40% of new home units in Noida delayed

Ramesh Saxena, a 29-year-old IT professional, had booked a flat in Noida Extension in early 2009. He was promised delivery in three years. But with his dream home nowhere near completion, he is paying Rs 20,000 a month as rent in Vaishali — apart from shelling out even an larger sum as EMI for the home loan.

“I am spending almost Rs 50,000 on rent and EMI. That leaves me with hardly any money. My father, a retired government employee, uses his pension money for other expenses,” said an exasperated Saxena, who had planned to get married only after moving into his own home. His marriage plans, too, are now indefinitely delayed.

Lakhs of middle class families who booked homes in Noida Extension region have similar harrowing tales. Industry estimates suggest that almost half of the four lakh residential units planned in Ghaziabad, Noida and Greater Noida (which includes Noida Extension) are delayed. Among the projects under construction, over 40% are running behind schedule.

“The problem (of delayed possession) is really serious. Most of the projects launched in the last four-five years or even before that have still not been delivered to buyers. Because of this end-users are losing faith in builders’ ability to deliver on time and the latter’s credentials have gone down drastically. This is one of the reasons why real estate is at a low point,” said Santhosh Kumar, CEO (operations) of Jones Lang LaSalle (JLL).

Kumar’s grim picture of realty’s reality comes from these figures given by JLL. At present, a total of 2.3 lakh residential units are under construction with 1.1 lakh in Noida (city and expressway); 94,500 in Noida Extension and 24,600 in Greater Noida (including Yamuna Expressway). “Of these, 231,956 residential units are under construction, 95,859 (or a whopping 41%) are running behind schedule, with maximum delay being four years,” he said.

Industry sources say that while land acquisitions problems have delayed projects, especially in Noida Extension — now Greater Noida (west) — the real problem is elsewhere. “Builders launch a project and based on its prime position, get buyers in droves. But instead of using this money to complete that project, they go on an expansion spree. Today most big names have a plethora of projects but hardly any of them are ready,” said a Noida-based property dealer who did not wish to be named.

Despite the grim ground reality, buyers have no relief from any quarter. A mere Rs 5-10 per square feet is the penalty for delay, and developers find ways to deny even that to buyers.

“In case of construction delays beyond the average stipulated time period of three years and a grace of three months, a few developers pay back some form of penalty either adjusted against the bill or as cash back to the customers. The penalty ranges from approx Rs 5 to Rs 10 per sq ft of the unit area,” said PropEquity CEO Samir Jasuja.

Even this is often denied to buyers. Many builders claim to give extra super area — which means not the carpet area of your home but the public spaces of your building, like stairs — instead. The only remedy for buyers seems to be going to consumer courts as successive UP governments have tended to be builder-friendly.
Lawyers dealing in consumer courts say they see a rush of such cases as this is the only place for harried buyers. “Buyers may get reasonable amounts as compensation for delayed possession from consumer courts but builders in almost all such cases challenge these orders and field legal eagles in higher courts of appeal. The buyer, therefore, is helpless there too,” said a lawyer on condition of anonymity.

Not surprisingly, AAP-style dharnas and agitations in front of builders’ offices or project sites have become a regular feature. “We have been duped by our builder. We were supposed to get our home two years back and there is still no sign of our apartment building on ground. The compensation for delayed delivery should be linked to market rates. We buy flats and then get treated like beggars,” said Pankaj Pokhriyal who has booked a flat in one of the biggest upcoming cities on Noida-Greater Noida Expressway.

“The real estate sector is still not governed by any blanket law due to which it lacks transparency and permits developers to flout monopolistic policies. With the advent of the Real Estate Regulator Bill, passed in the assembly in 2013, we are expecting strict rules safeguarding the interests of the customers,” said PropEquity’s Jasuja.

Till that happens, all buyers can do is curse their stars or suffer in silence.

This entry was posted in Ghaziabad Properties, Greater Noida, Home Loan, Loan Against Property, Noida Extension, property in gurgaon, property in noida, Property Investment, Real Estate, Real Estate Development and tagged , , , , , . Bookmark the permalink.

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