Home buyers fall for false promises by builders, complaints on rise

When Swati Jain, an executive with a private bank booked her flat in Noida, she was promised an area of 1,250 sq ft and all-inclusive cost of Rs 48 lakh. However, when her flat was ready for possession, to her dismay the actual carpet area was just 975 sq ft.

When she contacted the developer, they said the brochure mentioned built-up area and not the carpet area. She felt cheated and moved a consumer court where she has been fighting a case against the developer for the last two years.

"We had done the realty check. Their brochure clearly mentioned the carpet area of 1,250 sq ft and when I got my flat, I felt cheated. That was just one issue. They were equally evasive on the payment of service tax, leave aside so many unfulfilled claims," Jain said.

There are thousands of consumers who are victims of such false claims made by developers. Many are resorting to moving consumer courts.

Last week, when the Confederation of Real Estate Developers' Associations of India (Credai) announced that it would impose a code of conduct on its members to adopt best practices, it brought the focus back on the lack of transparency plaguing the industry in general and hurting customers interests in particular.

FAILING TO BUILD TRUST By signing code of conduct, developers will commit to the sale agreement they sign with buyers Realtors will need to specify the carpet area of dwelling Also, they would provide detailed break-up of the room sizes Developers would also have to specify delivery schedule, penalty for developer for delays & penalty for customer for default on payments

According to Lalit Kumar Jain, president, Credai, transparency is a big issue with the developers.

"Most of the developers do not clarify actual carpet area in their advertisements. Also, there are so many charges that they never mention in their advertisements or their brochures. At the end of the day consumers feel cheated," Jain said.

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"That is why we have decided to make a code of conduct and have asked all the member developers to follow it in their transactions," Jain added.

By signing this code of conduct, developers will commit to the sale agreement they sign with buyers, specify the carpet area of dwelling and provide detailed break-up of the room sizes, specify the delivery schedule, spell out the penalty for the developer for delays as well as for the customer for default on payments, Jain added.

"We have asked all the 6,000 Credai members to sign it within six months. It will help build the trust between the buyers and developers," he said.

However experts feel that without proper enforcement of law by the states, the code of conduct will not help the sector of the consumers in the long run.

"Can you imagine a shampoo company selling 300 ml bottle by mentioning 400 ml on it.

They cannot do that as there is an agency for proper enforcement of law. Till the model real estate Bill comes into effect, such a model code of conduct has no meaning," said a Gurgaon-based developer.

According to this developer Credai has been trying to form a code of conduct for the last one and half years but has failed to get it accepted by its own members.

Courtesy: Mail Today