Say no to possession if house is incomplete
Ask developer to complete the house, or compensate for deficient service. Legal route is also available
Kumal Bhangar, a consultant in Mumbai, rented a new apartment in a housing project only to find that many things were not as they should be. “Leakage in the bathroom had made the whole wall damp. Even though windows had nets, mosquitoes still came in,” he said. When he informed the landlord of all these problems, the landlord approached the developer. But nothing came of it as the landlord had already accepted the possession offer.
Buying a house becomes even more difficult when it has been “under-construction” for long. Many projects have now been delayed beyond four years. In some cases, even the construction has not started even though the launch was 2-3 years back.
Whatever be the reason for delay, it is the homebuyers who ultimately suffer; and some are driven to seeking legal recourse (http://mintne.ws/1UweuUs ). Even if possession is given, often, there are serious issues. Building or houses in a bad condition; sub-standard construction; lack of basic amenities; substantial change in final layout or apartment size; and more.
Alok Verma, a retired air force officer, booked an apartment in December 2007 in Raheja Atharwa, sector 109, Gurgaon. According to the builder-buyer agreement, which was signed a year later, the project was supposed to be completed within three years from the date of agreement, which was in December 2011. Within the same year, Verma had paid almost 95% of the full cost. But he and other buyers claim that they were informed by the developer that necessary infrastructure in the locality was not in place yet and so the scheduled possession date was being deferred. The developer, however, said that it was the homebuyers who had refused to take possession. “The structure of the project was ready in 2011. At that point, we had asked all our customers through mails if they would be interested in taking the possession without the external infrastructure facilities in place comprising of roads, sewerage, water (and) electricity, which was to be provided by the Haryana Urban Development Authority (HUDA). Most of the clients refused to take possession then,” said an official spokesperson of the developer, Raheja Developers Ltd.
Some industry participants, too, believe that the developer alone cannot be blamed for lack of infrastructure; the government authorities are equally responsible. “Neither the homebuyer nor the builder can do much about it. It was a joint risk that both had taken at the time of project launch,” said Mudassir Zaidi, national director, residential agency, Knight Frank India.
“There is a systematic failure in this. To avoid such issues, we should have a robust policy framework, based on correct data and facts,” said Vikas Malpani, co-founder and vice-president-groups, www.commonfloor.com, a real estate portal.
But getting approvals is the builder’s responsibility. “Why should a builder promise delivery when it does not even have government approval? Sometimes the builders are hand in glove with the authorities to cause delay and then refund the full amount without interest to the consumer. They can then sell at a higher rate to another buyer,” said Arun Saxena, president, International Consumer Rights Protection Council.
Even at the time of taking possession, many discrepancies can be there. Final handover of apartment could differ from what was displayed. Homebuyers realize the differences only at the time of possession. At that time, one can accept the house or even refuse it. Legal recourse is also available. While legal battles are not easy, recently, consumer courts and other forums have announced decisions in favour of homebuyers.
Buyer’s checklist
If you are about to get possession of an apartment that you had booked years ago, thoroughly check what you are getting against what you have paid for. If it appears that the building and apartment has all the amenities, size of rooms is as per approval provided, fittings are as per agreement, and other details are in order, go ahead and take possession. But if things don’t match, raise all issues with the developer. “The buyer should make a list of the deviations, short-falls and flaws. If these can be corrected, the buyer should demand that this be done immediately,” said Santosh Kumar, chief executive officer, operations and international director, JLL India. Developers are bound to rectify or repair the defects. “There is usually a gestation period of 3-6 months for rectifying problem areas, which varies from developer to developer,” said A.S. Sivaramakrishnan, head-residential services India, CBRE South Asia Pvt. Ltd.
Most homebuyers don’t cross-check details. The relief of getting possession is so much that even if they see flaws, they let the issue go. “Tendency is to get busy with moving in. By doing so, they are missing the optimal window of opportunity to get any problems and deviations in a ‘bare shell’ sorted before they get obscured,” said Kumar.
It is important to check the details because if the apartment or project is not handed over in the required manner, it can lead to problems. “There could be larger security issues. In addition, such projects are usually not properly habitable, nor is it possible to maintain them properly when some construction is still going on,” said Sivaramakrishnan.
If the amenities are not in proper shape, maintenance cost can go up. “The average cost (per sq. ft. per month) of maintaining a residential housing complex can be in the range of 2-3. Substandard construction and lack of proper amenities affects maintenance charges significantly, as repair and replacement can lead to high and frequent costs,” said Kumar.
A developer is liable to provide a project as per the agreement or as described. For any deviation or irregularities, it has to compensate appropriately. “If there are gross deviations in terms of size and dimensions, which cannot be corrected by remedial measures, it will probably become a case for the consumer court,” said Kumar.
Legal experts also suggest that in such cases homebuyers should stop any further or final payment(s) and insist that changes be made. “If on inspection, the buyer identifies shortfalls on the terms agreed by the builder, she should abstain from, firstly paying the instalment due at possession, and then propose cancelling the booking of the apartment with the builder,” said Divakar Vijayasarathy, co-founder, MeetUrPro.com.
If the developer does not make any corrections, homebuyers should first send a legal notice. “It is also suggested to send a formal legal notice for deficiency in service and that the final instalment is kept on hold till such time the anomalies are rectified,” said Vijayasarathy.
Even after this if the developer does not initiate the required changes, homebuyers can approach a consumer court. “Serving legal notice to the builder for initiating legal action at the consumer forum may be the only effective recourse. Where the society or association is already formed, a joint effort in serving legal notice is more effective,” said Vijayasarathy.
Mint Money take
Taking possession at any cost, whatever be the condition of the project or house, will be detrimental to your interests. Not only would you have paid for features that are not available, your quality of life and lifestyle may be affected. Need for regular repairs will escalate the cost of living. And, if you were to sell the house later, the selling price may be affected. Therefore, try to take appropriate action before taking possession of the house. As there is strength in numbers, get other like-minded buyers together and put pressure on the builder to follow the agreement.
Ready and in place
Documents: Ensure that the developer is handing over all necessary documents. The buyer should receive the possession letter, no-objection certificate, commencement and completion certificates, allotment letter, receipts for all payments rendered by the buyer up to this point and the development agreement. Developer should provide sundry maintenance contracts and utilities documents, such as for water, electricity and gas supply.
Final layout: Check the final size of the apartment. Measure the dimension of the rooms, living area, bathrooms, kitchen, balconies and others. The primary areas to focus on while doing a final check of the unit are the delivered carpet area, dimensions, windows, fittings and fixtures and the overall soundness of the construction.
Amenities: Amenities such as club, gym, park and swimming pool are difficult to have in an independent house but are a major attraction in bigger apartment projects. So, ensure that whatever was committed is in place.
Quality of construction: Construction quality plays a big role not only in future maintenance costs but also quality of living. Check if the flooring, tiles used and paint on walls are as per specification. A common problem area is fittings in bathrooms and kitchen. One should check for seepage of any kind; and all fittings including electrical and sanitaryware. Water and electricity supply should also be checked.
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First Published:28 Jul 2015, 06:41 PM IST
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