Tag Archives: Builder Buyer Conflict

Check your own conduct as homebuyer

Posted on by Track2Realty
Track2Realty Insights

Bottom Line: An ideal builder is a wishful thought that every homebuyer loves to fancy about. In a business that has a historical legacy of poor perception and projection, no one bothers to look at the other side of the table. Ravi Sinha takes a look at what makes you an ideal resident in an apartment.

Ideal apartment resident, Ideal homebuyer, Homebuyers as villains, Homebuyers as victims, Do's & Don'ts of housing societies, Rules & Regulations of housing societies, Ideal neighbour in housing societies, good neighbour in apartment, Housing societies neighbourhood issues, Common problems in housing societies, India real estate news, Indian realty news, Real estate news India, Indian property market news, Track2RealtySo, you have been blaming the builder for end-to-end problems that you have encountered before and after settling in your dream home. Cost of apartment, delay in delivery, mismatch in promises & performance, costly maintenance and poor facility management, the list goes endless. More often than not, the grievances are legitimate.

But beyond the builder bashing in WhatsApp groups, social media, inviting journalists, society meetings, even consumer courts and every other possible platforms, how would you feel if someone reminds you that you have also failed to be an ideal resident in apartment. Will you ever bother to check your own conduct as a resident of apartment?

“What? I have paid for everything and I am entitled to avail the house and the common facilities,” would be the most common reaction if one is reminded that he/she is not fit to live in the given society, more so in the high rises where the shared responsibilities are even greater.

Track2Realty notes down some of the most common habits and fallacies that define whether you are ideal apartment resident or mentally & socially still not fit to be living in a housing society. These are:

Balcony Dropping: “It is my balcony and no law on earth can deny me with its use as per my convenience,” argues Mr. Chaudhary. You are right sir! But then balconies are meant for having the comforts of an open air space within the house. You can have a cup of tea, read newspapers, have sunbath or just relax in the fresh air. It is definitely not your extended dustbin that you drop stuff, even combed hair, out in the open.

Some people think living higher ups in the multi-storied apartments make them closer to Sun and they offer water to please the planet from the comforts of balconies down the ground. Please be considerate that people are living down the floors and what is your presumed salvation is definitely a nuisance to them.

Flower Beds: We all love greenery and flowerpots. Isn’t it? But love for greenery and extending your balcony for creating flowerbeds are two different things. If you feel the green patches and gardens in the society are not enough to give you that personal touch, feel free to have them in your balcony. That is legitimate. But what is objectionable and a potential threat is to extend your balcony limits and hang flowerpots outside.

Your bragging of beautification in the balcony might give you appreciation of friends & family but could seriously hurt your neighbours if it accidentally falls from a height.  

Extended Hanger: Ms. Sunaina probably finds the cost of a cloth drier too high. For her it is pretty legitimate to hang the water dripping cloths in the balconies without bothering about those who live down the floor. In the process, the poor guy in the lower floor apartment is deprived of his legitimate right of enjoying the sunbath in his balcony. 

This practice is mostly banned in the upscale societies but in the affordable and mass housing the absence of dryers in many homes empowers the residents to use the balcony of the lower floor as their cloth dryer and hanger. A cloth drying stand won’t cost you the roof but would definitely make you appear more civilized resident of a housing society.

Door Littering: It is your door, alright! But if the other neighbours on the same floor start practicing this convenient way to clean the house, the lobby of the given floor would turn out to be an open dustbin. Ms. Verma doesn’t seem to think so. For her touching the dustbin after bath and morning pooja is a big ‘No’ and hence she finds it convenient to drop the garbage bag outside, well ahead of the society sweeper visiting the lobby.

Please understand even if your builder has not made the garbage chute on each floor, at least there is a society sweeper who collects it everyday. Your urgency to clean your house before taking bath might be a stinking punishment for neighbours.

Encroachment Mindset: No one would like to take a dirty shoe inside the house. Right Mr. Bhatt? But then no civilized person would like to encroach the staircase area and convert it into his personal space designed for shoe rack. In most of the affordable and mid segment housing societies with not-so-professional maintenance, people buying smaller housing units tend to have this tendency to grab whatever extra space they could.

The mindset to encroach is not confined to staircases alone where shoe racks and parking other stuff is a convenient option. Rather, the look out for ‘more space’ is often the stepping stone to the overall poor standing of the society. For example, balconies are your personal space but not to the point of that absolute ownership where you feel like having an extended carpet area to get it covered, often extending the limits, and violating all the norms and fire safety guidelines.  

Pet Terrorism: Facility Management of the society often fails to convince Rachna Shah that her love for the pet dog is actually scary for the neighbours in general and children in particular. “But my doggy is so cute and harmless,” is her oft-repeated argument. “Madam! You maybe right but if your neighbour tomorrow adopts a harmless snake or leopard would you accept the same argument?” The pets are allowed in housing societies by the rule of law. But what is neither allowed nor acceptable is your pet terrorism with an innocent excuse that your pet is cute & harmless to deserve being allowed to roam around free, including in the lift.

Showering this love for pets should not be at the cost of being cruel to the fellow residents of the society. Love is eternal and it can’t be thrust upon your neighbours and force them to love your pet as well. Some of them might not be comfortable with or scared to see a Labrador or German Shepherd. Your freedom of letting loose your pets inside the open spaces might scare others and this pet terrorism definitely does not qualify you as a civilized apartment owner.

Neighbourhood Gossip: Who doesn’t love gossip? It is national time pass in this part of the world. But then, there are bigger national and regional issues to gossip about than keeping an eye over personal life of your neighbours and gossip it loosely with other fellow neighbours. Your gossip about the private life of a neighbour, his boy friend or girl friend, or whose son is roaming around with whose daughter definitely makes you an uncultured neighbourhood gossip times. 

