house, with my ailing wife, before death, who is also bed-ridden."

Mr Bhatia explained his agony - he bought a flat in a project by Era/Adel Landmarks in Gurgaon in 2011.

After several days, in June, 2014, after receiving an amount of 29 lakhs, equivalent to 50% of total cost of the unit, the developer abandoned the project.

This was not the first cry of help. A huge number of questions from hapless buyers stuck with developers across the country have been coming to us since the start of The Property Show four years ago. These mails complain of unacceptable delays and rampant malpractices, with the most prominent being substandard construction quality, deviation in project plans to appropriate common areas, and change in apartment layouts to charge customers more.

In cases where the pain is the highest both emotionally and financially, the buyers have paid up 80-90% of the cost of the house which was to be theirs.

Every year, we've diligently tracked delayed projects and reported on them. Not a single developer has had the courage to face the camera and come clean. Most sent us utterly useless responses which in a nutshell said, "These are unfortunate delays beyond our control" with no further explanation to our follow up questions asking for details of what these beyond control factors were. And my frustrated reporters would conclude that the only hope is a real estate regulator.

RERA or the Real Estate Regulation Development Act was finally passed and notified on 1st May 2016. State governments have been asked to establish regulatory authorities within one year of the law coming into force. And these authorities are expected to take decisions on the complaints of buyers and developers within 60 days.

Yet, this summer, the dams of buyer despair have burst open. Patience has run out. And no one is willing to wait any more for justice.

A collective rage against builders who continue their kosher lives with absolute impudence has forced buyers onto the streets. He or she is willing to brave the scorching sun to protest in front of abandoned project sites. Twitter has become the dashboard for venting anger and a call for action. Indian Cricket team Captain MS Dhoni has been forced to resign as the brand ambassador of the Realty Firm Amrapali which has both delayed projects and delivered shoddy homes across Noida. Every channel and newspaper has been tagged and hustled to cover these protests.

Yet, none of these have made it to page 1 or 9 pm headlines in media and none will hold the nation's fascination for months to come aka Vijay Mallya.

Though why? Does it not matter enough that developers have swallowed the hard-earned money of lakhs of buyers?

For instance, where is all the money collected by the Jaypee group for its 41 projects which are running severely behind schedule? Over 35,000 buyers have been left in the lurch. Unitech has failed to deliver over 5,000 homes in Delhi-NCR despite taking almost full payment for each flat. At least 15 of BPTP's projects are witnessing average delays of more than three years with over 5,000 units stuck in limbo. Look at the dismal track record of Emaar MGF. 19 residential projects in Gurgaon, Mohali and Chennai are unfinished and five commercial projects in Gurgaon are running behind schedule with average delays ranging from 3 to 5 years.

While NCR developers might be the worst offenders, Mumbai isn't far behind.  DB Realty and Hubtown to name the most prominent ones, are facing the buyers' rage on every forum. Promoters of these projects continue to launch new ones or carry on work on others, while abandoning a few. 3,600 home buyers who had invested in DB Realty's DB Ozone in Dahisar, are still waiting. This affordable housing project was started eight years ago. And what's making the buyers livid, DB Realty has been offering chopper tours to prospective customers of its luxury project in South Mumbai, DB Crown!

Hubtown's Greenwoods project in Thane was launched in 2009 and the first phase of the project was to be delivered in 2012 - nothing so far.  Twitter is abuzz with #Hubtowngreenwoods where one angry buyer has posted a Hubtown invite for its  brokers for cocktails and dinner with a comment "Hamare mehnat ka cash aur hubtown ki aish!"

These are some of the largest names in the business. There are hundreds of smaller ones - 3C Company, Cosmos, Gardenia, easily adding up to a lakh plus stuck buyers stuck in delayed projects across India.

To quote a well-known Hindi idiom, "Taali do haath ssey bajti hai"  (it takes two to tango),  and in this mess, one cannot absolve the approval authorities (Centre and State). Building approvals don't come for months on end -that slows down construction. What's worse, local authorities willingly bend by-laws for the right price.

Take for instance the Supertech Emerald Court case where the Allahabad High Court ruled in favour of demolition saying, "It has repeatedly come to notice that builders, with officers of development authorities (implying Noida Development Authority in this case), flout every rule, including building ones." For months on end, buyers went crazy with worry till Supreme Court stayed the order. The future of the project remains uncertain even now.

While municipal bodies are willing to bend rules when greased well, they fail to do deliver on what they're supposed to - providing the promised infrastructure and amenities where crore of rupees have been sunk into buying homes. Three crucial lifelines - The Dwarka Expressway, the Southern Peripheral Road and the Northern Peripheral Road - which were supposed to improve connectivity among the emerging residential sectors of Gurgaon have been stuck for over seven years. On the eight-km Dwarka Expressway between Delhi and New Gurgaon alone, buyers have put in money in 33,000 residential units coming up across the 20 sectors.

These roads were proposed without adequate field surveys and this has led to bitter legal battles with farmers who own land along these routes. When the legal go-ahead finally came through, the Haryana Urban Development Authority or HUDA delivered a shocker, claiming it had no money to compensate the ousted farmers, thus leaving the roads half-done.

For years, Mumbai's flip-flop on Development Control Rules (DCR) stalled construction in a city starved of correctly-priced housing. Even today its causing bitter disputes with buyers saying say they're being asked to pay an amount over and above what they signed onto when they decided to purchase a flat.

Harish Bijoor, a well known brand strategy specialist who works with a number of builders says "With due respect to all of them, one of the big issues today in the industry is the trust deficit. The trust deficit is the highest common denominator and not a lowest common denominator issue, which means nearly everybody involved has a trust deficit".

Are there any surprises then that Indian real estate industry has hit rock bottom? It's a super mess!   

What's worse: the implementation of RERA is hardly a priority for state governments and this much-fought-for law might take at least two years to be effective -a  period long enough for defaulting developers to relocate to destinations such as Dubai and London. Some Like Shravan Gupta of Emaar-MGF already have. Delhi circuit is rife with rumours that Unitech and Parsavnath promoters are packing their bags as well. Now catch them if you can!

My take is simple. This erosion of buyer confidence is not a buyers' problem alone. It's terrible news for any government, Centre or state. Good economic principles tell you that revival of construction is crucial for growth and India's dream of 8% plus GDP growth. So I'm going  out on a limb to say unless the big wigs whose statements really do make the headlines - like the Finance Minister or RBI Governor - don't declare the same sense of urgency for nabbing the willful defaulters  in real estate, justice won't be served and the home buyer won't be back.

Manisha Natarajan and her Foot Soldiers (Saurabh Chakrevertty, Oineetam Ojha, Nikhil Sivadas,Chankya Bhatia & Ashwini Priolker)

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.

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