Tag Archives: Builders’ misleading claims

Misleading terms used by builders

Posted on by Track2Realty
Track2Realty Exclusive

News Point: There are many misleading terms used by the real estate developers to tempt the gullible homebuyers and an escape from the builders’ hook is not easy.

Professional Stress, Real estate professionals, Client demand, brokers pressure, NRI investment, real estate salary, real estate depression, unprofessional real estate, Track2Media Research, Track2RealtyFaced with budget constraints to pay additional PLC (Preferential Location Charges) Gaurav Chaudhary, a homebuyer in Noida Extension, asked the developer to show him an apartment that does not have location-view advantage. To the best of his surprise, he was told that none of the apartments for sale are without the mandatory PLCs. He called off the deal with the apprehension that the builder is playing a mischief.

“I believed it is one of the unfair trade practices in the housing market by this developer. But on my home search later, I learnt that most of the developers in this market were only offering the apartments that had extra loading of PLC. In fact, I was told that there are three kinds of PLCs – park facing, road facing and corner flats. Now by this definition all the apartment will fall into one or the other PLC,” says Chaudhary.

A closer look at the housing market suggests that this is not just a case of Noida Extension. It is a pan-India phenomenon. As a matter of fact, there are certain industry accepted and adopted misleads that are quite prevalent in the housing market. These common exaggerations are part of marketing brochure of all the developers.

We try to list some of the most commonly used and abused exaggerations here:

Strategically located: The project is said to be strategically located with 10 minutes distance to airport or 20 minutes distance to railway station. However, what the brochure does not tell you is that this distance is subject to your over-speeding drive with no traffic at all on the road. In the absence of this luxury, the distance of 20 minutes can also be one hour and 20 minutes.

Social Infra: There are very many good quality schools, hospitals and restaurants coming up near the project. This sounds tempting on the paper where there may be plots available for these social infrastructure projects but hardly any takers for the locality.

Façade of area: The green zone around the project, that looks so very beautiful in the brochure, can also be drainage area with green bushes around. The artistically create project elevation or the sample flat pictures on the brochure are more often than not misleading to the homebuyers.

Free area ratio: 80% green area with landscaping is what is an ideal answer to urban living. It definitely acts as a traction point when the developer offers it. However, even with the permissible FAR of 2 that is allowed in most of the cities, this seems highly improbable. Moreover, the marketing brochure simultaneously also says that the developer will apply for more structures subject to permission. There have been cases of the developer later converting the green zone to raise another tower.

Amenities: State-of-the-art amenities are probably the most over-used and abused claim in the marketing brochure of respective developers. Yes, there would be a gym, a swimming pool and a tennis court etc. But the question that is not answered is that will it be sufficient to serve the entire housing project. In most cases it is not.

The above listed exaggerations are quite common with the marketing brochure of nearly all the developers. Industry seems to know it and have accepted it as a practice; the homebuyers in this country have hardly challenged the builder on misleading claims.

Surabhi Arora- Associate Director, Research at Colliers India agrees that the marketing brochure of any housing project is full of exaggerations nowadays. Few of them are concept marketing like ‘Green Living concept’, ‘Ultra-Luxury’, ‘Super-Luxury’, ‘Smart Homes’, ‘Lifestyle Homes’ etc. The definition of these terms can vary a lot as they are not defined anywhere, but it seems to be attractive from the buyers perspective.

“Another exaggeration used in marketing brochures is the mention of BSP only. Generally, the overall prices come 15 to 25% above the BSP due to various inclusions like car parking, club charges, EDC, IDC, Electricity, PNG and PLCs. For example, now a days almost all the apartments have preferential location charges of 100 to 300 per square feet (PSF) for corner PLC, garden view PLC, swimming pool facing, club facing, road facing PLC, floor PLC, etc.” says Arora.

Amidst all the misleading claims and marketing exaggerations, location mapping is the most glaring one. Generally maps are not to scale and give the wrong perception of the location of the project. For example, the brochure will say 10 minutes from the airport or commercial district; it does not state distance in kilometres.

By: Ravi Sinha