And mind you! Mr. Sharma with whom you gossip about Mr. Verma’s wife being dropped from office by a colleague might be enjoying this gossip so long it is about someone else. But he would prefer to keep you at a distance from his close friends and relatives for this habit of poking nose into others’ lives and then spicing it up to broadcast like a newswire service.

WhatsApp Civility: If ever Mr. Mehra thought Society WhatsApp Group is his personal friend circle of like minded people, he was wrong. But before he could realize that, he got himself exposed to everyone in the society with his time pass mentality. It started with a tolerable ‘Good Morning’ wish everyday which by and large was not objected by anyone, even though for most of other residents it proved to be spamming. But soon, Mehra thought his political opinion is more profound than others in the society and started advocating who is the best politician and why.

What the gentleman forgot in the process is that the biggest trait of an opinion is that everybody has it. A couple of counter arguments later he was labeled as a person who has all the world’s time to spread his unsolicited political opinion in society WhatsApp Group. Worse even, the perception gained ground that the attention seeking gentleman lacked recognition in the right places to do so. Please understand that a society WhatsApp Group is meant to discuss the issues related with apartment and its upkeep, often housing market news for competitive outlook, and it is definitely not your drawing room.     

Imposing Belief : No one wanted to object it for her age but then everyone in the society was bugged up with the old mother of Mr. Agarwal for her super natural beliefs that she wished to impose on the collective wisdom of residents. Her astrologer’s advice for feeding bread to black dogs turned out to be apartment becoming haven for stray dogs. Her temptation to offer banana to monkeys was a security threat to not only the children playing in the park but even the security guards were at risk trying unsuccessfully to keep the stray monkeys away from the society.  

Everyone is conscious of the fact that as a society we produce more bawas & godmen than scientists and no law on earth can force us to be rational in our thoughts & beliefs. But to impose our beliefs & practices over the entire apartment and compromising the security of others definitely does not make any of us a civilized resident of given society.

Pesky Bonding: To meet with the new neighbours and knowing each other well is a civilized society behavior. But there is a limit of being sweet and the moment you cross that line you are a source of diabetes in the neighbourhood. Just because someone is friendly and gives you space, and access to his house, does not mean that you get into a pesky bonding and intrude his/her personal space anytime and uninvited. 

Mr. Saxena might be a nice gentleman who wishes to read newspaper along with others. But it does not mean his neighbour Mr. Khurana would like an uninvited guest every morning at his house. Please understand, while you may be having all the world’s time for neighbourhood bonding, the other person might be in a rush to reach office or seeking some rest or solitude.

Crusade Grouping: So, you thought all the slogan shouting and builder bashing is necessarily for the common cause of the residents at large? Well, if that be the case there is nothing wrong in grouping with the fellow residents for a society crusade. But wait! Like in any other sphere of life, pick your friends and society warriors wisely. You may have to repent tomorrow and worse even end up fighting with the same set of people you thought are God’s gift to the society.

All the holier-than-thou reform within the society might turn out to be a façade by some of the vested interests to arm-twist the builder, get paid for taking their heads out and then sit silent. In the long run you will not be seen as reformer or ideal resident but a vested interest even though you joined the group with all the noble intentions.  

Ownership Bragging: Of course, you are a proud owner of an apartment. So what? Had you never been a tenant? Did your neighbours or landlord always reminded you that they are superior property owners and you are just an inferior tenant? Apartment ownership is neither about bragging nor it would make you more than equal in the neighbourhood. And, of course, the law of the land will treat you the same as with any tenant, if tomorrow you are caught on the wrong side of the law.

Doesn’t it look not-so-graceful when you brag it in front of the neighbours who are tenants in the society. Mind you! Some of them might be having better financial standing than you and would be living in the apartment as tenant for their own reasons, ranging from short stay in the town or locality to a bigger apartment yet to be delivered. Your bragging doesn’t make them a lesser resident of the society than you but it definitely shows your class, or rather lack of it.

Facilities Abuse: Common facilities are by definition common and meant to be shared. But it seems Ms. Gayatri thought it otherwise when every morning she plucked all the flowers from the society garden for her personal pooja. Mr. Chawla even had a better idea when he insisted for the club to be allowed for his personal office meetings. Similarly, Mr. Gupta wanted to invite his friends & family for a joint swimming pool weekend and insisted that after having made payment for the apartment as well as the facilities it is well within his legal rights. 

Unfortunately, neither the law nor the civilized society norms would approve abuse of shared facilities in an apartment. Your apartment is yours but the building and its facilities are shared. Trying to be first among the equals definitely doesn’t make you a civilized resident of a housing society. Mind you! Even if you contest the RWA elections to extract more out of the shared facilities, you would eventually end up getting ostracized in the society.

An open letter to NEFOWA

Posted on by Track2Realty
Track2Realty Investigation Part-IV

Bottom Line: There are many question marks over NEFOWA as a legitimate association of homebuyers and it is time they answer it to come out clean before stakeholders. Ravi Sinha writes an open letter.

Team NEFOWA

NEFOWA, New Era Flat Owners' Welfare Association, Noida Extension Flat Owners' Welfare Association, NEFOWA fraud, NEFOWA cheating, NEFOWA complaints, Builder buyer conflict, fight for apartment delays, RWA, Residents' Welfare Association, NEFOMA, NERA, Noida Extension Residents' Association, Home buyer association legal limit, Track2Realty, Noida Extension property, Noida Extension projects, India real estate news, Indian property market newsI am, hereby, resisting the customary greetings with writing ‘Dear NEFOWA’ as I am not sure whether such respectable address should decorate you. However, I am writing this letter both as a real estate journalist as well as a stakeholder of Noida Extension where I have also invested as a homebuyer.

