DLF customers gang up, pressurise developer to commit refund
29 Mar 2009, 0633 hrs IST, ET Bureau



CHENNAI: Customer pressure seemed to have got the better of India’s realty giant DLF. Nearly 300 such buyers, who have backed out of the company’s

prestigious ‘Garden City’ project in Chennai, refused to leave its premises till they got a written assurance that their money would be paid back in full.

Consequently, DLF has assured them that the formal refund letter addressed individually to the exiters would be given by April first. In its communication dated March 28, 2009, DLF Southern Homes, the special purpose vehicle executing the project on Old Mahabalipuram Road, said "the process of full refund will commence from 1st April, 2009, and will be completed before 30 September, 2009. The priority of disbursement shall be based on the order of first exit letters received and will be intimated by 10th April 2009."

For over a year and more, problems for the country’s largest listed developer have only been mounting. It has been facing the ire of customers, who made bookings in the 3,493 apartment Garden City project on 53 acres, which marked the Gurgaon-based realty biggie’s maiden entry in the city.

Apparently, the total number of exiters from the project was pegged at 580 out of its existing base of 1,800 customers. DLF Southern Homes was to have given a letter outlining the timeline of refund for all the exiters. But that did not happen, provoking angry reactions from the exiters, who refused to leave DLF premises until they got one.

The buyers, who advanced payments, have organised themselves into a Google Group, constantly monitoring the builder’s progress. Last month, as part of the attempts to appease its customers, wanting to exit from the project, DLF had brought down the prices from Rs 2500 to Rs 2600 per sq ft against Rs 2800 to Rs 3200 per sq ft for its existing customers. For new customers, the basic price was fixed at Rs 2750 per sq ft.

But this too seems to have not made any headway. For, on Saturday evening, nearly 300 buyers converged at the DLF office, seeking a written assurance from the developer to refund their money paid as advance for the project.

Earlier this month, the realty major had expressed its commitment to complete the project on schedule. This was in the wake of reports about consumers shooting exit letters.

If delayed approvals triggered anxiety and panic among existing customers, DLF Southern Homes MD K K Raman allayed the fears stating that "the construction activity is in full swing and we are well on schedule. We are committed to hand over the homes by April to June 2011, as originally committed."

"We do not foresee any problem in adhering to the timelines as we are adequately capitalised," DLF ED J Subrahmanian further said.

="http://economictimes.indiatimes.com/DLF-customers-gang-up-pressurise-developer-to-commit-refund/articleshow/4328345.cms"]http://economictimes.indiatimes.com/DLF-customers-gang-up-pressurise-developer-to-commit-refund/articleshow/4328345.cms
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  • buyers should react like this only against fraud
    CommentQuote
  • I guess such tantamount problems faced by DLF are mainly due to the lack of approvals and also the lower cost of the apartments would have attracted people from lower financial levels,who would have heavily relied on their jobs and loans.

    The situation with Hirnadani Upscale I guess should be stable.As I have not seen much price fall in it. Actually I saw a price tag of 70L for a 2 bedroom 1295sqft apartment in axiomestates. Does any one clarify whether these apartments are selling at these rates even now ?

    I guess MARG should be well within lines with its feasible budget

    However, is there any issues with hiranandini Garden palace (or) with L&T (or) other biggies ?
    CommentQuote
  • Dear friend,

    Price reductions and cancellations takes place in every project including such big names like L&T, Hirnandani, etc. etc. But these do not get publicised. The rates of L&T Estancia, Hirnandani etc. are till high. Once these flats get ready for occupation, the rental values may be low and added to the rental is the high maintancnece charge of Rs. 2/sq. ft. per month. Another point to be considered is other large/big projects coming up in the stretch Urapakkam to Mahindra City and Vandalur to Kelambakkam etc. Thousands of flats are coming up and most of them will be for rental only and where are the people to take these flats on rental?

    ks2071746

    ks2071746
    CommentQuote
  • ]http://www.business-standard.com/india/news/after-dlf-unitech-has-restive-customers-to-soothe/353573/
    CommentQuote
  • ]http://www.livemint.com/2009/04/01012311/Job-losses-spur-cancellations.html?h=B
    CommentQuote
  • Originally Posted by Nataraajg007
    DLF customers gang up, pressurise developer to commit refund
    29 Mar 2009, 0633 hrs IST, ET Bureau



    CHENNAI: Customer pressure seemed to have got the better of India’s realty giant DLF. Nearly 300 such buyers, who have backed out of the company’s

    prestigious ‘Garden City’ project in Chennai, refused to leave its premises till they got a written assurance that their money would be paid back in full.

