contra

I have been reading the discussions and following the news for past 6 months. A lot of fraud in coming out .....what is ironical is that it is not small time builders but so called reputed builders who are real fraudsters.

1. DLF project at BTM new extension in Bangalore was launched & booking amount collected ......without land sanctions by BBMP who are talking legal action against buyers
2. DLF project at Chennai......without proper land approvals and acquisition amount collected.....a buyers revolt through online networking finally forced DLF to refund
3. Now Jaypee Aman.....at greater noida

and many more


I was reading a article by famous investor Dr. Marc Faber in which he says

"once the bull market has peaked...and after a correction from the peak

in the next stage there will be a bear rally within 1 year which can even touch previous bull market peak...this is the fraud stage when large scale fraud will happen according to Marc faber

after many such bear rallies (each subsequent one decreasing in strength) the real bottom will occur only after 6-7 years when everyone is totally exhausted and just forget the word "real estate".

Marc Faber had even shown a nice chart of Dow jones from 1929 to 1938 to explain this. Unfortunately i don't have link to this article.

amit_2009

That is so true!

Lifetime of riches awaits those.. who can patiently wait for the next 4 to 6 years!

abk

The big names have always attracted the high networths who always think big names means great products and quality whether it is apparel or apartments.
but the fact is that the smaller names strive to satisfy you to retain you whether it is the local jeweller or the builder. sometimes you may even feel pampered.you are not one among many as with the big names but
a valued few.

The frauds by the big names is bcoz of this blind mentality of faith in "brands". i have been let down by many .
before you buy check the documents at the builders desk.take a lawyer along and if satisfied pay a token and collect the papers for further evaluation.
ignorance is no excuse.

Abacus

Investors take protest against builders to EOW

Rahul Tripathi | TNN



New Delhi: As part of his plans to settle in India, NRI Mikki Maan invested in a property at Bhiwadi. However, even two-and-a-half-years after paying the pre-launch money, Maan’s much-promised house is nowhere in sight. He is among 500 people who have now complained to cops against Noida-based Green City Buildtech. On Thursday, 50 of them protested outside the office of the economic offences wing (EOW).
Another firm, Delhi-based AJS Builders, is also facing allegations of not delivering on their promises of homes in Gurgaon, Gannaur and Indirapuram. EOW officials said they had received more than 200 complaints against the two builders and registered cases which were under investigation. On Thursday, some investors filed fresh police complaints against the builders.
Speaking to Times City, Maan, who invested with Green City said, “I paid Rs 2.5 lakh for a plot in Bhiwadi in 2007. The builder promised that the project would be completed soon and we will get possession within two years. But after two years, the managing director of the company started avoiding our queries. We then lodged a complaint with the police.”
Maan alleged that the builder, who promised projects in Bhiwadi, Daruhera and Agra, did not have the requisite permission from the agencies concerned. Even the plots in question were owned by farmers, he alleged. Said Monica Saini, who said she had invested Rs 3.10 lakh in a prelaunch scheme: “We lodged a complaint with the police on Thursday. I had given Rs 3.10 lakh in January 2007 and since then have been running around the offices of the builder in Noida but they refused to return the money.’’
To check the veracity of the allegations, TOI made several attempts to contact Jeetendra Chaudhary, MD of Green City Buildtech, but his was switched off. Meanwhile, TOI spoke to the sales head of AJS Builder, Sumit Malik, who said: “We have got the permission and clearances. The investors need not worry. We will fulfil our promises. The investors want their money back as the economy is showing a downward trend.”
Vivek Paruthi, who works for an MNC, told Times City, “I invested in AJS’ Gurgaon scheme in 2007 and paid Rs 4.5 lakh. But when there was no response on the promised dates, we approached the authorities. We found that the builder did not even own the land.” He added, “We have also learnt from an RTI filed with HUDA that the builders did not have any permission and necessary clearances from the authorities and had spent lakhs in advertising.”
Delhi Police spokesperson ACP Rajan Bhagat said: “We have registered a case against Green City and AJS Builders.”


AT THE RECEIVING END: 200 complaints have been made

wiseman

Folks,

This person Chacko, who has been on the front pages for duping to the tune of 500 crores has been in the RE business for a long time and alegedly committing fraud much of that time.

This thing has not peaked yet. Many more such situations will arise when prices and demand remains low for a long time and puts paid to the sharp calculations of speculators who used the next project's money to fund this one and also diverted project money into all kinds of speculative schemes.

And then there is this other person who started a company named (don't laugh) Stop Loss Investment Pvt Ltd. and duped people to the tune of 1000 crores allegdly. As a friend remarked, he sure did stop his losses!!!

I recall that in Dubai a similar situation has arisen when builders with owners related to the ruling family has lived the high life with OPM (other people's money) assuming that the good times will never end and - when it did end - are now threatening the press (not to report) as well as depositors to pay up the rest as the countries rules does not permit them to walk away.

Apparently it is becoming a multi-million $$$ PR disaster since so many people from so many countries jumped into Dubai RE with both feet without looking

Appears we will see something to a lesser degree as time goes by. This is one more warning to people bent upon buying at any rate. Possibility of fraud at a later state even if the builder looks good now!

Watch out!

cheers

contra

During 2005 period some buyers who booked flats during initial launch or bhoomipuja got almost 200% appreciation after the project completion in 2006. This is what set the trend for many buyers (or would rather call them investors) to mainly look out for new project launches and pre-book them hoping to repeat 2005-2007 tactic of insta-appreciation after project completion.

This tactic miserably failed in 2nd half of 2008 for these investors

1. the flats whose projects got completed in 2nd half of 2008 could not be sold upon completion ( as NRIs and IT sector employees had suddenly become job insecure)
2. many builders who collected the booking delayed the project completion to 2009 furthur ruining the prospects for investors.

many real estate investors have burnt big money particularly since 2nd half of 2008, though the news media still seems normal .......many real estate investors who made merry during initial years of the boom are now in deep waters whose depth only seems to be increasing by the day.

builders who took the moolah during the later years of the boom......(1) from mega IPOs (2) from booking amounts collected from buyers (rather real estate investors) (3) from banks as debt (4) from PE funds etc.......and promised everyone that they are buying land to build ......now just don't seem to have even approvals or sanctions for those lands......their projects have also got delayed to 2011-2012 and beyond

ofcourse while real estate investors and shareholders can't do much...the banks are different they will hold these builders by their hairs.....finally it seems only if bankers take some action these frauds can reduce.