Is this the beginning of “the END” of builder mafia?

Owning a home is not just only a basic need of everyone, it is a lifetime dream that everyone cherish in their heart. That is why people invest their life long earnings in what they believe will be their dream house. But the way things have unfolded in our country in the real estate segment in India this dream house turned out to be the worst nightmare for homebuyers in India.

The real estate sector, especially the one that focuses on the residential form, is notorious for rampant practices like delayed delivery, exorbitant fleecing, unilateral agreements, hidden charges, substandard quality than what was promised, and missing/incomplete amenities than what was promised among a long list of issues. Every year these malpractices continue to crush more dreams than anything to else and subject the buyers to trauma that has no parallels.

While the reasons for the proliferation of such malpractices emanated from the builder sides, the role of governing authorities and that of a home buyer himself could not be undermined. It is widely accepted that the builders tend to satiate their greed by indulging in such malpractices; there had been several reported incidents where governing authorities have played hand-in-glove with the builder in such practices. On the homebuyers’ part, they have largely remained in the passive mode, rarely raising their concerns against such exploitation. Furthermore, there hasn’t been much awareness of the remedial actions that they could take to safeguard their interests.

However, the last couple of years can be considered as a phase that has led to the tipping point of such issues. The winds of change are more palpable than ever – more rigorous legal framework, the greater level of activism among homebuyers, and easier access to information along with other factors are creating this shift.

Changes in the legal framework

Till a few years back, it was unclear what legal code should be applicable to issues pertaining to the reals estate sector. In the absence of any specific “Act”, the issues were dealt with the general principles laid in the penal code. Often the buyers were not clear where should they register their complaints about a speedy resolution. A need for a framework similar to “Insurance Regulatory Development Authority (IRDA)” was strongly felt. The governments in power had been toying with the idea of a similar Act – Real Estate Regulatory Authority (RERA). It was earlier this year that RERA was finally endorsed by the Parliament.

RERA allows individual states to adopt their own version within a year and it will still take some time before RERA is implemented. Prior to setting up of IRDA, the insurance sector was marred with rampant malpractices against which buyers felt helpless and clueless about getting respite. Though it could not be claimed that malpractices have been completely eliminated from the market since IRDA, the course of action for the consumers is now much clear and easier. Similar is the expectation from RERA – it will not ensure complete clamp down of the builders’ escapades but it will certainly tighten the noose for them.

While the governments may take some time in implementing RERA, you can still take benefits of it. Here is how: Real estate bill will help Consumer Forum litigants

Pro homebuyers judiciary

While RERA is expected to have a significant impact in addressing the woes of homebuyers, it shall take some time to be effective. Meanwhile, there are several other law bodies viz. Consumer Forums, Lok Adalat – that exist to help homebuyers. And in the last couple of years, they have delivered several watershed judgements that pave a way for justice for the other homebuyers in the country.

In a recent judgement by Hon’ble NCDRC in response to a case filed by a group of 10 homebuyers from Jaypee’s group project – Kalypso in Noida against the builder, the bench has made very sharp observations against the conduct of the builder and imposed hefty penalties against the builder. Per the judgement the penalty will grow up to Rs 5,000 per day if the builder fails to deliver the flat up to a certain date.

Last year, the NCDRC ordered the refund of money at 18% for prolonged delays in handing over of possession for Unitech buyers in Greater Noida. This judgement was later upheld by the hon’ble Supreme Court.

Not to forget the Directors of Unitech had to spend a night in the jail for not honouring the orders of the NCDRC. 

These judgements, though, provide relief only to a handful of people (those who had filed the case), it sets a precedent that helps a lot of homebuyers to choose their course for their grievance redressal. Such judgements also help the future cases as reference cases and help to pronounce the judgements.

There are various examples of favorable judgements from NCDRC. You can read some of them here: Consumer Forum Archives

Increased activism among buyers

Until five years back, there weren’t too many platforms available for buyers to connect with the fellow buyers in the same project. However, with the widespread use of social media these days, the fellow buyers can connect with each other from the very early stages. The builders initially didn’t take social media seriously but there have been numerous cases in hand where social media activism has resulted in buyers to consolidate their actions against the builder.

People these days share their experiences with the builder, updates about the project; discuss their own issues and the possible remedial actions against it. Such a platform surely helps in synchronize the voices and efforts of the buyers against the builder. Any negative campaign against the builder can have a detrimental effect on his reputation, and builders are aware of it. So, this acts as a deterrent for a builder to indulge in malpractices. If it doesn’t stop a builder, social media at least helps in disseminating this information to the concerned parties.
It has always been difficult for a single buyer to take a tortuous route to seek relief; a group of connected buyers always help as their collective grievances in the magnified form get noticed easily.

Also read: It’s time to look beyond protest outside builder’s office

Ease of Information Access

What people do not realize is that they have a very powerful tool in the form of “Right to Information” (RTI) with them. RTI can help them access to critical information about the project – approved layout plans, FAR, filing for various completion/occupancy certificates etc. While getting information through RTI is a bit time-consuming process, it is certainly a useful tool to keep a check on the builder. It will also strengthen buyers’ case when they plan to move court with their grievances.

In a case involving the buyers of a group housing project in NOIDA, the buyers gathered a lot of information through RTI from the very initial stages, and discovered that the builder had been involved in blatant disregard for the rules/guidelines specified in the U.P. Apartment Act. This set of homebuyers is in the court now seeking compensation and relief, and their case rests heavily on the information collected through RTI.

Learn how to file RTI : File an RTI with NOIDA / GREATER NOIDA Authority, a step by step Guide

Conclusion

Despite the changes in the environment though the builders still continue to exploit the homebuyers, they (buyers) are less gullible than in the past. So, is this the inflexion point in India’s real estate market? Is this the end of builder mafia in the country? The answer to these questions is difficult to ascertain but one thing is clear – the things have definitely changed, and changed for better. Builders are now not at all at ease while committing these brazen practices. The LogicalBuyer (TLB) Group hopes for the speedy implementation of the RERA across the country and wishes its readers good luck against the malpractices in the real estate sector.

TLB certainly believes that the buyers will certainly be more empowered than ever against the builder. All they need is to shed the passiveness and “What can I do against the mighty builder” attitude.

One thought on “Is this the beginning of “the END” of builder mafia?

  • May 18, 2016 at 11:36 am
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    You have rightly pointed out that the competent authority like Noida Authority acts like hand in glove with the builder. Actually certain departments of Noida Authority like Chief Architect Planners office (CAP) will like to withold the information of the wrongdoings of the builder till the last and will make every effort not to part with any or all the information and further they will like to delay any and all actions to be taken by them against the builder thus encourage the builder to fleece the flat / home buyer..

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