Real estate market has been the biggest contributor to Delhi NCR’s economy . There are residential projects from old and new builders across Noida , Ghaziabad , faridabad and Gurgaon .
But the best development has taken place in Greater Noida region where more than 200 projects are going on and out of it Greater Noida West alone has more than 125 projects both Residential and commercial .
But where there is money , there are frauds also . Where there are genuine Builders , there are few who are waiting to make big cash by hook or crook .
Recent market conditions in Real estate market has pushed many builders into trap that is taking tolls of investors and end use customers . Greed has taken over the noble cause of housing and many builders have started piling up land banks in anticipation to make huge profits but the missed their basics and stretched their financials in tight market and are now trapped .
From last few months , can of worms has opened and big names like Brys and Jaipuria group has faltered . Rahul Gaur , CMD Brys group has been behind bars for chatting and selling same piece of land to multiple buyers is in dreep financial mess. All projects are scrapped or liquidated and Brys group has shut down operations .
Jaipuria group CMD has been arrested recently for cheating financial institutions and banks for taking credit facility by mortgaging already sold flats.
Similarly many other builders are about to join this list .
Pragati group having project by the name of Devika Gold Homz is also on the brinks of financial crisis as per the talks going around in broker’s circle .
Devika group has been soughting funds from many financial institutions and had been rejected for the same .
Funds collected from existing projects have been reported to been diverted for buying huge land bank in Dwarka L zone and it is turning to a dead investment as of now.
Further , banks have stopped sanctioning home loan for Devika Gold project on many complaints and financial issues .
Construction is not as per standard and also delayed .
Many cases of default by home loan clients in this project has also brought up attention towards the concept of Profile funding as in the case of Jaipuria group .
Unsold flats in the project are shown to be booked by fictitious customers and home loan is taken in the name of these fake profiles. Financial institutions/banks staff are supportive in this act of fraud to complete sales target .
Builder pays for the installments and interest of these bogus profiles and keep receiving funds from bank .
But the tight market situations and funds diverted else where , these payments to banks may have stopped and hence creating a big pool of defaulters .
With more worsened market conditions , it is almost impossible to clear the outstanding and hence a vicious cycle of default has started.
Also an RTI has revealed that there is a huge default on installments to authority by Devika Gold Homz . Earlier also in the month of May 2015 , a notice of cancellation of plot has been served to Devika group and the same was managed by them some how . Now again the same condition has arisen and it seems tough for builder to sail through this time if authority takes a stand .
On the client’s end , Devika is very prompt and strict towards installments and if any interest gets due for delay , they act like collection agency collecting defaults .
Also many customers have complained about irrelevant charges being levied upon and very unprofessional behavior of Devika staff .
Devika Skypers , a project in Raj Nagar extension has already been touted as Sub standard living experience by the flat owners with even some quoting as ghetto of RNE . Phase 2 of the project is largely unsold and hence builder has not started any construction for the same .
Going by all the points and talks going around , another builder is brewing
with troubles and any day news of its fall may come .
The big question remains , What will happen to customers of this builder ?