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