Here’s how builders are duping Mumbaikars


Mid-Day, 04-03-2012 04:30:07


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Municipal Commissioner Subodh Kumar has proposed amendments to the Development Control Rules to curtail corruption and ensure that prospective home buyers get what they pay for. But builders continue to cheat by forcing you to buy parking space, and charging you illegally for super built-up area 

South Mumbai
Our budget: Rs 3 crore
Builder: Rohan Lifescapes
Project: Girgaum, Grant Road, Bhuleshwar
Charges: Rs 22,000-30,000 per square foot
Extra charges: 5 per cent Stamp Duty, Service Tax, VAT and Maintenance charges
Parking space: Rs 8-10 lakh (compulsory)
Area: It is mandatory to buy on the basis of saleable area, which is nearly 30-40 per cent more than the carpet area
What they said: "The Development Control Rules (DCR) make builders pay a premium for the extra FSI allocated to flowerbeds, which earlier came for free. We are ready to negotiate."

Builder: DB Reality
Project: Mahalaxmi, Saat Rasta, Mumbai Central.
Charges: Rs 20,000 and above per square foot
Extra charges: 6 per cent Stamp Duty, Service Tax, VAT and Maintenance charges
Parking space: Nearly 6-8 lakh (not compulsory)
Area: It is mandatory to buy on the basis of saleable area, which is nearly 30-40 per cent more than the carpet area
What they said: The sales representative of the builder was ready to negotiate and said that it was not mandatory to purchase the car park area.

Central Mumbai
Our budget: Rs 2.5 crore
Builder: Neumec builders
Project: Lower Parel
Charges: Nearly Rs 1.25 crore for a 1 BHK
Extra charges: 6 per cent Stamp Duty, Service Tax, VAT and Maintenance charges
Parking space: Not available
Area: The super built-up area offered was nearly 750 square foot, but the carpet area was only 400 square foot
What they said: There was no one at the site, but on the phone, the sales representative clearly told us that they have only one BHKs and are ready to negotiate across the table.

Builder: Lodha Group
Project: New Cuffe Parade, Wadala
Charges: Over Rs 2.90 crore for a 2 BHK
Extra charges: 6 per cent Stamp Duty, Service Tax, VAT and Maintenance charges
Parking space: Rs 7 lakh (compulsory)
Area: We were charged for the super built-up area, which was 30-40 per cent more than the actual carpet area
What they said: The sales office representatives showed us an audio-visual clip about the project and a representative told us about the budget, and how they were not ready to negotiate.

Western suburbs
Our budget: Rs 2-2.5 cr
Builder: Hicon
Project: Carter Road Bandra
Charges: Rs 3.40 crore for a 2 BHK
Extra charges: No discussion
Parking spaces: No discussion
Area: No discussion
What they said: We met the builder’s representative at their Bandra office, but our conversation was cut short because the builder said he could not offer us anything within our budget of Rs 2 crore

Builder: Shamik
Project: Elanza, Santacruz east
Charges: Rs 1.62 crore for a 2 BHK
Extra charges: 6 per cent Stamp Duty, Service Tax, VAT and Maintenance charges
Parking space: Rs 5 lakh (compulsory)
What they said: The builder’s representative was supportive. He even mailed us the BMC approvals they had taken for the project. They were ready to bring down the price during negotiations.

Central suburbs
Our budget: Rs 1.5 crore
Builder: Nahar
Project: Nahar Amrit Shakit, Powai (Chandivali)
Charges: Rs 1.65 crore for a 2 BHK
Extra charges: 6 per cent Stamp Duty, Service Tax, VAT and Maintenance charges
Parking spaces: Nearly Rs 7 lakh (compulsory)
Area: The builder was selling saleable area, not carpet area
What they said: The builder’s representative was not ready to negotiate.

Builder: Neptune
Project: High Living, Bhandup, LBS Marg.
Charges: Nearly 1.10 crore for a 2 BHK
Extra charges: 6 per cent Stamp Duty, Service Tax, VAT and Maintenance charges
Parking space: Rs 5 lakh (compulsory)
Area: Price quoted on saleable not carpet area
What they said: The sales representative showed us the area and site and refused to negotiate on saleable area.

Municipal Commissioner Subodh Kumar first moved to modify development control (DC) regulations via a letter to the principal secretary, urban development department on July 13, 2011. If implemented, the new rules will reduce corruption at the BMC level and also drastically cut the profits of builders.

The letter, a copy of which is with SMD, says builders are misusing certain regulations with respect to ornamental features like terrace gardens and flowerbeds which are granted to them FSI-free, without premium.

In some cases, 300 to 400 sq foot per flat has been added in the name of a landscape garden with deck area.

Even as the developers lobby in Mumbai cries foul over the proposed modifications, the letter claims that meetings were held with the representatives of Maharashtra Chamber of Housing Industries (MCHI) and their views have been taken into consideration.

When we contacted Kumar for  a reaction to the discrepancies we found, he said that property prices should not be hiked because of changes in the DCR. "Once the new rules come into effect, consumers will pay for carpet area, the BMC will get its premium on extra spaces, and builders will not overcharge." He added that the BMC has not yet begun to collect the premium on flowerbeds etc at new projects, so what the builders are doing is illegal.

Buyer beware: What can you do?
Advocate Vinod Sampat, a legal expert in property matters said, "A builder is only supposed to charge for carpet area. It has been held by the Supreme Court and Consumer Court that it is illegal to charge for the car park and saleable area."

Sachin Ahir, the state Housing Minister said, "A buyer has to decide whether he wants to buy saleable or carpet area. The buyer can put his foot down and make it clear to the builder that he will only pay for the carpet area. He can then approach a competent authority like the Consumer Court or High Court. We are also asking the BMC to not sanction plans that do not clearly mark the carpet and super built-up areas. If a builder shows the buyer the exact differentiation between the carpet area and the area he’s planning to charge him for and the buyer has no objections to it, then it’s fine." He added, "There are several HC and SC verdicts  and the state government too holds that no builder is allowed to sell car park areas." Paras Gundecha, president, Maharashtra Chamber of Housing Industry, the apex body of builders in Mumbai said, "We have clearly told every builder that they should give the buyer the carpet area and saleable area rates. It’s illegal to sell car park area.

A buyer who is forced to buy car park area can approach our grievance cell and we will resolve the issue."
 

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