“BROCHURES” AS A PART OF THE AGREEMENT

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The Bombay High Court ruling treating brochures as a part of the Agreement will bring in greater transparency in the real estate industry, reports Yogesh Sadhwani.

Developers who over-promise and under-deliver better beware. According to a recent Bombay High Court ruling developers will now have to actually deliver on all the fancy promises they make in their marketing literature.

In his land mark judgment passed on March 16, Justice K.J. Rohee of the Bombay High Court ruled that though the brochure printed and circulated by a developer was not part of the agreement, but can be so treated

Justice Rhohee was hearing two petitions one filed by the residents of Maduvihar Co-operative Housing Society (CHS) against the developers, M/s. Jayantilala Investments and BMC and another filed by the developers against the residents. Both the cases dealt with construction of an additional building on the plot that was earlier5 depicted as open space and recreations area in the brochures.

While the residents contended that the additional building couldn’t come up on the plot as it was shown as open space in the brochures while selling flats in Madhuvihar, the developers said that they were within their rights to do so.

After hearing both the sides, Justice Rohee passed the Judgment in favour of residents. He not only asked the developers to convey the entire property in favour of the housing society but also restrained them from constructing anything on the vacant plot. The vacant space depicted by the developers in the brochures played a vital role.

The buyers have lauded this Judgment, while the developers say that only a small section of players who do not believe in delivering what they promise will be affected.

Advocate and Consumer activist Hemang Jariwala says, “While booking the flat, the buyers are show a rosy picture,. It is only when they sign the agreement, by which time they have paid a huge chunk of the consideration, they come to know that several amenities shown in the brochure has been deleted. A buyer has no way to back out. With the HC Judgment, however, the developers will no longer be able to take unsuspecting buyers for a ride.”

The real estate players, however, point out that only a handful of developers would be affected by the judgment. “Many time brochures are not indicative or reflective of the reality. This would affect only a few people. I don’t think the majority will be affected,” says Nirajna Hiranandani, MD, Hiranandani Constructions Pvt. Ltd.

Mukesh Patel, Knowledge Worker, Neelkanth Group says, “Whether it is a promise made in a brochure or an agreement,, a commitment is commitment and all reputed developers would live by them. But at the same there should be some flexibility, especially in terms of large layouts.”

Other believes that alterations in plans are not done deliberately. “The reason why most alterations take place is because there are changes in the FSI norms and thedevelopers obviously want to maximise their profits.

There are times when the developers have to alter the designs of the originally planned buildings to cater to certain class of people. In such cases if there is additional FSI left, they construct more later,” justifies Suresh Haware, Haware Engineers and Developers Pvt. Ltd.  He quickly adds that a handful of developers however, however, blatantly abuse the trust that the buyers repose in them.

Haware says that any sensible developer who is conscious of his image and wants to remain in business, will never deviate drastically from his initial plans or break his promise. “It is only a few who have tarnished the image of the community”, he says.

Similarly Savio D’Mello, Group Head of Ekta Supreme Housing, points out that brochures are printed on the basis of visual effect. “The exact dimensions are never mentioned. Moreover, all depends on sanctions from the civic body. All genuine developers deliver what theypromise and at the same time keep their own profitability in mind,” he says.

All the developers, however, admit from now on even the reputed ones, who never intend to dupe the buyers will have to exercise extra caution while designing brochures. Giving real estate an industry status and designing a code of conduct is another way to put an end to such problems and bring in greater transparency, concludes Haware.

Fraudulent builders soon to be black listed

The residents of the western suburbs in Mumbai have come forward to help the State Government in black listing the builders who have cheated citizens under the guise of providing houses under the Slum Rehabilitation Authority or SRA Scheme. The residents from Vile Parle, Santacruz and Andheri Station to the Governor S.M. Krishna’s bungalow at Malabar Hill on April 3. Though this yatra which will traverse 25 km, the residents want the entire city to know about the builders who have cheated them by making fake promises.

Mr. Asmitbhai Muchala, a resident of Gilbert Hill said, “We have come to know through the media that the Chief Minister during the State Assembly session has said that the builders who have cheated the tenants under SRA scheme will be blacklisted. Taking a cue from this, we have gathered residents who have been cheated by the builders and have planned to take out a rath yatra. We want to make people aware of the fraudulent behavior of the builders in the city.

Ms. Saira Patel, a resident of Andheri said, “For the past ten years, Srirang builders had promised me and other 100 residents proper housing under the SRA scheme, but there is yet no sign of any building coming upon the plot at Andheri.” She also said, “Our complaints went unheard in the past but this time we will take out a yatra and will present a memorandum to the Governor. We will also demand a thorough inquiry against the errant builders.”

Mr. Kantilal Maniyar, a resident of Santacruz blamed K.K. Developers of paying more attention to his private constructions which are ready for sale rather than completing SRA project. “He has neglected our housing and we are living in abysmal conditions in temporary accommodation since the last four years.”

The residents of the western suburbs also allege that these small time builders have made big money under the SRA scheme. The additional space which the builders get under the SRA scheme is frequently commercially exploited and sold by them. “The state government should make tougher guidelines for the builders so that they do not cheat us”, said Ms. Pate.