Why Greater Faridabad projects are delayed

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Why Faridabad Property Projects Are Delayed
July 26, 2012 by Sunil Tinani
Here are the reasons why Faridabad property possession dates are being delayed:

BUILDER GREED

A builder typically spends 25%-30% of the cost of the flat on getting the structure ready. By the time the structure is ready, the flat buyer has already paid 90% of the cost. This leaves a huge surplus with the builder, who usually uses the money in his kitty to finance new projects. This could be one reason why there are so many complete structures in Neharpar awaiting completion. Moreover, once the structure is complete, the buying and selling of apartments intensifies, and the transfer charges add to the builder’s profits. The builder would rather wait than complete the building and give possession.

BUILDER OVER-COMMITMENT

Once the builder starts expanding, he becomes over committed and this leads to a cash crunch. Naturally, with no cash in the kitty, no builder will complete any project.

CORRUPTION

It is an open secret that all government departments want their share of the loot. The general perception is that palms have to be greased before obtaining no objection certificates, environmental certificates, and a plethora of clearancees that are required to complete any residential project.

DELAY IN GOVERNMENT ACTION

Many government departments sleep over an area’s development. For example, Neharpar was conceptualized in 2005 and most of its roads have been developed by BPTP. The government has swung into action only recently. Sometimes, builders wait for the government to clarify their policies related to licensing, FAR, FSI, EWS housing, etc., while the government continues to sleep over these issues.

BUYER ISSUES

Many speculators get into a project for quick gains. If the project does not catch the investor fancy, the speculators are left with a dead investment. These speculators do not pay up installments and other charges and this delays the project. You will be surprised to learn that many Neharpar fresh bookings and many flats are being held by wealthy Faridabad financiers.

The builder also knows that buyers come from diverse geographies and backgrounds and as such do not have the capacity to fight with him.

NO REAL ESTATE REGULATOR

The reason why Indian builders get away with this kind of murder is because there’s no one to watch over them and penalize them when they go wrong. The absence of a real estate regulator has emboldened builders who regularly take buyers for a ride.

OTHER REASONS

Non-profitable land, internal disputes, death of key personnel, recession, and natural calamities are other reasons why projects are delayed. However, no such incident has occurred in any Faridabad property case.