I feel it is my professional and social obligation to raise some issues and point to the grey zones to help other gullible homebuyers who might be having trust left with this association. Many others have already lost trust after finding hidden motives and bullying tactics of the core team after their clarion call to fight for the rights of homebuyers. Many of them even allege this buyer association to be proxy of the builders and taking brief from them.

However, there are good number of gullible homebuyers who even today think it is a voluntary organization and would fight for their rights. You often pick up the fight by taking the lead, often uninvited and obtrusive. The demand for money follows thereafter and then the war is lost even before the battle is on. The builder laughs his way all through.

Let me admit here that in the beginning I also made the mistake of assuming that it is a voluntary association of the homebuyers to fight out the erring builders collectively. But, of late, I have reasons to believe that there is more than what meets the eyes as far as the shady functioning of NEFOWA is concerned. 

A number of buyers publicly blame NEFOWA for hobnobbing with Supertech and sabotaging their fight. The complaints are serious since these buyers at Supertech Eco Village allege the association pocketed the money to fight with the builder and then manipulated these buyers to sign the dotted lines of the builder.

In the compromise deal brokered by your association the builder was allowed to add extra FAR with the written consent of the buyers. But the buyers in return did not get the possession as promised.

My apprehensions are hence not without valid reasons. In the last few months I am closely monitoring the method into the madness of this alleged homebuyers’ association. You guys have also done well to manage the media, even though I turned out to be an exception. It is indeed interesting to note that whenever I hit out through my stories to certain select builders in this market the admins of NEFOWA Group on Facebook remove me from the Group without any rhyme or reason.

This suspicious removal of a real estate journalist who has the credentials of exposing the wrong doings of the builders is also in contravention to NEFOWA’s stated policy doctrine on the website that says, “NEFOWA is made for the betterment of Flat Buyers …..not for Real Estate Agents and Builder Agents… All members are on same platform. There is no discrimination among the members. Every member are being treated as friend and as future neighbours. We are here not just for our common goal i.e. our Home, but also for the sake of better relationship among the neighbours.”

On first occasion, I thought my removal to be inadvertent and joined the Group second time where I was asked to give my full introduction and contact details for some strange reasons. The demand has been unusual for a Facebook Group where I personally know a number of members who have absolutely nothing to do with Noida Extension but they are there only for gossips. Needless to add, many such members in the Facebook Group have never been asked to provide their contact details.

And here you have someone who is a stakeholder, both from media standpoint as well as the homebuyer in the given market. Still, I gave the association a benefit of doubt. However, within a couple of weeks I was again removed from the Group after my expose against certain builders of Noida Extension. It seems there are vested interests within NEFOWA who get their orders from these builders’ offices about the urgency to keep problematic journalist like me at a safe distance.

I am conscious of the fact that some of the shady builders in Noida Extension are pretty disturbed with my expose every now and then. But why are the core team members of NEFOWA so perturbed? Are they working on behalf of these builders to infiltrate among the homebuyers with holier-than-thou gesture to convince & confuse them?

I have a few questions to ask the team NEFOWA: 

Q. What is the registered legal position of NEFOWA?

Q. If it is an association where elections are due mandatory process then how is the association into the pockets of a few members only?

Q. What is the source of earning for major faces of NEFOWA?

Q. Is NEFOWA the source of livelihood for its core members?

Q. What is your legal locus standi to ask for money to fight on behalf of homebuyers?

Q. Is it ethical on your part to broker deals with builders and convince the buyers to sign the dotted lines of builder?

Q. After collecting money with homebuyers for so many years now, how many cases have you won where the contributing homebuyers have got the possession?

Q. If the accounts of NEFOWA are clean then why is an audited financial statement not uploaded online for every contributor to see?

Q. A number of victims of NEFOWA have published their grievances online in various forums. Why is NEFOWA silent on that? 

These questions are just tip of the iceberg. The malaise appears to be deep rooted in this alleged homebuyers’ association. A perception has gained ground in Noida Extension that if one seeks the help of NEFOWA in a society, the apartment owners lose out collectively after the initial protests and media show offs.

Easing the frustration of buyers and then not channelizing it to its logical end makes the association look suspicious. Pocketing money and then not fighting the battle to its logical conclusion is definitely not the purpose of a buyer association. Nor is it fair to not be transparent with expenses where the real victims are the contributing homebuyers.

An association that represents the case of harassed homebuyers and collects money with them without any accountability or transparency is definitely not a voluntary association or social cause. It is pure business of crooked minds that understands the ground reality of the market where a large number of homebuyers are physically not present after having invested into one or the other projects.

Will NEFOWA please explain now as to why it should be taken seriously as a legitimate homebuyers’ association? Will they respond to the above questions being raised? Will they justify why it is a pocket association of few vested interests? You better explain it now or be ready for more future expose.

 Yours

A critic journalist 

Is media fuelling homebuyers’ associations?

Posted on by Track2Realty
Track2Realty Investigation Part-III

Bottom Line: Even when the law of the land does not grant any constitutional teeth to homebuyers’ associations, Ravi Sinha finds that they thrive with their clout due to cozy relationship with the media.

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But the question is why do the builders entertain them? Is there something more than what meets the eyes? Are these associations proxies of the builders to bail them out? The developers maintain that by and large they too have their own compulsions to entertain what could be called as necessary evil. The more the number of members with the given association, the more they command the clout in their areas of operations.

Requesting anonymity, a builder in Greater Noida West admits that whenever there is any issue with the buyers, he gets the unsolicited message by one or the other associations. A formal meeting is asked for which is not meant for understanding the buyers’ concerns or mediating for the common meeting ground but for negotiating on behalf of the association.

