REDEVELOPMENT OF HOUSING SOCIETY AND COMPENSATION TO BE PAID BY THE DEVELOPER FOR DELAYED POSSESSION OF YOUR FLAT
Builders and developers play vital role in redevelopment of housing societies. Currently, the redevelopment mania of residential properties is booming in full swing and one finds in Mumbai that compound wall of every third property of a society is covered with tins as number of small time builders and real estate companies has joined the battle in an effort to grab a share of this fast rewarding pastry.
There is also likelihood of delay in completion of such projects followed by numerous complaints from the buyers when flats are not delivered in tine as documented. What do developers do when apartments are not finished on time? Some pay back their clients as part of a penalty clause.
It is a long ending tussle between builders and home buyers that never seems to end delivering projects on time. There are umpteen cases where builders have taken extra time to finish projects while leaving home buyers to suffer fiscal setbacks.
Imagine a situation where you have booked a house in an apartment complex while paying hefty EMIs and also the rent for the temporary place that you currently occupy. Any delay in getting into your own house obviously means a financial loss.
The only change today is that builders now have a penalty clause in their agreements with buyers. But that is not mandatory yet. There have been cases earlier where people have contested builders in courts but in most cases that is a long prolonged battle which not many are willing to go through.
There are cases where people have complained about delayed possession of apartments but these are not highlighted because there are no effective machineries available to redress their grievances. However, the larger and top class developers have their image to protect and to fulfill their commitment they include a penalty clause in agreements.
There are numerous causes for delays such as late government approvals, getting the completion certificate after a long wait, raw material delays, cement and steel procurement, manpower delay to list a few. Getting local approvals is a harrowing task and the new Environmental Impact Assessment clearance that is now mandatory can even take up to nine months. At any point in time, there is a 50 to 60 per cent shortfall in unskilled manpower in the market. Civil contractors executing projects have so much on their plate that managing different projects is becoming more and more difficult.
According to industry watchers, most developers face project delays. About 85-90 per cent projects are delayed in some way or the other and that a lot of the delays are not in the developer’s control. The delays on account of various reasons do affect the overall budget of a developer, increases the construction and storage cost and hit the brand image and future of the company. Of course, it has a direct impact on end-users as well.
A project in which the buyer has given a minimal advance, the pressure on the developer is far less compared to heavy advance acceptances. The buyers capital is stuck and they cannot go anywhere. In such a situation, strict penalty clauses are imposed. This is one reason why clients rely on top class developers who are sure of their deliveries.
The realty industry experts say that in the last few years, developers have taken up 10 times more projects compared to what they have done in their total lifetime. Have they thought where the availability of the labor, brick, steel and cement is? How will they manage all this? However, there are well-known construction companies who are trying to get more advanced technology for construction to match their deliveries. However, the cost of adopting such technologies in India is still very high and not many developers are able to benefit from it. The solution lies in the urban development ministrys plans to create a regulator for the...
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