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Consumer activism: Protecting the home buyers’ rights

Seven years after booking an apartment with a leading pan-India developer, Mohit Khan lost patience and approached the developer for a refund. Khan was denied on the basis of the claim that the project R

Seven years after booking an apartment with a leading pan-India developer, Mohit Khan lost patience and approached the developer for a refund. Khan was denied on the basis of the claim that the project was near completion. In fact, the developer sent Khan a fresh demand note for full and final payment of the remaining 10%.   

With no resources to take the developer to court, Khan resorted to vent his anger on social media. He made a Facebook group against the developer. Initially, it was ignored or went unnoticed by the builder. Soon, the group became a hyperactive platform for consumer activism, with more and more aggrieved home buyers voicing their grievances. The developer soon felt the heat and opened a channel of communication with the buyers.

Weeks of acrimonious conversations (escalating from customer care to senior executives of the company) later, the admins of the group were sent a legal notice. Ironically, this move backfired as the issue snowballed and became front-page news in leading newspapers, and a raging subject on Facebook and Twitter. The aggrieved buyers were soon accusing the developer of ‘Big Brother tactics’.

The developer was forced to withdraw his case and address the concerns of the aggrieved buyers. Romesh Chandra, one of the online crusade initiators, was soon approached by a number of home buyers aggrieved by other developers. “I have never been an activist but when it came to fighting for my lifetime’s savings, I was determined,” asserts Chandra. “Fortunately, social media proved to be a savior. My sense of justice and fairplay suggests I should advise people who are approaching me with their grievances” he says.

Consumer awareness and satisfaction

The Indian real estate market is sitting on scores of consumer cases in various courts. Many of the clauses, including the developers’ one-sided agreements, have been challenged in various courts and yet, continue to be upheld. In fact, those clauses continue to be a part of standard builder-buyer agreements even today.

A Consumer Satisfaction survey conducted 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, has been prevalent for a long time. Also, terms like super area, usable area and carpet area, have always been a bone of contention between home buyers and developers.

However, what has changed is the consumers’ awareness of their rights. They will not suffer silently, but vocalise their concerns. Hence, the Indian real estate industry has suddenly woken up to the new reality of consumer activism. Access to information and online networking seems to have exacerbated this new wave.

See also: Landmark win for home buyers: Consumer commission imposes Rs 3 crore penalty on Unitech

Raj Gala Shah, partner, Zara Habitats, points out that more than the technological shift, the mindset of both, the consumer and the developer has changed. The industry is steadily implementing transparency in 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 systematic and ethical,” points out Shah. “This has paved the way for corporate governance. An aware buyer is never a liability, if you have given him the facts and figures” he says.

Despite the fact that a section of developers are taking consumer activism as a learning curve, at least on face value, the sector seems to be fairly uncomfortable with the growing trend. They think home buyers often get away with unrealistic demands and arm-twisting due to poor perception and projection of the sector. However, this consumer activism is definitely empowering home buyers; something that will hopefully organise the housing market.  

(The writer is CEO, Track2Realty)

By: Housing.com/news

First Published on Jul 8, 2016 02:49 pm
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