“If their demands are met, they withdraw themselves from the issue. They even offer to convince it to the buyers that the demands are not legitimate and would not sustain the legal scrutiny. But if the demands are not met, a protest and media trial is what we have to face. So, we are left with no choice but to entertain them,” says the builder.

All for media limelight? 

Financial modeling and people behind the associations indicate genuineness

Beware of associations that hijack the core agenda & grievances for their media limelight

Builders too have their proxies in buyers’ associations 

The builder’s version is just one part of the story. The experience of the homebuyers suggests some of these associations are definitely the veiled proxies of the builders to shield them and divert attention. The smart builders more often than not use these associations to infiltrate among the protesting buyers and break the unity.

The harassed working class homebuyers looking for someone to represent their grievances, mostly due to lack of time, end up playing into the hands of one or the other associations. The collective consciousness of the homebuyers, more often than not, fails to differentiate legitimate consumer activism of harassed homebuyers and consumer blackmailing of buyers’ associations.

“I was approached by some of these activists and since I didn’t have time and resources to settle with the builder, I thought as if it is a divine intervention that has come through my way. But soon I started realizing that the actual game plan was not to take up my legitimate cause but to get legitimacy before the builder and media for having harassed buyers as complainants before them. I regret my decision to have thought that someone else would fight for my rights,” says Raman Parashar, a dejected homebuyer in Noida.

There definitely is a method into the madness of the buyers’ associations across the major property markets of India. Track2Realty got into the financial modeling of some of the most pro-active and vocal consumer associations operating in the housing market to understand how such constant activism is sustained in terms of financials and other logistics.

The research suggests most of the leading torchbearers of these associations have no other known source of income and this supposedly free voluntary service is often their full time occupation. Some of them are even nursing the local level political ambitions through this channel.

This clearly indicates that there is an urgent need for homebuyers’ education in India. They must be conscious of the fact that all the associations thriving in the name of protecting their interests are not that trustworthy. Unless the buyers are convinced with the association, its funding & functioning and people behind it, they should better stay away from these holier-than-thou high profile groups.

It is better to fight along with the fellow buyers who have the same set of grievances with the builder. Of course, that won’t be the easy way out; not someone will come forward to offer the free advice and legal help. The builder could even win over or buy out some of the fellow homebuyers. But then at least the buyers will be safe than sorry and fight their own battle without the vested interests infiltrating, hijacking the agenda and then compromising it.

Relationship management lacking in Indian realty

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: Relationship management on the lines of service industry can give much-needed facelift to Indian real estate.

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Investing in relationship management to earn the trust & goodwill of the homebuyers is something that the Indian real estate has not adopted as an industry practice. CRM or Customer Relationship Management is something that every developer today boasts of, but this relationship hardly goes beyond attending phone calls of aggrieved buyers and online registration of grievances.

Whereas the kind of relationship experience that Vakil is sharing is more on the lines of KYC (Know Your Customers) where the relationship managers have all the info about the homebuyers, his grievances, if any, and they are constantly met to update them on the developments with the housing project. This builds a level of trust and good will.

Divya Gehlot, a homebuyer agrees that relationship management of the developer not only breaks the ice but also goes a long way to understand each others’ point of view, thereby less acrimony. She had a similar experience where after booking the apartment the relationship manager did not forget even wishing her on the birthdays and anniversaries in addition to keep updating on the developments of the project. The dedicated manager was always there when she wished to visit the site.

“I was even invited by the relationship manager to show me many options for the tiles of the floor that they are going to use. I had the liberty of choice and since everything was done in a transparent manner I am not complaining now even though the delivery of the project is some eight months delayed. They have explained me the reasons of delay and I feel the reasons are beyond their control,” says Divya.

The question is how many developers are maintaining that kind of relationship management with the homebuyers. Are they even bothered to talk to the customers once the booking is done? As an industry practice today, the only interaction from the developers’ side is when they send the demand note for further payment. In some cases they keep updating over emails but one-on-one relationship management is a critical missing link in Indian real estate.

This raises a fundamental question as to unlike other matured industries why Indian real estate has failed to focus on relationship management with buyers and prospective buyers.

Rattan Hawelia, Chairman of Hawelia Group tries to explain method in the madness when he says that other matured industries which are focusing on relationship management are usually more service oriented whereas real estate has always been addressed as a product based industry. As per the traditional mindset, most of the developers consider that a homebuyer is a one-time consumer because of which they have always failed to explore the benefit of relationship management. Consumer connect is by and large a missing link with direct interface with homebuyers.

“I must admit here that the real estate sector has gone overboard on brand campaigns and publicity rather than identifying the gains by connecting with the customer. Exploring this medium by gaining trust and satisfaction of one customer for lifetime will surely open threshold for many satisfied referred clientele and direct boost in sales can be accounted. So far marketing communication has been majorly based on the perception and exposure at the basic level of the first generation business families in Indian realty sector despite the fact that relationship management is a key and effective component to connect with the customers,” says Hawelia.

How far is the perception that the nature of business does not support to have dedicated relationship managers a deterrent? Analysts maintain that due to the demand and supply gap the developers did not took a conscious call to defeat this perception and make efforts for word of mouth publicity through dedicated relationship management with the customers.

Of late, with the advent of second generation and overall changes in the ecosystem there has been sharp contrast in the nature of business. Now some of the developers have started understanding the benefits of relationship managers, and since the first visit of a prospective buyer a single point contact is being appointed who is responsible for all the needs of the buyer from readily sharing the required information & timely responding to their queries to arranging technical support from sales/administration/loan/construction/other department(s).

