8 Fake promises made by developers that buyers should be know

While scouting for property, home buyers listen to various sales pitches. However, not all are true to their words, and some are mere lip service to turn the prospective lead into a successful client. While property transactions in India come under the purview of the Real Estate Regulatory Authority (RERA), there still exist many cases where the developer makes promises that may not be possible to address in reality. While initially the home buyer may believe that all their requirements were fulfilled by the developer, as time progresses and the payment has been made by the home buyer, there is every chance they may be in for a shock. In this guide, we warn home buyers of false promises by developers that they should be aware of, in order to have a pleasant property buying experience.

Home buyer’s booking amount is safe with the developer

In case the sales team of the developer gauges that the buyer is almost convinced but showing signs of apprehension, to lock the deal, many developers tempt buyers into booking the fast-selling property of their choice by paying the down payment. They offer to cancel the deal and refund the money to the home buyer later in case of a change in mind. Developers may go to the extent of saying that buyers need not worry and their money is in safe hands. However, note that a seller is well within their rights to deduct a part of the token amount, citing cancellation. According to the rules mentioned by RERA, a seller has to return the token money after deducting 2% of the amount if the buyer cancels the deal within 45 days of receiving the allotment letter. This is allowed to make up for the losses incurred by the seller because of the cancellation of the deal. Earlier, the seller would deduct as much as 10% of the amount before refunding the token money. In some cases, the seller doesn’t return any money, citing that the home buyer has broken their promise.

So, a home buyer should remember that if any token amount is paid to the developer, upon cancellation, they may not get everything back, even if they were promised so during negotiations. Always insist on written terms about refund policies and understand RERA rules before paying any token money.

Comparison with the sample flat

Developers rely on the sample flat to promote their projects. Doing up the sample flat in a beautiful way with expensive interiors and grand lighting adds to the grandeur of the flat. However, you may not know the negatives that a property may have, as they’re not visible in the sample flat. So, you should not decide on a property just by seeing a sample flat. “We booked the property after viewing the sample flat, where the developer had promised Italian marble flooring in the living room. However, at the time of possession, we found that the marble tiles installed were of mismatched colours and poorly fixed. Instead of receiving a better product than expected, the outcome was quite the opposite—we had to remove all the tiles, carry out waterproofing, and install new flooring in the living room at our own cost,” said Prakash Yadav, a home buyer who invested in a premium property in Bangalore. Check the agreement carefully to ensure the brand, quality, and specifications of flooring, fittings, and finishes are mentioned.

Developer customising agreement as per owner’s needs

Most often, the sales team is approached by the home buyer citing that, although they are keen on property investment, they are not happy with the presence or absence of some clauses in the agreement copy that is stopping them from taking the decision.

To convert the lead into a sale, the salesperson may offer to change the clauses in the agreement at the time of executing it. This false assurance gives confidence to the home buyer, who may go ahead and make the down payment or part payment. At the time of registration, when the home buyer needs to sign the agreement, they may not see any change in the clause, and the developer would deny any such promise.

There have been cases where the developer may not acknowledge what the sales team promised, saying that nothing was mentioned in writing.

The road outside the gated community where I live is extremely crowded and chaotic, as it’s located near the railway station. I had raised this concern while booking the property. The sales manager assured me that, since it’s a large gated community, the approach road would be improved. Additionally, to ease traffic for residents, an internal east-west access road would be created within the complex to bypass congestion and save 15–20 minutes of commute time. This promise was made not just to me but to over 200 other residents as well. However, it was never included in the agreement. When I asked for confirmation, the salesperson assured me it would be added. The clause was never incorporated, and now, even after purchasing a property worth over Rs 4 crore, the approach road and surrounding area remain in a filthy condition” says Poonam, a homeowner and resident.

Note that many times the buyer is told that the agreement cannot be changed and that they can mention the changes on the company’s letterhead. The agreement should not contradict the commitment on the letterhead. If it does and there is a dispute, then the agreement is given priority over the letterhead.

The Project will be completed much before the date mentioned in the agreement

Most developers promise that the project completion date will be 6–8 months before the date mentioned in the agreement, again giving customers confidence to invest in under-construction property. However, this is rarely fulfilled, and in most cases, the developer approaches RERA to revise the date of completion. Home buyers should not entirely rely on the date mentioned by the developer and should plan shifting or renting the new house according to the status of the construction.\

There is no scope for any negotiation in the cost as this is the best price

A home buyer should be aware that a premium is charged by the builder. While selling, they may draw parallels with projects that may be either smaller or larger in configuration and of the same cost, but in a different location. While negotiating, the home buyer should know that what the developer is quoting is just the base price, and there will be additions to this such as stamp duty and registration charges, GST, maintenance collected by the developer for a said period, interiors of the house, etc.

The rate card of the developer always has some scope for negotiation. While the developer’s team may initially act firm on pricing and claim there’s little room for negotiation, the moment you approach them with a cheque book, they recognize your serious intent and are usually open to discussing better terms. Before signing, buyers should compare property rates on the state RERA website and real estate portals. RERA shows official per sq. ft. rates declared by developers, while portals list resale and competing projects. This data arms buyers with evidence to negotiate better prices or secure added benefits confidently.

Frauds related to property title

There are instances where the developer promises to share a copy of the title deed without handing over the original. This should be avoided, even if the developer talks the home buyer into believing them. It is a very common fraud where two people are sold the same property, with the developer sharing only a copy of the title deed and not the original document. Always verify the original title deed and ensure it is legally clear, preferably by consulting a property lawyer.

Premium fittings and fixtures

These are some of the pointers used by the sales team of the developer to attract the interest of the home buyer. Getting premium fittings installed adds to the value of the property. However, one should ensure that the developer delivers what is promised and doesn’t cut costs later by installing cheap fixtures with poor finishes. Ensure the developer mentions the use of premium fittings and fixtures, along with the brand name, in the agreement copy. Otherwise, you will be in for a nasty surprise when you take possession of the property.

Presence of world-class amenities

Many times the developer will mention ten amenities that the project will have in the agreement and will orally chalk out a list of 20 more amenities—stating that these are subject to approval. It is safe to say that the home buyer should be mentally prepared to never see the rest of the amenities, for which they have also paid a premium. To avoid such a situation, it is recommended to check the state’s RERA website, which lists the final amenities that a project will provide, so that all ambiguity with respect to what is being provided and what is not, ends.

Housing.com POV

There is a reason why everything has to be documented while doing a property transaction. The property investment is huge, almost takes up one’s life-savings and is a once- or twice-in-a-lifetime activity for many. It is always in the best interest of a home buyer to get whatever the developer promises at the time of sale documented, as orally made promises hold no value in a court of law. In case the developer refuses to document the promises, there is every chance that the developer is making these commitments only with the intent of closing the deal and not necessarily to help the home buyer.

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