    Consequently, DLF has assured them that the formal refund letter addressed individually to the exiters would be given by April first. In its communication dated March 28, 2009, DLF Southern Homes, the special purpose vehicle executing the project on Old Mahabalipuram Road, said "the process of full refund will commence from 1st April, 2009, and will be completed before 30 September, 2009. The priority of disbursement shall be based on the order of first exit letters received and will be intimated by 10th April 2009."

    For over a year and more, problems for the country’s largest listed developer have only been mounting. It has been facing the ire of customers, who made bookings in the 3,493 apartment Garden City project on 53 acres, which marked the Gurgaon-based realty biggie’s maiden entry in the city.

    Apparently, the total number of exiters from the project was pegged at 580 out of its existing base of 1,800 customers. DLF Southern Homes was to have given a letter outlining the timeline of refund for all the exiters. But that did not happen, provoking angry reactions from the exiters, who refused to leave DLF premises until they got one.

    The buyers, who advanced payments, have organised themselves into a Google Group, constantly monitoring the builder’s progress. Last month, as part of the attempts to appease its customers, wanting to exit from the project, DLF had brought down the prices from Rs 2500 to Rs 2600 per sq ft against Rs 2800 to Rs 3200 per sq ft for its existing customers. For new customers, the basic price was fixed at Rs 2750 per sq ft.

    But this too seems to have not made any headway. For, on Saturday evening, nearly 300 buyers converged at the DLF office, seeking a written assurance from the developer to refund their money paid as advance for the project.

    Earlier this month, the realty major had expressed its commitment to complete the project on schedule. This was in the wake of reports about consumers shooting exit letters.

    If delayed approvals triggered anxiety and panic among existing customers, DLF Southern Homes MD K K Raman allayed the fears stating that "the construction activity is in full swing and we are well on schedule. We are committed to hand over the homes by April to June 2011, as originally committed."

    "We do not foresee any problem in adhering to the timelines as we are adequately capitalised," DLF ED J Subrahmanian further said.

