DLF faces buyer activism
The Hindu Business Line, March 1, 2009, Page 15
A further price cut and registration of undivided share of land in the apartment buyers’ favour are among the prime demands of an online group of buyers, some of whom are threatening to exit DLF’s Gardencity residential township project.
Over 950 buyers have banded together through the Internet to apply their collective bargaining power, according to a spokesperson and a buyer coordinating the group.
This has emerged a significant issue among the real estate developers in Chennai, with DLF, one of the largest real estate players in the country, stumbling on its first residential project here.
The buyers are dissatisfied with the price reduction announced by the company recently. DLF cut prices by Rs 300 to Rs 600 a sq.ft; on prices that ranged between Rs 2,800 and Rs 3,200 when the project was launched in December 2007.
The other demands of buyers in the project off Old Mahabalipuram Road, about 20 km from Adyar, include: establishment of an alternative approach road that bypasses a settlement for the tsunami-affected, equitable penalty for delay by either the seller or the buyer and a lifetime membership in the club coming up at the township project.
A DLF official said over 200 buyers had submitted their request for refund, but at least 50 had changed their mind after DLF had highlighted the value proposition. The various issues have been addressed by the company.
On registration of undivided share of land, the DLF official said that is the norm when three parties — a land owner, builder and buyer — are involved, and the builder agreement is not divulged to the authorities. But when, as in the case of DLF, the owner and buyer are the same, the Stamp Act says that the full value (including land and builder’s agreement) has to be registered.
DLF’s procedure gives the buyers a better legal standing, he said. It has doubled DLF’s penalty for delay to Rs 10 a sq.ft a month “representing good rental value”.
Project provisions
DLF had announced a price reduction recently making it the most competitively priced project in the vicinity. “No other project on the OMR stretch offers such a strong value proposition with facilities like a school, mall and a host of other amenities and specifications meeting Zone 4 (earthquake resistance) standards,” he said.
The company is also providing an alternative approach road, the official said.
According to the spokesperson for the buyers, the online group accounts for nearly 1,100 apartments that have been booked in the project where over 3,493 apartments have been announced.
At least 600 have demanded a refund. People had wanted to exit the project from last September-October following the downturn in the economy, but DLF at that time threatened to invoke a forfeiture clause in the provisional allotment application.
This could mean the loss of several lakhs of rupees for the buyers. The customers are to meet on Sunday to plan on further course of action.
OUR CHENNAI BUREAU
The Hindu Business Line, March 1, 2009, Page 15
A further price cut and registration of undivided share of land in the apartment buyers’ favour are among the prime demands of an online group of buyers, some of whom are threatening to exit DLF’s Gardencity residential township project.
Over 950 buyers have banded together through the Internet to apply their collective bargaining power, according to a spokesperson and a buyer coordinating the group.
This has emerged a significant issue among the real estate developers in Chennai, with DLF, one of the largest real estate players in the country, stumbling on its first residential project here.
The buyers are dissatisfied with the price reduction announced by the company recently. DLF cut prices by Rs 300 to Rs 600 a sq.ft; on prices that ranged between Rs 2,800 and Rs 3,200 when the project was launched in December 2007.
The other demands of buyers in the project off Old Mahabalipuram Road, about 20 km from Adyar, include: establishment of an alternative approach road that bypasses a settlement for the tsunami-affected, equitable penalty for delay by either the seller or the buyer and a lifetime membership in the club coming up at the township project.
A DLF official said over 200 buyers had submitted their request for refund, but at least 50 had changed their mind after DLF had highlighted the value proposition. The various issues have been addressed by the company.
On registration of undivided share of land, the DLF official said that is the norm when three parties — a land owner, builder and buyer — are involved, and the builder agreement is not divulged to the authorities. But when, as in the case of DLF, the owner and buyer are the same, the Stamp Act says that the full value (including land and builder’s agreement) has to be registered.
DLF’s procedure gives the buyers a better legal standing, he said. It has doubled DLF’s penalty for delay to Rs 10 a sq.ft a month “representing good rental value”.
Project provisions
DLF had announced a price reduction recently making it the most competitively priced project in the vicinity. “No other project on the OMR stretch offers such a strong value proposition with facilities like a school, mall and a host of other amenities and specifications meeting Zone 4 (earthquake resistance) standards,” he said.
The company is also providing an alternative approach road, the official said.
According to the spokesperson for the buyers, the online group accounts for nearly 1,100 apartments that have been booked in the project where over 3,493 apartments have been announced.
At least 600 have demanded a refund. People had wanted to exit the project from last September-October following the downturn in the economy, but DLF at that time threatened to invoke a forfeiture clause in the provisional allotment application.
This could mean the loss of several lakhs of rupees for the buyers. The customers are to meet on Sunday to plan on further course of action.
OUR CHENNAI BUREAU
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