Brigade Gateway Project Delay

Dear Mr. Viswa Prathap Desu,

I would like to respond to your mail on behalf of Brigade Gateway Owners with whom I share common pain and sufferings.

I am a small person who booked the Brigade Metropolis apartment when there was only dust at the site, layout plans were still on the drawing table, there was a single security guard on the site managing vacant land and there was no visibility on ROI of this apartment. My dad was shocked to know that I had booked an apartment of 45 Lakhs, an apartment whose layout plan was still on the drawing board.

I booked with Brigade because I heard it's one of the "top builder" in Bangalore and after 3 years I have understood the bitter facts of "top builder"? In year 2005, I recommended Metropolis apartment to my friend in US who had never visited Bangalore forget about visiting the site. He booked an apartment within a week just because he had confidence on me and you will be surprised to know that my friend has still not visited the site and Bangalore. Now I feel guilty that I recommended Metropolis to a close friend without researching on past projects of Brigade.

Most of my office colleagues have been laid off and every Friday afternoon my wife calls in office to check if the worst fear came true. When my friends gets pink slip, I starts thinking of backup plan. If I had the apartment at least I would have been getting the rent which would had covered my EMI or in the worst case I had a shelter. Now I've been forced to take 2 weeks vacation and I feel handicapped. If I had possession of the apartment then I would had gone to India and had used this time to get registration, interiors and electrical equipment installed. But now I'll waste those precious vacation venting my anger on Brigade and ranting it in different forums and blogs.

I find close resemblance of your irresponsible statement "Project delays are unfortunately part of the construction and real estate industry" to Maharashtra Home Minister R R Patil statement "Aisa nahi hai. Itne bade shahar mein chhota hadsa ho jata hai. To total failure nahi hai. (It is not like that. In big cities like this, small incidents do happen. It's is not a total failure)".

RR Patil was a politician but you are from the corporate world and I expected a matured response from the top executive of Brigade.

Honestly speaking, I don't mind even if the projects are delayed for an year provided you compensate us appropriately. You must read this post to find out what should be the ideal compensation for an year delay. We have been hit badly by this delay and what's your impact? Peanuts.

All those awards and certificates are good for hanging in Brigade headquarters or in marketing brochures. Prospective buyers are least interested in those certificates and you have failed to understand their thoughts. I may not be marketing pundit like you but to let you know that most Prospective buyers research on different forums, blogs and go by friends & relatives recommendations before making a huge investment. Now you may ask didn't you researched enough? I was a fool and booked this apartment in a haste and unfortunately there was not enough information available on different forums. But with explosion of digital media in last few years you may find it really tough to fool my other friends and neighbors.

What does top builder means? Is it just the number of projects which you have executed or the market value in the share market? Top builder cannot be defined just by some numerical value.
You also need to account customer service, your commitment to milestones, weightage of your words. You may say that rating agencies have taken into account all those parameters. You are right Sir. If I'm asked asked to choose a PM between Lalu, Raj, Mayawati and Mamta what choice do I have? I may choose a lesser evil.

I like your advertising message "Upgrade to Brigade". Did you ever seriously debated on a White Board why buyers should "Upgrade to Brigade"? If you talk of enclave then there are lot of builders who are offering these concept? If you talk about Quality then I find every builder on the street has some quality certification.

Now if your unique selling point was a) Quality customer service b) Closeness to customers c) Commitment to milestones d) Weightage of your words then I can assure you Sir that buyers would had differentiated class from the mass and would had Upgraded to Brigade otherwise they think it's just another marketing gimmick.

Sugar coated soothing words were fine for initial months of delay but now it has crossed the limits. There has been a delay for an year. Bubble has burst and owners are in no mood to empathize. You need to act fast and tough in the best interest of customers. I'm sorry to say that I'll not be recommending your apartments to my friends and relatives and I'm sure there might be 1000's of owners with the same opinion.

I would be glad to hear your response someday if you happen to read this post.

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3- Response from Desu to Brigade Gateway Owner

"We are pained to see your comments. I am sure one cannot judge a company based on a particular project delay. Project delays are unfortunately part of the construction and real estate industry, not that I am justifying the same, but just stating the same.

Forbes is an International magazine of repute, which you may know. They have judged us as one of the 'Best Under Billion Dollar' Cos (amongst 200 nos) and we are the only Indian real estate co. to feature in this list..We are also amongst the top ten real estate developers in India - as judged by 'Construction World' magazine.

We are endeavouring to give a good product as has been proved by our other projects in the past which have become landmarks. While we empathize with you, we would also urge you to recommend this project to your friends/relatives. No doubt, Brigade Gateway is slated to be a landmark project in Bangalore."