    ="http://economictimes.indiatimes.com/DLF-customers-gang-up-pressurise-developer-to-commit-refund/articleshow/4328345.cms"]http://economictimes.indiatimes.com/DLF-customers-gang-up-pressurise-developer-to-commit-refund/articleshow/4328345.cms
    Proves
    a. DLF is a cheat company which planned for a 300% profit margin without even starting construction.
    b. DLF share prices have no relevance on RE prices just like Satyam share prices dont define IT industry.
    c. Therefore DLF price reductions DO NOT CONSTRUE ANY REDUCTION IN RE PRICES IN CHENNAI.
    A cheat can reduce his prices, that does not mean all were cheated in Chennai. RE is not falling, it is actually rising in Chennai, in particular in the city.
    An 8 year old flat in Palavakkam, Kandaswamy nagar is being quoted at 6700psft. FYI
    Proves
    a. DLF is a cheat company which planned for a 300% profit margin without even starting construction.
    b. DLF share prices have no relevance on RE prices just like Satyam share prices dont define IT industry.
    c. Therefore DLF price reductions DO NOT CONSTRUE ANY REDUCTION IN RE PRICES IN CHENNAI.
    A cheat can reduce his prices, that does not mean all were cheated in Chennai. RE is not falling, it is actually rising in Chennai, in particular in the city.
    An 8 year old flat in Palavakkam, Kandaswamy nagar is being quoted at 6700psft. FYI
    Proves
    a. DLF is a cheat company which planned for a 300% profit margin without even starting construction.
    b. DLF share prices have no relevance on RE prices just like Satyam share prices dont define IT industry.
    c. Therefore DLF price reductions DO NOT CONSTRUE ANY REDUCTION IN RE PRICES IN CHENNAI.
    A cheat can reduce his prices, that does not mean all were cheated in Chennai. RE is not falling, it is actually rising in Chennai, in particular in the city.
    An 8 year old flat in Palavakkam, Kandaswamy nagar is being quoted at 6700psft. FYI
    Proves
    a. DLF is a cheat company which planned for a 300% profit margin without even starting construction.
    b. DLF share prices have no relevance on RE prices just like Satyam share prices dont define IT industry.
    c. Therefore DLF price reductions DO NOT CONSTRUE ANY REDUCTION IN RE PRICES IN CHENNAI.
    A cheat can reduce his prices, that does not mean all were cheated in Chennai. RE is not falling, it is actually rising in Chennai, in particular in the city.
    An 8 year old flat in Palavakkam, Kandaswamy nagar is being quoted at 6700psft. FYI
    Proves
    a. DLF is a cheat company which planned for a 300% profit margin without even starting construction.
    b. DLF share prices have no relevance on RE prices just like Satyam share prices dont define IT industry.
    c. Therefore DLF price reductions DO NOT CONSTRUE ANY REDUCTION IN RE PRICES IN CHENNAI.
    A cheat can reduce his prices, that does not mean all were cheated in Chennai. RE is not falling, it is actually rising in Chennai, in particular in the city.
    An 8 year old flat in Palavakkam, Kandaswamy nagar is being quoted at 6700psft. FYI
    Proves
    a. DLF is a cheat company which planned for a 300% profit margin without even starting construction.
    b. DLF share prices have no relevance on RE prices just like Satyam share prices dont define IT industry.
    c. Therefore DLF price reductions DO NOT CONSTRUE ANY REDUCTION IN RE PRICES IN CHENNAI.
    A cheat can reduce his prices, that does not mean all were cheated in Chennai. RE is not falling, it is actually rising in Chennai, in particular in the city.
    An 8 year old flat in Palavakkam, Kandaswamy nagar is being quoted at 6700psft. FYI
    CommentQuote
  • we can get a new flat in thiruvamiyur for 6500 to 7000,ready to occupy,why should a buyer get it in palavakkam for the same price that too an 8 year old.can you justify
    CommentQuote
  • in thiruvamiyur new flat is around 6.5 to 7k
    CommentQuote
  • Dear friends,

    Why do one sees vacant flats in large projects like Arun Excello in GST road?
    In spite of low rentals? The facilities in these areas are not so much conducive for less botheration for the family to live. Can you find good restaurants, shopping facilities, public transport facilities in walking distance, good schools, good hospitals, good market- worth mentioning? One would not like to go out of the house after he returns from work even for vetthalai pakku? Going out to the city and returning back take a whole day and any one will get exhausted by the time they return home. Driving down to the city in one's own vehicle is very trouble some in the heavy traffic aa also parking problems. What do other members feel about these areas? They may have different views?

    ks2071746
    CommentQuote
  • Yes, Arun Excello will be a good project after 10 years. Not now.
    CommentQuote
  • Some corrections ....

    Originally Posted by Natarajg007
    Proves
    a. DLF is a cheat company which planned for a 300% profit margin without even starting construction.
    b. DLF share prices have no relevance on RE prices just like Satyam share prices dont define IT industry.
    c. Therefore DLF price reductions DO NOT CONSTRUE ANY REDUCTION IN RE PRICES IN CHENNAI.
    A cheat can reduce his prices, that does not mean all were cheated in Chennai. RE is not falling, it is actually rising in Chennai, in particular in the city.
    An 8 year old flat in Palavakkam, Kandaswamy nagar is being quoted at 6700psft. FYI



    1. Yes, Satyam's price does not constitute the average for IT. But its different for RE. EVERY company has seen 90% + fall. To compare correctly, if TCS, Infy, Wipro and all the rest see 50% fall, then its a fact that the entire industry has taken a 50% hit. So, the RE stock prices have actually taken a 90% hit!!!

    2. How did you arrive at 300%? If the price was Rs.3600 per SFt and profit 300%, are you saying actual cost is Rs.900 per SFT? Don't make wild allegations.

