According to Agarwal, in any of these groups, the largest part of those demanding refund appears to be of investors who prefer liquidity to property holdings at the present time. There are also genuine buyers who now have the option to buy ready-to-move-in properties at price levels that are on a par with under-construction properties and wish to take advantage of this fact.

REFUND: EASIER SAID THAN DONE

Obtaining a refund from the developer is not easy. “As there is a sale agreement signed between the buyer and the seller, it is never possible to refund the money at once. However, these allottees are free to apply for refund,” says a DLF spokesperson.

Legal experts think that full refund is never possible as a number of charges are incurred by the developer at the start of the project. “Any approval or licence fee paid by the developer will have to be passed proportionally to buyers too,” explains a legal expert.

Talking about developers’ plight, Agarwal says: “Developers are generally asking for sufficient time to make the requested refunds, which is understandable, since these are running business concerns and not financial institutions. It is obvious that there is no value in withholding refunds, since doing so would result in non-payment of future instalments at the least, and also legal wrangles that are in nobody’s interest.”

All of this points to the need for buyers to evaluate very clearly whether all the permissions required to start a project have been obtained, and whether the developer has adequate financial strength to complete the project (though it must be added that if the biggest players are today unable to complete their projects, what is the poor buyer to do?) The situation also points to the need for a regulator for the sector with the powers to make developers fall in line. l

... contd.