The recent trend of home buyers chipping in to help cash-strapped real estate developers to finish a project and take delivery seems a feasible option only in the case of small projects where most of the construction has taken place, believe stakeholders.
“Due to small amounts of money being involved in smaller projects — where there are five-six buildings to be constructed — this is the last, but ideal option to get a flat on time,” said Chitra Sharma, a homebuyer who has moved the Supreme Court against Jaypee Group.
With more people involved in larger projects, one of the major challenges is to create a consensus among home buyers. “In such a set up it gets difficult to bring unanimity and make everybody pay up,” said Mudassir Zaidi, Executive Director – North, Knight Frank India.
Industry experts are also of the view that this can be the option only when a project is in its last stage as there is optimism that upon pooling in some extra amount, the project will get completed.
Such cases require professional monitoring of funds which can lead to an increase in the project cost.
“So, there are two ways to ensure proper utilisation of funds. Either hire a professional or the buyers pool the required skillset from among themselves,” said Rahul Maroo, Senior Vice-President, Omkar Realtors.
Pankaj Bajaj, President, Credai-NCR, said that the cost of management of a project will be 3-5 per cent but time and cost overruns can be avoided.
Information Courtesy: thehindubusinessline