Such services helps in boosting the confidence of the customer manifolds and also supplements the mindset of Indian consumer who is investing his lifetime savings and hence wants to be treated as a preferred client.

In terms of the cost & benefit analysis of having a dedicated relationship manger for a group of customers, the operating methodology of most of the developers suggest there would not be major cost implications because the business model will remain more or less the same; though certain functional differences would be there in terms of promotion, lead generation and connection with the prospective customers. Such move will create a better understanding between the developer and the prospective customers which will surely help in building goodwill of the company.

The real deterrent is probably the developers’ inability to change with the changing market dynamics where the homebuyers are increasingly getting aware and demanding with their rights.

A dedicated relationship manger for the homebuyers can close doors to the market perception but what makes the developers uncomfortable is the fact that it also closes doors for deliberate delays and cutting corners in construction, as the homebuyers will more or less ask questions on a regular basis. Are the developers open to this customers’ scrutiny? The answer in today’s context is a clear No.

By: Ravi Sinha

Should you trust homebuyers’ associations?

Posted on by Track2Realty
Track2Realty Investigation Part-I

The homebuyers’ associations meant to serve the purpose of consumer grievances are increasingly exceeding their legal & ethical limits to turn into de facto consumer courts. Ravi Sinha finds that the primitive instinct of recognition & reward goads many of these associations to take up the cudgels on behalf of the buyers and ends up in connivance with the builders.

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It has been an ugly spat in front of the Corporate Office of Noida-based Amrapali Group one fine morning that has failed to deliver the apartments to thousands of homebuyers. At least three buyers’ associations were jostling against each other to claim they are the official homebuyers’ voice to protest.

While the harassed homebuyers were looking clueless, the core agenda of ‘Justice for Amrapali Homebuyers’ was lost in the dogfight of these associations. Each buyer associations with their handful of slogan shouting supporters were name calling others, terming them outsiders, and glorifying their association as the only representative for the buyers of Amrapali.

Needless to add, in this cacophony the core issue was relegated to the dustbin and each association blamed the other for this lack of cohesiveness and defeat of the cause.

Reality check of homebuyers’ associations 

All homebuyers’ associations are not trustworthy; often self-serving or custodians of the interests of builders

Multiple homebuyers’ associations in the same market often jostle and fight to claim their only authority

Homebuyers’ causes are often compromised when buyers’ associations hijack the core agenda

Check the credentials of buyers’ association before approaching them with grievances 

As a matter of fact, some of the buyers’ associations in the city are nowadays openly advertising on the social media to inform which project they are reaching next with date and time mentioned and invite the aggrieved homebuyers to come forward to share their grievances. The fact remains that none of these associations have the locus standi or legal teeth to invite the grievances of the consumers.

This is not just a Noida reality. The real estate markets across the major cities is today witness to a new spate of consumer activism which is more political in its functioning than consumer centric. Worse even, many of them even operate as the de facto consumer courts in advising others in how they should take on the builders.

For example, post the Competition Commission of India (CCI) slapping a fine of INR 630 crore on the realty major DLF in the case of abuse of dominant position in its project The Belaire, the RWA of the project suddenly had its hands full in advising other RWAs and buyers’ associations in confronting the builders.

Next: Legal limits & liability of homebuyers’ associations 

Vicious circle & challenges of best practices

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: It is a known fact that the projects get sanctioned easily due to the bonhomie between developers and the authorities. And the quality of construction and other grey areas go unquestioned.

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Most of the builder-buyer agreements are heavily loaded in favour of builders and the buyer does not get to see the agreement draft till one has paid the booking amount. 
Their disillusionment is reflected with the rise in the number of complaints that has challenged the growth of the sector.

Delivery delays, mismatch in area, changes in structure or designs in a project and developers going back on other promises have been quite common. These issues have given rise to consumer activism, in courts and outside. The Competition Commission of India (CCI) slapping a fine of INR 630 crore on DLF gave some hope to the buyers.

Supertech also bore the brunt of buyers’ wrath when the Allahabad High Court, on a petition by its residents’ association, ordered demolition of two towers in its Noida project, Emerald Court. Builders like Unitech, Jaypee Group, Parsvnath etc are repeatedly being reprimanded by various courts for non-delivery of projects.

JC Sharma, VC & MD, Sobha Limited agrees that home buyers expect developers to be transparent in their dealings, deliver their units on time and with the best quality of construction. The general perception in the market is not very positive and that is why the government has introduced the Real Estate (Regulation and Development) Act. According to him, some of the best practices that the developers should adopt are improved quality, customer-centricity and transparency. It is imperative that the focus should be on corporate governance, accountability and timely delivery of projects.

“In order to win the trust, full-disclosure policies should be adopted, making all information regarding project approvals, registration and process easily accessible. Another practice that is still evolving and has gained the attention of leading real estate companies is Corporate Social Responsibility (CSR). There is also an increasing level of consciousness among the developers to construct green buildings in order to protect environment. These practices will not only strengthen bonding with various stakeholders but will also win their immense trust,” says Sharma.

Nikhil Hawelia, Managing Director of Hawelia Group suggests the existing perception can only be changed if the developer fraternity adopts practice of transparency and streamline their professional intent. Foremost the developer should draw a limit to the quantum of work that is under their control for a certain business cycle. The major concerns like delay in possession, quality issues etc directly or indirectly occur because of over-limit & uncontrollable growth, especially in the North region of the country. Involvement of higher management at all verticals is crucial to meet up the commitments and promises.

“The other aspect which causes huge gap between the developer and consumer is “insufficiency in being answerable to the customer”. Consumer connect is by and large a missing link in direct interface with home buyers. The developer should take extra care to face and answer all types of queries of the customer as well as third parties to gain the confidence of the market. Indian real estate has to go a long way vis-à-vis other global emerging markets as majority of the Indian developers are still not practicing the best,” says Hawelia.

