Tag Archives: Unhappy Homebuyers

Poor consumer connect dent on Indian real estate

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: A Track2Realty study finds that the buyers hardly get to see the approvals obtained by the developers.

Homebuyers harassment, Project delays, Developers fault, Builders' high handedness, Real estate malpractices, Realty complaints, Homebuyers' woes, India real estate news, India property market, Noida property market, ATS, Amrapali, Supertech, Panchsheel,, Track2Realty, GaursonsA few ground realities that suggest real estate continues to be sellers’ market, more so with an opaque one.

8 out of 10 home buyers are not sure at the time of booking as to whether the developer has got all the mandatory approvals for construction

7 out of 10 developers refused to showcase even the project CC (Commencement Certificate) to the buyers

7 out of 10 buyers pay the due diligence fee to the lawyers to get the legal titles of the land, while developers only assure them verbally

9 out of 10 buyers have absolutely no idea about the fiscal management of the project and its execution feasibility

8 out of 10 buyers were persuaded by the lending banks to go by the verbal assurance of the developer

6 out of 10 home buyers really had to fight with the builder to get a copy of OC (Occupation Certificate) and CC (Completion Certificate) 

The above statistics says a lot about the way the home buyers have been taken for a ride. The developers in many cases do not have all the approvals in hand at the time of starting the booking the project. Many of them simply do not entertain the home buyers to showcase the approvals, even if they have obtained it.

Nothing hurts Indian real estate more than their inability to connect with the consumers and showcase them was is their legal right. The seeds of lack of trust in the minds of the buyers are sown at the time of booking itself as the developers do not find it necessary to showcase approvals, even when asked to, and it continues throughout the construction lifecycle.

The agony of the buyers continue till one fights for the Occupation Certificate and Completion Certificate. In Noida many home buyers have got the possession of the apartment and are living over there without the registry, as the developer has failed to get the OC for one reason or the other.

“I was simply told by the builder to take it or leave it when I wished to see the approvals and the legal title of the land. With no choice left, I made the payment of initial 20 per cent and the project has not yet started after two years now,” says a dejected Rakesh Mathur in Gurgaon.

Developers, on their part, assure that they have started interacting with the home buyers and they even address the website visitors and solve their doubts and queries which have started reflecting in their conversion ratio as well. But by and large addressing the consumer touch points is few and far between in the Indian housing market.

More importantly, the consumers are nowadays being pacified due to the fear of consumer backlash than a serious concern to address the grievances and be seen as a responsible and committed real estate brand.

Manju Yagnik, Vice Chairperson, Nahar Group defends that scenario is changing fast and the real estate has undergone a massive change in last one decade. According to her, there has been greater transparency and considerable awareness among the home buyers. Therefore, it cannot be agreed completely that consumer connect is a missing link and the developers refuse to show the approvals.  In fact, of late, social media and digital project promotions have effectively improved the transparency.

“There is a slight gap that exists due to certain conditions such as perception and lack of understanding on various facts which are beyond the control of the developer. These conditions will include lack of necessary infrastructure, complex real estate regulations etc. Consumers are less aware of the formalities and rights involved while purchasing a property. But these flaws can be overcome by creating better awareness among consumers,” says Yagnik.

However, Nikhil Hawelia, Managing Director of Hawelia Group admits that this is a prevalent market reality where the developers simply refuse to entertain the home buyers who ask so many questions. The idea is to simply have only that kind of buyers who could be handled easily. Since the market continues to be sellers’ market, most of the needy buyers just succumb.

“When I myself volunteered to showcase all the approvals and legal title to my home buyers in Greater Noida West they were all surprised. They had been witness to an altogether different kind of market reality. But in hindsight today I can say that those buyers have stood with me, even when the project was slightly delayed. As a matter of fact, some of them became my repeat customers as well,” admits Hawelia.

This any way is more of an exception than the market reality. The prevalent mindset of the builders is that why to entertain so much to the buyers and make them even more demanding. As a developer sums up the discussion, while requesting anonymity, “the more you try to be open with the buyers, the more they get demanding. We as the developers do not want one more party to arm twist us, as already the development authorities keep us pushed to the wall.”

No wonder, the homebuyers are not impressed with the poor consumer connect and opaque dealing of the developers. They are increasingly questioning their callous attitude and their frustration is vented out through protests and court cases. 

By: Ravi Sinha

Triple intervention helps homebuyers; hurts developers

Posted on by Track2Realty
Track2Realty Exclusive

News Point: Consumer activism, media trial & judicial intervention come to the rescue of harassed homebuyers; developers clueless to deal with it.

Unhappy Homebuyers, Consumer activism in real estate, Judicial intervention for homebuyers, Media and real estate, Indian real estate news, Indian realty news, India property news, Track2Realty, Property market of IndiaSnigdha Chauhan has been a dejected homebuyer for long after having invested in a housing project in Gurgaon that could not take off in the last seven years. She knocked every possible door – right from the developer who even refused to meet personally, to the fellow homebuyers who were clueless as to what to do. Media, of course, did not find a story into this as project delays are no news nowadays. And finally, her last resort in judiciary proved to be an ordeal of dates after dates as the developer had more financial clout to afford battery of eminent lawyers.

