1) Property Rate Protection,
2) Third Party Construction Quality Audit Reports
3) Compensation for Delayed Possession
are the 'life jackets' which may help the flat buyers
to survive the sinking ship of Pune real estate market!
After the demonetisation of 500 & 1,000 notes, most of the flat buyers who have already registered their Agreement to Sale have panicked.
"Should I cancel the agreement & jump off this sinking ship?" - some asked me.
"Am I going to go down with the sinking Pune real estate market?" - some are worried.
They have panicked because they firmly believe that demonetisation has completely disrupted the Pune real estate market. New flat buyers are going to postpone booking flats & wait for the rates to fall substantially. Slow bookings will hamper the progress of construction and possession would be delayed. Because of the delayed possession those who have booked will suffer huge financial losses.
Falling property rates will certainly reduce the builder's profit margins. To recover the losses the builders will cut corners and will offer inferior quality construction. Result is the flat buyers will not get value for their money and will suffer irrecoverable financial losses.
"Why are you thinking so negatively? Why are you ignoring the brighter side? Builders claim that because of the demonetisation not only the property rates but home loan interest rates are also going to go down and real estate is going get a big boost!" - I asked.
"My agreement is already signed & registered at a much higher rate - reduced property rates is nothing but a loss for me - banks & builders are famous for ignoring old buyers - they only care for the new bookings & the new borrowers" - some flat buyers said.
"Big boost - means big problems - these notorious builders divert money and launch new projects - means assured delayed possession & inferior quality construction" - some flat buyers said.
"Reducing property rates, delayed flat possession & inferior construction quality were serious concerns for a long time - even when you booked - demonetisation hasn't created these issues - right?" - I asked.
"Right" - most of the flat buyers agreed.
I fail to understand why did these flat buyers take the risk of booking a flat!
Unaffordable property rates was not the only reason why flat buyers were not booking.
Poor construction quality, delayed possession, unfair & exploitative terms of transactions in the flat agreement - were equally responsible for discouraging the flat buyer to book.
By publishing circular of director general of police even Maharashtra Government had accepted that builders are committing crimes against the flat buyers.
By passing RERA the central government of India also announced the need to end builders' criminal business practices.
Point is - for the last 3 years - booking a flat was as dangerous as drinking & driving at high speed on the wrong side of Mumbai Pune Expressway.
Glaciers of property price reduction, inferior construction quality & delayed possession had already damaged the ship of Pune real estate market. These guys boarded this sinking ship without wearing life jackets. And now, after the demonetisation they have panicked and trying to jump off the ship. How stupid!
Guys, come on. Real estate development is a 'collective investment scheme'.
A Collective Investment Scheme (CIS) is an investment scheme wherein several individuals come together to pool their money for investing in a particular asset(s) and for sharing the returns arising from that investment as per the agreement reached between them prior to pooling in the money.
When you book a flat - you become one of the owners of the project.
When you book a flat - you become one of the partners of the development.
When you book a flat - you become one of the stakeholders in the venture.
As the owner - partner - stakeholder - you have all the rights to protect yourself.
To protect yourself order your builder to install new policies about - 1) Property Rate Protection 2) Third Party Construction Quality Audit Reports 3) Compensation for Delayed Possession.
1) Property Rate Protection - Till the completion of construction & obtaining 'completion & occupation certificate' - if the property prices are reduced - the same reduced property rates should be applicable to you - even if your agreement is registered. You should get the credit note for the reduced price which you can redeem at the time of possession.
Pethkar Projects' Siyona at Punawale is offering Property Rate Protection Policy from the day project was launched in 2014.
Rohan Builders was the first builder in Pune who offered Price Protection Scheme in 2009.
2) Third Party Construction Quality Audit - Durocrete Construction Quality Rating Agency Pvt. Ltd. (CQRA) is offering construction quality assurance services since 2004. CQRA advises, trains, monitors, inspects, audits construction at every stage. Home Inspect - prepossession inspection of every flat covers over '75 parameters' including electrical, plumbing, waterproofing etc.
Order your builder to appoint CQRA or any other third party construction quality auditor.
3) Compensation for Delayed Possession - When possession is delayed every month you lose - 1) Pre EMI - which is nearly an EMI of your loan amount + 2) Monthly Rent 3) You suffer social insult & mental agony. Obviously, compensation for delayed possession must cover your all losses. It means that 9% interest or a rent - which some scumbags are offering - is certainly not enough.
Order your builder to rewrite the compensation clause in the agreement. If it is not there - add it.
The Problem of builders in Pune is - they misunderstand their role & responsibilities.
"I am the promoter & developer - means the owner of this project & I will run it as I wish" is the feudalistic delusion of these scumbags. Exactly like politicians who believe that they own this country.
Obviously, initially, you will face resistance from your builder.
So, first you have tell these scumbags that you - the flat buyers - are the paymasters - owners of this collective investment scheme. Your builder is just a facilitator - a coordinator of services. If there is a deficiency in the services offered - he will be penalized.
And do your best to teach your dumbhead builder how these policies will also help him to survive the sinking Pune real estate market!
What say you?
Can you survive the sinking ship of Pune real estate market with the help of 1) Property Rate Protection, 2) Third Party Construction Quality Audit Reports 3) Compensation for Delayed Possession?
Would you like to suggest something more?
Please, share your ideas in the comments.
1) Pune property rates will keep on going down
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