An eco system that empowers the buyer with equal terms and conditions as those enjoyed by the builder will definitely change the outlook of buyers about the sector and its practices. Today, the reality is that despite liberal payment plans and discounted deals in the market, people are yet not ready to trust the developers. They have burnt their finger in the past due to various hidden clauses and arm-twisting after making the first payment.

By: Ravi Sinha 

Next: Indian homebuyers struggling for basic consumer rights

Miles to go for best practices in Indian real estate

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: The understanding of best practices is very archaic in the Indian real estate. The intent is even more conservative and hence Track2Realty observes that the sector has miles to go before they can look forward to adopt some of the globally accepted best practices.

Best practices, Best practices in Indian real estate, Professional practices in Indian real estate, Cheating in real estate, Builders cheating buyers, Consumer complaints in Indian real estate, India real estate news, Indian realty news, Real estate news India, Indian property market news, Track2Realty, Track2Media Research“Once the customers become captive, the builders start fleecing them. I have already held in the case of DLF that this conduct is called ‘after market abuse’. This is a fit case of abuse of dominance by the opposite parties,” said CCI member R R Prasad in a dissenting order 

FIR against Vatika Group MD, three others on fraud, cheating charges 

Orbit Corp MD Pujit Aggarwal arrested by EOW in Rs 52 crore cheating case 

Manesar land scam blew lid off government nexus with private builders 

Mumbai’s ‘One Avighna Park’ builder Nish Developers booked in INR 2,000-crore fraud case 

ATS, Unitech, Amrapali among the biggest land defaulters to Noida Authority 

Supreme Court snubs Supertech asking the builder to “sink or die but pay back the buyers” 

Unitech mired in litigation in at least five forums—Company Law Board, NCDRC, Supreme Court, High Court and also state consumer forums 

CCI orders probe against Jaypee Group through majority orders in two separate cases involving real estate projects in the national capital region for alleged abuse of dominant market position and imposition of “unfair” conditions on buyers 

Noida builders flout norms, ‘use ground water for construction’ 

What would you make out of a business where the above headlines continue to haunt the home buyers on a routine basis? While the overt consumer activism, social media outcry, media trial and judicial intervention forced the sector to change its tune to Best Practices on the face value, there is a chasm between the lip service and the practices on ground. It seems the developers’ comfort zone lies in to operating in the dark age.

The developers are by and large living in denial. The deep rooted psyche is that once the market conditions improve the buyers have no choice but to run for an asset class that is not only need-based but also a business where the demand far exceeds the supply. This medieval thought process is in fact the biggest roadblock in the way of best practices gaining ground in the Indian real estate.

Best practice is something that the sector never bothered to adopt. But the slowdown and nose diving sales graph are clearly indicating that the developers have no choice but to stop sulking and blaming market conditions for poor sales and start accepting the hard truth.

The buyer today has lost all confidence in developers. The only way this can change is by simple changes the developers make in their business practices that will bring that confidence back. Before they expect market conditions to change, they have to change their own outlook first.

Privately some of the developers admit there is neither any incentive for developers to adopt best practices nor are there penalties for those who do not follow such practices.

A section of analysts also point to developers’ facing challenges in adopting the best practice in the sector. Issues like multi-partner projects; inability of the developer to execute large projects because of their organizational limitations; leverage on finance – personal equity versus project cost; delivering large projects without competent team of vendors; and huge finance cost are some of the issues that force the developers to compromise the professional integrity. 

Devina Ghildial, former MD, South Asia – RICS points out that the success or failure of any real estate and construction project can largely be attributed to money, material, manpower, machinery and management. The collaboration of these factors along with effective project management that encapsulates planning, scheduling and budgeting are critical to project delivery. However, the real estate and construction sector in India for long has been fraught with several long-standing issues such as adequate reforms, coupled with changing market dynamics that pose as bottlenecks in project execution. Liquidity concerns, rising costs and lack of specialized manpower are just some of the challenges that developers have continued to grapple with.

“With the evolution of a global marketplace, international property markets have become intrinsically linked and there are international consequences to consider. Then there are also local factors that affect the performance of the sector. The future success of the Indian real estate and construction sector lies in its ability to regulate its operations and professionals. It is also widely felt that awareness and introduction of internationally recognised and locally relevant best practices such as common area measurement and valuation standards can contribute towards uniform practices and lend quality assurance and credibility to the sector,” says Ghildial. 

By: Ravi Sinha

Next: Baggage of trust deficit & best practices

Indian homebuyers struggling for basic consumer rights

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: While the matured property markets are adopting evolving best practices, the Indian market is not offering even the basic consumer rights to the homebuyers. 

Homebuyer Confusion, Confused homebuyer, Homebuyers grievances, Homebuyers' legal options, India real estate news, Indian property market news, Track2RealtySome discussions about best practices in the Indian real estate has started because today the investors also do not want their money to be locked in an asset that is neither growing nor is likely to get delivered. Worse even, there is no authority or court in India that has been successful in getting a stalled project restarted or in forcing a bankrupt builder into selling his assets to compensate his allottees.

AS Sivaramakrishnan, Head – Residential Services, CBRE South Asia maintains that product quality and product delivery, along with pace of construction, are becoming the current key words in customer satisfaction for home purchases. Especially with the implementation of the Real Estate (Regulation and Development) Bill, these practices will become even more important for development firms to keep in mind.

“A key area of differentiation between mature global markets and the housing market in India lies in the fact that all aspects of developing and maintaining a residential project are handled by professional firms, unlike the case in India. Developers should increasingly focus on their product rather than on marketing paraphernalia, which will help in controlling market perceptions,” says Sivaramakrishnan.

