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The Indian real estate fraternity, has often been blamed for its inability to connect with the consumers. The lack of trust in the minds of home buyers, begins right at the time of booking, as many developers do not find it necessary to show the approvals for the project, even when asked to. In a pre-RERA period, buyers were even forced to fight for the Completion Certificate and Occupancy Certificate. “I was simply told by the builder to ‘take it or leave it’, when I wished to see the approvals and the legal title of the land. With no choice left, I made the initial payment of 20% and the project has not yet started, even after two years,” says a dejected Rakesh Mathur in Gurgaon. A Track2Realty study, suggests that before RERA made revealing of compliances mandatory, buyers hardly got to see the approvals obtained by the developers.
Key findings of the Track2Realty study
- Eight out of 10 home buyers were not sure at the time of booking, as to whether the developer had obtained all the mandatory approvals for construction.
- Seven out of 10 developers refused to show even the project CC (Commencement Certificate) to the buyers.
- Seven out of 10 buyers paid the due diligence fee to lawyers, to get the legal titles of the land, while the developers only assured them verbally.
- Nine out of 10 buyers had absolutely no idea about the fiscal management of the project and its execution feasibility.
- Eight out of 10 buyers were persuaded by the lending banks, to go by the verbal assurance of the developer.
- Six out of 10 home buyers had to fight with the builder, to get a copy of the OC (Occupancy Certificate) and Completion Certificate.
Transparency has improved, say developers
Developers, on their part, assured that they had started interacting with the home buyers and even addressing the queries of visitors to their websites, even before RERA came into effect. This, they claim, has started reflecting in their conversion ratios.
Manju Yagnik, vice-chairperson of the Nahar Group, maintains that the scenario is changing fast and the real estate has undergone a massive change in last decade. It would be inaccurate to say that consumer connect is missing and the developers refuse to show the approvals. In fact, of late, social media and digital project promotions have improved transparency, she says. “There is a slight gap that exists due to certain conditions, which are beyond the control of the developer. These conditions include lack of necessary infrastructure, complex real estate regulations, etc. Consumers are less aware of these formalities and the rights involved while purchasing a property. However, these flaws can be overcome by creating better awareness,” says Yagnik.
Why builders prefer hassle-free customers
Recalling an incident in his project in Greater Noida West, Nikhil Hawelia, managing director of the Hawelia Group, says that his home buyers were surprised when he volunteered to showcase all the approvals and legal title to his project, even before RERA mandated that builders do so. “In hindsight, those buyers stood by me, even when the project was slightly delayed and some of them became my repeat customers, as well,” says Hawelia.
Presenting a counter view, another developer, requesting anonymity, shares that “The more you try to be open with the buyers, the more they get demanding. We, as developers, do not want one more party to arm-twist us, when the authorities already keep us pushed to the wall.”
(The writer is CEO, Track2Realty)