DLF, Unitech ask flat buyers to pay more

DLF, Unitech ask flat buyers to pay more
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First Published: Sun, Dec 14 2008. 10 49 PM IST

Unplanned costs: A DLF complex in Gurgaon. The company has doubled the maintenance fee from what was agreed to in the buyer’s contract. Rajeev Dabral / Mint
Unplanned costs: A DLF complex in Gurgaon. The company has doubled the maintenance fee from what was agreed to in the buyer’s contract. Rajeev Dabral / Mint
Updated: Sun, Dec 14 2008. 10 49 PM IST
New Delhi: Buyers who bought apartments in Gurgaon and Greater Noida from DLF Ltd and Unitech Ltd are complaining that the builders have increased maintenance charges, sought advance payment of such charges, and increased the so-called super built-up area of their flat resulting in an escalation of costs.
Unplanned costs: A DLF complex in Gurgaon. The company has doubled the maintenance fee from what was agreed to in the buyer’s contract. Rajeev Dabral / Mint
At least three projects around capital New Delhi—DLF Pinnacle, Unitech Horizon and Unitech The World Spa—have seen changes in charges and terms from what was originally stated in the buyer’s contract, buyers say.
DLF and Unitech say they are within terms of the agreements with buyers and such changes are not unusual.
The increase in charges that have taken payments by a few lakhs comes at a time when demand for real estate is waning and developers find themselves faced with reduced cash flows from new projects.
“I got a bill in November this year from DLF asking me to make an advance payment of Rs45,000 towards maintenance fees for five months,” says a Singapore-based investor who has bought a 4,000 sq. ft apartment in DLF Pinnacle for about Rs1.2 crore. “I think it is completely inappropriate that they are charging this fees in advance.”
DLF has also doubled the monthly maintenance fee to Rs2.50 a sq. ft from what was agreed to in the agreement.
“The finishing of the apartments has not been done and the place still looks like a construction site,” says Girish Khera, another owner of an apartment in Pinnacle.
Maintenance, normally, is the builder’s responsibility until such time a possession certificate has been handed over to the buyer, says Sanjay Dutt, chief executive officer (business) of realty consultancy Jones Lang LaSalle Meghraj. “This is the general rule though this could vary depending on the fine print of the contract.”
Buyers also had a shock when they were informed that DLF had increased the super built-up area of the apartments without any increase in the carpet area forcing buyers to pay more for the same apartment. Carpet area is the actual usable area within the apartment, while super built-up area also includes the apartment’s proportionate share of all the area under common spaces.
Super area is completely under the discretion of the builder, says Dutt. “It is a very grey area as far as transparency issues are concerned.”
A DLF spokesperson says its decisions were not unusual. “The super area of every project we sell are tentative at the time of sale,” says the spokesperson. “The final areas are calculated after construction is finished, which is when we apply for occupation and hence informed them about the final area one year back, not on possession.”
On maintenance charges, the spokesman adds, “(it) is on a ‘no loss no profit’ basis and surplus, if any will be passed on to the next financial year.”
At Unitech’s The World Spa project in Gurgaon and Horizon development in Greater Noida, buyers have a similar story to tell.
“I originally bought a 1,693 sq. ft apartment but now my total apartment size has increased to 1,760 sq. ft for which I have to pay an extra Rs1.5 lakh,” says a buyer who works with a multinational corporation in Greater Noida. He did not want to be identified. “(Unitech) told me that they have built a separate staircase for fire exit and a water tank on top of every tower, so (costs of) the super-built up area has increased.”
Together with advance maintenance charges, the buyer has to pay Rs7 lakh as final payment, about Rs3.5 lakh more than initially budgeted. “I took a loan to buy this property. I don’t know how I will get this extra amount,” he says.
Unitech accepts that the contract only mentioned one year maintenance charges but says it is only doing the duty expected of a residents association usually tasked with running maintenance of an apartment complex and which can take up to two years in forming. “It is our practice to immediately hand over the complex to the association after it has been formed and in such an event balance amount in the sinking fund is also transferred to the association,” a company spokesperson said.
Unitech said that the cost of inputs towards maintenance services has increased over the last three years when the apartment was allotted and the agreement states that prices might be revised.
Some buyers say such charges are being imposed because developers are not regulated. The urban development ministry had proposed a regulator to oversee developers in Delhi and around the city but legislation is yet to be presented in Parliament.
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First Published: Sun, Dec 14 2008. 10 49 PM IST