Buyers fight back, exit stalled housing project
Consumer awareness in an economic downturn has made big builders bow to small buyers. On Friday, DLF, the country’s biggest builder, agreed to give an exit option to buyers pressuring the property giant for the slow pace of construction of its New Town Heights project. Ruchi Hajela and Sanjeev Ahuja report.business Updated: Apr 11, 2009 00:47 IST
Consumer awareness in an economic downturn has made big builders bow to small buyers. On Friday, DLF, the country’s biggest builder, agreed to give an exit option to buyers pressuring the property giant for the slow pace of construction of its New Town Heights project. In a letter to buyers, DLF said it would refund their money within six months.
“We have done our best to keep you happy and satisfied in the project and are doing our best to start the construction within a month’s time,” the letter says. “If you are still not happy to continue, you may exercise the exit option.”
The trend is not limited to DLF buyers alone. The letter could inspire other harassed consumers to hold builders accountable for project delays. The Vatika group and Unitech are just two other builders facing the buyers’ ire.
Just last month, DLF had allowed buyers of its Garden City residential project in Chennai to exit. A DLF spokesperson told Hindustan Times that the option was made available only to buyers who were financially distressed owing to job losses.
The New Town Heights project, with over 3,000 mid-sized apartments priced at Rs 45-75 lakh, was announced in March 2008 with completion due in 2011. However, a group of around 600 buyers expressed concern that construction had not begun and environment clearance was not in place.
In a March 26 letter, DLF said it would complete construction within three years from the booking date. However, protestors maintained that a majority wanted to exit the project.
The anger is spreading. On Thursday, a 30 people who had booked apartments valued between Rs 38-55 lakh in Vatika Group’s 500-acre township off the Gurgaon Expressway, staged sit-ins at the builder’s office to protest slow construction. In some cases the builder allegedly changed the location of the project from what was promised.
“We want the booking amount back,” said a buyer.
A Vatika official insisted construction would begin in June and brokers had misled some buyers about the location. “Only those who had invested in the project expecting a rise in the prices want to exit,” said Pankaj Paul, vice president, Vatika Group.
Last week, dozens of apartment buyers from India, the US, UK and Singapore and their families camped at Unitech’s Gurgaon office to make company officials commit on the completion of the World Spa project. For the project, apartments of 4,000-5,000 sq ft were sold by invitation to top business honchos in 2004 with a promised completion time of 30 months.
Unitech officials said that the project got delayed as buyers asked for structural changes.
“The payments are under the construction-linked payment plan,” a senior Unitech official told Hindustan Times. “Also, buyers are duly compensated for delays, if any.”