Demonetisation, cash crunch led to more housing frauds in Mumbai
EOW officials attributed the uptrend to cash crunch post-demonetisation and to booking builders under MOFA on not delivering flats to buyers in timemumbai Updated: Feb 05, 2018 11:56 IST
The city has witnessed an increase in number of housing frauds in 2017 as people opted to report cases against builders who duped them of their life savings in the name of building their dream homes.
According to the Mumbai police statistics, 50 cases of housing frauds were registered in 2017 as compared to 32 cases in 2016. Maximum of these 50 cases are registered under the Maharashtra Ownership Flat Act (MOFA) and involved transactions of around Rs1,085 crore collectively.
Officials from the economic offences wing (EOW) attributed the uptrend to the cash crunch post demonetization and to booking builders under MOFA on not delivering flats to buyers in time.
“There was a phase post demonetization, when the market observed a serious cash crunch. And the phase adversely impacted small and middle level builders and developers. They failed to complete housing projects and deliver them to buyers on time, as their traditional system of using black money for the work collapsed,” said an EOW officer, requesting anonymity.
Another EOW officer said many builders found themselves on the wrong side of the law as they followed the practice of misusing the home buyer’s money. “A builder takes money from home buyers and then puts that money in other projects he has. So, if one project gets stuck owing to some problems or clearance, the other projects get affected too. We have seen cases wherein builders have invested house buyer’s money in other non-housing projects and films,” the officer said.
Former director general of police, Praveen Dixit, said, “Earlier few cases would come up to the FIR level as builders would use their lobbies to influence the enforcers. But, the practice was cut down by the MOFA, which was there in place, but was not being used. During my tenure, I had given instructions to all unit heads in the state to register cases against builders under the MOFA.”
There is also a need for spreading awareness among people about their legal rights when they go to buy homes, he said.
A senior EOW official said that the cases of housing frauds are likely to drastically go down in the coming years because of the effective and transparent mechanism of the Real Estate Regulatory Authority (RERA). “The new mechanism leaves almost no scope for builders to cheat home buyers,” he said.