I am writing this blog in my personal capacity to highlight the mental agony, uncertainty and financial misery caused due to delayed delivery of my flat by Jaypee. In the year 2009, I decided to buy a retirement flat. In those days, the Jaypee group was presenting itself as the largest and safest builder of NOIDA. The newspapers were full of advertisements and I along with many others in govt. service with me decided that Jaypee enjoyed the best brand recognition, was a very large builder from a stalwart of Indian industry and would be the safest builder to buy a flat from.
When I think back, it was a very bad mistake, but at that time when compared with small and unnown builders and the other names like DLF and Unitech being caught up in financial mess, going with Jaypee seemed safe. So I gave a cheque for the booking amount - for three lakhs - filled up a form and became a Jaypee customer. The cheque was immediately encashed and I thought I was in safe hands.
I was once again sadly mistaken because of exceptionally poor customer service. I kept visiting Jaypee to get my allotment letter but it was never ready and I was called again. After a couple of visits, which is very time consuming since I live in Delhi, I then started phoning them. Poor responses and employees who did not know what was going on were what I encountered. After many months I received a Provisional Allotment Letter or PAL. To my shock, the date of allotment was written as 31st March 2010 - many months after my initial booking cheque had been encashed.
This was very unsettling because the delivery dates were now linked to the date of issue of allotment letter and not the date on which they deposited my booking amount. When I contacted Jaypee, they said the linkage was to PAL only because the next two time linked payments were decided by the PAL issue date. When I pointed out that I was sitting ready with the amounts in my savings account for the past many months - losing interest in the process - that I had been chasing them to issue the PAL but they failed to do so and collect my payments - they expressed their inability to do anything about it and that it was now impossible to change the PAL date.
I fail to understand how the same project can have different delivery dates based on when the customer booked - surely the project would have its own delivery schedule and only that should be applicable? Kosmos flats are still being sold by the company - so if it is sold in 2014, then its delivery date will be 2017 for that customer? Surely the much higher upfront prices paid after completion of a certain amount of the tower as well as the higher per square feet price being charged now is all that should be imposed on the buyer? Why give him a 3 year time for completion when a lot of the project is already completed?
I fail to understand how the same project can have different delivery dates based on when the customer booked - surely the project would have its own delivery schedule and only that should be applicable? Kosmos flats are still being sold by the company - so if it is sold in 2014, then its delivery date will be 2017 for that customer? Surely the much higher upfront prices paid after completion of a certain amount of the tower as well as the higher per square feet price being charged now is all that should be imposed on the buyer? Why give him a 3 year time for completion when a lot of the project is already completed?
After issue of PAL, there was no progress on my tower for about two years - they dug a pit which turned into a pond and on each visit all I could see was a pond full of water. After about 2 years like this, slowly the construction started and now after 5 years, the tower has reached 11th floor out of the 17 floors it is supposed to have. So I would estimate that about 3 more years are left for construction to get over. Eight years to construct a flat? From the same people who built the Tehri Dam and the numerous hydroelectric dams in various part of the country? The same people who in the same time after I booked, finished the F1 racing track and the Yamuna Expressway? How was this possible?
The buyers got together and had numerous meetings with Jaypee management. They were very nice and talked very nicely to us and told us how here was a massive labour shortage and so projects were delayed. When asked why the F1 racing track and Yamuna expressway were completed during the same time - where was the labour shortage for that - they had no answer. Till 2013 they have been always very nice and explained very nicely and even provided some kind of food - and all of this we had to swallow along with a bitter pill - that our flat was not ready - nowhere close.
We repeatedly asked them to increase our compensation for such enormous delays, since my delivery date of 2013 was now past and it was the same for many others in 2012 itself. They refused. We told them 5 Rs per square feet was too little - we were renting at 12 to 15 Rs per square feet - and it was impossible to rent flats of 1000 square feet at 5000 Rs per month - anyone who lives in NCR will be able to appreciate that it is indeed impossible. We told them that they were charging penalty at 18% whereas they were compensating us at some 1-2% (based on amount deposited with them) - sinc 5 Rs per square feet amounts to this miniscule amount in terms of interest.
We told them that we were paying them our money raised at home loan interest rates and they were taking it - but by not keeping their end of the promise to build our flat - they were taking our money at 1-2% effective interest. In the meantime many of us were paying rent as well as EMI. We were also losing the tax advantages. In effect, we were leveraging our salaries to give money to Jaypee - but they did not even have an escrow account to ensure that our money was spent on the purpose for which we had given it. In the absence of such escrow accounts we dont know on what our money has been spent - since it definitely hasnt been spent completing our flats which stand incomplete.
Then in 2013 a bombshell was dropped on the customers of Pavillion which was the first project delivered by Jaypee. Booking had started in 2006 and it was now being delivered after 7 years. But instead of giving compensation, Jaypee demanded more money from them saying super built up area had increased ! They said the super area was higher by 16% but they were going to charge an extra 10% only since that was written in the PAL - that Jaypee can charge upto 10% extra for super area increase. This meant that Pavillion customers, instead of getting compensation were ending up paying almost 10 Lakhs more to get their flat - although the carpet area was the same ! They were not getting a single square inch of extra living space - just a massive bill for this mysterious super area which had increased - how? How can a building plan filed with NOIDA authority and executed properly cause this 16% inflation? We did our own calculations and found that Jaypee had included design elements made of concrete - in the form of external shuttering for concrete designs - as part of super area ! Whereas these were ornamental - nobody could stand on them, they were not part of common area or flat area - they were just concrete ornamental work, completely useless. Since Pavillion was sold at a much higher premium per square foot price, such design ornamental work should have been part of the extra psf price already charged from the customers and should not be included as super area since nobody could use it.