Vineet Relia, Managing Director, SARE Homes feels transparency, fair norms and delivering on promises made either verbally or in the builder-buyer agreements are imperative to change negative perceptions. Moreover, instead of a commodity-selling approach, developers should adopt a value-based, professional approach that keeps customers fully informed about all the benefits of investing in a particular project. A professional approach can ensure all unique project propositions – location, amenities, pricing, after-sales service and other salient points – are made crystal clear to customers. Transparency in all dealings and practices is required to transform perceptions about the Indian real estate industry.

“Best practices in Indian real estate were majorly non-existent, until recently. Moreover, each market has its own drivers and challenges, which differ from other markets. Comparisons can therefore be odious and misplaced. But the best practices used by a few professional developers compare favourably with the best globally, including that in emerging markets. But consistent performance, proper pricing of products and excellent service at all times – before, during and after sales – can play a pivotal role in the success of any developer and such practices are bound to gain ground in the days ahead,” says Relia.

The need of the hour is to take lessons from streamlined markets abroad and introduce comprehensive disclosure norms. For instance, US home buyers are entitled to receive a number of disclosures during the course of the house purchase.

These disclosures give a homebuyer a somewhat transparent and fair picture of what he is getting into. On the other hand, Indian home buyers sign agreements that are one sided. They even get unpleasant surprises in terms of hidden costs.

Analysts believe bulk of the challenges or the evils can be addressed if the RERA is implemented sincerely and effectively. The judiciary is getting more and more conscious and discharging consumer related cases quickly and in most cases with a consumer protection mindset.

While the homebuyers in mature markets may be having a level playing field, the Indian buyers are struggling for the most basic consumer rights. The demands of the buyers in this part of the world are not very unrealistic.

Some of the common issues are: 

Title assurance and right to see all approvals in place

Rates based on carpet area

Right to a full refund within 30 days of booking

Equal penalty for delay in completion

No change in area bought

No hidden charges or escalation charges

Separate escrow account mechanism

Free first transfer

Fair agreements with indemnities for delays, poor workmanship etc.

Open and transparent communication throughout the project period

These are not very unreasonable expectations and can be achieved without any extra burden, if only the developer is committed to adopt best practices. However, that is easier said than done and Indian real estate has a long way to go before we claim to be at par with the developed countries.

There is a lot that needs to be done at government level as well to instill confidence in homebuyers. Land titling, title insurance, quick judicial remedies, standardisation of numerous norms etc are areas yet to be addressed.

By: Ravi Sinha

 

Supertech facility management a case study in conflict

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: Supertech locking of facility management office one find morning and leaving maintenance services without proper handover to the RWA is a case study for all the wrong reasons. Track2Realty looks into the grey zones of maintenance of the housing societies. We speak to cross section of professionals to find a way out.

Supertech Sports Village. Sports Republik, Greater Noida West Property, Noida Extension property market, Greno West Real estate, RK Arora, Sports-themed housing projects, Indian real estate market, Indian property market, India real estate news, Track2Media Research, Track2RealtyThe residents of a housing society, Supertech Emerald Court, in Noida were taken aback one fine morning when they found the office of facility management locked. The builder had left the maintenance overnight after having tussle with the Residents’ Welfare Association (RWA) for quite some time over the maintenance, or rather the lack of it. The residents alleged that the builder had left them in the lurch as it was not a proper handover of maintenance to the RWA.

The incident yet again exposes the critical issue of facility management and the conflict between the builder and the buyers. It also highlights how the builders keep the buyers disconnected with the maintenance services even when the RWA is formed.

Track2Realty asked the following questions that Supertech failed to reply:

Q. Is it justified on part of Supertech to lock the facility office and leave maintenance all of a sudden?

Q. What is your reply to the allegations of the RWA that Supertech did not fulfill the obligations of a formal handed over?

Q. Has Supertech transferred the maintenance fund and the IFMS to the RWA? If not, why?

Q.  If there were long standing disputes with the homebuyers why did not Supertech hire a professional arbitrator for reconciliation? 

Relinquising maintenance responsibility without a proper handover and ensuring that the basic services like the water and electricity does not get affected is the responsibility of the builder. But in this case it appeared to be a blame game where the builder alleged that the residents had not paid the maintenance for months and the residents in turn were asking for the transfer of maintenance fund, including the IFMS (Interest Free Maintenance Security) and Sinking Fund.

Analysts point out that the handover of maintenance entails a formal process where various factors that come under maintenance, like power backup, water supply needs to be ironed out. A developer should ideally handover the facility management to the RWA within 12 months of obtaining Occupancy Certificate.

To smoothen out this handover process, the developer should ideally bring on a Facility Management Services Company once the project nears completion so that a systematic maintenance process can be established during the handover/possession phase, which will enable the RWA to take charge sooner and more efficiently.

Kunal Lala, Vice-President, SILA (a property consultant with Facility Management at its core) maintains that transparency & accountability on part of the developer is desired by every buyer, and the same can be easily showcased through facility management. A developer and the service provider need to involve the buyers with all facility management related decisions as early-on in the process as possible.

“A strategic partnership and clarity of guidelines of the processes to be followed as per the contract that has been mutually agreed upon will help with fewer conflicts between the buyer and the Facility Management Services Company. The contract between both should be drawn in a way that their interests are aligned and it is a win-win situation for the buyer as well as the service provider,” says Lala.

How to reduce conflict? 

