Tag Archives: Indian property market

Admitting fault, Noida Authority urges NGT to dump garbage in 138A

Posted on by Track2Realty
Track2Realty Exclusive

News Point: In a classic case of callousness and contradiction on part of Noida Authority, the city civic administration urges the National Green Tribunal to let it dump the garbage closer to human habitation in absence of alternative.

Noida 137 Protest, Protest against garbage dumping in Noida, Noida real estate, Properties in Noida sector 137, NGT, National Green Tribunal, NGT raps Noida Authority, Noida Authority, India real estate news, Indian realty news, Real estate news India, Indian property market, Track2Realty In its reply to the National Green Tribunal (NGT) in the case filed by journalist Gaurav Chaudhary & others, the Noida Authority urges the NGT to let it allow unauthorized dumping the garbage in sector 138.

After having failed to respond to the earlier summon by the apex environment body, the Noida Authority has now admitted its fault. In a written submission, the Authority admits that the site at Sector 138 is not earmarked as the dumping ground in its Master Plan.

Strangely, the plea of the Authority nevertheless is that they don’t have any alternative site for dumping the garbage. The designated dumping and solid waster treatment site at Astroli is yet not ready.

Furthermore, the Authority seems to have tried to mislead the NGT when it files the reply that the area is not closer to the human habitation. It says the garbage site is 600 meters away (aerial distance) from the human habitation.

A Google Map nevertheless shows that the garbage dumping ground is just 500 meter away from the nearby village. It is also closer to the eight housing societies of Noida Sector137 that is home to no less than around 50,000 people.

The Noida Authority also submits that the quality of ground water has been tested and is found to be meeting the required standards. It fails to mention the details of the findings of the report, if any by a standard agency. The residents of the area are continuously complaining about the heavy metal contents in the water.

The residents of the area maintain that Noida Authority is playing foul with them. If they manage to convince the NGT, the onus of future potential epidemic in the area due to air pollution and water contamination will shift to the NGT. The Authority will escape free maintaining that they dumped the garbage closer to human settlement on the orders of National Green Tribunal.

“It is travesty of justice that a responsible government body like Noida Authority is asking the NGT to reverse its stay order and allow garbage dumping in the residential zone. Who will be responsible for future epidemic? Why did Noida Authority cheat the homebuyers by concealing the fact that tomorrow they would create a dump yard closer to the homes that we bought on the promise of Authority’s Master Planning?” questions HO Katiyar, a resident of Paras Tierea.

The reply by Noida Authority is contradictory when it says, “The site in question is a temporary site and not permanent site and the moment the demarcated permanent site becomes operational there will be no necessity of even storing the garbage at the site in question. It is submitted that the application is misconceived.”

Track2Realty maintains that the response of Noida Authority is misleading and goes against the law of natural justice. The 20,000 odd homebuyers have bought the apartments on the promise of the Master Plan of Noida Authority that does not have any garbage dump yard in the neighborhood with potential health hazards.

Moreover, the plea that the Authority should be temporarily allowed to use the site as the dump yard because they don’t have any alternate plan shows the poor planning and execution of practical problems on part of the Noida Authority.

Shift from product-based to service oriented mindset

Posted on by Track2Realty
Track2Realty Exclusive

View Point: Indian real estate has always been addressed as a product-based industry which runs on independent guidelines and regulations varying from developer to developer, writes Nikhil Hawelia, Managing Director, Hawelia Group.

Nikhil Hawelia, Managing Director, Hawelia GroupBest practices in any industry have been identified as the means by which result superior from all other alternatives can be achieved. It mainly refers to the standard way of executing a task which is among the best available methods.

Real estate industry in our nation has always been in question due to prevailing autonomous rules and guidelines of every developer. There is an immediate need of a governing body which can address all such concerns of the sector. Government of India at national level has already introduced RERA which will address all these concerns.

In my opinion, apart from this commendable initiative of our government, developers too should undertake at all possible levels the best practices in the sector such as commanded fiscal management, timely execution capabilities, perception building, transparency, functional professionalism and last but the most significant ‘consumer connect’.

In my experience and belief, lack of financial management discipline is also the key reason to make any developer fiscal risky. Over leveraged balance sheets, unreasonably high cost of acquisition of newer land parcels, too many launches of new projects and at the same time unforeseen challenges in the construction business is hurting the sentiments of real estate companies which in turn forces the developer to expand on funding even at high cost of finance.

The major concerns like delay in possession and quality issues 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. Working in such controlled atmosphere and leveraging rightly at every cycle of business will help scaling their business positively while achieving the progress in execution capabilities.

