Sunday, August 28, 2022, assumed historical significance when Noida Supertech twin towers were reduced to rubble, in line with the Supreme Court orders. The Court had described the skyscrapers as illegal.
Even as demolition of illegal structures in India has taken place in the past too, the Supertech twin towers, with an altitude of almost 100 meters, which is more than the height of Qutab Minar, are the highest structures ever demolished in India.
The towers, named as Ceyane (29 floors) and Apex (32 floors), were found to be in violation of multiple regulations governing such constructions. Reportedly, these tallest twin structures comprised about 850 flats for residential purposes.
In 2014, the Allahabad High Court in response to a petition filed by the Emerald Court Owners Residents Welfare Association (RWA) in 2012, had ruled that the towers were illegal and ordered demolition. The ‘Supertech Emerald Court’ is the housing society in Noida in which the two towers were located.
The Noida Authority and Supertech approached the Supreme Court challenging the Allahabad High Court order. On August 31, 2021, the apex court upheld the ruling of the Allahabad High Court and ordered the demolition of the skyscrapers.
Among other things, the top court found the construction of the towers in violation of the minimum distance requirement. It said the towers were built without complying with building regulations and fire safety norms.
As per the SC order, the demolition was to be carried out within three months, but owing to several delays, the date of demolition finally settled to August 28.
The historical demolition continues to dominate media headlines focusing particularly on the amount of loss of investment and the pain it has inflicted upon the homebuyers who had booked their flats in the twin towers. A report reveals that the demolition of the towers caused a loss of about Rs 1,000 crore to the developer - Supertech. It also took nearly Rs 20 crore to raze the building.
Whatever the amount of loss to the developers of these twin towers, the demolition has dashed the hopes of hundreds of homebuyers who had invested everything in their dream of owning a home in the skyscrapers. Besides, the homebuyers, for none of their fault, were forced into mental trauma and the biggest battle of their life since 2009 when they had booked their ‘dream home’ in the towers. Reportedly, scores of homebuyers had made the full payment for their flats.
The construction of illegal or unauthorized buildings by realtors and developers, mostly housing residential flats is not new in the country. These residential flats have always remained in demand as more and more people have an urge to own a flat in his/her lifetime.
Many invest in such flats to carve out regular income by renting out such accommodations. This is here the realtors and developers try to capitalize on the demand to make the most out of their projects. During the process, most of the developers violate the building norms and expose the homebuyers to trouble.
Here an Economic Times report is worth quoting. The report published on August 26, states that the Indian government in July informed that in Delhi alone 64,300 illegal or unauthorised constructions have been identified since 2016 by various agencies. Of these, 53,171 were identified by the municipal corporations. Also, 29,986 illegal or unauthorised constructions have been demolished or sealed in Delhi from 2016 onwards.
Precisely, we can sum up that all is not well in the realty sector and the Supertech twin towers’ demolition serves as an eye opener for all the stakeholders in the sector.
It’s a warning to realtors and developers that any bit of deviation from the norms can prove disastrous for their projects. However, the blasting of the skyscrapers at the same time will be a constant reminder for the homebuyers to remain alert and exercise caution while booking a flat in any building structure.
Let’s review the scenario in the context of our region (J&K) where we see a lot of appetite shown by the local investors and homebuyers in real estate projects outside J&K especially in the northern part of the country.
Interestingly, the growing appetite of people to have housing property outside J&K attracted local property dealers and they too started expanding their real estate ventures outside the state, mostly in Delhi, Uttar Pradesh and Haryana.
This combination of local property dealers and the local investors has become a convenient means of flight of capital from the region to other parts of the country. Initially, this looked prosperous for both.
But over a period of time, the investment has lost sheen and many investors found their money locked in the troubled waters of the real estate sector in the country. Those who have invested in under-construction properties are the worst sufferers.
The investment in under-construction property has turned a matter of worry for most of the investors as the builders/dealers have failed to give possession of the property to them in the given time period. The builder has either failed to complete the construction or has got entangled into some legal dispute over the under-construction property.
Now the basic question is what precautions one should take while intending to invest in an under-construction property?
The basic thing is that one should first ensure that the project is registered with the real estate regulator - Real Estate Regulatory Authority (RERA). Under the RERA Act developers are required to register themselves and their projects with their respective state’s regulatory authority.
Since the registration involves full disclosure of details such as project layout, land title, approvals, construction and delivery timelines, along with developers’ details such as pending litigation and financial status, a buyer can trust projects and developers that have been registered with the regulator.
Notably, it is mandatory for the builders and developers to adhere to RERA regulations before they start the project, starting with registering the project under the RERA Act.
Don’t invest in under-construction properties which have not been registered with the regulator. You can cross check the facts about the project from the State’s RERA website.
The RERA Act extends several benefits to the homebuyers. Firstly, a buyer will come to know about the reputation of the builder in terms of his work profile and the buyer will also have access to the full details of the project.
Secondly, there are fewer chances of falling into the trap of fraudulent builders. If a builder is found to be committing any unfair and fraudulent practices, his registration would be revoked instantly.
Thirdly, as envisaged in the RERA Act , the builders cannot take advance from the homebuyers before entering into a sale agreement. After executing a sale agreement the homebuyers cannot be asked to pay more than 10% of the cost of property.
Meanwhile, there is also the right to compensation in the Act. If the builder fails to complete the project within the given time, the buyer is entitled to lodge a claim for compensation.
Notably, if the builder is not able to complete the project on time, and the buyer wants to withdraw the project then the builder is subject to compensation along with the interest as prescribed by the Act. But if the buyer does not want to withdraw from the project, the builder is liable to pay interest for every month of delay, till the possession is transferred to buyers.
Even the buyer can claim for a defect after possession. The Act says that if any structural or general defect appears to the buyer in the property within 5 years from the date of possession, such defects are to be repaired by the builder within 30 days of the defects detected, free of cost.
(The views are of the author & not the Institution he works for.)
Disclaimer: The views and opinions expressed in this article are the personal opinions of the author.
The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.