The tale of Indian real estate investments is — a red carpet entry, exit at your own risk. Most developers have projects where they promise a lot at the time of the sale, but turn a deaf ear and express helplessness when it comes to delivering or providing an exit option. Project delays, projects not taking off or projects stuck in limbo due to lack of money/regulatory clearances — this is the story in most under-development housing plans that have been pushed hard through advertisements and promoted by developers to rake in money.
More often than not, such funds are diverted to other projects. The risks associated with project execution and completion, have strangely, been shifted from the developer to the buyer.
So you can invest in a project today, but whether the project will be executed within the given time-frame and to the indicated specifications, is not a certainty. In fact, in the legal documents signed by the buyers, developers protect themselves from any action by the buyers. Hence, the project may be indefinitely delayed, not fully executed, executed with significantly revised specifications and so on, with virtually no recourse.
Developers are well aware that with their strong legal teams and large resources, they can easily weather a court battle stretching out over several years, even as hapless buyers struggle to keep the legal battle going — solicitors don’t come cheap, especially if you want a good one to counter the legal eagles engaged by builders.
Consumer courts, in this context, are a far better option. The other, is to have the developer become the subject of media attention. The latter, of course, being a long shot. The regulatory changes proposed for the sector can go a long way in addressing such issues, but alas the new laws are still to come into effect. And if the Parliament fails to function, home-buyers will continue to be the risk-takers and the money providers.
Former Editor, Outlook Business and Executive Editor, NDTV Profit, the writer is a personal finance expert. Mail him at propertyplus@thehindu.co.in
