The unfairness of developers to buyers with the rise of complaints

The increasing trend of litigation

The relationship between the buyer and the builder was always governed by the agreement between them. In that, the past experience of the experts says that the builder always had an upper hand. The builder was said to have an upper hand in all the spheres right from the bookings of the properties, handing over possessions, and in all other chores. The experts say that the builders have a clause in the agreement that states the owners of the apartments have inspected every detail and the apartment or the house is delivered as per the agreed specifications. This clause naturally leaves the buyers very little scope for challenging or complaining against developer on any discrepancies in the court of law.

The unfairness of Developers towards Buyers

Statistics says that the court cases and the disputes relating to real estate and that too relating possession related issues have risen in the consumer courts. The trend watchers say that it’s not only a fact that it is happening due to increasing consumer awareness but simultaneously the cases of cheating by developers, defaults and delays are on the rise as well. The statistics say than since January 2016 about 2,041 cases have been launched for the disputes arising from housing related issues with NCDRC. This is of course close to the number of the complaints that was lodged in 2015. The statistics further point out that there were 2, 495 house related cases in last year and in 2014 about 1, 063 cases were lodged. This is also a fact that in 2013 a meagre 104 cases were lodged as per the government data. The government data points out that insurance grievance topped the list of complaints till last year and from recent times housing related issues have increased exponentially putting insurance related cases at the back seat.

The problem areas:

Recent survey data from Liases Foras pointed out that the issues and disputes between the buyer and the developer can get even worse if one looks at the increasing number of unsold units. The data says that unsold stock increased by 22 percent in the eight major cities of India in comparison to last year. According to the research data the increase in the unsold stock outnumbered that of sales. The inventory across the major cities of the nation stands at an alarming 42 months of average stock. This made the stock rise by 13 percent in one single year. The yardstick is that an efficient market maintains an inventory level of eight to twelve months.

The trend watchers opine that the developers have been struggling with the rising inventory since the recession struck in 2008. In this, the delay in completion of the projects is one of the most common grievances that the buyers have. When enquired, the developers normally put the blame on issues like delay in the approvals from the state and the central governments, agencies and the ministries. The other cases as per the data are the poor quality of constructions, deviation from plans, etc. The trend watchers say that in the past there were instances where the developers and the builders intentionally took to slower pace of construction if the larger parts of the projects were not sold or the sales were slow. They may have taken the capital generated from one project to another project in the pre-launch state or otherwise.

The outlook with RERA in force

The experts are of the opinion that once the real estate regulation Act came into being things will change diametrically. Once the RERA is implemented the developers who will be able to play the rules will be able to survive. The Act provides such clauses that once the law is in force the developers will have to register their projects even if it is under construction and they must disclose accurate information about the projects. To prevent the developers siphon funds the law also mandates that 70 percent of the buyer’s money has to be deposited in the escrow account to secure the common buyers. The experts and the veterans of the realty sector opine that the law maintains a level wherein a balance is maintained between the motives and intentions of the developer and the buyer. 

Mistakes people often make in real estate investment

You must know Donald Trump as he can be the president of the United States. But first of all he is a real estate tycoon. In one of his quotes he said “The most important thing of life is to love what you are doing.” That’s how he got the success that he represents today in real estate. But most of us do not follow this simple rule of life and end up being in clutches of other propensities and especially the negative ones like greed and invest in real estate. The only goal is to make money. In these kinds of half -hearted endeavours the experts say the end result is always failure. Yes! That’s true. Failure in real estate can cost you lot of wealth. That is precisely the reason why we are collating the factors of failure in real estate investment. Lest you want to fail, you better read this article if you want success in your real estate investments.

Common mistakes people often do while investing in Real estate

Rule 1: Done get fantasied and be megalomaniac

TV commercials of the expert realtors and books about real estate success and the millionaire real estate promoter next door can perpetrate one to wish of becoming a real estate tycoon. But that is not at all practical. One should start small with the reality in mind and not being governed by greed and megalomania. But investing in real estate like residential land plots is such an investment that has practically made many, rich from the rags. This makes others to think that it is possible but they have to have the mettle in them. So in case of real estate investment and especially at the beginning one should think small and cut the coat according to one’s cloth.

Rule 2: Be knowledgeable and do what you love

Do not be allured by the money but passion is very much required in real estate like all other fields. Your mission defines where you want to reach and why. These ingredients of success are very much needed in real estate investment also like all other fields if you aspire to be successful. The experts say that many gets allured by the glamour of real estate and get in to the field and most of these people end up in failing.

Knowledge is another factor that you need as well like all other fields. Known circles and acquaintance with of people is also required here to be successful. So, at first one should equate whether one has all the requisites to be successful in real estate or not. Having an ultimate cheat sheet before buying real estate may help you in such cases.

Rule 3: Be practical and lot of groundwork is needed

The experts may tell you that one of the thumb rules is that the property you buy need to give you a monthly return of at least 1 percent per month. You may get that but then you may find that you have paid more for the property than what you should have paid. These kinds of errors are inevitable if you go by the theory and do not come to the basic human motives and judge the ground reality. On top of that you should have lot of contacts to get the right information in time and you should know the market value of properties thoroughly. In practice it is always healthy if you have to pay lesser than the market rates. This always keeps you a step ahead in investment. If you are going for resale or old properties there would always be expenditure for repairs and other miscellaneous reasons. This says the experts have to be thought of while investing in the first place.

Rule 4: Do not overpay

There is no emotion or love when you invest on a property. The sole aim has to be to make profits and increase the return on investment. In this context it is never healthy to overpay for a property at all. Here are 5 emotional mistakes in buying real estate that a buyer should avoid while dealing with property.

Rule 5: Don’t look for information at wrong places

While it is true that you may get a good deal from the newspaper advertisements or the internet but the experts say that the real lucrative deals go by the word of mouth. That’s because many a times the sellers are in the paucity of time and trust is also a factor due to which they prefer the old methods especially in India. If you have lot of contacts and ways to get information then you would get the right information at the right time. The network is important in real estate.

Note: Here is a guide to detect fake online reviews to prevent you fall into any traps.

Rule 6: Never let greed control your actions

You may be seeing so many instances where people have become abnormally rich through real estate investment. This may make you allured towards realty investment and you may also be governed by greed and may also want to invest. This may lead to wrong decisions. That is why the experts suggest that you need to evaluate yourself, love the avocation and then invest.