We went to Jaypee and objected. And they dropped a second bombshell. They said for all projects the super area will increase. We objected. We said it was illegal as per UP Apartment Act. They said UP Apartment Act was not applicable to them although it had been passed in 2010 because it hadnt been notified for NOIDA. Only in 2013 was a Allahabad high court judgement passed which said UP Apartments Act is operational from the time it was passed - and NOIDA and Greater NOIDA areas were to be covered. Only after that has NOIDA and Greater NOIDA recently notified the provisions of UP Apartments Act for their areas.
As per this act, the builder has to notify the buyer in advance in case the super area is to be increased - i.e. if the plans filed with the authority are to be altered in any way. They have to take consent from the buyers. But is it applicable to flats sold before this act was passed? We dont know. But certainly one sided actions by any company to the great financial detriment of the buyers should not be allowed - the govt and the courts should prevent Jaypee and other builders from arbitrary last minute super area increase which negate even the meager compensation being given by the builder - and end up imposing 10% or more extra cost for a greatly delayed flat.
In 2014 January and March we had met with the builder and demanded justice. Times of India even covered our meeting with this news article:
http://timesofindia.indiatimes.com/city/noida/Flat-buyers-protest-at-realtor-office/articleshow/31248247.cms
In this meeting Mr. Sachin Gaur came out and promised action and redressal of our problems. But in the end, Jaypee did nothing. Six months later we are back to square one.
We have highlighted our problems in television media also - and hope the authorities are taking notice.
TV Program on NDTV about unjust practices by Jaypee
We buyers want very simple things from Jaypee - please complete our flats as soon as possible. Please increase our compensation to a level similar to the penalty demanded from us by Jaypee if we delay the payments - even by one day. Please stick to the super area as sold to us, please dont increase the super area.
All of our demands are just. Nobody in the world will say that we are demanding anything more than justice.
Jaypee, please become customer friendly, listen to your customer and behave in a just fashion. Making money by causing financial hardship to your customers in an unjust fashion does not reflect well on a company listed in the stock exchange and taking money from national and international lenders. I am sure your present actions will not withstand scrutiny by your international lenders or Indian courts - please dont make simple home buyers run around to shareholder meetings and the slow Indian courts to get justice - provide justice to thm yourself.
And beware that the courts might impose penalties akin to the 650 crores imposed on DLF for similar unjust and customer unfriendly one sided actions.
Beware of the punishment that markets can meet out to poor corporate governance and failure to abide by the laws like UP Apartments Act.
Update: 22.8.14
When we sent our agenda and demands to Jaypee we made it very clear that we wanted to hold them accountable. And the print media published our problems in this article below.
Times of India covers our fight for consumers rights
Flat-buyers-threaten-stir-over-delay-in-possession
PLEASE LEAVE YOUR COMMENTS BELOW BY CLICKING ON THE COMMENTS LINK
We went to Jaypee and objected. And they dropped a second bombshell. They said for all projects the super area will increase. We objected. We said it was illegal as per UP Apartment Act. They said UP Apartment Act was not applicable to them although it had been passed in 2010 because it hadnt been notified for NOIDA. Only in 2013 was a Allahabad high court judgement passed which said UP Apartments Act is operational from the time it was passed - and NOIDA and Greater NOIDA areas were to be covered. Only after that has NOIDA and Greater NOIDA recently notified the provisions of UP Apartments Act for their areas.
As per this act, the builder has to notify the buyer in advance in case the super area is to be increased - i.e. if the plans filed with the authority are to be altered in any way. They have to take consent from the buyers. But is it applicable to flats sold before this act was passed? We dont know. But certainly one sided actions by any company to the great financial detriment of the buyers should not be allowed - the govt and the courts should prevent Jaypee and other builders from arbitrary last minute super area increase which negate even the meager compensation being given by the builder - and end up imposing 10% or more extra cost for a greatly delayed flat.
In 2014 January and March we had met with the builder and demanded justice. Times of India even covered our meeting with this news article:
http://timesofindia.indiatimes.com/city/noida/Flat-buyers-protest-at-realtor-office/articleshow/31248247.cms
In this meeting Mr. Sachin Gaur came out and promised action and redressal of our problems. But in the end, Jaypee did nothing. Six months later we are back to square one.
We have highlighted our problems in television media also - and hope the authorities are taking notice.
TV Program on NDTV about unjust practices by Jaypee
We buyers want very simple things from Jaypee - please complete our flats as soon as possible. Please increase our compensation to a level similar to the penalty demanded from us by Jaypee if we delay the payments - even by one day. Please stick to the super area as sold to us, please dont increase the super area.
All of our demands are just. Nobody in the world will say that we are demanding anything more than justice.
Jaypee, please become customer friendly, listen to your customer and behave in a just fashion. Making money by causing financial hardship to your customers in an unjust fashion does not reflect well on a company listed in the stock exchange and taking money from national and international lenders. I am sure your present actions will not withstand scrutiny by your international lenders or Indian courts - please dont make simple home buyers run around to shareholder meetings and the slow Indian courts to get justice - provide justice to thm yourself.
And beware that the courts might impose penalties akin to the 650 crores imposed on DLF for similar unjust and customer unfriendly one sided actions.
Beware of the punishment that markets can meet out to poor corporate governance and failure to abide by the laws like UP Apartments Act.
Update: 22.8.14
When we sent our agenda and demands to Jaypee we made it very clear that we wanted to hold them accountable. And the print media published our problems in this article below.
Times of India covers our fight for consumers rights
Flat-buyers-threaten-stir-over-delay-in-possession
PLEASE LEAVE YOUR COMMENTS BELOW BY CLICKING ON THE COMMENTS LINK
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