Real estate citadel crumbles under fraud weight

BHUBANESWAR: After the arrest of businessman Tirupati Panigrahi and two of his associates for the alleged real estate fraud, realtors are worried that frequent incidents of cheating by a section of players are pushing the housing market into uncertainty.

"Buyers become wary of investment after such developments. Of late, hundreds of complaints have been reported about builders not keeping their promises. Many prospective buyers are staying away from investments apprehending developers' credentials," said D S Tripathy, state president of Confederation of Real Estate Developers Association of India (Credai).

Tripathy said apart from increased supply of housing projects, distrust on builders is a prime reason behind the prolonged stagnation in the market for the past two years.

Around 400 complaints surfaced against Panigrahi alone, who allegedly floated plotting schemes but did not deliver the pieces of land to investors.

Housing prices grew at around 15 to 20% annually for some years till 2010. However, there has been hardly any increase in prices in the last two years though over one lakh housing units are estimated to be under construction in and around the city.

To ensure builders with dubious credentials don't become its members, Credai recently decided to scrutinize applications of builders by a two-member committee before enrolling them. "Any member whose activities become suspicious will be debarred from Credai membership," he said.

Real Estate Developers Association of Odisha, another state-level alliance of realtors, faced an uncomfortable situation during a two-day property fair at Dubai in December when non-resident Odias (NROs) complained how they were cheated. "At least 25 NROs complained that they were cheated by builders in Odisha," said a developer.

Eleven developers with proven track record in real estate showcased their inventories, both affordable as well as high-end properties located in and around Bhubaneswar, for prospective non-resident Indian (NRI) buyers in United Arab Emirates (UAE).

Reda president Pradipta Kumar Biswasroy said buyers should exercise caution by checking developers' credentials. "One should find out whether a project is approved by the Bhubaneswar Development Authority (BDA) and if the builder is empanelled by the BDA. They should not get carried away by alluring promises, which can be deceptive," he said. Biswasroy said Reda frequently issues newspaper advertisements about precautions investors and home buyers should take.

BDA authorities said it is easy to check on builders and projects. "One could see the BDA website to find out if a builder is empanelled and if a housing plan is approved. They should take due care while buying a house," said BDA planning member P K Patnaik.

Source: timesofindia.indiatimes.com

Source: timesofindia.indiatimes.com