HOUSE OF CARDS?
AMONG THE SEGMENT OF RESIDENTS WHO OPTED FOR REDEVELOPMENT, THERE ARE MANY, WHO ARE FACED WITH STALLED PROJECTS, AFTER THEIR BUILDINGS HAVE BEEN DEMOLISHED. IS THERE A SOLUTION? KAMLESH PANDYA FINDS OUT
For residents staying in small-sized flats in old buildings, redevelopment was the ideal solution – a new flat, with additional space, modern amenities and best of all, located in the same place. Developer Vivek Abrol explains “For the developer, land cost effectively works out to zero. So, many project contractors saw redevelopment as an ideal promotion, to becoming a developer,” he adds. It is these people, who picked up projects at unviable terms, explains developer Prakash Dhoka. “From the residents’ perspective, it was a simple matter of getting more bang for their buck, even if it means a wafer-thin margin for the developer,” says Dhoka. The problems started when realty prices started going south, says developer Atul Shah. “These projects were the first to become unviable and in practically every major locality in Mumbai and the suburbs, you have such stalled re-development projects. With developers unwilling to complete the project at a loss, their stance is that the project has become unviable. So, work has stopped till a price revival happens,” explains Shah.
Siddharth Shah is a financial consultant and has relatives who have fallen victim to such a situation. “The project, off Chandavarkar Lane in Borivli west, is being undertaken by a prestigious developer, who is a CREDAI member,” says Shah. “The residents have moved out, part of the demolition has been carried out and now, the project isn’t moving. There is no response to queries, apart from a standard ‘work shall re-start in a fortnight’, leaving the residents a worried lot. Is there a solution?” he wonders.
According to advocate Vinod Sampat, redevelopment is a valid contract and a change in business climate cannot be an excuse to wriggle out. “Affected residents can approach criminal and consumer courts, citing ‘deficiency in service’. Call for a press conference, take out a morcha and most importantly, find out where else the builder has his other projects and intimate members of those projects,” he offers.
If there is a price fluctuation, it is the builders’ business risk. “He is doing business and he has to be ready to face all consequences of pricing,” says consumer activist Arun Saxena. “Depending upon the terms that were agreed upon, the consumer court can either pass an order for payment of compensation, or for delivering possession of the flats. Despite this, if the flat is still not delivered, the builder/developer can be put behind bars and his property may be attached, to recover the consumers’ money,” he elaborates.
Real estate consultant Prashant Puri feels that residents should also look at realistic solutions that would work faster than legal proceedings. “If residents give up some of the extra free space, or some amenities, it might be easier for the developer to complete the project. The builder will also have to accept a reduced or no profit situation and complete the project,” he suggests.