Project delays - deviations & customer woes in real estate

Reams of newsprint have been dedicated to discussing the sufferings of consumers in the Indian real estate sector. Particularly, homebuyers’ woes related to late delivery of projects, deviation of housing projects from promised quality, additional payments due to change in apartment area and inadequate protection of their rights have been well-documented. The question that invariably arises is whether the developer is at fault, or whether larger MARKET forces beyond the control of developers are at play. Construction Delays – By Developer Or By Approval Authority? Technically speaking, the time consumed in obtaining all approvals adds to the total time expended in completing the project.

Any approval which is needed between the launch to the actual start of construction up till handover of the apartments to the buyer will be an additional time factor. Delays here will cause cascading delays in delivering the project as per the promised time. Before a project is officially launched in the market and offered to buyers, there are myriad approvals that a developer needs to obtain from the state and central agencies and ministries. In any business, the longer raw material is held, the higher is the holding cost – which, in addition to interest costs in case of borrowed FUNDS, causes an increase in the overall price of the finished product.

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