Snigdha, and many harassed homebuyers like her, are today smiling as the tables have turned and the simultaneous triple intervention of consumer activism, vigilante media and judicial cognisance have changed the outlook of the helpless homebuyers completely. This triple effect is proving to be the boon for the homebuyers and bane for the defaulting developers who took the buyers for a ride too long due to lax regulations and passive institutional responses.

“I was taken aback on that night when I found it in the TV news that after the buyers’ protest and its telecast on the TV news channels, the court has now intervened and ordered that the developer will have to refund the homebuyers’ money with 18 per cent interest. I think the collective power of consumers, media and judiciary saved us from being robbed of our lifetime’s savings,” says Snigdha.

Emerging realities 

  • Consumer activism, media trial & judicial intervention helping the harassed homebuyers
  • Developers are clueless in terms of dealing with the simultaneous spate of consumers, media & judiciary
  • Developers blame it to approval delays but are not open to be transparent with homebuyers
  • Elements of consumer blackmailing also gets legitimacy due to poor perception of the builders

This is not an isolated incident where some of the homebuyers like Snigdha could get the justice; though delayed but not denied. Today, as the consumers increasingly understand the power of collective might & activism and media is supporting the worthy cause leading to judicial interventions & speedy trials, the market dynamics of Indian real estate has suddenly changed a lot.

This also raises a fundamental question as to how long will this triple action continue. More importantly, are the developers at the receiving end of the current spate of consumer activism, vigilante media & judicial intervention ready to change the ways & means of operating recklessly?

Most of the developers admit that today environment is challenging for a real estate developer. They, however, blame it to the external factors than accepting their own fault. A section of developers maintain that there are so many unforeseen reasons and force majeure which are beyond the control of a developer. So, during that period construction is stalled beyond months to years. That period cannot be contracted. Developer faces two losses, one is time, and another is financial loss.

Pratik K. Mehta, Managing Director, Unishire maintains that consumer activism is good but needs to be used constructively to resolving a problem. Similarly, with the vigilante media and judicial intervention, lot of the non-transparent issues could come to light which are not always due to a developer but sanctioning authorities also.

“I understand that there is a valid reason behind the new wave of activism that is taking place and agree that if a developer has not delivered on promises and commitments, they should be penalized but blatant activism without appropriate knowledge of the situation may only worsen the problem,” says Mehta.

A critique of consumer activism, Raj Gala Shah, Partner, Zara Habitats says that such market forces will definitely be the catalyst to better the eco system, provided there is ethical practice followed while fighting for the right cause and for that to happen self governance is crucial. It should definitely be the ultimate aim to weed out unscrupulous elements, not just from the business but also from the consumer activism side wherein certain individuals pursue monetary benefits under the garb of activism.

“Under an united effort the consumer, media and judiciary, the real estate sector can steer the future to a transparent environment, without being dependent on the government. As the adage goes ‘with great power comes greater responsibility’ and it seems apt for the current scenario of consumer activism. With the easy availability of information through RTI, 24×7 media coverage, a judiciary with stern outlook towards the real estate sector, it seems that there are only unscrupulous elements in the business,” opines Shah.

Developers have their reasons to sound like every consumer activism is blackmailing. But the fact remains that it is not consumer activism alone but two pillars of democracy – media and judiciary – that have become part of this ‘operation clean up’.

Of course, certain elements of consumer blackmailing cannot be completely ruled out. But then the developers are guilty of lending credence to every arm-twisting as legitimate activism since they have not taken care of perception management. CREDAI President Geetamber Anand repeatedly talks about perception management but has thus far failed to take any action against the erring developers who have been indicted by various judicial interventions in recent times.

This spate of collective might of consumers, media and judiciary promises to change the market dynamics more than any government appointed regulator. The reason being that it is coming out of spontaneous reaction and calls for fighting against the malpractices in the business where the developers have enjoyed the free reins far too long.

A section of analysts admit that the genuine developers who are not guilty of delaying and denying the buyers should rather welcome this triple intervention. They can also be more open about the issues the developers have to face. Of course, the single most and biggest challenge is the approvals systems for projects. It is the leading cause of worry on part of the developers as reason for many project delays is the system.

There is absolutely no accountability in the approval systems and due to several agencies involved there is lack in coordination and willingness to adhere to timelines. Also, most of the authorities are ill equipped to handle their respective jobs/positions which worsens the situation.

With the onset of consumer activism, a lot of these processes can be monitored, documented and understood by the general public at large to understand the various challenges developers face. This also could pose a huge pressure on the departments to work diligently as now they are answerable to not just a handful of developers but to a larger set of an audience that is not ready to be a silent spectator any longer.

Will the triple force of consumer, media & judiciary weed out unscrupulous elements from the business? There is no second opinion that if channelized properly, this spate of vocal outcry can certainly identify and weed out the unscrupulous elements form the business. Of course, the element of consumer blackmailing threatens to derail all the good work done. But then it is not the consumer activism alone but to monitor and take it to logical conclusion, media and judiciary are also playing an active role. Collectively, this promises a new eco system of housing market in the country.

By: Ravi Sinha