Sunday, June 30, 2013

Jargon used by Builders in Haryana.

Since a lot of builders are deficient in disclosing crucial facts about the property in launch of their projects and a lot of times fool the gullible Home-buyers with fancy jargon like Pre-launch, Launch, Super Area, FAR, Build-up Area, Covered Car Parking, Possession for Fit-outs etc. Therefore at each stage there is a term used by Builders which usually means almost opposite of what a common definition would  classify. Hence, we shall start to explore these definitions so that we are more aware of the facts rather then getting misled by false statements of the Brokers into buying something that does not exist. It is important that we start first with Pre-launch as that is the first jargon that we have to deal with when we look for projects on sale and as its understanding determines the extent to which the builder has achieved in terms of the development cycle of the project at the time of pre-launch.

The Building bye laws governing licensed colonies in Haryana is regulated by the Haryana Development & Regulations of Urban Areas Act, 1975 and the rules framed there in. Section 7(i) of the Act of 1975, clearly prohibits the Builder to advertise and transfer plots, " without obtaining a license under section 3, transfer or agree to transfer in any manner plots in a colony or make an advertisement or receive any amount in respect thereof". Its true though that the administration has banned the pre-launch of projects but each project in haryana is pre-launched by the builder and every consumer tries to get into the project at the initial stage due to the attractive price tag at which the property is Pre-Launched. In common parlance we are told that Pre-Launched project is a project where certain formalities have yet not been completed but would be done within a few months and thereafter the project would be launched. What formalities have not been completed by the builder that we never get to know, whether the builder has the title of the land on which the project is being Pre-launched or not, has the builder got the license as per the Act of 1975 or not etc.

The factual matrix is that at the time we decide to enter into the property which is Pre-Launched/Soft-Launched there is no true information shared on any facts about the stage the project is in, what is shown is only a brochure which says all maps, drawings, etc are tentative and subject to change and many times even the customary brochure is also not prepared, it is the brokers presentation that we believe with open eyes. The builders in most of these cases do not even have the title of the land where they want the customers to believe the project is going to come. That is the reason the property is priced at much lower level to entice the gullible common man. It is only after the builder has sold considerable part of the project  to consumers that he pays the landowners with whom he had entered into an agreement to purchase the land. Most often, for various reasons the deal entered into by builder and landowner turns sour by the time the final payment has to be made by the builder to the landowner/s and innumerable times the builder is not able to get the whole continuous patch of land as planned. Here is where the delay starts, now the builder starts to hunt for land which could take him months and by the time he is able to get the total area needed for the project the zoning conditions do not allow the permission for grant of license as 20% of the sector land is already sanctioned as group housing to other builder. Therefore more delays and the reason for many a times the project being shifted from one area to another.

Where the title of the land is with the builder and pre-launch is announced, it is still safer but does not guarantee much. The fact that the license to develop and market the project is with him or not is still not clear. yes we can check the status of the license if granted to a colonizer as it is available online at it is a welcome initiative by the Town & Country Planning Haryana to allow updated information to the citizens. The problem arises here is that 90% of the colonizers do not have license in their name but in their Subsidiaries name and it is difficult for the home buyer to ascertain which license is for his project. Therefore it is very essential that the Town & Country office mandates the Builders to only apply for license in the name on which it is selling the project. Till this is not done the home buyer would still be in lurch.

If the Builder has the title of the land and the license from Competent Authority, then it is a safer proposition for any Home-buyer. The next step is the approval of the layout plan of the colony, clearance from Ministry of Environment and Forest, building plan approval etc. which might take three to six months depending on the six of the project , height of the towers, location of the project etc.

The important question that troubles every Home-buyer is how to ascertain the above facts to make informed buying decision. Since the Housing industry is not self regulated it is very difficult to get the information from the Builder, very few Builders actually divulge the true information regarding the development cycle of the project at the Pre-Launch stage. The Authorities like the DTCP take months and months to give any information to the prospective consumers as the name of the builder for which information is sought does not match with the records of the subsidiary which is licensed. Therefore it is best advised not to go for Pre-launch offers, as they are tricky and risky proposition.  Most number of litigation pending in the consumer courts are of the Pre-launched projects only. If at all any consumer wishes to buy in Pre-launch then he/she should be prepared for longer gestation period of the project to actually take off, be careful of not paying more them 10% or 15% percent till all approvals are taken by the builder for the project and healthy follow-up on the latest status of the project with the builder and its agents. These few steps would mitigate any major loss to the Home-buyer.


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