How you can make builders complete projects or compensate for delays

[tarun1305]

This is a good article on ET yesterday:

Builders always like to be in the news. When they are not selling flats, they are busy buying polo teams or sponsoring cricket tournaments. While the reason for being in the limelight may have differed over the years, today it's the same for most developers, and it's the wrong one, delayed projects.


Most builders are sitting on projects that are long overdue and many are unlikely to hand over the keys in a hurry to the house that you may have already paid for. According to industry estimates, at least a third of residential projects is facing execution delays.

The reasons vary from lack of demand and paucity of funds for the developer to delay in getting regulatory approvals. According to a recent study by property research firm PropEquity, almost 45% of the projects launched between January 2007 and June 2009 in the three biggest property markets (Delhi/ NCR, Mumbai and Bangalore) are facing significant execution delays. PropEquity surveyed 1,920 projects that were scheduled to be completed by January 2012 ( see graphic below ).

When Delhi-based retired Air Commodore DVS Trehan booked a 2,400 sq ft apartment in November 2007 in Noida, he was looking forward to moving in by early 2010, as promised by the builder. But even after four years of paying the entire sum, the developer seems in no hurry to hand over the possession of Trehan's house.

"I had sold my earlier flat and pooled in my retirement money to purchase this house. The company was to hand over the possession by January 2010, but even by late 2009, they had not begun any construction activity on the proposed site," he says.

Trehan's repeated queries and visits to the developer's office were met with empty promises. "The office staff would fob me off with stories that they have the latest technology, which would enable them to complete building the structure in just six months," he adds.

Trehan is not alone. There are countless such cases where buyers are still waiting for their homes and have not received a single rupee as compensation from the builder. The wait has been particularly tough for those whose EMI clock has begun ticking.

However, the situation is unlikely to become better any time soon as builders continue to face a funding crunch and the demand for property across most cities remains weak. With inflation continuing to be above the central bank's comfort level, any action on the home loan front is also likely to be gradual.



Even developers are beginning to realise the severity of the problem. For, after endless claims that projects get delayed because of factors beyond their control, they are now considering it as a serious issue knowing that they cannot brush it aside by shunning responsibility. So an industry body has come up with a code of conduct for its 6,000 members to 'maintain the honour and dignity of developers, promoters and builders'.

The move is being lauded in industry circles as long overdue, but its effectiveness in curbing the menace is being questioned. "What can it do? At most, it can cancel my membership of the association," says a developer, whose two projects have been delayed in the National Capital Region.

What are your options?

This is not to say that the code of conduct may not be of much use. Perhaps it will make an impact on the way the developers treat complaints from buyers, but that is still a long way off. The point is, as an aggrieved buyer, you should not wait for either the builder to take the code seriously or fast-track the execution of his project just because he has to follow a code. In the following pages we tell you what your options are while taking on the builders to demand what is rightfully yours, and also how individuals and groups are doing it across the country.

To know your rights as a buyer

You must understand the obligations of the seller. According to Section 55 of the Transfer of Property Act, 1882, the seller is bound to:

--> answer all the relevant questions put to him by the buyer about the property or its title.

--> provide to the buyer all the documents related to the property that are in his possession or power.

--> disclose any material defect in the property or in the title about which he is aware, but the buyer is not.

--> execute a proper conveyance of property when the buyer tenders it to him (after payment of due amount) for execution at a proper time and place.

--> to take care of the property and all relevant documents in his possession between the date of sale and delivery just as an owner would.

--> pay all public charges accrued in respect of the property up to the date of sale .

http://articles.economictimes.indiatime ... l-projects

With Regards
Tarun

[s1joshi]

Excellent compilation of various available options... Thanks for sharing

[dheerajjain]

Practical and easy to understand steps for buyers to follow. Thanks for posting !

[Nibha28]

Dear Friends,

Pl read the following article forwarded by Ms Nidhi Sood.

http://economictimes.indiatimes.com/mar ... 571372.cms

Pl share your views and takeaways.

Saraswati