Consumer Grievances in Real Estate - Addl Inputs
Friends,
Early on in this circle, we had reviewed the subject of Real Estate. Now that the circle is much bigger and the Ministry of Consumer Affairs and affiliated departments are part of it, we would like to seek additional inputs. Listed below are the Issues, Root Causes and Solutions when it comes to Consumer Matters in Real Estate. Kindly review them and if you have any additional inputs, please do share.
If you have specific instances where consumers are being cheated/unfairly treated, you are also welcome to report them separately.
Consumer Grievances in Real Estate
Issues Identified:
1. Major delay in possession
2. Corruption in registrar’s office
3. Stamp duty is pretty hefty
4. Non-compliance of building laws
5. Properties handed over to customers without proper certification
6. Black money being used as cash for purchases
7. Fertile land converted to plots
8. Low quality materials used for construction
9. No regulation for pricing – price decided by word of mouth
10. No single touch point to verify the authenticity of the project one is going to invest in
11. A lot of projects falls prey to some or the other fraud
12. Difference between Built Up, Super Built up / Saleable area
13. Builders Agreement is generally one sided in their favour
14. Builders appreciate the price drastically by citing the examples of proposed major infrastructure projects around the apartment complexes or residential layouts
15. Fly by night developers are fleecing the unsuspecting public. For each project they create a new company and afterwards go bankrupt
16. Solar Panels, Fire Systems, water conservation systems are often setup only for completion certificates and they are non-operational from there onwards. The review mechanism either do not exist or often corrupt systems
17. Securing a bank loan is a tough task.
Root Causes Identified:
1. Corrupt nexus between builders and government officials
2. No laws against cash transaction while purchasing properties
3. Builders provide discounts for cash deals
4. No laws against the false promises that builders make to dupe customers
5. No penalties charged to the builder for not completing projects on promised time
6. The builder cannot be held responsible for anything that happens to the house after possession (substandard quality of construction etc.)
7. Lack of an independent regulator
8. A lot of raw material is sourced from the local un-registered vendors, who don’t understand quality control, legality, taxes etc.
9. Government officials are bribed for not reporting non-compliance of building laws
10. Most of the projects have political/criminal backing. Hence people are scared to go to court against them
11. Non availability of a dedicated forum to redress the grievances of customers pertaining to real estate
12. Lack of awareness among customers
Solutions identified:
1. A governing authority in the construction sector is the need of the hour (like TRI in the telecom sector).
2. Heavier penalty should be levied if the builder fails in his commitments towards delivery.
3. There should be mandatory penalty for poor quality construction or false promises
4. There should be uniform sale purchase agreement for all the states across the country
5. The municipal authorities must help to teach investors the requirements of documents
6. There should be strict laws to regulate the acquiring of Land for construction
7. No agricultural land - used or unused should not be let out for constructions
8. A forum or think tank to assist the buyers regarding valuation and legal formalities should be formed
9. There should be a government organization or regulatory committee to fix the land value in each area
10. All transactions should be made mandatory through cheques only
11. Cement & steel manufacturers cartelisation should be broken through some law amendments
12. Research should be focused to find an alternative & greener options of raw materials to sandstone aggregates etc. with affordability
13. Approval by government for building commercial or residential complexes must be given only when there are appropriate roads, space for parking available for the complex
14. The criminals involved in cheating the people in Real Estate cases should be severely punished and all their wealth should be confiscated
15. Home loans should be made available at low interest rates more
Early on in this circle, we had reviewed the subject of Real Estate. Now that the circle is much bigger and the Ministry of Consumer Affairs and affiliated departments are part of it, we would like to seek additional inputs. Listed below are the Issues, Root Causes and Solutions when it comes to Consumer Matters in Real Estate. Kindly review them and if you have any additional inputs, please do share.
If you have specific instances where consumers are being cheated/unfairly treated, you are also welcome to report them separately.
Consumer Grievances in Real Estate
Issues Identified:
1. Major delay in possession
2. Corruption in registrar’s office
3. Stamp duty is pretty hefty
4. Non-compliance of building laws
5. Properties handed over to customers without proper certification
6. Black money being used as cash for purchases
7. Fertile land converted to plots
8. Low quality materials used for construction
9. No regulation for pricing – price decided by word of mouth
10. No single touch point to verify the authenticity of the project one is going to invest in
11. A lot of projects falls prey to some or the other fraud
12. Difference between Built Up, Super Built up / Saleable area
13. Builders Agreement is generally one sided in their favour
14. Builders appreciate the price drastically by citing the examples of proposed major infrastructure projects around the apartment complexes or residential layouts
15. Fly by night developers are fleecing the unsuspecting public. For each project they create a new company and afterwards go bankrupt
16. Solar Panels, Fire Systems, water conservation systems are often setup only for completion certificates and they are non-operational from there onwards. The review mechanism either do not exist or often corrupt systems
17. Securing a bank loan is a tough task.
Root Causes Identified:
1. Corrupt nexus between builders and government officials
2. No laws against cash transaction while purchasing properties
3. Builders provide discounts for cash deals
4. No laws against the false promises that builders make to dupe customers
5. No penalties charged to the builder for not completing projects on promised time
6. The builder cannot be held responsible for anything that happens to the house after possession (substandard quality of construction etc.)
