Hyderabad

In Telangana, luring home-buyers with low prices bait

Even with online building permissions systems and TS-RERA coming into effect, it takes up to a year to get approval for multi-storey buildings.   | Photo Credit: Ramakrishna G.

Just when everything seemed to be going well for the real estate industry post the COVID-19 lockdown with construction workers returning, demand picking up and the government initiating online approval process, a new kind of scheme is causing jitters.

Aggressive marketing

Prospective buyers are apparently being lured with prices almost half of the prevailing market rates for highrise apartments with enticing images of the architectural imagery and attractive locations in the suburbs in the past few months. These are being marketed through WhatsApp forwards and crores of rupees are allegedly being collected from customers even though none of the projects plans has been cleared by the municipal regulatory authorities.

Any real estate developer has to obtain building plan permissions from the municipal authorities and other departments like fire safety, etc., besides, the final approval of the TS-Real Estate Development Authority (TS-RERA) before advertisement of any form is put out for the project and money is collected from prospective buyers.

“There is an outright subversion of the existing rules and regulations by collecting money from prospective customers without even getting the requisite permissions. We fear this is another Ponzi scheme and could affect the entire industry besides causing tremendous financial loss to the general public,” claims Confederation of Real Estate Developers Association of India (CREDAI)-Hyderabad president P. Rama Krishna Rao.

Every day, fellow registered members have been bringing to his notice such projects being marketed online, mainly through WhatsApp and about newbie developers registering ‘undivided share of land’ in small parcels to customers.

‘Worse than loan scam’

“Any registration of land should go ahead only with the sale deed or sale agreement, but we are worried that these basic tenets are being given a go-by. This could be worse than the online loan scam,” says Shiv Raj, a prominent developer.

Even with the online building permissions systems and especially after the TS-RERA has come into effect, it takes up to a year to get permissions for multi-storey buildings. TS-RERA regulations have also clearly stated that the real estate developer can start selling the units only after all necessary permissions are obtained and the funds collected should not be used for any other project.

“While we, as registered members, have to wait for TS-RERA approval before we can start selling, the new operators are doing things in the reverse — selling without a single permission and the money collected is being used to purchase more land. We are not only worried as an industry but feel the city’s image will take a beating as these projects can go bust,” says Mr. Rao.

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Printable version | Apr 22, 2021 8:47:23 PM | https://www.thehindu.com/news/cities/Hyderabad/luring-home-buyers-with-low-prices-bait/article34014195.ece

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