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Developers, it's time to start communicating with your customers

Should developers tell buyers the truth about project delays and risk a few cancellations, or withhold the facts and risk stoking the rumour mill? The choice is more obvious than they think

Project delays and procrastination by the staff to facilitate registration are both problem areas.

Project delays and procrastination by the staff to facilitate registration are both problem areas.

On Friday afternoon, the managing director and CEO of Edelweiss Asset Management Limited, Radhika Gupta, unleashed a Twitter mini-storm by citing her after-sales experience with Kalpataru Ltd. The company has an upcoming project called Avana where Gupta and her husband made a purchase in 2015. The poor after-sales experience primarily revolves around a lack of communication by the builder on two fronts a) Timeline for completion of the project, given the delay it has seen b) Nimble processing of the stamp duty payment, given the expiry of the stamp duty benefit that exists until March 31.

There are two different categories of problems in this episode. One is the larger problem of the apartment delivery being substantially delayed. Gupta was given a possession timeline of 2017-18 although the date mentioned by the builder on RERA was March 2019. Thereafter, the possession date was revised further to June 2022 on RERA. Needless to say—for a purchase done in 2015—it is an exasperating delay. The second problem, in my view, is the smaller one of staff members probably just procrastinating on facilitating or communicating the registration of the apartment. On speaking with Gupta, I am told that Kalpataru has sprung into action and will be meeting with her on Sunday, March 28.

I have also reached out to Kalpataru and the copy will be updated with its comment.

People who follow me on social media will know that I am personally fond of Kalpataru. They may not be very high-profile and top-of-mind, but they execute better than most and have a keen product focus that is missing in several developers. Not many would know that the company built one of the first skyscrapers in Mumbai when it did the Kshitij at Nepeansea Road in 1975. In 1999, it did the Kalpataru Heights at Mumbai Central which stood out until Raheja Vivarea set a new benchmark in that market. More recently, it did the Sparkle at Bandra East and Aura at Ghatkopar—both well-executed projects.

Social media is abuzz with two questions after this episode. The first is: If a reputed player like Kalpataru handles its customers in this manner, then how do the less reputed housing companies treat their customers? The answer: Largely, the same. Or even worse. That’s because this is not a Kalpataru specific problem. It is an industry wide problem. Most of the industry, with few exceptions, suffer from the Bachna Ae Haseeno syndrome. Much like Ranbir Kapoor chasing actresses, finding success and thereafter abandoning them in search for a new candidate, most builders will chase the prospective buyer with utmost gusto and energy. Once the prospective buyer becomes the buyer, the eyes of the builder shift to finding a new prospective buyer to convert. The buyer is thereafter an ignored specie. The only touch point between the buyer and builder between the under-construction and completion stage is when the builder seeks disbursement of funds on completion of a new slab. Customer Relationship Management staff are largely glorified collection agents.

The second question in the mind of social media is this: If such an event could happen with an influential figure like Gupta, then what treatment should a common person expect? The answer: Not very different. The truth is that if there is any one industry that has the record of being an equal opportunity offender, it is the real estate industry. The rich and influential may get an audience with the promoter while the ordinary middle-class will normally just have to suffice with the sales manager. The message, however, remains the same. Remember in a webinar in May 2020 that is now deleted, the Union Minister Piyush Goyal had mentioned his own terrible experience with an under-construction project in South Mumbai several years back. Given his outburst against developers in that same webinar, it doesn’t appear as if he has forgotten and forgiven.

I have asked several stakeholders regarding this pattern in communication and culture of the industry. At one extreme is the common view that developers think of customers with disdain and it shows up in incidents like these. As much as customers may deny this, it is no secret that this is a reality stemming from a legacy that refuses to go away.

The other view is around the fear and consequences of being transparent with customers. Would a new buyer purchase from me if I tell him the project has temporarily stalled due to approvals? Will the current buyer cancel his booking if I tell him the project has liquidity issues and is thereby delayed? There is merit in this fear.

Yet the alternative often has even more worrying consequences. Every project has buyers that are vigilant and careful. On sensing and gathering something fishy, they start their own ‘probe’ by talking to multiple stakeholders. Given the nature of the industry, often the findings of such a probe reveal an exaggerated sense of the challenges in a project. Conversations breed rumours. And rumours feed a perception that has the potential to convert it into a nasty reality.

Eventually, who is at fault? The developer. If the communication channel existed efficiently and the communication was transparent, the rumour-mongering would never have arisen in the first place. Developers should leverage the low expectations buyers have from the industry with regards to things like timely delivery. They must keep talking with their customers—especially when things aren’t going according to plan. That’s the first step towards accountability.

Vishal Bhargava is a real estate enthusiast who views and reviews new projects, when not busy with his newstoon platform Snapnews. The views are personal.