A court’s decision to send to jail the owner and two top executives of Unitech has created a stir among real estate developers. They were jailed on charges of cheating and misappropriation of funds.
This has come as a warning to real estate companies who failed to deliver on the promises made to buyers.
Getamber Anand, President of real estate associations CREDAI said, “This is a clear message that the law will catch up and developers should focus on execution, delivery and keep their promises made to the buyers.”
There is no doubt that the Unitech case has jolted real estate developers on the need to speed up delivery of office and residential property after the company’s top officials were sent to jail. It is reported that handover of 300,000 houses are delayed by up to eight years.
There are reports that reputed developers such as Unitech and DLF are being dragged to the courts and tribunals by angry consumers upset over delays in the handing over of property.
The brief detention by the police of three top executives of Unitech Ltd is only the latest in a series of troubles hitting India’s real estate industry, in which both builders and consumers have been hurt.
In the case of realtors, they are stuck with unsold inventory or unviable projects as they cope with a prolonged demand slump linked to high interest rates.
The reworked realty bill, set to be introduced in Parliament, should ease some of these issues by bringing in transparency and accountability.