    3. If DLF is a cheat for supposedly having a 300% profit margin, then isn't a particular person also a cheat for asking an innocent person to shell out 1.25 Crores in Saligramam or Urapakkam at exorbitant margin simply because that innocent person did not have a clue about prices in that region? :D

    4. DLF is the market leader. They are like TCS in the IT business, irrespective of your liking them or not! If they are facing a crunch - and I assure you that Sobha too has brought down prices from 3600 to 2400 in some areas - then every builder is facing the same problem. Therefore, DLF reduction does construe a general fall in market prices (of course you are different. If you sit on property and not sell at all, then you can always say that prices have not fallen since there is no sale at lower prices. But unlike you, the big players acctually do business by buying and selling and thus their prices are more realistic than your "quoted" prices).

    5. Lastly, I do not understand your use of quoted price and transaction price depending upon convenience.

    In one argument when someone uses highest quoted price to show how prices have fallen, you tell them that using quoted prices to compare is not correct.

    In another argument, when quoted price is higher, then you use it to justify how prices have not fallen. Btw, how long has that 6700 quoted flat been in the market for sale? 1 year? Anybody can quote prices as you yourself have said and thats not to be used in comparisons. So why use that price only to suit your argument?

    Please be consistent in using facts. If you keep twisting them to suit your purpose, in the end, no one will believe you - but thats already a fact by now, right?

    So, all these allegations proves nothing!!!

    cheers
    CommentQuote
  • Originally Posted by wiseman
    1. Yes, Satyam's price does not constitute the average for IT. But its different for RE. EVERY company has seen 90% + fall. To compare correctly, if TCS, Infy, Wipro and all the rest see 50% fall, then its a fact that the entire industry has taken a 50% hit. So, the RE stock prices have actually taken a 90% hit!!!

    2. How did you arrive at 300%? If the price was Rs.3600 per SFt and profit 300%, are you saying actual cost is Rs.900 per SFT? Don't make wild allegations.

    3. If DLF is a cheat for supposedly having a 300% profit margin, then isn't a particular person also a cheat for asking an innocent person to shell out 1.25 Crores in Saligramam or Urapakkam at exorbitant margin simply because that innocent person did not have a clue about prices in that region? :D

    4. DLF is the market leader. They are like TCS in the IT business, irrespective of your liking them or not! If they are facing a crunch - and I assure you that Sobha too has brought down prices from 3600 to 2400 in some areas - then every builder is facing the same problem. Therefore, DLF reduction does construe a general fall in market prices (of course you are different. If you sit on property and not sell at all, then you can always say that prices have not fallen since there is no sale at lower prices. But unlike you, the big players acctually do business by buying and selling and thus their prices are more realistic than your "quoted" prices).

    5. Lastly, I do not understand your use of quoted price and transaction price depending upon convenience.

    In one argument when someone uses highest quoted price to show how prices have fallen, you tell them that using quoted prices to compare is not correct.

    In another argument, when quoted price is higher, then you use it to justify how prices have not fallen. Btw, how long has that 6700 quoted flat been in the market for sale? 1 year? Anybody can quote prices as you yourself have said and thats not to be used in comparisons. So why use that price only to suit your argument?

    Please be consistent in using facts. If you keep twisting them to suit your purpose, in the end, no one will believe you - but thats already a fact by now, right?

    So, all these allegations proves nothing!!!

