Frustrated property buyers in an Emaar-MGF development in the Indian city of Gurgaon are stepping up their action against the developers with a case set to be lodged in the consumer court.
Investors in the Emaar MGF ‘The Palm Terrace’ project, who have paid 93 percent of the asking price, have faced delays of over two years in the handover of their unitss.
The project, which has more than 200 apartments measuring 2,100 to 3,500 square feet, was launched in 2010 with the promise buyers would be able to take possession of their units within 33 months.
To date, none have been delivered and owner-occupiers, who are paying rent and mortgage payments, are now planning to launch legal proceedings at the consumer court.
The latest delay, according to media reports in India, has been down to the Emaar-MGF joint venture reportedly coming to an end, with the Dubai-based developer believed to be taking control of the remaining projects.
Investor Vikas Mehta, like a large percentage of the buyers who are taking the case, bought a property for himself and intends to live there. “In April 2010 I paid a down-payment of one million rupees ($15,000). They gave me a payment plan in June of the same year and the contract clearly said that it will take 30 months to deliver and within that a grace period of three more months,” Mehta, who works in the communications industry, explained.
Any delayed payment in the schedule resulted in the buyer incurring a late payment penalty of 24 percent per annum interest, he said, while delays on behalf of the developer would mean five rupees per square feet for the buyers.
“Everybody signed on because it was Emaar and everybody expected Emaar to keep their schedules and dates,” he said.
“After 30 months, we started to get emails from them (Emaar-MGF) saying that it will be delivered around 2014.”
When 2014 came, nothing happened and the property buyers were told that they would be delivered in the second quarter of 2015. Having waited for 30-months already, he said they were willing to wait again in order to finally get their units.
"When 2015 came, still nothing had happened. We wrote to them and tried to speak to them but we were getting the 'PR answers' saying the ‘work was in progress’,” Metha said.
Frustrated with the ongoing delays, a group of 90 buyers, including Metha, have formed a group to collectively get solid information as to when the properties will be delivered and to try and get adequate compensation.
They will take their case to the consumer court, where Metha said they hope to have their claim dealt with efficiently.
“They take up a case pretty fast by Indian standards. Within three months you will get the first hearing and within 45 days the respondent has top respond,” he said.
Emaar has been contacted for comment.