At least 100,000 buyers, who booked apartments in projects coming up in Noida Extension that got mired in a land controversy last year, are now looking at the possibility of delayed possession. The same fate awaits about 1,500 homebuyers in Jaypee Wish Town, Sector 128, Noida, being developed by Jaypee Greens, the real estate arm of Jaiprakash Associates Ltd (JAL), an infrastructure company that also runs hotels, cement plants, utilities and recently opened the Buddh International Race Circuit, which successfully hosted India’s first Formula One Grand Prix in October last year.

Project delays are common in the Indian real estate market. With a spurt of project launches over the last two years, news of delay are now trickling in with the possession dates nearing.

While it is difficult to predict a project delay, a closer look may give you warning signals. If you are able to detect these, you may save yourself from getting stuck in a delayed project.

Initial authentication

If you are investing in a project, your developer should share all relevant documents about the property and the project. These include licence of your builder for construction, land title papers and sanctioned building plans of the project. So make sure you enquire about these when signing the builder-buyer agreement for an apartment. Also, the developer should be ready to share these details.

Checks to run: For any project, licence number, land title papers and sanctioned plans are the most important documents. Ask for these at the time of investing. “If the developer shows his sanctioned plan at the start of the project and at the time of the booking, it means he has all the necessary papers and approvals for construction as per the plan. But if he fails to produce this even during the course of the construction, consider the project to be unapproved,” says Ravi Saund, chief operating officer, CHD Developers, a New Delhi-based real estate firm.

If you have already invested in the project and you want to check on the approved plan, visit the development authority’s office. Here you can file an application to the public relations officer under the Right To Information Act (RTI) to verify land title records, approved building plans and about the completion certificate. Once you file an RTI application, the authority official will take 10-30 days to answer your query. You can even consult a lawyer for this. A property lawyer will generally charge you Rs. 5,000-10,000 to get the documents verified from the authority. If you find any discrepancy in the details furnished by the developer, you can consider exiting the project.

Other than the authority office, you can speak to real estate brokers in the region to find about the project’s status. “Local real estate consultants are often invested in the project. They always keep a check on the status of the project,” says Pradeep Mishra, a New Delhi-based real estate consultant.

Change in the proposed building plan

In practice, developers usually start digging for construction based on the license to build. At this stage, they also start taking advances for booking apartments that are yet to come up. While homebuyers are shown a proposed site plan, the builder applies to the city town planner’s office for getting the proposed plan sanctioned. An approved plan mentions details of the sector roads, address of the property and the name of the developer.

But at times, owing to certain regulatory hurdles, the proposed plan is not sanctioned. The builder then applies to the town planner with a new plan that is acceptable to the authority. If the second plan is sanctioned, the first site plan shown to you at the time of booking does not apply. The builder will now reformat the project as per the new plan. However, this may be revealed to you at a later stage. The new plan may simply add another apartment on the same floor increasing the population density per floor. The new plan may simply reduce or increase the size of your apartment. Here you may want to exit the project if the new plan does not fulfil your requirements.

Checks to run: As mentioned earlier, it’s best to verify the builder’s documents, including the approved plan for the project.

Construction stages

Most houses are bought either through a construction-linked or flexi plan. Here, the money is paid to the builder in tranches either through a bank loan or personal funds.

At every predetermined stage, the builder demands a certain amount of money, which either your bank will pay or you will pay. Along with the demand letter, the builder sends the details about the progress of the construction. In case, the demand becomes infrequent, you may want to check with the builder and may also need to personally visit the site.

For example, on completion of the basement slab, the builder may ask for 10% of the property value. But you have no word from the builder for another six months or a year.

There can be various reasons for delay at this stage: there could be a dispute regarding the land. The court may pass a stay order on the construction. For instance, buyers in the Noida Extension came to know about the land dispute only after it was reported by the media. Had they tried to find out, they may have come to know on their own.

“Your developer should also send you actual photographs of the site at regular intervals during the construction and send mails for respective payments for each stage,” says Surinder Chopra, managing director, SC SL Buildwell Pvt. Ltd, a real estate asset management company that is developing and marketing a luxury project in Gurgaon.

Checks to run: Every project is built in stages. Each stage has a timeline for its completion. Says Rajesh Aeren, vice-chairman, Aeren R Group, a New-Delhi based development firm, “Every builder keeps 21-30 days for the completion of each small stage within the bigger stages. The developments at each stage are monitored by preparing a ‘progress chart’ along with some analysis and comments.”

For example, ideally it takes three to four months from the stage of excavation to the stage when the basement is completed. Within this period, there are various stages such as beginning of the excavation work, completion of the excavation work and building of the foundation followed by laying of the basement floor. “If the work that was supposed to begin on a particular date gets delayed, later stages also get delayed. Each stage within the bigger stages, if delayed, delays the overall development of the project,” adds Aeren.

You can ask the developer to provide the progress chart of each stage since it is not published separately and is basically for internal use. Once you have the chart, you can see the development of each stage and the completion date mentioned in the chart. “The civil engineers prepare the chart and give their comments for each date. If the construction is behind the schedule by a particular number of days, progress chart will mention this. Every builder who follows a good practice has such a progress chart,” adds Aeren.

If you really find out that your project is getting delayed and want to exit, be prepared to lose some money. Builders charge a fee for early exit: it is usually 10% of the earnest money paid. In the secondary market, there may not be many buyers for a delayed project.


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