Perception building and transparency are inter-linked or we can say inter-dependent on each other. 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 which is under their control for a certain business cycle. Execution capability ratio plays important role to inline these two aspects. It is the capability of the company to execute the amount of work in controlled manner in all respect.

Functional professionalism is the need of the hour at all segments and levels of a real estate company. Developers have undertaken far beyond the limit range of work and projects which is directly impacting the professional approach at all in-company department(s) right from sales, marketing & purchase to customer support, finance, accounting & construction.

It has been noted that whatever the team represents at one end of the chain is what is being flowing from the top end. Highest management vision and work direction should be based on transparency and professional approach, so that the system can never go in misguided path.

As per the traditional mindset, many developers consider that a homebuyer is a onetime consumer because of which they have always failed to explore the benefit of relationship management. The Indian real estate sector has gone overboard with brand campaigns and publicity rather than identifying the gains by connecting with the customer. 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.

Addressing the concerns and issues of consumer on realistic ground with assurance will give a meaningful result oriented solution. One should prioritise the customer needs and focus on their actual problems. In today’s real estate scenario, most of the developers who are gaining grounds are mainly focusing on customer satisfaction and relationship management, which in turn is the best marketing medium for word-of-mouth publicity. Exploring this medium by gaining trust of one customer for lifetime will surely open threshold for many satisfied referred clientele and direct boost in sales graph.

It has been wisely said that period of product specific industry had gone; now the time is for service industry. One should be approachable, answerable and responsible towards their customer(s). Indian real estate developers immediately need to adopt best practices in the sector for survival and growth in time to come. Clearance to real estate regulatory bill will also ensure much awaited transparent business practices in the real estate sector.

This is being considered as the first step towards organising this unorganised and immature sector into a professional industry with values and commitments. The Act ensures organization of Indian real estate sector with required transparency and strengthening of relation between consumer and developer.

I sincerely request the respective State Government(s) to accelerate their action on formation of RERA so that sincere real estate players could gain the momentum and the sector will get a boost and confidence of the homebuyers. This will surely help genuine developers to come in front and will show exit doors to most of the fly-by-night operators of the sector.

Policy advocacy contradictory in Indian real estate

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: Track2Realty observes that unlike many other matured & emerging sectors, Indian real estate has completely failed on policy advocacy. The local nature of the business, added to the fact that vested interests dominated the industry bodies, defeated the very purpose of the policy advocacy. The casualty has a direct impact on the professional practices in the sector. 

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, land acquisition bill, parliament of india, Government of IndiaDuring the CREDAI national convention few years back, a miffed real estate seemed to settle scores with the then Union Urban Development Minister Kamal Nath. Displaying stiff opposition to the proposed real estate regulator, the builders’ body went critique to say it is not actually a regulator bill, but builders’ harassment and public amusement bill.

The minister sitting on the dais kept smiling over the CREDAI allegation that after the implementation of the bill, the face of the sector is known only either to the God or to the minister. Kamal Nath, however, took no time to hit back on the same platform when he said that the realtors have got into the habit of living in an era of boom and anything less than boom is cried hoarse as doom and gloom.

Much water has flown since then but it seems when it comes to policy advocacy real estate and the policy makers are still at loggerheads. Realty body proposes and the government disposes on occasions more than once and policy advocacy is something which, if happens at all, is always on a one-on-one basis depending on the developers’ individual clout and personal rapport with the minister or official concerned. Sadly, most of such policy advocacy is actually back channel lobbying for the company concerned, with hardly any short term or long term impact over the fortunes of the sector.

Challenges of policy advocacy

Policy advocacy challenging due to localized nature of business

Lack of consensus among the developer biggest roadblock

Larger developers get what they want through back channel negotiations

Blame game of developers, instead of engaging with policy makers, also responsible for policy advocacy failures

In an eco system where most of the contentious issues have not been settled over the years, one naturally wonders whether there is any communication by the stakeholders concerned beyond the media eyeballs. Yes! There are two notable builders’ bodies called Confederation of Real Estate Developers’ Association of India (CREDAI) and National Real Estate Development Council (NAREDCO) that lobbies with the government for their interests but there seem to be a clear realization by the government side as well that these industry bodies are lobbying for their vested interests than policy advocacy in the right context.

