Home buyers left in the lurch

Builders fail to give possession of homes in stipulated period
Chandigarh, July 18
Rising cost of construction material, sky rocketing interest rates on realtors and for home loans and a cautious approach by banks to finance these projects is keeping hundreds of prospective buyers from getting possession of their ‘dream homes’.
Contrary to the general opinion being created by the realtors about a new boom in the market, The Tribune has found that the genuine home buyers in this region have been hit hard by the lull in the real estate market. With most of the builders failing to give them possession of their homes, these buyers have been burdened with escalating home loan rates. On the other hand, most of the realtors, having made their profits by selling anything between 30-50 per cent of the project at exorbitant rates, have stopped construction at these project sites and re-invested the money in either enhancing their land banks, or ploughed money collected from one project into another.
Be it in Zirakpur, located on the outskirts of Chandigarh, or the financial capital of Punjab, Ludhiana, the slump in the real estate sector has started taking its toll. At most of these project sites, one is greeted by rows of unfinished concrete structures. In some projects, the external development work has just begun to take off, though the projects were announced and bookings were made almost four to five years back.
The Tribune has learnt that almost 40 per cent of projects in Zirakpur have put their construction on hold because of a cash crunch (mainly because funds from these projects have been diverted to buying land to launch the next phase of the project), and 90 per cent of those projects where construction is still on, are working on extended time lines.
Top executive with a leading multi-national company Dheeraj Gupta, who was supposed to get the possession of his apartment in Zirakpur in March this year, informed The Tribune that he was now feeling the pinch of paying a higher EMI instalment, even though he has not got possession of his apartment. “When I booked this apartment, I went into an agreement with the developer, according to which the developer is liable to pay me a penalty of Rs 5 per square feet (for the total area of the flat) in case he failed to give me possession in the time frame that was promised. I had already sold off the flat where I was living earlier and have now been forced to live on rent as I have not got the possession of the flat. This is not just true in my case, but for a large number of home buyers in Zirakpur, VIP Road, Peer Machalla, Dhakaula and Dhakoli, where possession has been delayed. A number of people have also taken these developers to the consumer court for failing to deliver the services,” he said.
In Ludhiana, the realtors have failed to give possession of the land/villas/ apartments in a majority of the projects that took off since 2005. Those in the real estate sector allege that many of these top real estate companies that launched housing projects at the peak of the boom have collected money from the investors here, but diverted it to their under-construction projects in bigger cities.
In Bathinda, which is the emerging boom town of Malwa region, illegal colonies have mushroomed and many people have invested their hard-earned money in buying land there, only to be deprived of electricity and water connections as these colonies have not been approved by the Punjab Urban Development Authority (PUDA).