Cost of delay not adequately paid by builder
Whereas they charged 18% PA for delayed payment by home buyer, but paid less than 2% for their delay of 4.5 years and more issues....
Summary
A. The benefit of delay in construction to builder=560 Crore (less escalation for 3.25 years)
B. Exorbitant maintenance charges
and many more everyday issues
Major Issue 1
• This is the reality of Ajana’s Home 121 project in sector 121, NOIDA (UP)
• The project is approx 32,00,000 ft2 (Estimated)
• The project was to be handed over in Jan 2012 to 2014 in phases
• Actual legal possession offered in March 2016
--------------Delay 4years 3 months to 2 years 3 months(Phase wise)--------------------
1. Penalty charged by builder in case of payment delay by buyer=18% per year
2. Penalty clause in case of construction delay by builder=2% ( approx) per year
3. Actual penalty paid by builder for delay 1% per year ( On pretext of NGT issue)
4. Therefore the excess money pocketed by builder=@17% on Rs 960 Crores for average 3.25 years= Rs 560 Crores
Major Issue 2
• Maintenance
o Advance maintenance security= Rs 17.20 Crore
o Charging 24 months advance @ Rs 2.5 per foot2 which is Rs 19.20 Crores
So the money available for maintenance is 36.4 Crore
1. In case builder hands over in 24 months to RWA the monthly cost for maintaining 25 Acre project:
= Rs 54.6 Lacs (18% PA on 36.4 Crore as Interest)+70.4 Lacs as monthly fee
=125 Lacs per month
2. In case builder used up the IFMS…say 80% (80% of 17. 2 Crores), then monthly cost to residents would be
=125 Lacs+57.33 Lacs (prorated part of IFMS )
=182 Lacs per month... This appears to be atleast Rs 100 Lacs more than what it should be, given that almost all the facilities are separately charged
How much infra would be required to incur such kind of expenses..???
Whereas they charged 18% PA for delayed payment by home buyer, but paid less than 2% for their delay of 4.5 years and more issues....
Summary
A. The benefit of delay in construction to builder=560 Crore (less escalation for 3.25 years)
B. Exorbitant maintenance charges
and many more everyday issues
Major Issue 1
• This is the reality of Ajana’s Home 121 project in sector 121, NOIDA (UP)
• The project is approx 32,00,000 ft2 (Estimated)
• The project was to be handed over in Jan 2012 to 2014 in phases
• Actual legal possession offered in March 2016
--------------Delay 4years 3 months to 2 years 3 months(Phase wise)--------------------
1. Penalty charged by builder in case of payment delay by buyer=18% per year
2. Penalty clause in case of construction delay by builder=2% ( approx) per year
3. Actual penalty paid by builder for delay 1% per year ( On pretext of NGT issue)
4. Therefore the excess money pocketed by builder=@17% on Rs 960 Crores for average 3.25 years= Rs 560 Crores
Major Issue 2
• Maintenance
o Advance maintenance security= Rs 17.20 Crore
o Charging 24 months advance @ Rs 2.5 per foot2 which is Rs 19.20 Crores
So the money available for maintenance is 36.4 Crore
1. In case builder hands over in 24 months to RWA the monthly cost for maintaining 25 Acre project:
= Rs 54.6 Lacs (18% PA on 36.4 Crore as Interest)+70.4 Lacs as monthly fee
=125 Lacs per month
2. In case builder used up the IFMS…say 80% (80% of 17. 2 Crores), then monthly cost to residents would be
=125 Lacs+57.33 Lacs (prorated part of IFMS )
=182 Lacs per month... This appears to be atleast Rs 100 Lacs more than what it should be, given that almost all the facilities are separately charged
How much infra would be required to incur such kind of expenses..???