The problem is that asking for industry status, the sector does not want elements of accountability that comes with the package. Quite opposed to the very idea of regulation, even after self-regulatory attempts didn’t work out, realty does not evoke confidence at the policy level and often ends up being at loggerheads with the government. Though policy advocacy is very much desirable in the sector, it is yet so debatable that the stakeholders have failed to evolve a consensus over its issues and agenda.

There are many within the sector who are forthright in accepting that unlike policy advocacy adopted collectively in other industries to create a level playing field, in real estate the business methodology does not support any such move since the larger players in the fray are too big for the boots of industry bodies concerned.

For example, when the CREDAI wanted to throw its weight to sign the code of conduct a few years back, it ended up with leading players’ indifference and eventually expulsion of three giants, DLF, Hirco and Hiranadani from its Karnataka chapter. No one is sure till date how many of its 11,500 odd members spread across 105 cities in 22 states have actually signed it. More importantly, whether they follow any uniform code of conduct in dealing with the homebuyers even after signing the CREDAI document?

The micro market focussed business with myopic vision makes the policy advocacy a distant dream for the Indian real estate. Even prior to the Union Budget when the business bodies of other industries lobby it hard to get the best deal for them, realty ends up with endless debate only to be left sulking in the end. In the past, industry bodies have made some blatant demands of the government to bring about certain reforms in the sector. However, most of these demands were put forth without having in place the adequate enablers of change, which could address the level of confidence needed in the sector by the government, financers and consumers alike.

Sachin Sandhir, Global Managing Director-Emerging Business of RICS believes it is absolutely imperative that stakeholders engaged across the sector take adequate steps in order to reduce its risk weightage in eyes of the lenders, improve credit worthiness to mitigate the lack of liquidity, and in the process instill consumer and investor confidence and arrive at a common consensus to drive the industry in a better and profitable manner – in the process being viewed favourably by policy makers.

“A common view from all quarters within the real estate and construction sector is acquiring the long demanded ‘industry status’ for the sector, along with an ease in accessing capital. While there has been consensus on these issues for long, the views and opinions in enabling these factors of change to find a place within the industry are varied across stakeholders. In my personal opinion, in order for the sector to acquire industry status and for capital to be more accessible, there is a prevalent need for the realty sector to undergo a much needed ‘image makeover’. It is imperative that the sector improves on its global transparency ratings and creates avenues for skilled manpower to be employed and retained in the sector. Should we choose to go down this route, we will attain a favourable response from policymakers, investors and stakeholders alike,” says Sandhir.

Arvind Nandan, an independent property consultant, is candid enough when he says any talk of policy advocacy is meaningless unless the government is a willing party to come on board for dialogue and discussion. Developers alone can not take policy advocacy forward because they have been a partner in crime with project delays and illegitimate source of funding in the sector.

“The idea behind policy advocacy must be to bring government and private players together for meaningful dialogue and discussion for the benefit of all stake holders, including the consumers. What is happening actually is that sector lacks vision on reforms and hence policy means different things to different stakeholders. There are developers, financers, facilitators, occupier. Even when you say land owners, it can be either a developer or agriculture land owner, and to bring everyone on board for consensus you need credible industry forums. I am not sure unlike other industries a standalone face can represent the sector, since there is no superstar or charismatic leader in the sector today,” says Nandan.

Nikhil Hawelia, Managing Director of Hawelia Group admits that the non-seriousness of the policy advocacy on part of real estate industry bodies is now seen as deliberate in collective consciousness. According to him, no one within the sector want a level playing field due to non-cohesive nature of the business and hence policy advocacy is more about media noise due to which it often fails to address the core issues.

“I do admit that the developers need to engage with the government to make the officials accountable. But the problem is that there is no consensus on what are the issues to deal with as every micro market has its own set of critical issues. Moreover, there is no transparency among ourselves as to which issues are equally desirable to create a level playing field in the business,” says Hawelia.

Some analysts are of the view that in some other sectors people are vocal because they come from very powerful political background and are second generation entrepreneurs. Then, they are active at the federal level without any structural defect where policy at centre might help at some level and hamper at some other state level. Automobile policies, for instance, are framed for across the country.

Realty is predominantly a regional business, primarily on account of land being a state subject. Therefore, it is a tough task for one single body or association to represent the views and opinions of all stakeholders in the sector. Some sector analysts assert that few realty associations and public interest bodies are all working at some level in the same direction to improve dealings within the sector, albeit the medium used to communicate these views vary.

This school of thought hence insists that at the end of the day it is not necessary to be one voice in the industry, as far as the message is the same and consistent across any one whom delivers it. The question remains—has the voice been one?

