Supertech verdict may lead to activism in real estate
May 02, 2014
Source : The Economic Times


DELHI: Sohan Mishra has been driven to wits' end over a real estate builder reneging on the delivery date of his dream house in Noida. A delay of over one-and-a-half years has forced him to extend his rent agreement. This has strained his finances, as he is also paying back his home loan in fixed monthly installments. However, there is now a glimmer of hope.

Allahabad High Court's order last month to demolish Supertech's two 40-storey towers in Noida for violation of building norms has opened a window of opportunity for disgruntled home buyers. They are now considering legal action against builders who have ignored pleas for timely delivery or bilked them.

Lawyers involved in cases against real estate developers say they have received several enquiries from homebuyers over the last few weeks, with issues ranging from delayed delivery of apartments, one-sided clauses to maintenance issues after getting possession.

"There is a spurt in enquiries. People want advice. They have started to believe they can win against a builder, even if it takes time," said Vaibhav Gaggar, partner at law firm Gaggar & Associates, which represented Gurgaon's Belaire Owners' Association in the 2010 case against DLF.

India's real estate sector has perennially suffered long delays in delivery of homes and other real estate projects. A 2012 survey by Liases Foras showed that nearly half of the 323,000 homes that were to be delivered in 2013 were behind schedule while a third would not be ready before 2014.

"We have met the developers several times, but there is no commitment yet on the date of delivery," said Mishra, an engineer who has booked a three-bedroom apartment in the housing project Homes 121. A group of over 25 buyers in the same project is now seeking legal advice on what should be done. Bangalorebased lawyer Arun Govindaraj, who runs Govindaraj Associates, said he's seen a spate of enquiries in recent weeks. "People have been disgruntled with the system, but now they are becoming more curious about their rights," he said.

Amit Kumar, who bought a retail shop in a mall in Ludhiana, said he is considering filing a petition in court against the builder, Omaxe Developers, for violation of building bylaws and for erecting the mall without environment clearance.

According to Kumar, the builder used more FAR than he was granted and that the building was occupied by a cinema even before occupancy certificate was granted by the authorities. "The Noida judgement makes me believe there is a chance," Kumar said.

Omaxe refuted the claims. "We have all the approvals in place and have not violated any laws. The concerned individual is trying to seek undue benefits. No other customer of our mall has any issue except the said gentleman, who is also trying to coerce and instigate other customers against the company, which further raises doubts about his ill-intent," Omaxe said in response to ET's email query on the issue.

Vineet Gupta, director of Ajnara group, which is building the Homes 121 project along with another developer, Gulshan Homz, said there were other reasons for the delays.

"It is also because of many other external reasons, such as delay in approvals, shortage of labour. The developer is never interested in delays; his interest is in delivering on time," Gupta said. "These cases of activism are welcome, as they keep us on our toes to deliver better. But we are worried about over activism.

In the Supertech case, residents complained that the two towers (Apex and Ceyane) were sanctioned without maintaining the mandatory distance of 16 m between the new towers and their building block Aster-2, as required by the Noida Building Regulations and Directions, 2010, "making their block unsafe, apart from blocking light and air".

In 2011, the Competition Commission of India had imposed a .Rs 630-crore fine on DLF for unfair practices, abuse of market dominance and "brutal disregard of consumer right" by signed sale agreements that were one-sided. Here too, the developer had been accused of arbitrary changes in the building plan by the Belaire Owners' Association in Gurgaon.













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