Marg marketed various projects like MARG Pushkara, Pushpadruma, Kalpavriksha and Savithanjali Smart Homes in OMR; Brindavan in Sriperumbudur, an integrated township in Tirupathi and MARG Swarnabhoomi.
Apart from Pushpadruma, no other project has been delivered till date.
Sand scarcity, statutory approvals....cited for delay
Between Savithanjali’s launch in April 2010 and September 2015, only 40-50 per cent of the work has been completed, while most customers have paid between 85 and 95 per cent of the price of the apartment. The builder started work in 2011 and then abruptly stopped work in March 2013. It sent an e-mail in February 2014, citing reasons for delay as problems like sand scarcity due to ban on river sand mining. The situation was supposed to normalise by April 2014.
The second communication was in July 2014, citing delay in statutory approvals leading to stoppage of work. It also said that the executives of MARG ran pillar to post because they were unaware whether the approvals should be obtained from the Central or state government.
Shouldn’t obtaining approvals be the first priority? Why wasn’t this done earlier? Does it mean they started construction without proper approvals?
These approval delays were cited reasons for delay in construction. Despite all these e-mails, nothing was done to ensure construction commenced after receipt of approvals. The reasons touted were recession, slow down in real estate market and cost escalation.
The Thiruporur Panchayat has now sealed the project quoting that the time limit for MARG Properties to complete construction lapsed on 5 April 2015, which MARG had failed to renew.
Who are suffering?
People who booked houses took loans from banks to finance their houses. The EMI’s range between Rs 20,000 and Rs 50,000.
MARG Properties regularly sent payment requests between 2011 and 2013. The customer were given a month to pay the instalment. If he did not pay within the due date, MARG charged interest @ 24 per cent pa on the amount payable.
Customers face a new problem now. Banks refuse to defer EMI payments until construction work is resumed reasoning they have no role to play - because the agreement was between the customer and the builder. Lenders to MARG are unwilling to take the responsibility for ensuring clear title to the property against which loans had been extended. They have not also monitored progress of construction for releasing the loan instalments.
How is the fraud happening?
Frauds like this are easy to commit, but hard to detect. It is camouflaged in such a manner that every new buyer thinks the project will be completed within the time frame by the builder. They claim that Block A will be handed over in June 2016, Block B in September 2016 and Block C in December 2016. The promoter, G R K Reddy, has confessed that he has only Rs 50 lakh to spend on the
project. He is trying to get customers to sign a MoU which will make the customers deposit the balance amount in an escrow account which will be used to meet expenses like labour cost. Thankfully, that did not happen.
Secondly, Savithanjali’s website says that the project has a 5-star rating from CRISIL. Check on CRISIL’s website and you will find that the 5-star rating was suspended!
There are theories that MARG is planning to bring in a new contractor to complete the project, with an additional cost of Rs 100 per sq ft with a huge compromise on several facilities originally promised by MARG. Delivery has been shifted to 2017-18. MARG had a meeting with its customers recently; but not much clarity on the outcome. There is no guarantee that the new builder would deliver on the promise.
Not just MARG – you get equally dirge songs from hapless customers of the mammoth DLF Garden City and several others. The new Act promising protection is thus welcome.