Buying in pre-launch comes with its own risks
Experts advise against buying a house in UDS projects
These projects do not have HMDA approvals
UDS projects are not registered with the RERA
If land disputes arise, the landowner must take responsibility
Although house prices in UDS projects may be lower, they are not secure
Undivided Share of Land (UDS) is a common term in the real estate business. Although the government has instructed that flats should not be sold using the UDS method, some builders are ignoring these directives. They are luring customers with the promise of lower prices, trapping them in a predicament. As a result of delays in obtaining approvals and constructing houses on time, customers are facing difficulties. The situation is such that in the past five years alone, real estate scams worth 10,000 crores have occurred just in Hyderabad. This highlights the severity of the issue. Therefore, real estate experts are warning against buying houses in UDS projects.
Even though the government has issued orders stating that sales should not be made using the UDS method and that strict actions will be taken against those who violate these regulations, some developers are ignoring these directives. Taking advantage of the common man’s dream of owning a home in Hyderabad, they continue to show land and sell houses using the UDS method. Buyers, eager to purchase apartments at lower prices in empty plots where developers have made agreements with landowners, often rush into buying without much consideration. Although the price of undivided land may be lower, buyers end up facing losses if any legal issues arise or if construction approvals are not obtained. The government and the Confederation of Real Estate Developers’ Associations have issued several warnings about the potential losses when buying under UDS. It is advised to purchase homes only from projects registered with RERA and agents who have received RERA approvals.
As part of UDS projects, developers are merely making agreements with landowners and then immediately selling houses to customers. Typically, if the price per square foot of a house is Rs 5,000, they offer it for just Rs 3,000 per square foot, collecting the total amount within 45 days to two months. The buyers, attracted by the Rs 2,000 per square foot discount, rush to purchase the houses. Developers promise customers that the project will be completed and the houses handed over within at least two to four years. However, since UDS projects do not have the necessary approvals, many of them are not progressing. As a result, customers who have paid the money are facing significant difficulties, including delays in construction and the inability to get their money back.
Real estate companies in Hyderabad such as Sahiti, Bhuvanteza, JJ Infra, JV Builders, and Jai Group have engaged in pre-launch projects and deceived customers. Thousands of people have been cheated by investing in houses in such projects across various areas of Hyderabad, including Narsingi, Puppalaguda, Nanakramguda, Financial District, Kokapet, Kollur, Nizampet, Tellapur, Shamshabad, LB Nagar, and Adibatla. It is estimated that real estate scams in Hyderabad over the past five years amount to approximately Rs 10,000 crores. Real estate experts warn that fraudulent real estate companies are emerging in large numbers and advise against falling for their scams.
Since January 2017, every project constructed in more than 500 square meters or 6 units must comply with the regulations of the Telangana State Real Estate Regulatory Authority (TS-RERA). Experts recommend that buyers verify whether the property they are purchasing is registered with TS-RERA before making a decision. In Hyderabad, a significant percentage of buyers are first-time homebuyers who may have limited knowledge about resources and real estate transactions. In such situations, buyers often rush into purchases when they see lower prices without checking the developer’s profile, and experts advise against this practice.
