Bangalore: DLF Ltd, India’s largest property developer by market value, has been accused of illegally selling apartments without mandatory sanctions at its maiden project in Bangalore.
The Bangalore municipal authority said in a public notice on 6 May that it has not yet given mandatory sanctions for development of the project, DLF Westend Heights, at New Town, off Banerghatta Road. The municipality, Bruhat Bengaluru Mahanagar Palike (BBMP), is the final authority for clearing building sanctions in the city.
It also said DLF has only got approval from the Bangalore Development Authority (BDA) for constructing four floors in all the buildings at its project, while the firm’s been advertising 18 floors.
The Gurgaon-based developer launched the 80-acre project earlier this year after reformatting it from premium homes to smaller, less-expensive residences costing Rs1,850 per sq. ft.
On its part, DLF said the company has kept its customers informed about the status of the approvals and will not start construction till it gets all the clearances.
“DLF has paid Rs14.60 crore to BBMP towards betterment charges last August, which indicates that it would seek approval from the authority,” it said, adding that it started bookings from customers only after studying the legalities and taking into consideration the approval process underway. The developer has been attempting to launch the project since early 2008, but was held back by delays in getting approvals and because of changes in the design of the project, which will be built in phases.
Meanwhile, DLF has accepted 600 bookings for 1,600 flats in the first phase spread over 27 acres. The company expects to complete the first phase in two-and-a-half years.
“Prospective buyers are advised against the purchase of such illegal apartments as they are liable for all lawful action that will be initiated against such illegalities, including demolition,” BBMP commissioner S. Subramanya said in the notice.
Typically, building approvals have to be procured by the developer before starting construction in a real estate project, two property consultants in Bangalore said. However, firms such as DLF begin bookings even before getting all the sanctions in what the industry terms as soft launches. The two consultants didn’t want to be named.
Amita Vatsa, who has booked a three-bedroom apartment in the complex, says she isn’t worried by the warning. “DLF is a known brand and if the project is in some legal trouble, I know I shall get my money back,” she said. Vatsa said that when she booked her apartment, DLF had told her that they had got BDA approval and the other sanctions were in process.
Over the past few months, DLF has slashed prices of homes by 20-25% in its Chennai, Gurgaon and Bangalore projects and has seen 560 buyers exit from the Chennai project, primarily dissatisfied over a lack of progress in the project’s construction.
Recently, DLF, along with its Dubai-based partner Limitless Llc, formally pulled out of the multi-crore Bidadi Knowledge City project, 30km from Bangalore, accusing the government of delaying the acquisition and handing over of land to the company.