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Wednesday, December 24, 2014

Maharashtra Government announces stringent remedies against cheater builder developers.

On Tuesday chief minister of Maharashtra announced stringent remedies against cheater builder developers. He assured legislative house that the properties of such unscrupulous, fly-by-night builders and developers will be sold to refund money to consumers. He also assured to amend the Maharashtra Protection of Interest of Depositors (MPID) Act . currently this law is applicable to investors and not buyers of property however Government  is planning to amend the MPID Act to include such crimes to enable the government to sell the property of those involved in these cases and return money to investors.


In last some years it is observed that gullible flat buyers fall in trap of verbal claims, glossy brochures of builders. The increase in the demand and the offered promises does not ensure that the promises will fulfilled on time. Builders fail to deliver on time,  the delay in handing over possession is rampant. Many builders start selling flats even before work starts and in some cases the builders don’t have commencement certificate even after buyers occupy the flats and start living in it.

Because of one-sided sale agreements tilted in a developer's favors, buyers have no option but to be patient when the developer delays his project. Builders start selling flats even before work starts. There are several reasons for a stalled project. Many times builder run out of funds or the authorities issue them a stop-work notice for violations. Many times such delay is there because the developer  changes the building plans or  delay in procuring approvals,

Before buying any property one should check copy of all legal documents like approval of municipality, sample sale agreement etc. and get these document verified . Many times buyers get the legal papers only after paying the cash component or some percent of  the price of property .Once buyer pays some amount ( that goes into some lakh rupees) he fall in builders trap he has no option other than to believe or wait for the project to be completed. He avoids any legal action or complaint to authorities because fear of losing money. And delay in justice in India is main cause of such fear.

It seems that Mr. fadanvis has taken common flat buyers problems seriously. Recently he announced to to clear construction proposals by developers within seven days from their respective municipal authorities or district authorities if the building plan submitted by them is as per any of the 56 plans approved by the government.

In last many years in India housing for poor or affordable housing has become a serious issue. Many Governments brought many legislation or schemes to promote such housing. Be it urban land ceiling Act ( Funny thing is this act was brought so that poor people should get house and it was repealed for the same reason) , Housing for economically weaker section ( EWS ) , Housing for dis housed (HDH), special Township schemes etc. etc.

Many concessions benefits were given  to promote such schemes. The Idea was to make available affordable housing for poor. But that didn’t happen because builder with help of politicians and bureaucrats siphoned off all these concessions and benefits in between. They didn’t reach to whom those were meant for i.e real, poor and needy flat buyer


In two circumstances real estate industry unites remarkably 1)To siphon of concessions-benefits meant for common people and 2) to oppose or put pressure on government , not to make efforts that may regularize real estate industry. Best recent examples of it are  Real Estate Regulatory Authority  and recently announced  certification the measurement of flats sold to buyers.The real estate industry as expected has heavily reacted on this decision.

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