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Are Home buyers now taking on fraud builders for real?

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Are Home buyers now taking on fraud builders for real?

Last updated: July 29 2016
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  • Are Home buyers now taking on fraud builders for real?

    Have been reading about how buyers have been taking fraud builders head on in cheating cases. With the growing interest of media and their newfound legal power, they have been making news everywhere. Now, they are more aware of courts, the laws, the knacks that work, the frauds that take place and other such matters.

    With the sternness that consumer forums have been dealing with in such cases against such builders and penalising them recently, it looks like the days of the buyers are back, or is it so?

    So is it a fad that will pass or an era that will last for as long as it is needed?
  • #2

    #2

    Re : Are Home buyers now taking on fraud builders for real?

    *manzb ; *GlobeSon ; *Bala2107 ; *manujmohla ; *ultichakri ; *amitexpert ; MANOJa; - Tagging you guys to share your views - others can also share theirs
    Last edited July 18 2016, 05:21 PM. Reason: user tag

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    • #3

      #3

      Re : Are Home buyers now taking on fraud builders for real?

      Originally posted by movedin View Post
      Have been reading about how buyers have been taking fraud builders head on in cheating cases. With the growing interest of media and their newfound legal power, they have been making news everywhere. Now, they are more aware of courts, the laws, the knacks that work, the frauds that take place and other such matters.

      With the sternness that consumer forums have been dealing with in such cases against such builders and penalising them recently, it looks like the days of the buyers are back, or is it so?

      So is it a fad that will pass or an era that will last for as long as it is needed?
      When the RE market is buoyant and in the bull phase, this issues comes very rarely.. As it is a pure gamble by both the players, incl the developers & buyers, when the liquidity dries up, such conflicts comes out in the open and becomes order of the day.

      Developers gamble by acquiring more and more land banks then he has plan to develop in near future. Also he takes lots of loans/ debts incl the dreaded shark loans etc to acquire more land banks. If the market keeps moving at faster pace as it was doing from 2004-2013, he has no issue, his valuation of land bank keeps on increasing, he can divert as much funds to acquire new plots, while using bare minimum in the project for which the money collected for. But once the sale velocity went down, the liquidity that supported the RE engine for the developers stopped. So they found out that they have lots to be developed but no funds coming up as no new buyers (sufficient numbers) are there in the market. So as they have already used up all the money to buy land banks, there is no money to develop the UC projects. So he is almost helpless. He can't sell the land banks (as there is not many buyers ready to pay the money he is looking at), he can't sell flat, as there is no construction activities going on.. he needs to pay all the loans as per the agreed terms, specially the shark loans, which are normally acquired from dangerous people (underworld-politician nexus) who might even bump him off, if needed.

      Buyers- they just think that RE is one investment which will keep doubling every 2-3 years for eternity, irrespective of location, builder, project approvals status, construction status etc. Many of them just take as much loan possible to get into the investment of lifetime, which will make him rich and richer. It happened when the market was moving so between 2004-2013, but once the market got into the un-affordable region, the RE market simply stopped growing and in fact came down in real terms in few markets like NCR etc. Now just wonder about the guy who invested let's say 50 lacs for a flat, and expecting to get possession in 3-4 years, is still waiting for the possession despite almost full payment and on top of it the prices are not going up if not going down. He is loosing all sides. For many, it is the single biggest investment of his life and the entire thing seems now are up in the smoke. So what the poor fella can do? He can't hire someone to bump the builder, right? So he goes to the court. As more and more people are falling into this category who have failed to realise their dream by investing in UC properties, are now fast approaching the courts.

      So whether such incident will go up? Yes, most likely as market is not likely to go up any sooner, means more effected people will take the last resort of filing court cases. Also the RERA may help people to seek justice under it, once operationalised. One thing is for sure many builders have learnt their lesson and hope will not repeat such actions in the future, whereas others are still looking ways to keep their liquidity going by using the same old trick of launching newer and newer Pre-launch projects, many of which may never see the light of the day.

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      • #4

        #4

        Re : Are Home buyers now taking on fraud builders for real?

