King Johnson Koyyada: For those who think that the Telangana RERA Authority has turned a blind eye and is not paying much attention to the irregularities of UDS (undivided share of land) and prelaunches in the State, here is some shocker. It is learned that the RERA has initiated an in-depth probe of these schemes. The authorities have been collecting complete details of UDS/prelaunch ventures/projects on social media and RERA staff will soon take up field-level inspection to review their records. If proved guilty, they might impose a fine of at least Rs 2 crore, depending on the size of the project.
Over the last a few days, some of the worst scams in the Hyderabad’s real estate sector are coming to light. The arrest of Sandhya Convention Center managing director Sridhar Rao, had stirred up the hornet’s nest. But one must wait longer to discover more such frauds. While the Telangana’s construction industry is becoming the focal point for such latest scams, those who continue to operate UDS and prelaunch schemes are making the bizarre argument that they are not cheating anyone. It does not seem wrong for them to start selling properties without RERA’s permission, to take cheques or take cash from buyers under UDS and prelaunch offers. Instead, by selling properties at a pre-launch price, they are under a misconception that they were doing a favour to their customers.
A collusion
Since 2006, Hyderabad’s real estate industry has been transforming into an organised sector. The role of many construction companies in this transformation, is unforgettable. Though some companies have occasionally troubled buyers, there was no major negative impact on the construction sector. A large percentage of companies carry out construction activities as per norms in an organised manner. Unfortunately, the city has become the focal point for UDS and prelaunch scams for sometime now.
It is a well known fact that some of the big builders are also involved in such schemes. The State government has now realised that the real estate developers associations in Telangana construction sector have no guts or courage to put things in order. However, the government too made no concrete efforts to curb these scams. The Municipal department has only issued cautionary measures to customers and investors against purchasing properties in such projects, but there has been no specific action plan to keep tab on UDS and prelaunch offers.
Would Hyderabad meet Noida’s fate?
Looking at the recent developments, it makes sense that the Hyderabad construction sector is going the way of Gurgaon and Noida on the outskirts of Delhi. Someone deals with the land owner, while another one pays the advance. The third person puts the space for sale in the market, while another person deals with the real estate agents to sell plots and flats. Another person would register the UDS land in the name of buyer.
Thus, the real estate sector is witnessing new trends where the buyer and builder would not come in direct contact with each other. But what does such development indicate? The real estate developers associations are being criticised for not pay much attention to such unruly activities taking place in the industry for the last few years. If all these associations do not wake up and take remedial measures, they are likely to fail as their counterparts did in Delhi and end up paying a hefty price. If people lose faith in these organisations or even genuine developers, it will be difficult to regain their trust.
Hefty fines of 10 percent
If the project is taken up without the permission of the Telangana RERA Authority, a penalty of 10 per cent of the value of the project will be imposed on the builder. If the layout or the project is worth Rs 100 crore, then 10 per cent of its cost i.e. Rs 10 crore will be imposed has fine. One must realise that after paying advance to the land owner and paying such huge penalties, will the developer who sold their flats through UDS and prelaunch schemes ever be able to complete the project.
It is doubtful that people who wanted a dream home or invested in these properties, would ever realise their goals. Those who invested in many commercial properties in Hyderabad, are unable to get their investment back or take possession of their properties. Instead, they are running around the developers as well as the government authorities for justice. To avoid any such headaches in future, one must not invest in UDS or prelaunch projects.
