Builders can’t ignore consumer activism


News Point: A study by Track2Realty finds real estate on the list of top 10 consumer cases in India. Developers are clueless to deal with consumer activism.

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 IndiaIn 2007 Mohit Khan booked an apartment in Kochi with a leading developer that had a pan-India footprint. After seven long years of wait he finally lost the patience and approached the developer to refund. The developer denied it saying the project is near completion. As a matter of fact, the developer sent a fresh demand note for full and final payment of remaining 10%.

Khan had no resources to take the builder in a legal battle. However, fed up with delay and unresponsive behavior of the developer, he resorted to vent out his anger on social media. He made a Facebook Group against the developer. Initially, the builder either did not notice it or preferred to ignore.

However, the Facebook wall soon got hyperactive platform of consumer activism with more and more aggrieved homebuyers with the same builder coming together to air their grievances. The developer soon felt the heat and opened the channel of communication with the buyers.

It followed up with over weeks of acrimonious conversations, escalating from customer care to senior executives of the company. Finally the admins of Group on Facebook were sent legal notice.

It nevertheless backfired on the developer. The legal news soon snowballed to become front-page news in major newspapers and a raging thread on Facebook/Twitter. The aggrieved buyers were soon accusing the developer of Big Brother tactics. The developer was left with no choice but listen to a conversation over which the giant realtor had no control.

In the end, the developer simply withdrew its case, and was forced to address the concerns of the aggrieved buyers. Romesh Chandra, the homebuyer who made the mighty builder bite the humble pie was soon approached by a number of aggrieved homebuyers with various developers to help them mobilise their collective strength.

“Frankly speaking, I have never been an activist at any level. But when it came to the question of fighting for my lifetime savings, I was determined to fight it out. Fortunately, the new age social media proved to be a savior. My sense of justice and fair play suggests I should at least advice people voluntarily who are approaching me with their grievances,” says Chandra.

The Indian real estate is sitting on scores of consumer cases in various courts. They have nevertheless enjoyed the best of lax regulation thus far and failed to bring consensus on the issue of transparency. Many of the clauses, including developers’ one-sided agreements, have been challenged in various courts and also upheld. Still those clauses are part of standard builder-buyer agreement.

A study by Track2Realty finds real estate on the list of top 10 consumer cases in India. The study also notes that delays in delivery or default in design or construction promises is not something that has creeped in recently. Terms like super area, usable area and carpet area have always been bone of contention between the homebuyers and the developers.

What has, however, changed is that the consumers are getting more discerning about their rights. They are no longer ready to suffer silently but are vocal. And hence, Indian real estate has suddenly woken up to a new reality of consumer activism. Access to information and online networking seems to have added a zing to this new wave of consumer activism.

Is the realty sector ready for this? Raj Gala Shah, Partner, Zara Habitats points out that more than the technological shift, there has been a shift in the mindset of both the consumer and the developer fraternity. The industry is slowly and steadily adapting itself into implementation of transparent deals and providing correct and specific project information to the consumer.

“An educated consumer has been a catalyst in transforming the industry from being unorganised to becoming more systematic and ethical, thereby making way for corporate governance. An aware buyer is never a liability if you have given him the facts and figures transparently,” says Shah.

“The issue is not that whether the developers are ready for it or not. The issue is that they don’t have a choice today. Deal with it; address the legitimate grievance; and make it open in the public domain as to which of the demands can not be met and why,” says a candid Nikhil Hawelia, Managing Director of Hawelia Group.

Despite the fact that a section of developers are taking consumer activism as a learning curve, at least on the face value, the sector is by and large pretty uncomfortable with this growing trend. They think the homebuyers often get away with unrealistic demands and arm-twisting due to the poor perception and projection of the sector.

But this consumer activism is definitely empowering the homebuyers; something that shows the way forward for an organised housing market.

By: Ravi Sinha


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