Professional facility management company than builder’s in-house team should take over maintenance

Buyers should be made a part of decision making in facility services

Maintenance transfer to RWA must be process driven and not ad hoc

In case of conflict, a professional arbitrator should be appointed to take amicable decision

Most of the facility management professionals agree that the developer could have easily avoided this by hiring a facility management company. This would have eased the maintenance pressure on the developer as the facility management company would have put a ‘Transition Team’ on board to oversee the fit-out and flat handover process, reducing the burden on the developer.

In that case, the facility management company would be solely responsible for the maintenance of the property and would adopt a process-driven handover of the flats to the buyers, ensuring complete transparency and enhancing the value of the property as well as that of the developer’s brand name.

Nikhil Hawelia, Managing Director of Hawelia Group nevertheless feels the onus of having a seamless transition from builder to buyers’ association lies on either parties. Accoding to him, the lack of trust and understanding about each other should not be allowed to escalate to the extent of builder leaving the maintenance overnight.

“Yes, it is a loss of brand identity for the builder and being in maintenance office the first duty to reach reconciliation lies with him. However, there are situations when the builder finds it tough to deal with a group of vested interests whose only aim is to take over the facility management even when majority of buyers are against it. In such a case, the builder cannot afford to ruin his brand reputation and has no choice but to leave. But in this case also, the handover should be thorough process driven. If there is a need, the builder can hire a professional arbitrator for the same,” says Hawelia.

It is trus that whatever be the case, even if hostile buyers asking the builder to leeave the maintenance, the builder must act mature and professional. One can always hire a professional arbitrator to ensure an inclusive approach is adopted while dealing with buyers who refuse to pay monthly maintenance. They need to be encouraged to become a part of the maintenance process while the property is being handed over.

Such buyers usually have grievances which are unattended for a long time and this leads to resentment. A dialogue should be encouraged between the buyer, developer and the Facility Management Company maintaining the property, to arrive at a mutual understanding. The buyer should also be explained that paying the monthly maintenance will help maintain their property in an optimum manner, resulting in value enhancement for their asset.

By: Ravi Sinha

When consumer activism turns into blackmailing

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: With the growing spate of consumer activism in real estate, element of consumer blackmailing has also made inroads.

Consumer Activism, Consumer blackmailing, Homebuyers protest, Grievances of homebuyers, India real estate news, Indian property market, NRIs worry in property market, Track2Realty, Track2Media ResearchA Ghaziabad-based developer was approached by 20 customers en block. Prima facie there was nothing to suspect. The developer was rather happy that in a slow moving market he had a bulk buyer deal walking up to his sales table. However, he was soon exposed to the unpleasant reality of organized consumer blackmailing.

These homebuyers started accusing, demanding, arm-twisting, protesting before media and threatening to drag him to the court. Taking at the face value of consumer grievance, he later got to know that this is the modus operandi of some of the local influential people to get together and put the developer in a spot.

“I was told by some other developers that these people have got good media connection. So, even if they cannot harm you legally, they are influential enough to create an ambience that is not good for the brand image or the sales channel. So, I did what some other developers had done in the vicinity. I gave them exit with lucrative buy-back offer to save the reputation of my company in a market where the collective consciousness and media will make it believe that the builder is at fault in any case,” admits the developer on condition of anonymity.

Indian real estate, of late, has woken up to the new reality of consumer blackmailing. While in most of the cases the grudge of the homebuyers has been genuine; it seems there is an organised mechanism emerging that want to encash upon the homebuyers’ acrimony with the developers.

There has also been instance when the victims suddenly turned out to be crusaders; of course the gains (monetary and otherwise) not withstanding. A classic case in point is when the Competition Commission of India (CCI) imposed penalty of Rs 630 crore on DLF, for ‘unfair trade practices’ and ‘abuse of market dominance’ with project Belaire. The Belaire Owners’ Association had then suddenly became self-styled crusaders against developers. They started openly advising several Residents’ Welfare Associations (RWAs) from Gurgaon to Greater Noida how to resolve their flat-related problems.

The moot point remains as to whether homebuyers’ legitimate grievances being addressed can empower a group of victims to suddenly emerge as de facto consumer courts overnight?

Qubrex, the real estate brokerage firm that presented an expert report to the CCI on the market share of DLF to establish its dominance in Gurgaon, also got its hands full, with various buyers seeking its help against developers.

Madhrendra Sharma, a Supreme Court lawyer points out that some of the homebuyers approach the court with such flimsy grievances that there is no ground for any legal case. He believes the problem lies in the way real estate business has grown; it has arm-twisted the homebuyers; and in the way some smart homebuyers’ are finding an opportunity in adversity.

“I advised a builder client to expose the racket of some organized pressure groups in his project. They were arm-twisting the developer with demands that were neither part of builder-buyer agreement nor part of industry practice at large. But the developer instead settled it with them out of court as the case might have affected his overall reputation,” says Sharma.

Raj Gala Shah, Partner, Zara Habitats tries to put up a brave face when he says that consumer activism can turn into blackmailing only if the developer has failed to provide correct information to the said consumer from day one.

“If no information has been concealed from the developers team while selling /marketing the property then there seems to be no cause of worry towards any instance of consumer blackmailing. It would be inappropriate to term a consumer’s demand for his right as consumer blackmail,” opines Shah.

Consumer blackmailing might have serious consequences for the grievances of the legitimate buyers. It might lead to a perception gaining ground that all the consumer activism is handwork of vested interests. This can defeat the homebuyers’ cause the way it has been with the PILs (Public Interest Litigations) where the respective courts started objecting to the locus standi, motive and objective of many of these cases.

Media might be a party in fuelling the fire with consumers’ aspirations but in the court of law only and only the evidences will stand to scrutiny. However, the perception of consumer blackmailing as a prevailing reality will definitely hurt the legitimate consumer activism in the long run. 

By: Ravi Sinha

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