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

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

Embassy Group sells most expensive home in South India

Posted on by Track2Realty

News Point: Single Level Unit Four Seasons Private Residence at Embassy ONE Bengaluru sold at INR 50 crores. 

EmbassyONE, Embassy Group, Four Seasons Residence, Bangalore luxury property, Costliest property in South India, Costliest property in Bangalore, India real estate news, Indian realty news, Real estate news India, Indian property market, Track2Media Research, Track2RealtyLuxury living has a new price tag in Bengaluru, with Embassy Group closing the sale of one of its iconic branded Private Residences, at its flagship luxury integrated development – Embassy ONE.

The 30th-floor single level unit of the new Four Seasons Private Residences at Embassy ONE has been sold for a record-breaking INR 50 crores, the highest price ever fetched for a branded residence in South India.

The buyer who spends a considerable amount of time overseas has chosen to remain anonymous and Embassy Group, as part of their buyer’s confidentiality privacy policy, would not be disclosing the name.

Located at the gateway to North Bengaluru, the sale of this spectacular 16,000 sft 30th floor residence is now on par with prices in the ultra-luxury market segments in Mumbai and NCR.

Reeza Sebastian, Senior Vice President, Residential Business, Embassy Group said, “We are elated to have sold Bengaluru’s most expensive residential property. Luxury homeowners are more specific about the legacy of brands, quality of construction, the promise of delivery and re-assurance of continued impeccable levels of service. The Embassy Group, Four Seasons Hotels and Resorts and Blackstone being leaders in their own spaces, have recognized these aspirations of residential homebuyers and partnered to create this coalescence of 109 iconic homes that are among the most desirable in the city. Embassy ONE is the emergence of an elevated, integrated lifestyle.”

James Price, Vice President, Residential, Four Seasons Hotels and Resorts said, “The sale speaks of the value and benefits that Four Seasons brings as a brand, and is a vote of confidence in the project. We are excited to have partnered with the Embassy Group to create this remarkable lifestyle opportunity in one of the fastest growing cities in the world – Bengaluru”.

Bengaluru is among the top three cities to have witnessed unprecedented growth in demand for ultra-luxury homes in the last two years. The year-on-year growth of ultra-luxury homes in the city is at an all-time high and the estimated total value of ultra-luxury housing projects in various stages of construction in Bengaluru are valued at INR 6,000 crores. (source: JLL report)

Developed by Embassy Group, Embassy ONE houses lifestyle residences representing exquisite engineering, cutting-edge design and dedicated service matching international standards. India’s first Four Seasons Private Residences in Bengaluru, are a part of this marquee destination.

The community of private residence owners at Embassy ONE span across industries and countries and represent a niche lifestyle desired by many, but acquired by only those with a true penchant for world-class hospitality within the comforts of their curated luxury homes.

Victoryone buyers coerced to pay arbitrary demands

Posted on by Track2Realty
Track2Realty Exclusive

News Point: Victoryone buyers in Noida Extension are protesting against unjustified and arbitrary financial demand by the builder. 

Victoryone Central, Victory Group, Victory Infraprojects, Victoryone Infraprojects, Sudhir Agarwal, Greater Noida West, Noida Extension, India real estate news, Indian realty news, Real estate news India, Indian property market, Track2Media Research, Track2Realty, Best news on Indian real estate Abuse of dominant position in the market is an unfair trade practice that is often perceived in the collective consciousness on part of the larger players having established their brand equity. But in Great Noida West (popularly known as Noida Extension) Victoryone Infraprojects, a lesser-known developer registered with a subsidiary Intellect Projects Pvt Ltd is a case study in abuse of dominant position as a builder against the hapless homebuyers.

Coercing the buyers at the project Victoryone Central in Noida Extension to pay arbitrary demands, the builder is flouting all business ethics, established market norms and his own one-sided Builder Buyer Agreement (BBA).

The homebuyers have taken to streets to protest against what they call a clear design to extract more arbitrary payment out of buyers with disregard to what has been agreed upon.

The buyers have alleged that in the final demand letter the Victoryone has not honoured the one-sided Builder-Buyer Agreement (BBA) that mandates the builder to pay penalty. However, the builder is referring the same BBA with wrong interpretation and forcing the buyers to pay more in the name of signed agreement.

The buyers allege that they got an opportunity to see the terms of BBA three months after making the payment of booking amount. They were left with no choice but to sign the document to save the signing amount being forfeited in case of cancellation.

Track2Realty has reviewed the one-sided BBA of the builder to find the agreement did not even follow the mandatory norms of two witnesses to be signatories. It clearly did not give the hapless homebuyers any chance to consult the lawyers.

