NEW DELHI | MUMBAI | BENGALURU: Fed up with builders not completing projects on time, some home buyers are taking matters into their own hands. They are bypassing litigation and finding ways to finish their projects instead, with or without the builder.
After waiting almost 10 years, 83 people who invested in Media Majestic Towers in Kaushambi area of Ghaziabad near New Delhi brought in a third-party contractor to finish the two-tower project, which had been hampered by the death of the builder and a default by the company on a loan.
“The bank had put a notice in 2010 under Sarfaesi that they are taking over the buildings,” said VK Goel, a businessman who is secretary of the project‘s flat owners association. Sarfaesi (the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) allows banks to auction properties when their borrowers default on payments.
The buyers contested the notice in the debt recovery tribunal and got an order in their favour. They paid Rs 3 crore to the bank and reached a settlement after which they got possession of the land. “This was after we had already paid over 90 per cent of the money to the builder,” he said. The project developer, AJS Builders, could not be contacted.
A third of more than 25 lakh apartments in the top cities launched between 2008 and 2014 has been delayed by at least a year, according to data from property research firm Liases Foras. The delays are costly for buyers, several of whom pay rent alongside their home loan EMIs.
In some cases there are genuine reasons such as delays in getting government approvals but in others, the builders might have simply absconded or just don’t respond to buyers’ pleas to complete the projects.
Ravinder Pal Singh, a 70-year-old NRI who was looking to settle in Bengaluru after a long stint in Sweden, was taken aback when the builder asked him to cough up more money to complete his apartment. He had purchased a luxury apartment in Gold Improse in Bengaluru for over Rs 1.6 crore in 2008 but work had been stalled for three years.
Singh and eight others who bought the luxury apartments in the upmarket Indiranagar area decided to complete the project on their own after the builder demanded over Rs 1.2 crore. Last year, Singh and the other buyers spent Rs 45 lakh to complete the project, in addition to paying 80-90 per cent of the original cost. The builder, Gold Enterprises, could not be contacted by ET.
In Mumbai, a group of 30 home buyers, including 52-year-old Dinesh Raitani, decided to get a new developer to complete a residential project in Mumbai’s Oshiwara locality by Shree Shubh Builders in which they had booked apartments in 2009-10. Raitani said work was delayed because of financing issues between the landlord and a lender, following which the court ordered a stay on the development.
“We are seeking the court’s approval to rope in a new builder to take over the project by paying the loan for which the project has not made progress. At least, the project will get started and we will get our homes delivered,” said Raitani, who is a civil contractor.
Shree Shubh Builders’ spokesperson Arpit Somani said the company has contacted another developer, which had already invested in the project, to take it forward.
“We are ready to discuss this with home buyers and will be sending our official response soon. If any of them wants to exit, he (new developer) can provide that or can also take the responsibility of delivering their homes,” Somani said.
In Gurgaon, in the case of one of the towers in a project called Aloha by developer AEZ, the buyers and the builders have decided to work things out together. The project, started in 2005, got delayed due to a slowing market and after about 20 of the 62 buyers refused to pay on time.
After a large group of buyers offered to pool in money and pay in advance if they were paid the interest, the builder agreed. “We were also asked to put up the initial amount to restart construction, which we have already done,” said Shrey Aeren, spokesperson for AEZ.
One of the buyers, Rajesh Savlani, said they wanted to take control of the project because it was already delayed and faced a shortage of funds. “We will just oversee the work now,” he said.
Credits ET Realty