Real estate frauds in Chennai

I came to see an article in the Hindu about the real estate frauds happening in Chennai. The essence of it was almost 300 to 400 cheating cases were registered against different realtors in the last year 2008-2009. Most of the cases were registered in the areas like OMR, ECR, and GST Road etc.

Most of us feel that this time during the recession is the best time to book a dream home. Beware of the following new types of real estate frauds.

1. Less quoted price/sq feet as launch offer: This is a cheap marketing strategy played by some of the builders in Chennai. The price may look lucrative and you will be heads over heals to drive to the site and make your booking fee without even asking some very basic/important questions like

a. Have the builder got the necessary approvals for the construction for the block where you are booking the apartment?
The trick goes like this: Some builders do not get an approval but still collect the booking amount from you and keep you in wait mode. They will keep digging the earth for months to make you feel that the work has kick started. Then the work will be stalled for many months. Imagine how much time it takes to fill back the dug earth. One fine morning the builder calls up for a meeting with those who have booked and apartment and announce that the project is going to be winded up since the approvals are not in place and he returns you back the initial deposit you made. You will be happy to see a genuine builder like this and return home happily. After few months when the economy is booming you will be jolted to see a new Advertisement by the same builder who is launching the same project where you had booked for an apartment few months back with a much higher price/sq ft than before. The premium here for the builder is the interest received from the booking amount given by us.
b. Till when the offer price is valid?
There will be some clause in the agreement which says that the offer price will be valid only if you make 20-30% of the amount on or before a certain date. The trick here is that the date will be so near that you will not even get your loans approved from the banker on or before the mentioned date which make you fall back into the normal price slabs.
PLC Charges?
The PLC charge is something which is additional to the basic cost. It increases based on the apartment you choose. For instance if your apartment faces the road side, swimming pool, parks etc the additional cost will be a few 100’s additional to your basic cost. Even if we choose an apartment which does not have any such panoramic views the builder will have only one answer “Sorry Sir!! The apartment is already booked”. This may not be true; the builder might sell the apartments with no such panoramic views at the end when the market conditions are good for a higher price.