The beleaguered consumer who has coughed up a huge amount for purchasing an item is ready to pay more money for maintenance of the same under the maintenance contract, but the innocent consumer is not getting a good bargain. At last, the only alternative available to a dejected and deceived consumer is the Consumer Forum. The three tier Consumer Disputes Act, 1986 was framed with the pious intention of solving the consumer disputes and to give some relief to the consumer from the protected litigation.1 District Forum 2 State Consumer Disputes Redressal Commission and National Commission. These forums are delivering excellent judgments on various types of disputes to strengthen the consumer movement. This has made the manufacturer more conscious in issuing the advertisement. The need of the hour is how to educate and equip the consumer to protect himself from the sugarcoated and tailor made advertisements. In cases, pertaining to real estates, advertisements have played a vital rode in influencing decisions.
The developer also claim there proximity to the city centre, coupled with facilities such as health club, restaurants, hospitals, schools, shopping malls etc. which is enough to convince the common man to put his hard earned money on an apartment. These days, developers take care of the religious element too and it is mentioned if a temple, mosque, church or gurudwara, is located in the vicinity. They also organised free side visit to satisfy the buyers that the builder mean honest business. However, the said fact is that most of these ads only lead the investor up the garden path, says Sandeep Singh Executive member of All India Consumer Education Society. There are number of ways the builder has cheated the common investor by making false promises. In the recent real estate boom many companies who are not in this trade diversified their business to real estate business and to attract the common investor giving number of promises for there up coming project and also taking the advance money with attraction of discounts in pre-launch schemes.
The results were fantastic and the builders collected crores from the public. Not any consumer activists have taken the matter to court and the builder is missing to avoid arrest. A well-known builder that is known more for its interests in non-realty business faces an FIR by Haryana Town & Country Planning Department for allegedly doing illegal pre-launch bookings in Rewari township falling under NCR. District Town Planning Department of Gurgaon approaches district administration for lodging an FIR against a Delhi builder for indulging in illegal pre-launching of plots through brokers for a colony carved out in the controlled areas of Manesar. Another Delhi-based builder is under the scanner of District Town Planner, Gurgaon, for collecting money for pre-launch of a Golf Homes project. A little known developer under the pretext of pre-launching a residential project in Indirapuram collects about Rs 3 crore and vanishes overnight leaving seven dozen retail investors high and dry. A leading Delhi-based real estate developer that claims to have pan-India operations is rapped by Haryana government'sTown & Country Planning Department for making a false claim through an advertisement about setting up a housing project near Chandigarh. Following this, a broker through newspaper ads solicited pre-launch bookings in this project for which no permission or license was reportedly granted to the company by the authorities. Few months back, Jaipur Development Authority also issued a caution notice in city'snewspapers warning people against investing in few residential projects of well-known Delhi developers in the city who were allegedly engaged in bookings for these projects. These are just some of the representative cases of pitfalls of pre-launch properties?a mere tip of the iceberg of such illegal transactions that could well ruin the rosy dreams of retail investors lured by the builder-investor-broker nexus to make fast buck. Interestingly, this phenomenon of pre-launch is mostly prevalent in Delhi NCR and North India in Haryana, Punjab, Uttar Pradesh and Rajasthan. This is clearly evident from the rush of newspaper ads of pre-launch projects from the north. ?This is largely because of the fact that North Indians are more adventurous in risk-taking and they have seen the benefits of financial jugglery by north Indian developers. Following the pre-launch rush, states like Haryana and Rajasthan have particularly become alert. Says S P Gupta, Administrator, HUDA, Haryana, ?pre-launches without proper license is a serious violation of Haryana Urban Area Development Act and we?re initiating action against the erring developers.?
Developer-investor-broker nexus
The entire business of pre-launch sale of property revolves around the chain formed by developer, big investors and brokers. The investor comes first in the chain of command that is approached by the developer. He invests in the project, normally on the promise of about 40 per cent appreciation in property price at the time of the launch. Some big- time brokers are also involved in underwriting the project.
(Writer is a recipient of National Award on Consumer Protection and can be contacted at [email protected])
