The delay in delivery of apartments and houses by private builders has become a norm rather than the exception in the Millennium City, forcing buyers to now come out on the streets to protest. What is surprising is that the builders still act as ‘masters’ - the State authorities have failed to rein them in and have chosen to act as bystanders in this conflict (if not acting in collusion). While apartment owners of New Town Heights, a high-end DLF project came out on the streets this Saturday to protest. Many have been left in the lurch despite having signed contracts and made payments. The buyers in these delayed (and maybe doomed) projects are a worried lot, and experts opine that if top builders in the City are defaulting, then it could be even worse with the second (and third) rung of ‘developers’ who have jumped on the real estate bandwagon in the new sectors. The delay in delivery of apartments means that the buyers are forced to continue to pay both the EMIs as well as rent – a situation that is impossible to manage in the poor economic climate today.
More than 300 apartment buyers of New Town Heights, a premium township of DLF, protested at Jantar Mantar this Saturday, and also in front of the corporate headquarters of the Company, against the delay in delivery. Nitin Grover, President of New Town Heights Apartment Buyers Association, says that DLF had promised delivery in February 2011, but the customers are yet to get their flats. “DTCP had issued Occupancy Certificates (OCs) despite the Complex being unfinished; heavy construction is still going on even in the towers where the OC has been granted”, says Grover. Shalabh, who has bought an apartment, says, “We have paid money for registration, gas and even cess for the construction labour, but our homes are yet to see the light of day”. The residents also allege that the Company, in violation of the Haryana Apartment Owners Act (HAOA) and a Supreme Court decision, sold the parking spaces, a common area, to buyers. Ritu Jain, a buyer, says that despite complaints to DTCP, no action has been initiated. Grover says that recently the Company handed over 80 flats for possession, but the construction was not complete. “We have invested hard-earned money, and most of us are first time buyers. The Developer is playing with the emotions of common people. We want them to come forward and provide answers to our issues, and reply to our mails and phone calls”, says Grover. The Association has already filed a case with the Competition Commission of India, and Senior Advocate ML Lahoty has been hired as Counsel. In its demands the Association has also said that the Builder forced them to pay the registration money directly to the Company, with the promise that the properties would be registered within a month - but this has not happened even after two months. “Our biggest grouse is that the sale of the apartments has taken place on the basis of ‘super area’, a term that is not defined under any law. Under this garb the Company has sold 13,05,072 sq ft more than the sanctioned FAR. We want the Company to share the detailed calculations with us in writing, so that the buyers know what they are buying”, says Grover.
SAS Arcadia was launched in 2009-10 by Sumel Heights Private Limited, comprising low-rise floors (G+2) on 240 & 300 sq. yards plots. The License Number of the project is 113 of 2008, issued by District Town and Country Planner, to M/s Vatika Developers. Gulshan Malhotra, General Secretary of the SAS Arcadia Apartment Buyers Welfare Association, says, “The Project has not seen the light of day after 4 years”. However, while the Project was sold at Rs 2,100 psf at the time of launch, the current rates (despite no building) are Rs 6000 psf. This seems to be the primary reason why the builder does not want to continue with the original buyers. He is waiting for them to cancel their bookings, which were made at the lower rates, allege the buyers. “This is nothing but injustice and we have filed a petition in the court. Soon the matter will be taken to the Economic Offences wing,” asserts Malhotra. “The builder also made ‘bogus’ allotments of apartment/floors in the name of its employees, which was done to create a fake demand, to induce buyers to continue to invest,” alleges Malhotra. Interestingly, Vatika, in whose name the Licence has been issued, is ready to get the Project developed, but SAS group seems to be unwilling, he adds. A number of other builders such as Landmark, Pal and others have also refused to build after taking money for some projects.
The buyers of Express Greens in Manesar, who brought the property in the hope of timely possession, have also come forward and expressed resentment against the non-delivery of their property. Sanjeev Sharma, a buyer, says that they had come to the corporate headquarters to meet the Company representatives and register their complaint. More than 200 homebuyers of Uniworld Garden II, a Unitech project, came onto MG Road to protest – by ‘begging’ - against the non-delivery of their flats. Joginder Singh, President of the Uniworld Garden II Apartment Owners’ Association, says that they had cumulatively paid Rs 300 crores to Unitech in 2009 and still haven’t got possession of their flats.
Sanjay Sharma, MD Qubrex, says that more such delays and cancellation of projects are likely to happen because of the exponential increase in the price of land along the Expressway. Real estate analysts point out that one important reason for delays in delivery of a large number of projects is that almost 60 per cent buyers of Gurgaon real estate are investors, who benefit because of the late delivery. “The investors pay only a certain percentage of the cost and want to exit the project once the prices have begun to shoot up. It is only delays and the artificial jacking up of the prices that has kept them in good stead for so many years. But this bubble is likely to burst as the economy is in the doldrums, jobs are not being created and even IT has slowed down considerably”, says an analyst. The recent decision of the RBI, to put a lid on the 80:20 subvention schemes, was also a step towards curbing speculation in the real estate trade, as a large number of investors were using this route to speculate in property. Sanjay Sharma believes that the RBI decision to insist on construction-linked payment is like a vote of no confidence on real estate. Another reason being ascribed to delays is that even after taking 90 per cent money from buyers, the developers divert the same to buy land for future projects and put the present (even almost complete) ones on hold.
Instances like these are now rampant across Gurgaon, and with the economy slowing, it is being speculated that things could go from bad to worse. Real estate experts warn that unless the State government as well as the local authorities take responsibility, it would be impossible to stop buyers from getting fleeced. They say that with cases filed by different RWA Associations – with the CCI as well as Supreme Court – some of which are in the final stages, it is most likely that concerns of the consumers will be finally and effectively addressed by the judiciary.
A letter from a harassed buyer
I purchased a 3BHK apartment in July, 2011, in resale, at the rate of Rs. 2,700 per sq. ft., in a project located in Sector 106, on the proposed Dwarka Expressway. The original booking was @ Rs. 2,385 per sq. ft (14-Sept-2010). There had been no allotment till my purchase date. I was told by the builder that the construction work would soon start, as some layout approvals were pending with the concerned authorities. I made 30% of the total BSP payment to the builder. Since then they always reply that they are working to clear pending approvals and promise start of construction in the very near future. There is no written communication. On the eve of Deepawali last year I received a letter, dated 09-Nov.-2012, from the Developer, where they have mentioned about an on-going civil-suit (since 14-Feb.-2012) and court orders dated 01-Sept.-2012 - whereby the land of this Project was subjected to a stay, till further orders. A general offer was made to buyers that we could take back the amount we had paid, with simple interest at 9 %, if we wished. When I contacted them, they replied that it would be better to wait for a while to get a clear picture, as they were taking up this matter with the concerned authorities to seek remedy.
However, I came to know that they had quietly decided to put the ‘refund’ into my bank account through online-transaction, without any notice or any formal request from my side. They said that as the Project Licence had been cancelled, due to the on-going legal battle, they were left with no option but to refund the amount. This resulted in mental trauma to me and my family, as we were expecting to move into a house in a good location in the near future. We are under shock. How can they do this to us? Rates in that neighborhood have increased many fold and are now beyond our paying capacity. What legal stand can we take to see that our interests are addressed properly by the builder? We want a house in the same place and at the original booking rates. We do not want a refund.
(Name withheld on request)