Faced with budget constraints to pay additional PLC (preferential location charges), Gaurav Chaudhary, a home buyer from Noida Extension, asked the developer to show him an apartment that does not have a location-view advantage. Chaudhary was told that none of the apartments for sale are without the mandatory PLCs. He called off the deal believing the builder to be deceitful. “I felt that it was an unfair trade practice by this developer,” informed Chaudhary. “However, I learned that most of the developers in the market were only offering apartments with extra costs of PLC. In fact, I was told that there are three kinds of PLCs – park facing, road facing and corner flats. By this definition, all apartments fall into one or the other PLC.”
A closer look at the housing market suggests that this is not just the case in Noida Extension. It is a pan-India phenomenon. As a matter of fact, there are certain industry accepted and adopted, practices that are quite prevalent in the housing market. These common exaggerations are part of every developer’s marketing brochures. Here is a list of the most commonly used exaggerations:
Strategically located: The project is said to be strategically located, within 20 minutes of the airport, or 10 minutes away from the railway station. However, what the brochure does not tell you is that the distance is subject to your speed of driving and lack of traffic. In the absence of this, a 20-minute distance can stretch up to an hour and 20 minutes.
See also: Are referrals an effective strategy in real estate?
Social infrastructure: There are many good quality schools, hospitals and restaurants coming up in the project’s vicinity. This sounds tempting on paper where there may be plots available for social infrastructure projects but there may hardly be any takers for the locality.
Façade: That green zone around the project, that looks so beautiful in the brochure, might be a drainage area with green bushes. The artistically created project elevation or the sample flat pictures in the brochure, are more often than not misleading.
Free area ratio: A green area of 80% with landscaping is the ideal urban living situation. It is definitely a huge attraction when a developer offers it. However, even with the permissible floor area ratio (FAR) of 2 that is allowed in most cities, this seems highly improbable. Moreover, the marketing brochure simultaneously says that the developer will apply for more structures subject to permission. There have been cases where the developer has later converted the green zone to raise another tower.,
Amenities: State-of-the-art amenities is probably the most over-used claim in a marketing brochure. Yes, there will be a gym, swimming pool and tennis court. However, whether they will be sufficiently large enough to serve the entire housing project is not addressed. In several cases, it is not.
Nearly all developers have used these exaggerations in marketing brochures. However, hardly any home buyers have challenged any builder on these misleading claims.
Surabhi Arora, associate director, Research at Colliers India, agrees that “Few of them are marketing concepts like ‘green living’, ‘ultra-luxury’, ‘super-luxury’, ‘smart homes’, ‘lifestyle homes’, etc.,” she points out. “The definition of these terms can vary a lot, as they are not defined anywhere but it seems to be attractive from the buyers’ perspective.
Arora continues, “Another exaggeration used is the mention of basic sale price (BSP) only. Generally, the price increases by 15 to 25% due to inclusions like car parking, club charges, external development charge (EDC), internal development charge (IDC), electricity, PNG and PLCs. For instance, these days, almost all apartments have preferential location charges of Rs 100 to 300 per sq ft (PSF).”
(The writer is CEO, Track2Realty)
Ravi Sinha is a journalist with nearly two decades of cross-discipline media exposure. He is the CEO of real estate think-tank group Track2Realty. He has been writing extensively on the real estate sector for nearly a decade. Evaluation of real estate brand performance is his expertise and he has immense insight into consumers’ psychograph in the property market.
Twitter: https://twitter.com/ravitrack2media
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