However, beyond the legality/validity of the BBA, as the buyers have signed it in absence of any choice, what the homebuyers are finding surprising and objectionable is that while the one party (builder) is twisting the terms of the agreement to demand more money, it is not ready to honour the legitimate right of the other party (buyer) for delay in construction.

For example, the Total Super Area is increased by 3.5% and there is demand for more payment in lieu of. Buyers maintain that it is a clear case of abuse of the dominant position of the builder as against the buyers. The prescribed norm of +/-3% (as mentioned in Clause No. 5 of BBA) was meant for inadvertent deviation in the design & layout and anything over and above that is a deliberate act.

They question that if there had been the intent of the company to increase the Super Area by 3.5% the builder was liable to communicate the layout changes to the buyers to get the prior consent of the two-third of the buyers.

“Any demand against what has not been agreed upon or mandated by majority of the homebuyers in the project is not justified on part of the builder. Buyers of affordable housing projects like us are not in a position to arrange extra money all of a sudden for something that we have not agreed upon,” says a dejected buyer of Victoryone Central.

Furthermore, the builder is not ready to honour its own agreement with regard to penalty for delay in possession. Track2Realty has reviewed one of the documents to find that clause 15(c), states that builder has to pay the penalty, as there has been a delay of more than 1.5 years from the actual date of possession as per Allotment Letter Date that is dated 14th April 2013 with Construction Period of 30 months plus 6 month as a grace period (Total 3 Years).

But with the Offer of Possession Demand dated 21st Sept. 2017, there is no mention of any penalty or adjustment against it. The buyers allege that the builder has verbally refused to honour this clause. An email query sent by Track2Realty did not get any response, the builder even refused to speak when approached through the phone calls.

What also raises the doubts over the intent of the builder is the fact that Victoryone still doesn’t have Completion Certificate but there is demand for full and final payment, and even the additional payment. In Final Demand Letter it is clearly mentioned that Victoryone has applied for Completion Certificate which they have not received yet.

Also, as per the last email exchanged with the homebuyers, Victoryone on 13th July 2017, the builder had communicated that they have only applied for Completion Certificate and is expected to receive the same in August 2017 which they have not received.

Sending final demand without having Completion Certificate again raises questions on Victoryone’s intention. As per the market norms, the fit-out period notice of 30 or 45 or 60 days is given on offer of possession when the OC or CC has been obtained. But in this case, the certificate is still awaited.

A few questions that the builder, Victoryone has to answer:

Q. Why didn’t the builder take the consent of two-third of the buyers in exceeding the Super Area by 3.5%?

Q. How much has the carpet area in the given project extended? Or is it just a case of super area being extended that can’t be measured by the homebuyers?

Q. Why the homebuyers were denied an opportunity to evaluate/consult the Builder Buyer Agreement before making payment?

Q. Why is the builder abusing his own agreement with denial to pay penalty to the homebuyers for delay in delivery?

Q. Why is Victoryone asking for full & final payment even before the completion certificate?

Q. After having started fit out in the apartment and full payment received, will the builder compensate the buyers if tomorrow CC is delayed?

Q. Why many of the financial demands are not part of the agreement or were kept hidden at the time of booking?

Q. Does the BBA anywhere mention that only the builder has the right to penalize the buyers, in case of delay or alleged delay?

Q. Is the builder not liable to honour his own one-sided and arbitrary agreement with the buyers? 

These questions were raised before Victoryone Infraproject CMD, Sudhir Agarwal. But it seems the builder is so arrogant that he does not care to speak to the journalists.

Track2Realty maintains that in a market like Noida-Greater Noida that is notorious for the lack of professional practices, forget best practices, builders like Victoryone are breaching the low benchmark of builder-buyer trust quotient. It will not only dent the brand reputation of the builder but also affect the sales velocity of the overall market.

By: Ravi Sinha

NGT stay order against dump yard in Noida 138A

Posted on by Track2Realty
Track2Realty Exclusive

News Point: The National Green Tribunal (NGT) on Tuesday, October 10, 2017, grants stay order against unauthorised dump yard in Noida Sector 138A.

NGT, National Green Tribunal, India real estate news, Indian realty news, Real estate news India, Indian property market, Track2Media Research, Track2RealtyOne man’s relentless fight has led the National Green Tribunal (NGT) to question Noida Authority against the illegal garbage dump yard in the neighbourhood. The NGT has also granted an interim relief to the applicant with stay order.

