Credai mulls suspending membership of serial offenders

In its bid to attract serious players and weed out habitual defaulters, the Confederation of Real Estate Developers Association or Credai is mulling over suspending the membership of some developers primarily from the NCR, who have repeatedly gone back on their promises to property buyers.

According to Credai president Getamber Anand, there was a need to enforce discipline among some members and ensure a code of conduct among members of the association.

Anand, who is also the CMD of the Delhi-based ATS Infrastructure further added that the association was trying its utmost to bring in more transparency among its members and narrow the communication gap between buyers and developers.

Credai, a prominent industry body has some 11,500 members across the country, with an estimated 200 members from the NCR.  While declining to name the developers in question, Anand asserted that the real estate sector had earned a bad name due to the antics of certain players and only developers who were serious about their business would be a part of CREDAI going forward.

Anand's assertions can be borne out from the several cases of project delays, sudden changes in structure and design of projects and developers frequently back-tracking on their promises to buyers, which have given rise to several legal hassles for the already beleaguered industry.

More recently, one such instance witnessed DLF, the largest property developer in the country, being imposed with an INR 630 crore penalty by the Competition Commission of India, a matter that is now before the Supreme Court of India following an appeal by the builder.

Another case also pending before the Supreme Court involves Supertech, another reputed developer who faced the ire of buyers who petitioned the Allahabad high Court which subsequently ordered the demolition of two towers in one of its Noida projects.

Having taken charge as Credai president since March this year, Anand is keen to bring back buyer confidence. Among the steps taken to ensure this is the setting up of an entry barrier for gaining membership to Credai.

According to Anand, this now involves a developer to have a track record of having delivered atleast 100,000 sq ft of area and securing the recommendations from two member developers.
 
Further an in-house consumer grievances redressal forum comprising of retired high court judges among others has also been set up to try and resolve issues and complaints between developers and buyers.

The panel also allows the buyer to approach a formal court if he or she is not justified with the ruling given by the forum. However inspite of being around for a few years now, the forum has seldom been used to settle such disputes.

The NCR has been in the throes of several realty disputes in recent times against the backdrop of falling sales and rising inventory levels. A bulk of the complaints are related to extensive delays in project completion and some developers not adhering to their promises made to buyers.

According to recent industry data from Liases Foras, the NCR tops the list of unsold inventory in the country with stocks that can last for approx 71 months followed by the MMR with 46 months and Chennai at 36 months for Q1 this year.