Recently I met one of my old friends, who had invested in a residential project in Greater Noida. During the discussion, I asked him about the likely date of possession for his apartment, in which he had invested three years back. It was shocking to learn that he was still awaiting possession for the past 2 years even though having made 100% payment.
In his words, “I bought the house in 60:40 plan where I had to pay 60% while making the down payment and remaining 40% at the time of possession. I made down payment by taking a home loan for which I had to pay half EMI till possession. Just to check the construction process, I once visited the site and to my surprise, it was still in the initial phase. After a few months, I got a notice from the builder asking for remaining 40% money to take possession. I was given just 15 days time to make remaining payment if I wanted possession. When I thought of the construction status I checked last time, I was a bit doubtful, but I had no option than to make the payment.”
He further added, “Anyhow I made the entire payment, after which, my complete EMI also started. The builder also demanded maintenance cost of the first year. But where is the possession of my house; in my dreams!”
This is not the case of just my friend. There are a large number of investors who fall prey to the tricks played by the builders in India. Whether you are investing in a ready-to-move-in home or an under-construction property in India, builders and agents play different games to befool investors. Over years, builders have come up with new tactics and innovative fraud techniques to take innocent investors for a ride.
With the increased incidents of frauds in Indian real estate market, it is high time that these are discussed and delineated carefully. Here are some common tricks used by the builders from which you should safeguard yourself.
Possession of the Apartment
Most of the builders don’t mention possession date in the agreement. They just mention, “Completion of the building is expected to be delivered by the date mentioned in the covering letter of this allotment. The delivery of the possession is subject to force majeure.” This directly says that no action can be taken against the builder if he doesn’t hand over possession of the project on given date.
In most of the cases where builders make delays, buyers put up with the delay quietly just to avoid the retribution, harassment and further delays by the builder. Further, there is no mention of any penalty or consequences for the builder. The agreement papers are in favor of builders.
What to do?
Don’t just relax on confirming the construction status with the builder. Visit the construction site often and start pressurizing the builder in case of delays. As it can be difficult to pressurize the builder alone, make a society of all the buyers and go together.
Have you ever got a paper from the builders saying that 90% of their units have already been sold and just 10% are left? Or with limited time offers on Diwali or New Year, where you get just 10 days’ time to book the property? These are just marketing gimmicks used by the builders to create a fake emergency. Buyers who are interested in the project feel left behind and make a decision in hurry.
What to do?
Most of the times, this is artificial scarcity just to push the buyers. Ask the builder for time to think, to do verification and make an informed decision. You can talk to different agents about the available units in the same residential project to get a real picture. If they are using tricks, the number told by them will be different.
Super Stylish and Luxurious Sample Flats
It is human nature to visualize and fantasize about different things in life. This is the reason, most of the builders spend a lot of money on jazzy brochures and designer sample flats to trap you. When you look at these brochures and sample flats, you immediately start imagining yourself there living a comfortable and lavish life.
In this tech-savvy world, where buyers check real-life videos of sample flats with people enjoying there, befooling home buyers has got much easier for the agents and developers.
What to do?
Don’t make any decision until you meet someone who has really enjoyed that life. Don’t forget to visit the actual project site to see the real picture. Check locality, roads, neighborhood and other important factors, as you have to spend your life there.
Fake Deals and Discounts
While going through different real estate websites of residential projects during the festive season, I saw different deals and discount schemes. Some were offering free modular kitchen while some were boasting of the free car with the villa. As a buyer, we definitely feel happy to get something free. And when it is about a car worth lakhs of rupees and a modular kitchen of around Rs. 50,000 we definitely have a reason to be happy. Isn’t it?
No, builders never pay for anything from their own pocket. It is you, the buyer, who pays for every extra (free) amenity.
What to do?
Compare the price of two different projects offering apartments of the same size and in the same locality. The extra price quoted by the builder offering free modular kitchen will be the money you need to pay for the free deal. So don’t fall prey to discounts and deals; compare prices and features before paying money.
Read brochures and location advantages of any residential project in India and most of them will have some upcoming infrastructure mentions. Wide roads, metro lines, national highways, some educational institute etc. are some of the factors used by the builders to create an illusion of a well-developed society.
What to do?
Get tempted by these “upcoming features” only if you want to live your life on Google Maps. We all are aware of the speed at which these proposed projects are completed. So look for a project where you can start living a convenient life immediately. Make sure you visit the project site and get a real picture of the infrastructure in the locality.
Be a Logical Buyer
Indian real estate is a complicated sector where a buyer cannot survive by just being emotional. Buying a home is a lifetime investment, for which you should use your mind. So be a logical buyer and pay attention to the basics of home buying before stepping out to start the quest of your dream home.