    cheers

    1. The 6700 quoted flat is on sale very recently. I picked it up from one of those standard sites and talked to the owner who happens to be in Bangalore!
    2. As for 300% margin let me explain. DLF must have bought land at probably 300psft. Even if it did at 1000psft for pleasing you! It uses a FSI of 3.5 comfortably. So land price is 1000psft/3.5 which is 300psft. Construction cost must be Rs 1000psft. Even if I give them other cost for marketing and development, it wont be more than 1300psft. So net cost of flat is 1300+300=1600 psft. I agree that if you argue on the 1600psft rate 300% margin is incorrect. However if you take the normal builder who invests nothing and in DLF case even worse, they hardly build anything even after collecting money, then what is margin. After all their investment is just that 300psft on the land and maybe another 200psft on marketing. So you cant calculate margin on the 1600psft but on the essential 500psft that THEY SUNK IN (INVESTED). So at 3600 they are not working on 300% margin rather on 700%! Got it.
    So my 300% was based on the normal builders who use a higher land price with a lower FSI rate.
    Now all I wanted to highlight was the following. If their net cost of building is at 1600psft and their quoted price is 3600psft they have nothing to worry by reducing price by upto 2000psft. So reducing by 300psft and making a FOOLISHMAN write about it (seems like you are their marketing agent!) shows why the FOOLISH DENIZENS OF CHENNAI are up in arms against them. Well Chennai denizens always make the mistake and then complain.
    So they will invest in a DLF who has not even placed the first stone but will argue with me for a PRIME PROPERTY in Saligramam as if it is any worser than a SLUM PROPERTY OF FOOLISHMAN in Mylapore!
    Finally rest of your garbage is not worth responding to you and will be dumped by me along with you in the sea!
    CommentQuote
  • Originally Posted by lovebird
    DLF customers gang up, pressurise developer to commit refund
    29 Mar 2009, 0633 hrs IST, ET Bureau



    CHENNAI: Customer pressure seemed to have got the better of India’s realty giant DLF. Nearly 300 such buyers, who have backed out of the company’s

    prestigious ‘Garden City’ project in Chennai, refused to leave its premises till they got a written assurance that their money would be paid back in full.

    Consequently, DLF has assured them that the formal refund letter addressed individually to the exiters would be given by April first. In its communication dated March 28, 2009, DLF Southern Homes, the special purpose vehicle executing the project on Old Mahabalipuram Road, said "the process of full refund will commence from 1st April, 2009, and will be completed before 30 September, 2009. The priority of disbursement shall be based on the order of first exit letters received and will be intimated by 10th April 2009."

    For over a year and more, problems for the country’s largest listed developer have only been mounting. It has been facing the ire of customers, who made bookings in the 3,493 apartment Garden City project on 53 acres, which marked the Gurgaon-based realty biggie’s maiden entry in the city.

    Apparently, the total number of exiters from the project was pegged at 580 out of its existing base of 1,800 customers. DLF Southern Homes was to have given a letter outlining the timeline of refund for all the exiters. But that did not happen, provoking angry reactions from the exiters, who refused to leave DLF premises until they got one.

    The buyers, who advanced payments, have organised themselves into a Google Group, constantly monitoring the builder’s progress. Last month, as part of the attempts to appease its customers, wanting to exit from the project, DLF had brought down the prices from Rs 2500 to Rs 2600 per sq ft against Rs 2800 to Rs 3200 per sq ft for its existing customers. For new customers, the basic price was fixed at Rs 2750 per sq ft.

    But this too seems to have not made any headway. For, on Saturday evening, nearly 300 buyers converged at the DLF office, seeking a written assurance from the developer to refund their money paid as advance for the project.

    Earlier this month, the realty major had expressed its commitment to complete the project on schedule. This was in the wake of reports about consumers shooting exit letters.

    If delayed approvals triggered anxiety and panic among existing customers, DLF Southern Homes MD K K Raman allayed the fears stating that "the construction activity is in full swing and we are well on schedule. We are committed to hand over the homes by April to June 2011, as originally committed."

    "We do not foresee any problem in adhering to the timelines as we are adequately capitalised," DLF ED J Subrahmanian further said.

