"This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means… Innumerable children have been born into the cause; innumerable old people have died out of it."
- Charles Dickens
The novelist may have been railing against the legal system, but today the rant may well be against the real estate firms that are learning the art of procrastination.
Several real estate companies announced ambitious projects, took booking fees from buyers and then were probably forced to delay things. Lack of finances and a slump in demand led them to push back ongoing projects. They reckoned that if they stalled for some time, people would either forget the project or would be willing to pay more just to see it completed. They did not foresee that their customers would join forces to fight such delays.
Perhaps the developers hoped for a class action suit, which would have led to infinite legal delays. Instead, the buyers have decided to let public pressure do the job.
Around 900 buyers of apartments in a housing project on Old Mahabalipuram Road, near Chennai, formed an online group on Google Groups in March 2008. They collectively built pressure on the company to refund the buyers who wanted to exit the project. The reason: inordinate delay in completion and the builder's inability to get the plan approved. Subsequently, the company was forced to reach out to them in a bid to stop a majority of them from pulling out. Apart from bringing down the costs, the company, in a letter dated 28 March 2009, said that it would return full booking amount to all the customers who wanted to exit.
This is not an isolated case. A similar group has been formed for a project in Gurgaon, launched in June last year. "Quite a few online groups of buyers have been formed after getting in touch with us. Till now, the buyers have been at the receiving end of builders' whims. We have now found a new voice, expressing our collective will through the Internet forums," says M.S.D. Prasad, who spearheaded the group for the Chennai project.
Similarly, a Yahoo Group has been formed by the buyers of another project in Gurgaon, who are concerned about the delay in its completion. Buyers of yet another real estate project have formed a group as the builder has not been responding to their complaints. Nitin Goel, a member of the group, says, "Our builder has also been demanding payment as per a timelinked plan, though it had said it would take it as per a construction-linked plan."
Cases like Prakash Agarwal's are sadly becoming too common. "My mother booked a unit in a project in Gurgaon, which the developers promised to deliver by mid-2009," he says. "When we visited the site in January this year, we saw hardly any construction. We were told that it would start by end-January, but even in April the situation is the same. Now they say that we will get possession only by the end of 2010. We have already paid 95% of the cost," adds Agarwal.
Other buyers are railing against the fact that while they have paid more for a house, the buyers who came in later are being wooed with discounts. "If developers are willing to offer huge discounts to generate new sales, shouldn't they be considerate towards the buyers who came in at the beginning and got the project going?" asks Shaleen Garg, an investor in a Gurgaon project.
 |
| Dinesh Verma, Chartered Accountant, Delhi |
| Core member of a Yahoo Group on a housing project in Gurgaon. The group is demanding timely completion of the project, an exit option and price cuts. The membership has grown from 20 to 800 in four months. |
| "If a realty company has the right to launch projects, then it is its duty to listen to the existing customers." |
Experts say that this activism comes at a time when builders are already facing problems. "One reason for the increasing incidence of disputes is the decline in real estate valuations, which is prompting the buyers who had booked property at high prices to seek refunds and switch to cheaper developments," says Anuj Puri, chairman of Jones Lang LaSalle Meghraj. "It is true that many projects have been delayed for genuine reasons like lack of finance, but at the same time, the tolerance level of buyers has gone down," he adds.
Experts see the coming together of home buyers as symptomatic of young investors using technology to bargain for better deals with realty firms. "These days, we have far more discerning buyers. They are not people who have invested money in a project at a later stage in life and are dependent on the developer for delivery of the project," says Aditi Vijayakar, executive director, residential, at Cushman & Wakefield Asia.
Of course, the Internet is not the only option, but it is fast becoming the most popular. It's cheap and has an incredible reach. Here's how you can leverage the power of the Internet to get people together and fight for a common cause.
DEDICATED WEBSITES: If you are considering the purchase of an apartment, all it takes is a click of a mouse to access feedback from buyers on the developer or the project. Websites like complaints.com or mouthshut.com offer such platforms. The opinions, posted so freely, make it imperative for the companies in a competitive market to respond to complaints.
VIDEO CLIPPINGS: Sites that are similar to YouTube can work as powerful tools of complaint. A buyer, after he moved into his house, found that the developer was not redressing complaints about peeling paint, cracking plaster, etc. He shot a seven-minute video of all that was wrong in the building and posted it on YouTube. Soon after the link was posted, the management stepped in to carry out the muchneeded repairs.
BLOGS: Create a free blog and drive traffic to it by posting links on popular forums. People with similar problems will find their way to your blog and a community will be formed with little effort.
CONSUMER RIGHTS GROUPS:. Organisations like Consumer Voice and Investor Helpline have also gone online and allow registered users to post complaints and opinions. "The idea is to give the customer access to corporates without having to resort to the judicial system," says Virendra Jain of Investor Helpline.
However, while the Internet opens up new avenues, it doesn't come with any assurances of redressal. Do not expect results in a day just because you have posted your complaint. Though the process starts with one complainant, a random check on the Net about your particular grievance will give you an idea whether other people are also affected and provide information about the right forum to join.
"Sometimes joining an existing forum makes much more sense than starting your own crusade because you are immediately in a position to take advantage of the gains that have been made by the group," says Dinesh Verma, who is spearheading an online group against a developer.
You also need to back up the online campaign with offline efforts. But, remember, that while you can fudge the number of hits and visitors to your site or forum, the company can dismiss the entire campaign as false if you really indulge in such an activity.
As the number of online groups grows, you will have to think of newer ways to force the developer to sit up and take notice. "One trick we have used successfully is by approaching the corporate communications department of these companies and threatening to go to the media. The links are easily available on most companies' Websites," says a blogger.
If all else fails, there are always the courts and class action suits - but be prepared to face delays.
