Realty Bites: Homebuyers pay a heavy price for incomplete houses

Stung by inordinate delay, and duped by stakeholders, millions of people across the country are paying a hefty price for investing in their dream home

By Rajiv Singh Forbes India Staff

Published: Oct 10, 2022 03:54:59 PM IST

Updated: Oct 11, 2022 11:41:40 AM IST

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Homebuyer, Akansha Tete

Akansha Tete has been living under an intense fear of the number 10 for over a decade. “I just want 10 to be out of my life,” underlines the 48-year-old communications professional. “It might sound irrational but can somebody just delete this bloody number from the calendar,” whines the Gurugram resident. “Every month I get hyper anxious and restless on this day,” says Tete, who had booked a three-bedroom apartment for Rs70 lakh in 2011, and has been religiously paying an equated monthly instalment (EMI) of Rs34,500 on the 10th of every month. “It has been more than 10 years,” she says, adding that her intention is to stop paying, but knows that the consequences can be disastrous.“My credit score will go for a toss if I default.”

Back in 2011, there were five members in the family: Tete’s toddler daughter, her husband, Tete’s mother and a domestic help. “This was our first house after marriage,” recalls Tete who moved into a small apartment owned by her husband after the wedding. A consistent nudging from her mother, who wanted to share her room with her doting granddaughter, made Tete buy a bigger apartment. “My mom died a few years back,” she chokes, gasps for air and starts sobbing.

The interview took place at a South Korean bakery in Gurugram on the last Sunday of September, just two weeks short of the dreaded October 10. “My dream of owning a house is shattered, and I don’t know for what I am paying the EMI,” says Tete, sounding lost. The work at Sunehra Apna Ghar Cooperative Group Housing Society in Gurugram, where Tete booked her flat for Rs70 lakh and was supposed to be delivered in 2012, has been stuck for last four years. “We already paid Rs 40 lakh to the builder,” she continues, adding that the project is in limbo.

Umpteen complaints to the authorities resulted in zilch. Bank too did nothing except sending EMI reminders every month. “Are they not accountable? After all, they disbursed the amount to the builders without monitoring the project,” she asks. The pain of watching the jinxed building every day for last 10 years is clearly visible in her eyes. “It’s just a kilometre from the place where I live now,” says Tete. “I watch the incomplete structure every day while going to office. It’s agonising,” she says, adding that most likely the building will never get completed. What, though, will definitely get over is her EMI tenure in 2030. “I have no option but to pay,” she adds.

Image: Madhu Kapparath

Some 70 kilometre from Gurugram, Haryana, is Greater Noida. It is located in a different State, Uttar Pradesh, but the story is the same. Consultant Reetesh Singh booked a flat in Amrapali Dream Valley in 2012, and took a home loan of Rs18 lakh. The property, which was supposed to be completed in 2016, is now being completed by the government’s construction arm NBCC (National Buildings Construction Corporation), and will be ready by 2024. In its landmark judgment in 2019, the Supreme Court cancelled the registration of the Amrapali Group, directed the Enforcement Directorate to investigate money laundering and diversion of funds, and barred the errant builder from taking up any real estate projects. “It is shocking and surprising that so many projects have remained incomplete,” the Supreme Court observed in its verdict. “Several lakhs of homebuyers have been cheated,” it added, pointing out that it (appears) as if there is no machinery of law left to take care of such situation and no fear left with the promoters/builders that such acts are not perceivable in a civilised society.

Three years after the verdict, not much seemed to have changed on the ground. Look at the numbers. Around 4.80 lakh units of flats were stuck at various stages of incompletion across top seven metro cities till May this year. In terms of economic value, it comes to around Rs4.48 lakh crore. The National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) together account for 77 percent of the incomplete projects. In terms of volume, Delhi NCR tops the chart with over 2.4 lakh of stuck units. While MMR comes second with over 1.28 lakh units, Pune and Bengaluru follow with 44,250 and 26,030 units, respectively, according to a recent study by property consultant Anarock.

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In Greater Noida, meanwhile, the delay has taken a taken a toll on Singh, both mentally as well as financially. “I have been paying monthly loan instalments as well as rent,” he laments, adding that every month he has to shell out Rs18,000 on rent and almost an equivalent amount on EMIs. “All I wanted was to buy a house,” he says. And after a decade, all he have is a complete mess, he says. The Supreme Court highlighted the real estate mess in its verdict in 2019. “Bank has made payment to the builder, owners have the liability of making payment of amount with interest, homebuyers are still waiting for their dream houses to be completed,” the court pointed out.

Image: Amit Verma

Back in Gurugram, Anil Jain reckons real estate is the biggest scam in independent India. The businessman booked a flat Raheja Shilas in Sector 109, Gurugram, in 2011. It has been more than a decade and the 59-year-old is still awaiting possession. Though it’s valid to find out why it happened, Jain underlines, the larger question that nobody is asking is why such a real estate mess was allowed to happen. “There is another crisis that is going unnoticed,” says Jain, alluding to thousands of homebuyers who have started living in apartments which are yet to get OC (occupancy certificate) from the local authorities. What it simple means, Jain explains, is having a property that can’t be registered. “You will continue to pay EMIs on a flat that legally and technically will never be yours,” he says.

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Jain is pointing to another aspect of the housing scam in India. The homebuyers took loans, the builders never delivered flats on time and the consumers had no choice but to live in housing societies which still don’t have any legal status. “Well, there were families staying. So we too shifted,” says Anurag Pandey, one of the homebuyers in Greater Noida, explaining his move to shift into a building which was yet to get clearance from local authorities in 2019. It has been over three years, and the builder is yet to get an OC. Pandey, who runs a garment store, now sounds disillusioned. “There is no news yet and I don’t know if OC will ever come,” he says, adding that the builder doesn’t have funds to clear the dues and get the nod.

Hemant Kumar, a consumer rights activist in Noida, explains why even enactment of RERA (Real Estate Regulation and Development Act, 2016) could not make much dent in solving these woes. “Who will break the builder, banker, official and politician nexus,” he asks. While the demolition of the Twin Towers in August this year conveyed a strong message, the move was largely symbolic. “Did it break the nexus?” he asks. The problem, Kumar reckons, is with lack of political might of the thousands of middle class families who are not looked upon by politicians as vote banks. ‘Why should anybody care about these homebuyers,” he asks. The problem has been there for decades but has been conveniently ignored by authorities. “They would have lost much even if they happen to win one fine day,” underlines Kumar, alluding to the plight of the homebuyers.

Back in Gurugram, Tete reckons she is not going down without fighting. “It’s my hard-earned money and I will keep fighting till my last breath,” she says. “Justice might get delayed. But I still believe it can never be denied.”