Kerala: Real estate in no man's land

Thiruvananthapuram: With the government failing to bring in a reliable mechanism to protect homebuyers from cheating by builders, a group of flat owners in the state capital had initiated a new approach. After the builder had failed to meet repeated deadlines, they pooled funds and finished the project. While the much-hyped Real Estate Regulatory Authority remains powerless without framing rules, orders of consumer commissions and forums are hardly being implemented.

Hence hundreds of flat owners being cheated by builders are literally in dire straits. Most of them are having endless wait to get legal remedies, while many keep on knocking at the doors of the builders to get the work completed. But a group of flat owners of a Kristal Techpark View close to Technopark opted a different and much practical approach. As the repeated deadlines set by the builder had elapsed and even the intervention of the chief minister himself failed to produce results,  they decided to complete the remaining works by themselves to make the flats in a livable condition.

Owners of 82 apartments in Tower 3 of Kristal Techpark View pooled about Rs 4.5 crore apart from the funds they had already paid to the builder and undertook the remaining work, which is now in the finishing stages. "We had booked the flats in 2008 and as per the condition, the entire work was supposed to be over by 2011 June. But the work dragged on, and the builders failed to keep the repeated deadlines too. By that time many owners had even paid almost the entire amount as agreed with the builder," said a representative of the flat owners' association.

To exert pressure on the Bengaluru-based builder, they even called on then Chief Minister Oommen Chandy. But even his intervention did not bring any relief. At that stage, like many other victims of real estate cheating, they also thought of approaching court. But some of them suggested a much practical way of taking up the project themselves. "Most of us had already invested heavily in the project by that time and about 25 percent of the project was still pending. Since seeking legal remedy may take a long time, we decided to give priority to completion so that our investments won't remain dead. Hence some of us took the initiative to convince others that we can pool funds and finish the work," said an office bearer who preferred not to be named.

Lawyer S. Reghukumar, who have been dealing with consumer issues, say it could be for the first time in the state that homebuyers are taking such a bold step. "Though they had to pump in additional funds, their investment won't remain dead indefinitely. Moreover, they still have enough scope to move legally seeking compensation," he said.

Highlighting the grim scenario, Mr Reghukumar said about 40 percent of the cases coming before the State Consumer Disputes Redressal Commission these days pertained to the real estate sector. Meanwhile, industry sources blame banks for the bad practices in the sector. As per norms, banks are supposed to release housing loans only in instalments after physically verifying stages of construction. But many collude with the builders and release almost the entire loan amount directly to builders even when the construction drags on.

Bring in more clarity

Rakesh Nair
livit homes, kochi
 
Delay in framing the rules and regulations of the Real Estate Regulatory Authority has put both builders and customers in dire straits. Since there is no clarity on rules, regulations and powers of the Authority, builders are reluctant to initiate projects since there are restrictions on publishing advertisements of new projects. The time-frame set for the setting up of the Authority has already exceeded but it is earlier the better as it would bring in more transparency and the processes would be smoothened.

Make authority functional

V.K. Sankaran Kutty
President of Apartment Owners’ Apex Body
 
Though the State government has formed the Authority with appointment of a senior town planner, it is yet to be functional. Its rules, regulations, powers and constraints are not defined. The builders are unable to hand over the finished homes as registration with the Authority is mandatory to get occupancy certificate. The customers also are in a fix. State government should initiate measures to make the Authority functional and to avoid the fluid and uncertain situation in the realty sector. A major drawback of the Authority is that it caters only the new buildings and silent on the long drawn incomplete projects on which hundreds of customers have invested huge amount.

Sellers, buyers equally lose in game of confusion

The delay in implementing the Real Estate Regulatory Authority as per the law passed by the Assembly is affecting the sellers and purchasers alike, say realtors. While the serious buyers insists on the credentials and a regulatory body for surveillance, they abstain from buying the flats and ready-to-use villas. Result: Advertisements appear that the flats are available for discounted rates. There are also advertisements by certain groups that they are certified by Real Estate Regulatory Authority, while in reality, nobody knows about their existence.

According to Taxpayers association chairman P.T.S. Unni, the sellers and buyers are equally affected. “There should be a unified charge for selling the houses and apartments. People are yet to see apartments as safe investments. The builders should come forward requesting certification. That adds value to their property,” he said. However, Kozhikode Residents Apex Council president T.P. Rajan, who is also the state treasurer of Real Estate Workers’ Union, said that implementing a body would reduce corruption in real estate deals. “The builders are not coming forward to register. This affects the owner, even when he tries to sell the property,” Mr Rajan said.