When Gaurav Choudhury, a journalist by profession, bought an apartment in Noida Sector 137 along Noida-Greater Noida Expressway, he was confident to invest in an organized property market where the master plan being rolled out by the Noida Authority could tell him about the present and future developments.

In the planning of the Authority there was absolutely no provision of garbage dumping in the neighborhood. However, he was soon exposed to the reality of official apathy on part of the Authority. In the absence of the officials having any concrete plans to dispose and manage the garbage and other solid waste, they allowed the area to be used as an open garbage dumping ground.

The dumpers were fetching the garbage from all across the city. Even the industrial waste from the nearby SEZ region was being dumped over here. It was thus gradually turning the locality into a Ghazipur landfill site kind of stinking place.

After having met and given representation to the Noida Authority officials, who were clueless with the possible solutions of the health hazard, Gaurav Choudhury finally moved to the NGT for shifting of the dump yard away from the human settlement area, comprising of 8 housing societies and a few villages nearby.

The NGT has now given an interim order to stop further dumping and has given one week’s time to the Noida Authority to file its final reply.

“The NGT Chairman asked if there was an approved plan for the garbage dumping in the area. Since the area was not earmarked for the dump yard in the master plan of the city, he has given us interim protection with this stay order. It is a clear case of violation of rules on part of the Noida Authority,” said Ms. Sabah Iqbal Siddiqui, advocate for the applicant, Gaurav Choudhury. 

Noida Authority had earlier not replied to the NGT’s query over why the site is being used as a dumping ground. The Authority have now been given last opportunity to file the reply.

Next hearing is on 6th December 2017, and if the Authority fails to give a satisfactory reply, the NGT might give the final judgment to shift the dump yard from the neighbourhood of 8 housing societies of Noida Sector 137.

The dump yard has been a health hazard for the residents living in the sector. They have been protesting for long to get it shifted away from the residential zone.

“Our demand has been to shift the dump yard to the designated location at Astroli in Greater Noida. The Noida Authority told us that the garbage disposal plant is yet not ready. If that were the case, then also they were supposed to dump the garbage, including industrial waste, away from the human habitation area. It is not only a cause of air pollution but also soil and water contamination,” says Gaurav Gupta, Founder President of Paras Tierea Apartment Owners’ Association.

Independent study has pointed out that Noida’s 14 lakh population generates nearly 660 tones of waste daily. However, the 40-year-old city still does not have a landfill site to dispose its municipal solid waste, which instead is dumped on roadsides and in vacant spaces. The large chunk of this waste is, of late, being dumped along the Noida Expressway.

Dr Ashutosh Marwah, a pediatrician, who lives in one of the housing societies, Supertech Eco Citi, believes the potential health hazards are even worse and yet to surface. According to him, with the open garbage dump that has dissolved toxins and heavy metal poisoning, it is a life threatening issue.

“All that we can check is the TDS level of the water without understanding the arsenic and other heavy metal toxins that could possibly lead to residents developing blood problems. Noida Authority has destroyed our eco system and I fear it may lead to birth defects tomorrow with pregnant women consuming such toxins,” says Dr Marwah.

The National Green Tribunal has now asked the Noida Authority as to what are the plans of the development authority to shift this piling garbage. The authority have thus far failed to come up with a detailed plan to remove the health hazard.

By: Ravi Sinha

Poor vendor management in Indian real estate

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: It is not just poor consumer connect that affects the credibility of Indian real estate, even the vendor management is so poor that suppliers don’t trust the builders.

Vendor Mangament, Supply chain, Real estate suppliers, Real estate developers not paying to suppliers, Nonpayment in real estate, No credit in real estate, India real estate news, Real estate news India, Indian realty news, Indian property market, Track2Media Research, Track2Realty “The day I joined this real estate company I was exposed to an altogether new reality of vendor management,” admits the marketing head of a Noida-based real estate company. She had earlier worked in hospitality industry where she never felt the need to not face the vendors due to payment delays and defaults.

“Here I had to literally look for excuses to not come across the vendors, including even the media companies, for endless delays in payments. I never realised before joining the real estate sector as to making payment against your order is such a big issue. Most of the reputed vendors either refuse to work with the sector or else ask for upfront advance payment,” she says.

Today, there is so much of distrust on part of the vendors that the suppliers of housing equipments, like the bathroom fittings are ready to offer big time discount due to lesser demand in the market but are not ready to give credit. They have had a tough time in recovering their dues from the builders. The same is the reality with all the vendors & suppliers, right from the tiles maker to the cement manufacturers.

