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Unity is strength – Homebuyers can work together to achieve common goals

Homebuyers' groups help gain insights into how others have achieved success. It is a platform buyers can approach for resources and support to fight their battle.

Vandana Ramnani @vandanaramnani1

Tarun Chauhan is one among thousands of homebuyers who withdrew money from his provident fund to invest in his dream house. Like others, he too had to endure delays in getting possession but what made his case different is that when he finally moved in, instead of his apartment facing a manicured garden as promised by the builder, it was located in front of a proposed landfill site.

That's when he decided to take up the fight for which he had the support of thousands of buyers residing in a township in Ghaziabad.

"When we bought our apartments, we were clueless that a dumping ground would come up within 100 m of the project. We then decided to form an association comprising almost 20,000 homebuyers and fight a court battle. Our numbers became our strength. From High Court to Supreme Court and finally to NGT, our fight finally bore fruit after a three-year struggle when we finally won the case and it was decided to relocate the dumping ground. We collected over Rs 4 lakh from homebuyers to fight the case," he told Moneycontrol on the sidelines of a homebuyers conference held in NCR.


His advice to buyers is that they should check the developer's track record and the quality of construction before signing on the dotted line. Most important, go through the master plan of the area carefully, he said.

Also, as far as possible, buy a ready-to-move-in apartment, he added.

His wishlist for the new government is that a clause be included in RERA that fifty percent of the apartment cost should be collected by the builder from the homebuyer only at the time of possession. “If this is implemented, 90 percent of our problems will be sorted.”

Buyers, I shrunk the size!

A host of builders may be reducing apartment sizes to suit the tastes of millennial homebuyers, who are averse to investing in both high maintenance costs and the additional effort that larger properties entail. But this case concerns an apartment worth crores located in Mumbai where the carpet area of the flat was allegedly reduced by 30 percent of what was promised in the company's brochure.

"When I finally received delivery of my apartment last year, there was not a single amenity in place out of the 55 amenities listed in the brochure. The homes were half finished, of extremely poor quality and unsafe for residing. We found there was lot of manipulation in the carpet area and there was a shortfall of almost 30 percent. This is nothing but blatant cheating on the part of the developer. We got together to challenge the part occupation certificate in the Mumbai High Court for which we were able to muster the support of 120 people.  We collected Rs 50,000 from each member of the buyers' association," said Paresh Mehta, who bought into an apartment in a posh complex by a renowned Mumbai-based developer.

Platforms such as Forum for People’s Collective Efforts come to the rescue of buyers such as Mehta. "You need a lot of courage and guidance from fellow homeowners to fight such a big builder," he said.

Another resident of the same complex, Shilpi Thard, whose video on the quality of construction of the apartment she had moved into went viral a few months ago, said: "We (homebuyers) did not buy a house thinking we would have to get into such a huge battle."

Both she and her husband had paid up over Rs 7 lakh for two apartments in 2012 in the complex.

"The apartment did not live up to its status of a seven star luxury apartment. The unit was made of gypsum walls instead of the customary brick walls," she said.

Her advice to homebuyers is that they should ensure that the builder has all the permissions in place and that they should get their application vetted by a lawyer before submitting it.

"Before the sale agreement is signed, buyers have the right to go through it. It shouldn’t be that the builder gets it straight to the registration office and you have no time or option to sign on the dotted line. Go through the agreement carefully and question unfair clauses," said Mehta.

Most important, 'don't fear the builder's might. There is strength in numbers," is Thard's advice to homebuyers.

When buyers turned down the offer of possession

Orissa's Bimalendu Pradhan has a strange tale to tell. Even though he led the fight against the builder for late delivery of project and won the case along with hundreds of others, till date he's the only one in the project not to have received possession of his unit.

"We faced several problems. First, the project was delayed by almost four years. Second, the area that was finally offered was 43 percent less and third, the builder was selling parking separately," he said.

More problems followed. When the buyers approached RERA, they found that while the Orissa Development Authority Act had been in existence for over three decades, the local laws were not in place. There was also a provision that stated that the common areas would remain with the builder for eternity, he claims.

"Over 80 buyers got together to form an association. In 2018, when the builder decided to offer possession, we all refused because the occupation certificate was not in place. That forced the builder to go back to the authorities and get one. After a year he has offered possession to everybody except me," said Pradhan.

Challenges and the way forward

Several real estate projects have been delayed because realty companies were, perhaps, taken in by the 'investors' high interest in projects as a sign of actual demand for houses. This buoyed them to launch even more projects to meet the extra demand, which actually did not exist, setting off a 'chicken-and-egg' cycle.

"These projects were launched without a proper demand and supply analysis and now these are stuck. A major issue is that some of the developers lacked the will to complete the project and preferred fund diversion, the tightening credit crunch has also been a major problem," said Anuj Puri, Chairman, Anarock Property Consultants.

An association helps homebuyers gain insights into how people have achieved success in their struggle.

"It helps shorten our struggle. The takeaway from such homebuyers' platforms is that as part of a group, homebuyers can only fight to win. All they need is perseverance and the will to fight till the end," said Pradhan.

Girija Balakrishnan, advocate, says that Forum for People's Collective Efforts is being envisaged as a platform buyers can approach for resources and support to fight their battle. Her advice to buyers is that before purchasing an apartment they should get the basic due diligence done, whether the title deed and approvals are in place for the builder to start construction. If construction has progressed, buyers should check if it is as per norms.

Abhay Upadhyay, national president FPCE and member, Central Advisory Council of Government of India on RERA told Moneycontrol that the key takeaway from the conference is that homebuyers should only purchase ready-to-move-in flats and that is going to be "our future strategy".

Execution of RERA orders is a big issue and "we hope to take up this matter with the government. A mechanism needs to be put in place wherein RERA orders are executed mandatorily within 90 days after being passed".

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First Published on May 30, 2019 12:55 pm
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