Chennai
A number of investors have sunk their money in real estate ranging from vacant plots to apartments and commercial properties. This is because of the confidence that investment in real estate yields lucrative return on investment. There are certain ground realities which investors are supposed to adhere to prior to plunging into investment but for those who have failed to do so, it has turned into a nightmarish experience.
Ranjan (name changed), an NRI from Kuala Lumpur, had invested in land on the outskirts of Chennai and when visited the plot during his holiday, he found that the land had been acquired by the state government. When he approached the land developer, he confirmed the move and convinced him to provide alternate plot. But the land provided in a far away place where even access was quite frustrating. He has not even passed on the compensation received from the government to the investor.
Kumar (name changed) is working in Sharjah for the past fifteen years. A land developer from Chennai had sold plots near Hosur during the boom days. But, he could not locate the plot in spite of commitment to arrange for site inspection during his holidays. A group of NRIs hailing from Sharjah who have been take for a ride by the same land developer has voiced concerns to the Indian consulate in Dubai but no concrete action has so far been taken in this regard, say market sources. The land developer has closed his Dubai operations and none of the investors could get their grievances redressed in spite of knocking at the doors of the company’s operation in Chennai.
In yet another instance, a land developer had sold the land on the coastal area to an NRI in USA which was never registered and subsequently the land had been acquired by the government.
It is not confined to NRIs alone but even resident investors are left in the lurch. Take the instance of Sahara township project due to come up near Savitha Dental college on the outskirts of Chennai which has not taken off the ground.
Even the new development near the IT Corridor has been shelved to put investors in the lurch. Take the case of IndiaBulls which has launched phase 3 project in Perumbakkam. Investors are now compelled to take the refund amount failing which it would be credited to their bank account leaving little time for investors to decide on the option. In a written communique to those who have booked apartments a year ago, the company has simply mentioned that they could not get the approval from the government authorities due to land title issues. It is not clear how they can accept the advance from the investors without obtaining the approval from the authorities or without the due diligence exercise. The company officials could not be reached for comments.
These are isolated instances but they reveal the extent of ignorance on the part of investors to follow ground rules before plunging into realty investment. A leading property lawyer in the city cautions investors to visit the site not once but at least three times on different dates to make detailed enquiries about the ownership in the neighbourhood. In one case, a shrewd buyer came to know that a part of the site was used as burial ground which fact was hidden while marketing the property to investors.
The Chennai Metropolitan Development Authority (CMDA) has an investor cell wherein one can get details about the approval accorded for sites free of cost. Investors should invariably engage the services of a professional lawyer before opting for investment. Plot loans are available which is yet another way to minimise the liability of the investors as the in-house legal team in the lending institutions would scrutinise the title deeds before sanctioning plot loans.
V Nagarajan, Property Consultant
Source: http://content.magicbricks.com/ground-realities-before-investing-in-real-estate
