Moneycontrol PRO

Homebuyers wait anxiously as construction of Thane residential project drags on

Across Indian cities, buyers have been waiting for years for what they hoped would be their dream homes after investing their life savings and borrowing from banks. Moneycontrol chronicles the plight of homebuyers in one stalled project in Thane.

Raj Torres is just one of the many residential projects in MMR that are stalled because their developers ostensibly ran into financial difficulties.

Raj Torres is just one of the many residential projects in MMR that are stalled because their developers ostensibly ran into financial difficulties.

Prakash Patel, a retired banker, used his life savings to buy a 750-square-feet, two-bedroom apartment in Thane, near Mumbai, for Rs 1.24 crore in 2016. Six years on, he hasn’t received possession.

The project is called Raj Torres on Ghodbunder Road and was launched in 2014 by Rajesh Estates and Nirman Private Limited under the banner Rajesh LifeSpaces. Rajesh Patel is the Managing Director of Rajesh Lifespaces; Pratik Patel and Priyal Patel are its directors.

“I upgraded from 1 BHK to 2 BHK for my son and daughters. I also sold my property back in my hometown, but today I am residing in a rented accommodation," Patel, now 66, said.

Patel isn’t alone. At least 100 buyers are waiting to move into what they had hoped would be their dream homes in Raj Torres Phase-2, which was conceived as a residential development consisting of five wings of 28 floors and 29 floors and offered one-, two-, three-, and four-bedroom units.

Raj Torres is just one of the many residential projects in the Mumbai Metropolitan Region (MMR), which includes India’s financial capital and nearby towns, that are stalled because their developers ostensibly ran into financial difficulties.

Close

Homebuyers’ plight

For homebuyers in these projects, the wait has been seemingly interminable

Aditya Srivastava, 31, booked a three-bedroom-apartment in Raj Torres for around Rs 1.75 crore and was promised possession in March 2021.  "I booked a flat in 2018 by selling my 2BHK house and I am paying a hefty amount on the rented accommodation and the pre-EMI on the home loan,” Srivastava said.

"We were promised 28- and 29-storey towers but today what we see is just a couple of floors. The developer is not communicating anything. I have also filed a request in the conciliation forum of Maharashtra RERA (Real Estate Regulatory Authority) but the developer has not responded yet,” added Srivastava.

In the meanwhile, one of the home buyers in Raj Torres approached Thane Police in September 2021, alleging delay in receiving possession of their flats.

Under investigation

Sulbha Patil, a senior Thane police inspector, said: “The case is under investigation and we have also heard from the developer. Prima facie, it looks there are two issues to be looked after, of which one is buyers not getting possession and the second is related to finances of the developer. The charge sheet has not been filed yet.”

An e-mail query sent to Rajesh Patel of Rajesh Lifespaces remained unanswered. Attempts to reach the promoter via phone calls and a WhatsApp message also did not yield any response. 

Rajesh LifeSpaces has had a presence for five decades and has a portfolio of several residential and commercial projects that range from budget homes and future-ready apartments followed by office spaces including retail hubs. The website of Rajesh LifeSpaces maintains that in the last five decades it has delivered over 9.1 million square feet adding that over 100 projects have been delivered to over 13,000 families.

The developer's website also displayed names of the 68 real estate residential projects it has constructed in Mumbai. As of July 5, 2022, it  said that there were currently seven ongoing projects of which Raj Torres is one where the developer has taken an extension. A search on the website of MahaRERA reveals that the developer has taken extension in five out of the six ongoing projects of which the possession date of December 31, 2021 in case of one project named Raj Altezza has already passed.

Project deadline extended

According to buyers of Raj Torres Moneycontrol spoke to, the project received dozens of bookings in 2016, 2017 and 2018 for units in its A, B, C, D and E wings. Work slowed by the end of July 2018 and stopped by 2019, said the buyers, adding the developer blamed financial troubles for the halt to construction.

According to information on the website of Maharashtra RERA, the proposed date of completion was initially December 31, 2020; it was revised later to March 31, 2022.

Homebuyers came together and formed Raj Torres Buyers Welfare Association in September 2020 to wage a united fight. Homebuyers came together and formed Raj Torres Buyers Welfare Association in September 2020 to wage a united fight.

Patel, the retired banker, said, “Now we are hearing that someone else will take over the project and construct the house. It is good but we have already lost time. If nothing works out, I will approach Maharashtra RERA. At least after me, my son will get the house.”

Homebuyers came together and formed Raj Torres Buyers Welfare Association in September 2020 to wage a united fight.

In a statement, the association said, “The project was launched sometime in 2014 and a majority of the buyers booked the apartments in 2016. Many buyers are paying home loan pre-EMI/EMI for it despite the subvention scheme where the developer is supposed to pay interest on pre-EMI/EMI. The dates of possession mentioned are in three sets, which is one for 31 Dec 2020, 31 March 2021, and 31 Dec 2021. The RERA has extended the completion date to March 2022, and the developer further wants an extension, but the buyers are yet to give their consent. There has been no construction activity at all since 2019 April, yet the builder got an extension citing COVID."

Lawyers speak

Advocate Satish Dedhia, who handles several RERA cases and is also vice-president of RERA Practitioners Welfare Association said, "I have done some research online on the website of the ministry of corporate affairs and other portals regarding the lending patterns of the developer. Considering the financial situation, the chances of the developer completing the project in the near future appear to be bleak."

Dedhia said the association should apply for the project to be taken over by another developer. “Simultaneously, buyers should also approach the high court and ask for a forensic audit of the entire group as well as the role of financial institutions (lenders) in failure to detect the risks involved and failure to act diligently,” he said.  “The developer is not uploading mandatory disclosures and still MahaRERA also did not take steps. MahaRERA ought to have compelled the promoter to bring sufficient funds to complete the project," Dedhia added.

What is ahead for buyers?

Homebuyers say the developer has been communicating with their association members verbally. The company has told them that it is trying to convince its creditors to allow other developers to take over the project.

“We are happy that there is an attempt by the developer to solve our problem, but we are not happy with the pace at which it is happening....some are fortunate to own a house, but there are buyers who are paying for EMI (and) rental accommodation. The process needs to be expedited," said the association’s statement.

The association members are now also planning to appoint a lawyer and file a complaint against the developer for delayed possession and seeking relief from MahaRERA. 

The buyers said they were not going to RERA till now as they thought that the builder will start the work and their focus was ensuring the builder starts the work and work towards possession rather than going behind him and complaining. However, last year they approached Thane Police which has maintained that the investigation is ongoing. Additionally, they said now they have decided to appoint lawyers and file complaints in RERA individually so the pressure on the developer and lender is felt.

A comment from MahaRERA on the project is awaited.

Project Timeline

2014: The project is launched

2016: A majority of bookings are received

2017: An agreement for sale is signed after the passage of the Real Estate (Regulation and Development) Act, 2016 

Work slows in 2018 and halts in 2019

2020: Around 100 buyers registered with the Raj Torres Buyers Welfare Association.

2021: RERA extended the deadline for completion of the project until March 2022.  

2021: One of the buyers filed a complaint with Thane Police Station.

2022: Buyers say developer now wants to exit project, talks with lenders ongoing.

2022: Meanwhile, buyers are also planning to file complaints with MahaRERA.
Mehul R Thakkar
first published: Aug 4, 2022 04:26 pm
Sections
ISO 27001 - BSI Assurance Mark