June 2014 \ Cover Story \ Cover Story-Real Estate
Realty Mess

The home buyer is today at a risk. The tall claims of leading developers notwithstanding, projects are delayed by months and years. Litigations between builders and owners, or state players, are hidden from public glare while advertising the projects. Real estate may be giving good returns, but the pangs of suffering unscrupulous builders if far greater than the joy of owning a home or office

By Yogesh Sood

 Today, the real estate industry is one of the most flourishing industries in India. The Sector is unique because the target group is categorized in unique ways-----people invest to buy homes for themselves or to make money, by renting them, or selling at a higher price. In such a scenario, the demand for residential and commercial property is increasing constantly and so are the number of builders and developers who offer special features to attract prospective buyers.

Without checking the credentials of the mushrooming developers especially in Delhi- NCR region, hordes of NRIs and other investors have been depositing the initial 10 % deposit money for booking their homes with these lesser known and lacking-in-credibility developers. Very often, buyers find themselves locked into buying defective properties or paying for things they don't need. Worse, they might be shelling out more to fund fines levied on builders.

Unfortunately, India's real estate industry is notorious for lack of transparency. In most of the cases, the greedy developers cheat their customers of their hard-earned life savings promising the moon through the hoardings around the city and full page newspaper color advertisements. They also profusely use the electronic media and SMSes, e-mails claiming they would ensure 12 per cent assured returns on their investment in residential as well as commercial properties. Some developers who have recently mushroomed on the Indian realty scene have started calling themselves ‘PROPERTY GURUS’. They have the dubious distinction of buying awards from organizations whose existence itself is in question. Big newspaper advertisements and hoardings around the city are put up by these developers to fleece the gullible investors in their residential and commercial projects.

All constructions in the country have to be done according to the National Building Code. Though all good developers get their plans cleared by the authorities, some do not strictly adhere to them. In some cases, the building is not built according to the plan submitted to the governing body and the poor buyers of the property have to pay dearly. The violations range from the height of the building to margins namely the open spaces. The two classic cases are Mumbai’s Campa Cola compound and Noida’s Supertech’s two under-construction 40-storey towers----Apex and Ceyane. It is no secret that in both the cases, the poor home buyers have been the victims. Their dream of having their own property has shattered. The message in both the cases is loud and clear: customers have to be vigilant before buying a flat (see box on buyers’ checklist).