THE TRAGEDY OF HOME BUYERS

By Ruma Dubey

You have lived in a rented apartment for the better part of your life. Now you saved enough money and decide to put all the life savings in a new home – a permanent roof over your heads which you can call your own. You do your research and sanity check and finally decide to go with a big company. The faith with a big company is that, you believe, it will not sink as it is solid and the promoter has a reputation, which under no circumstances he will jeopardize.

That’s exactly the reason why some 32,000 people invested their hard earned money with Jaypee group. They knew the past track record, knew that Jaypee had built huge infra projects and the promoter was well known. Jaypee was huge and one of the fastest growing companies of India. And that is the one warning signal which these 32,000 people missed out – it was growing too fast, getting carried away with its own momentum and reputation. This was its undoing as the debt just kept on piling up. The National Company Law Tribunal (NCLT) initiated bankruptcy proceedings filed by IDBI bank against loan default of Rs 526 crore by Jaypee Infratech,

This has put the entire home buyers fraternity in a limbo. One does not now know what are their rights are if the company goes into liquidation. Another rumour is doing the rounds that Amrapali, another realty company which unfortunately Dhoni had endorsed could also go phut as it too has not been able to meet financial obligations and deliver anything on time.

Here we are not talking about how the home buyers will now proceed but we question – how did we get here? If this is how it is with such big timer like Jaypee, what can one say about smaller companies/developers? Surely, such similar cases are only going to pile up! We cannot help but wonder how Jaypee got the nod to build this huge township when it was already under a deluge of debt? Why is it that competency of the promoter and his company is always overlooked when it is a big name? RERA has come in only now but what about all those projects which are stuck in limbo before 1^st May? It would be so frustrating for people to continue paying up their EMIs even when legally the developer is down and under!

Having said all this, the overall faith is that Jaypee is too big and they will do everything possible to not down shutters. Yet, at the same time, the uncertainty and anxiety in which these home buyers will have to now live with is simply not worth it.

So does this mean that one should now not buy any project from big developers as they have too many projects on hand and debt is piled up? But then we do not trust the small developers too? And the mid-sized ones are neither here nor there. Isn’t this the real reason why people are not buying homes today and not the interest rates as many experts would like us to believe? The deficit in trust factor has overshadowed rhe dream to own a home; the precedence of failed and delayed projects is keeping people away. After Jaypee, the realty sector will be hit all the more.

At this juncture, its best to buy homes which are ready; do not put money in under-construction projects as the uncertainty is too much. Go for only RERA approved projects. 

In realty sector, whether you book from a small, mid or big developer, ultimately it’s your luck and not the creditworthiness or reputation of the promoter – you could get your home or continue to wait for years. Realty in India – not even the Gods can help you!