Missing vendor management

Parryware has witnessed sales coming down due to payment issues

Vendors & suppliers of Indian real estate suffering, not in terms of orders, but in billing cycle

Privately developers call it market default which is a result of fiscal constrains to slow sales and approval bottlenecks

Ancillary industries supplying to real estate maintain over-dependence on builder contracts that ensure bulk buying, going overboard on commitments and under-utilisation of retail network are the major reasons why they are trapped in a vicious circle today

The developers do admit that there has been some bad precedents set by the over-leveraged companies. As a result, the industry has got such a bad name that those service providers and suppliers who have business in other sectors have refused to do business with the real estate companies.

However, there are certain ancillary industries that cannot do away with the Indian housing market. Their dependence on the real estate is making them suffer, not in terms of orders but in billing cycle.

A section of home equipment suppliers even admit that over-dependence on builder contracts that ensure bulk buying, going overboard on commitments and under-utilisation of retail network are the major reasons why they are trapped in a vicious circle today.

The developers privately share their own reasons, ranging from fiscal challenges to slow sales and approval bottlenecks, but most of the defaulting companies are not ready to speak on record. And those who have a good track record are few and far between.

Nikhil Hawelia, Managing Director of Hawelia Group admits that this is one critical issue where the track record of Indian developers in general and developers based out of Delhi-NCR in particular is less than desirable. According to him, this is the fallout of phenomenal growth of the sector that made the developers over-leverage & over-commit. Today, they are in a hopeless situation and are left with no choice but to either delay or default in payments.

“Even in these challenging times we as developers are getting the credit of three to six months, but only with those suppliers who have been with us for quite some time and have got their payments on committed timelines. The problem is when you start defaulting on the payment. Then what happens is that your tried & tested vendors desert you and the new ones will not supply unless you offer advance payment,” says Hawelia.

There are other developers with sound fiscal management who claim that their timely payments rather empowers them to take the final call. These are the developers to whom it is not the vendors who would evaluate, rather the developers are evaluating the performance of the vendors.

Sobha Ltd. Claims that the performance of vendors is evaluated on a quarterly basis by the Purchase Department. A vendor is evaluated on the defined parameters of timely delivery of material, consistency in quality, competitive rates, credit terms, dependability, coordination and product innovation.

“If the performance of a vendor is found to be below average he will be informed about the same and given a chance to improve his performance in the next quarter. If the performance of the vendor continues to be below average in the next quarter too, the vendor will be suspended. On monthly basis, the need to locate new vendors is assessed considering all cost reducing measures,” says JC Sharma, VC & MD of Sobha Ltd.

However, not all the developers can claim this in today’s market where they have reasons to avoid meeting up with the vendors. Payment defaults are not unusual in the real estate market even in the global context but in India the aggressive developers have left behind a vast poo of dissatisfied vendors and contractors. The problem is from where to procure the raw material now. This has a symbiotic relation with the project timelines as well.

With a trail of unpaid bills, the India real estate has opened doors to market perceptions where right from the bathroom fitting manufacturers to the wooden door frame makers are testimonials of poor vendor management of the Indian real estate developers.

By: Ravi Sinha

Check before buying property in secondary market

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: An average homebuyer may be getting hundreds of advice on how to deal with the developers. But that market is relatively small in size compared to the secondary market which is beyond the hands of even developers.

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estateWhen the then Finance Minister Pranab Mukherjee said there is a cartel of black money in the real estate, he was probably addressing more to the secondary market than the primary market. Can there be any regulation for properties on the resale market where transactions are happening with the mutual consent of the buyer and the seller?

Secondary market attracts a significant number of transactions and as per a rough estimate nearly two third home buyers get an apartment in the secondary market.

The recent Supreme Court ruling on the general Power of Attorneys (POA) is the only step in recent times that promises to check the rampant use of corrupt practices in the secondary property market. Hence, buyer awareness is very important in the secondary market. Though all the checklists needed in the primary market are very much applicable in this market as well, the secondary market home buyers should additionally also inspect the house and verify the condition of plumbing, electrical, woodworks etc.

It would be better if the buyer could get the home inspected by a professional valuer, some of whom are even empanelled with banks and other financial institutions. In addition to inspecting the natural wear and tear they should also check for any structural damages, before purchasing an older home.

Anshul Jain, Managing Director, Cushman & Wakefield India says in case of first sales, the basic selling price is set by the developer for all apartment units and it acts as a benchmark. Any price negotiation may be done based on the level of buyers’ interest in the project, current unsold inventory, current market conditions, payment terms, etc.