    ="http://economictimes.indiatimes.com/DLF-customers-gang-up-pressurise-developer-to-commit-refund/articleshow/4328345.cms"]http://economictimes.indiatimes.com/DLF-customers-gang-up-pressurise-developer-to-commit-refund/articleshow/4328345.cms
    I like this name "LOVEBIRD". Reminds me of the MGR-Saroja Devi song of yesteryears. Nice that ID THEFTS and DUPLICATION has been handled very well by this forum. Otherwise we will have Wisemaan and ABKE not to mention KS12345.
    High time timepassers dont trouble serious boarders. Thanks mod for yor appropriate action. Also good to see Whathehecks and Strongs disappear to their smelly nooks.
    I like this name "LOVEBIRD". Reminds me of the MGR-Saroja Devi song of yesteryears. Nice that ID THEFTS and DUPLICATION has been handled very well by this forum. Otherwise we will have Wisemaan and ABKE not to mention KS12345.
    High time timepassers dont trouble serious boarders. Thanks mod for yor appropriate action. Also good to see Whathehecks and Strongs disappear to their smelly nooks.
    I like this name "LOVEBIRD". Reminds me of the MGR-Saroja Devi song of yesteryears. Nice that ID THEFTS and DUPLICATION has been handled very well by this forum. Otherwise we will have Wisemaan and ABKE not to mention KS12345.
    High time timepassers dont trouble serious boarders. Thanks mod for yor appropriate action. Also good to see Whathehecks and Strongs disappear to their smelly nooks.
    I like this name "LOVEBIRD". Reminds me of the MGR-Saroja Devi song of yesteryears. Nice that ID THEFTS and DUPLICATION has been handled very well by this forum. Otherwise we will have Wisemaan and ABKE not to mention KS12345.
    High time timepassers dont trouble serious boarders. Thanks mod for yor appropriate action. Also good to see Whathehecks and Strongs disappear to their smelly nooks.
    I like this name "LOVEBIRD". Reminds me of the MGR-Saroja Devi song of yesteryears. Nice that ID THEFTS and DUPLICATION has been handled very well by this forum. Otherwise we will have Wisemaan and ABKE not to mention KS12345.
    High time timepassers dont trouble serious boarders. Thanks mod for yor appropriate action. Also good to see Whathehecks and Strongs disappear to their smelly nooks.
    I like this name "LOVEBIRD". Reminds me of the MGR-Saroja Devi song of yesteryears. Nice that ID THEFTS and DUPLICATION has been handled very well by this forum. Otherwise we will have Wisemaan and ABKE not to mention KS12345.
    High time timepassers dont trouble serious boarders. Thanks mod for yor appropriate action. Also good to see Whathehecks and Strongs disappear to their smelly nooks.
    CommentQuote
  • Chennai customers did a bad mistake by pressurising DLF

    I think that DLF garden city customers in Chennai have done a big mistake by ganging up and pressurising DLF to refund, using such pressure tactics against the most reputed builder in India was a serious mistake which will cost many years for Chennai. Already when I talk to people outside Chennai like those from Delhi they are always reluctant and ask me questions like what chennai, that place, how do you manage them? ( To be frank even I was born in Tamil Nadu though brought up outside)

    Most of those who booked apartments in DLF's first residential project in Chennai were senior director level professionals in IT companies working around OMR. One would not expect such immature behaviour from such experienced people. When IT industry was going great guns in 2007 they jumped above one another and booked at DLF garden city. Now when IT is slowing down they want to exit and use immature pressure tactics.

    Bankers are noticing this bad behaviour of senior IT director level persons. Sometime in near future Bankers will be reluctant to give huge home loans (above 40 lakhs etc) to people from this industry or from this city Chennai.
    CommentQuote
  • Originally Posted by contra
    I think that DLF garden city customers in Chennai have done a big mistake by ganging up and pressurising DLF to refund, using such pressure tactics against the most reputed builder in India was a serious mistake which will cost many years for Chennai. Already when I talk to people outside Chennai like those from Delhi they are always reluctant and ask me questions like what chennai, that place, how do you manage them? ( To be frank even I was born in Tamil Nadu though brought up outside)

    Most of those who booked apartments in DLF's first residential project in Chennai were senior director level professionals in IT companies working around OMR. One would not expect such immature behaviour from such experienced people. When IT industry was going great guns in 2007 they jumped above one another and booked at DLF garden city. Now when IT is slowing down they want to exit and use immature pressure tactics.

    Bankers are noticing this bad behaviour of senior IT director level persons. Sometime in near future Bankers will be reluctant to give huge home loans (above 40 lakhs etc) to people from this industry or from this city Chennai.


    Who cares what others think.

    If DLF is trying to cheat, every one will raise. Those who invetsed only will know the pain. Others can just make only remarks
    CommentQuote