Common man continues to be the victim of builder sharks

Common man continues to be the victim of builder sharks

Submitted by alvin on Sat, 2016-07-02 10:23 Often for builders mistakes and flagrant violations, the hapless and often clueless flat buyers are the victims. Just go to any residential complex, built by “reputed builders” of the country, problems galore confront them, and at times, the owners of the flats do not know where to go and whom to approach.The builders, on the other hand, are masters at manipulating the situation and often with the active support and even help from the officialdom. Actually it is this builders lobby that has artificially hiked up the prices of flats that is now finding itself unable to tackle the monster they have created.The prices of flats are out of reach of any common end-user, so it is not a surprise that many flats, almost ready to occupy are lying vacant – and unsold.It is this situation of glut, perhaps, serving the builder right – as their monies locked up in mega projects with mega loans and with no chances of selling them, clearly the builders are under pressure. In Chennai, at least half of the newly constructed flats in the outskirts of the city are vacant, even if sold. Similar is the case in Bengaluru or Delhi for that matter. Even though there is desperate need for housing and the pressure is felt by the end-users, the prohibitive pricing discourages them from making an effort.The result – with constructions booming all over India, there is a glut in the residential real estate. Over and above this in the general economic downturn and growth rate slowing down, professionals coming under pressure and job losses being reported from different sectors of the economy, there is so much uncertainty that is adding to the problem of contraction in demand for housing – the real demand, that is, whatever the perceptions may be.Which is why, it is not surprising that even big builders, reputed ones, too are facing the music now, from the financiers who are unwilling to wait. One classic example is of Mantri Realty, a very reputed real estate company, has come under the sharp focus of the judiciary, which has ordered its assets be liquidated for compensating those who lent money to the company.The Bombay High Court has asked the liquidator to begin the process of liquidating assets of realty developer Mantri Realty, whose properties include its headquarters in South Mumbai and 12 cars and use the proceeds to repay the unsecured creditors of the company.The builder was engaged in a legal dispute over alleged default in repayment of loans to the tune of Rs 300 crore. The company had allegedly defaulted on payments for close to two years and later reached out to creditors to settle the matter out of court. But the lenders are unwilling and want the legal proceedings to continue as the offer by the builder was substantially less than what they were to get.The court has observed that all unsold flats will remain in its legal custody and whether they will be sold by public auction or private treaty will be decided at a later date. However, the sale proceeds of all those flats will come into the hands of the liquidator for the satisfaction of creditors’ claims,” according to the lawyer representing the lenders.If this builder in Mumbai is facing such issues relating to finances, largely owing to the slowdown in real estate business across the country, another one in Chennai is paying for his negligence as also for constructing a high rise apartment complex in a marshy land. This twin tower under construction had collapsed two years ago, killing 61 construction workers, and one tower came crashing down. The other tower in the 11 storey high-rise apartment complex was ordered to be demolished by the collector, but the builder went to the High Court and got a stay on the demolition. It was only after the Supreme Court vacated the stay that the demolition will be carried out, possibly within a month now.Unfortunately, here too, the builder may have suffered minor losses in terms of loans to repay, but many people who booked their flats in the complex are a shattered lot. There were to be 78 flats in each tower and now it is two years since construction stopped and there are no signs it would resume anytime soon. If not anything, a private company has begun the demolition process and the building will be brought down in 10 minutes on the appointed day.Here too, barring the few days the builder and his son spent in jail before being bailed out, the builders often get scot free, given the slow legal process that gives them ample scope to wear out their opponents (often hapless individual flat buyers) by tying up the cases in courts and legal battles.And in cases where builders have managed to build and give flats to owners, there are different ways and means they use to harass them. Word has it that a reputed builder in Bangalore is harassing one of its residential complex residents by threatening to stop services – power, water, electricity, security and host of maintenance activities – as the residents wanted to take over the maintenance activities themselves. The reason being exorbitant bills being raised by the builder for maintaining the residential complex, which also has a commercial component, often maintenance bills coming in the range of Rs 6000 to Rs 8000 per month for a 3 bhk flat. This, rate over Rs 6 per sq feet, is much higher than is charged by any other flats complex in the city.Similar examples are many. And builders often delay projects, in which individual buyers have paid through their nose. They also have to pay EMIs and rents where they are staying at present.But will there ever be ache din for the aam aadmi?The one who pays for everything and everybody else’s mistakes ? -- and continues to get fleeced – in every matter relating to Roti, Kapda aur Makaan.Hope the new real estate regulator bill , if and when state governments ratify the bill and constitute the redressal mechanism does the trick. Hope state constitutes the State Real Estate Regulatory Authority, for a single window clearance of grievances of the common man against the erring builders.Till then, the struggle of the common man continues, with prayers on his lips for a better tomorrow.