        Thanks for your input manzb; you kind of summed it up in a way. You are right about builders having learnt a lesson and many more on the way to learning theirs. Pre-launches are a bait that people fall to and will keep falling to. Maybe RERA will have something more to offer than just guidelines.

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        • #5

          #5

          Re : Are Home buyers now taking on fraud builders for real?

          I just had another thought manzb; will there be a transformation in the approach of the buyers in common? I mean will they transform from being a harried lot filing complaints to an aware lot not letting anything or anyone taking them for a ride?
          If they don't buy it - builders won't be able to sell it, right?

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          • #6

            #6

            Re : Are Home buyers now taking on fraud builders for real?

            Originally posted by movedin View Post
            I just had another thought manzb; will there be a transformation in the approach of the buyers in common? I mean will they transform from being a harried lot filing complaints to an aware lot not letting anything or anyone taking them for a ride?
            If they don't buy it - builders won't be able to sell it, right?
            Have you ever heard of a place called Las Vegas? Almost all who goes there places bet and the chances are almost bright that you will loose it. Despite knowing that, people flock there to place bets. In essence placing bets is in the genes of humans. Even stock market is a bit gamble. Similarly buying pre launch or even UC is a gamble. It gives a similar rush while placing our bets. We believe that " I am smarter than the others including the builder" and hence my bets will definitely will win. Though the probability of winning may be higher when market is in Bull phase, it is exactly opposite when it is in bear phase. When almost all players are winning, no one complains, but when almost all are loosing, everyone complains

            So whether buyers have learnt.. may be, but whether they will stop betting on UC and pre-launch, they will not. In fact, Pre-launch is illegal, whicgh is kind of teen-patti of betting world, despite that people (even the learned ones) rushes to invest in such pre-launch.

            It is sad, but it is true. Unless govt crack down on pre-launch and put builders behind bars for pre-launch, it will not stop. There are enough fools or clever guy (whatever way you want to dub them) in the world, who are always there to gamble, if they are given an option. Teen-patti never goes out of fashion and out of business either.

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            • #7

              #7

              Re : Are Home buyers now taking on fraud builders for real?

              manzb; haha - Las Vegas! that was such an explanation you gave to movedin; - true to the core!

              You are right - it is a Gamble and we all like to gamble, try our luck, show that we are street smart and know a little more than the other guy, and place a bet when all are against it, in the pursuit of "fruitful outcomes" ...

              Maybe you are right, there are people and they will gamble, and as long as they will gamble, there will be those who will give them options. It is indeed a Gamble!
              Last edited July 18 2016, 10:05 PM.
              Talk TRUE; Talk IREF

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              • #8

                #8

                Re : Are Home buyers now taking on fraud builders for real?

                Yes, this is for real. Buyer is up in arms and builders are not taking it lightly.

                I have been in the center of all this from last 4 years now and have seen winds of change. With easy access to information and not so difficult consumer forums, they seem to now understand that just dharna etc doesn't solve the problem.

                I personally get 5-6 calls daily from home buyer to help them find lawyers or understand the right approach etc. All this is happening because some developers still fail to accept that this is for real. If you push the buyer to far, they would retaliate.

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                • #9

                  #9

                  Re : Are Home buyers now taking on fraud builders for real?

                  Yes manzb; you are right and so is Malvish; it is a gamble and such has always been a part of all material pursuits. There will always be disgruntled buyers as long as there are builders manipulating who get away with crooked plans.
                  Last edited July 19 2016, 10:56 AM.

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                  • #10

                    #10

                    Re : Are Home buyers now taking on fraud builders for real?

                    Thanks for sharing amitexpert; You might be right as I guess you have been crusading the cause for years (your posts depict that). Good to know that there is some amount of awareness sneaking in.

                    What confounds me is the lack of initiative from the buyers end - they know all, they see all but they still do it all!
                    What can change that approach? What kind of initiative from the government or buyers associations can yield results?

                    Like manzb; rightly mentioned - it is a gamble and people do that every now and then. Do you think that there has been a change in the approach to a high percentage or do buyers get active after they have been cheated?

                    You said that you get calls from buyers, so are these buyers influenced by other aware buyers or the amount of awareness spread around by individuals like you? Can you share a bit as it would be helpful in identifying the source of such transformation?

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