While in case of secondary market, the asking rate for an individual apartment may just reflect the expectation of the seller and may only be broadly in line with the prevailing market rate. Here, the potential buyer may not have enough comparable properties to arrive at a fair market value.

“Even in cases where more than one apartment units from the same project is on offer, the condition of such units may vary considerably depending on how well it has been maintained. Another factor which influences the price would be the quality of the interior furnishings which can also vary greatly. In addition, legal vetting of the documents are also essential to ensure that the titles are clear and there are no encumbrances on the property, while such risks remain limited in case of first sale from the developer. Hence, purchases from secondary market remain riskier than direct purchases from developers,” says Jain.

Furthermore, the cash component in the secondary market is high since the seller usually wants to avoid paying Capital Gains Tax and stamp duty which is a fit case for a regulator in the real estate sector who monitors all the transactions.

Analysts suggest there are some associated advantages and challenges posed by under-construction property or purchasing property from the primary market. Such properties typically tend to spread one’s capital outflow and also provide a discount of about 10-25 per cent to a buyer in comparison to a built-up property. However there are several aspects that pose as deterrents to investment in such properties. As buyers do not have any control over the progress of construction, there is no guarantee that they will get possession as indicated at the time of the initial investment.

Consequently, this may affect a buyer’s finances considerably, especially in the case of those individuals who have procured a home loan-which is typically the case with most buyers today. As construction gets delayed input costs may rise and this gives way to escalation clauses, consequently buyers end up paying more for the development and more pre-EMI interest on the loan amount.

Also, in the case of those projects which do not have the requisite approvals and plans in place there could be legal constraints which further affect the time and cost outlays of projects and can adversely affect buyers. Even the levy of service tax on under construction property is regarded by several buyers as a disadvantage, considering these charges are passed on by the developer to the consumer.

Also, buyers tend to be heavily penalized and charged high rates of interest of 15-24 per cent per annum for payment delays. In case of forfeitures, on account of default beyond a certain period, interest rates range anywhere between 15 to 20 per cent of the total sale consideration. Developers on the other hand, only pay Rs 5-10 per sq. ft/month as penalty charges, after taking into consideration a grace period for delays. Also, developers tend not to mention any ‘possession dates’ on allotment letters – keeping contracts ‘open-ended’ with no specified date mentioned for project completion.

Sachin Sandhir, Global Managing Director – Emerging Business of RICS asserts that in primary market buyers also end up paying a ‘holding charge’ of INR 5-7 per sq. ft in cases where possession has not been taken on time.  Buyers are further affected by lopsided contracts, as most BBA’s (Builder Buyer Agreements) provide developers with the flexibility of effecting suitable (so-called) alterations in the layout plan, as and when found necessary. Such alterations may include change in the area, layout plan, floor, block, number of said flats and increase in the area of the said unit, which in effect raises the total cost for buyers.

“When buying a property from the secondary market, it is extremely helpful to get an idea of the prevailing capital values of listed properties from property portals, which these days are available in abundance. However, consultations with a real estate agent or broker to arrive at an informal price is a relatively simple method to check the availability and compare properties, which is still by-far one of the most popular mediums of information collation used by prospective home buyers,” says Sandhir.

However, there are some important aspects that buyers must check before finalizing on their purchase decisions for resale properties, some of which include: 

Registration: checking the registration of property and ensuring that all documents relating to property are available

Establish a clear property title: ensure property is free from disputes and ensure that the purchase is made from the ‘real owner’ or the person who has the right to sell the property

Building Approvals: While purchasing a resale property, ensure that the building is constructed as per the plans and layout approved by authorities

Ensure that the seller has the certificate of completion, occupancy and NOC (No Objection Certificate) from the respective authorities

Check whether the property is still under mortgage. If so, check on the status of the debt and whether the property has been approved by the authorities for which all taxes and other duties/levies such as stamp duty and registration charges etc. have been duly paid 

If the resale property being purchased is in a registered co-operative/group housing society, some of the additional documentation that will be required includes:

Original share certificate of the Society

Allotment letter from the Society in the name of the buyer

Copy of the lease deed, if executed

Copy of order under the Urban Land ceiling Act

Copy of the building plans sanctioned by the competent authority.

Commencement certificate granted by Corporation/Local Authority

Certificate of the registration of the society

Copy of the bylaws of the society

No-objection certificate (NOC) from the society

Copy of N.A permission for the land from the collector

1 2 20