7. Lack of an independent regulator
8. A lot of raw material is sourced from the local un-registered vendors, who don’t understand quality control, legality, taxes etc.
9. Government officials are bribed for not reporting non-compliance of building laws
10. Most of the projects have political/criminal backing. Hence people are scared to go to court against them
11. Non availability of a dedicated forum to redress the grievances of customers pertaining to real estate
12. Lack of awareness among customers
Solutions identified:
1. A governing authority in the construction sector is the need of the hour (like TRI in the telecom sector).
2. Heavier penalty should be levied if the builder fails in his commitments towards delivery.
3. There should be mandatory penalty for poor quality construction or false promises
4. There should be uniform sale purchase agreement for all the states across the country
5. The municipal authorities must help to teach investors the requirements of documents
6. There should be strict laws to regulate the acquiring of Land for construction
7. No agricultural land - used or unused should not be let out for constructions
8. A forum or think tank to assist the buyers regarding valuation and legal formalities should be formed
9. There should be a government organization or regulatory committee to fix the land value in each area
10. All transactions should be made mandatory through cheques only
11. Cement & steel manufacturers cartelisation should be broken through some law amendments
12. Research should be focused to find an alternative & greener options of raw materials to sandstone aggregates etc. with affordability
13. Approval by government for building commercial or residential complexes must be given only when there are appropriate roads, space for parking available for the complex
14. The criminals involved in cheating the people in Real Estate cases should be severely punished and all their wealth should be confiscated
15. Home loans should be made available at low interest rates more
Viewed by 1407
View all 43 comments Below 43 comments
The case is not mine but I want to draw your attention to the just recent case in MUMBAI where the upper floors were demolished with the high court orders but the occupants of the said flats have agreements, Paid all dues but still they lost everything. There was a discussion on this where experts favoured the flat owners giving many examples such frauds but all went in VAIN ending losing everything. Let CONSUMERS have your VIEWS on it. more
Jul 30
The major issue is the decision target is not available in courts. Our courts are having building on the foundation of next dates. Only three or Four month will be give to any court to take decision. In other courts like Excise & Customs Deptt the courts are bound to give decisions and finish the case. Why in real estate where the money is only factor and court can take decision very quickly. more
Jul 06
There are lot of ambiguity in the pricing of apartments. (1) Often the builders quote the rate for super built-up area of an apartment which no buyer in the country can figure out how the super built up area is arrived by the builder. There need to be come control on this. Either the rate should be on the carpet area or there should be some percentage calculation to arrive at the super built-up area, such as 10% for a single building apartment or 20% for a multiple building complex with club house, gym facilities, swimming pool, etc. (2) Secondly the builders price the balconies at the full rate of the flat in many cities. The rate for the balconies or any other areas which are not walled from all the four sides should be calculated at half the rate of the completely walled areas. (3) On the approval part of the Local authorities, no buyer is able to track what is the approved plan and whether the builder is constructing as per the approved plan or not. Hence the builders should mandatroy put up the approved building plan at the site and make sure the building is constructed as pre the approved plan. In order to ensure that the buyers are not at the mercy of the builders, there should be a phase-wise inspection and approval by the approving authority and such approval shall be made available to buyers at any time on demand. (4) There are many cases where the building construction gets struck due to some litigation by the owners of the land or some problems faced by the builders in the course of construction which results in geting the project either delayed or never completed. Here the buyers loose their hard-earned money. In order to avoid this proper regulations and check should be in place and the approving authorities should make sure that the builder has cleared all the possible litigation issues and financial tie up in case all the apartments are sold at the approval stage itself and before inviting for sale of apartments. more
Jul 05
This REAL ESTATE sector is the single biggest source for the profileration of BLACK MONEY in the country and if the powers that be, denies it - they are not accepting a FACT. Perhaps - many in the ' power seats ' will not accept this statement since they may also be the source of this phenomenon....!!!..Be it UPA or the NDA - ALL the politicians are mainly reponsible for the " Notoriety " in this Real Estate sector. Right from buying of the Land, to getting the neccesary " building plan " approvals, the arrangements for Sand ( fully controlled by the local politicians along with the local River basins ), then - the approvals AFTER the completition of construction activities etc etc, works fully with Political muscle and hence, this sector is a totally corrupt sector. This may be one of the main reasons for the absence of the organised sector till recently since they would not be able to " organise " the speed money portion of the transactions, at every stage of this sector. Thus most of the players would be either family entities, ' one man show 'players or the " fly by night " operators - who would ' vanish ' at the first sign of trouble or ' muscle ' their way with their ' connections ' , in case of trouble. Hence, Transparency,equity, fair deals etc etc were unheard of, in this sector. What is needed in this sector is a " STRICT ENFORCER " of rules and establishment of an Authority to Arbiter the matters, in case of injustice. This authority should be a person of High standing and NOT a Govt. person ( just like a Chief Election Officer..!!..)with enormous arbitary powers to mete out justice to the affected party. Hope it does come about and there is a place for JUSTICE in this sector....!!....Will this happen....????... I have No Hope...!!... ( since, that is how politicians garner their fund collections to finance their own election campaigns by giving away " inducements " ) . more
Jul 04