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2- Comments from Owners to Desu
(Frustration mail for the delay.... )
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1- Letter to Brigade Gateway Owners from Brigade
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Dear Brigade Family,
Greetings from the Brigade Group!
We are proud to share with you significant milestones, Brigade has reached now:· Only Real Estate company to be featured "200 Best under a Billion Dollar" Forbes List for Asia Pacific Region.Ranked as one of India's "Top Ten Property Developers "by the Construction World Magazine. ISO Certified for Quality, Environment, Health & Safety by Bureau Veritas.

We are pleased to show case our projects, Brigade Gateway @ Malleswaram- Rajajinagar and Brigade Courtyard @ HMT Main Road. Currently we have some limited period special offers running as part of the bookings.

Brigade Gateway: - A Lifestyle enclave spread across 40 acres with 1200+ Luxurious apartments with amenities like Brigade School,Columbia Asia Hospital, Orion Mall, Galaxy Club, North Star, Office Tower, Sheraton Bangalore - (Five Star Hotel) and a beautiful man made lake spread across 2 acres.

Brigade Courtyard:- The project is developed on a 3 ½ acre land which is part of HMT township. About 60% the property is reserved as open area. The project is designed with a refreshing concept of terrace areas being attached with almost every apartment. Just 4 apartments to a floor; 4 floor to a wing, 2 & 3 bedroom luxury apartments, paved pedestrian avenue, multi level clubhouse, water features, landscaping and children's play area.

Referring your friends and relatives can enable you to earn a special referral incentive of upto Rs.2,37,000/ - * if in Brigade Gateway and upto Rs.61,000/- * if in Brigade Courtyard on a confirmed booking.

You would agree ,this is the best time to buy , best offers coming your way....and a best choice to make, "Upgrade to Brigade". You could visit our website www, brigadegroup. com for our updated info. Please feel free to contact the undersigned for any assistance.
Thanking you and assuring you our best services.
for Brigade Enterprises Ltd.,Viswa Prathap Desu

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Read all posts related to Brigade Gateway

Delay Penalty for Apartments

"Taarikh pe Taarikh, Taarikh pe Taarikh pur "apartment" nahin mila - Mila to sirf Tarikh."
Date after Date and Date after Date but didn't got the apartment. What I got was only Date?

This was one of the famous dialogue of Sunny Deol in Damini movie. Same story gets repeated in real life - There are dates after another date with no sign of Brigade Metropolis possession date.

As per my agreement the apartment was supposed to be delivered by March 2008 but now officially the project has been delayed by an year (March 2009). Officially it's an year but technically it's two year. I booked the apartment in Pre-Launch offer and was informed by Brigade marketing executive that hopefully we will launch the apartment in next 2 months and you should get the apartment in next 2 years. Ok, it was my first apartment and I was a fool who fell into those sugary words.

Last official communication (mail & letter) from Brigade was in Sept 2007 that project has been delayed for 3 months due to shortage of cement, sand and labour. Since then there has been a silence from Brigade Executives and there is no further official clarification as why the Project has been further delayed? Now the forums and word of mouth has become source of "official" communication channel.

I must admit that though Brigade has delayed the project for an year but Brigade was "kind enough" to pay 3 Rs/sq ft as delay penalty with number of "if "and "else " clause.
What is the impact of this delay on our pocket?

• I'll continue to live in a rental property for an year. If the rent in Whitefield is 10-12 Rs/ sq ft then I loose 120-144 Rs/sq ft in a year.
• I'll continue to pay Pre-EMI and will not get tax benefits.3) In last one year Property registration cost, BESCOM/KPTCL and other payment to the different government offices may have increased which will make a bigger hole in the pocket.
• If inflation is 10% then I'll be paying almost 10% more for buying interiors and electrical appliances for the apartment.
• If you have spent 10 min. everyday for an year posting e-mails on different forums , reading blogs, writing mails to Brigade, following up on response, visiting Brigade office & Metropolis site to check the possession date, browsing through lawyers & Consumer forum sites, researching on the process of legal action for delay and compensation then you have spent close to 61 hrs or roughly 8 days of effort/year. You have lost 8 days of salary due to delay in possession date.
• Have you added cost of mental agony? My dad asked me when are you coming to India? I replied the Brigade Metropolis apartment is getting ready in Oct 2008 and I will be in India that time for registration and Interiors. At every new milestone I kept assuring him now this is the final date and there won't be any postponement and I was wrong each time.
  

The date shifted to Dec 2008 and now it's Mar 2009.

• If your office is in Whitefield and you are forced to continue living at some other place in Bangalore because the Metropolis apartment is not ready then add the cost of fuel and commute to Whitefield.
• If you had plans to get your kids admitted to some school in Whitefield in 2008 but has to temporarily get him/her admitted in some other school in your current neighborhood then add the admission cost of that school.

If you add total cost then it comes to minimum of 350 Rs/sq ft but what is Brigade paying 3 Rs/sq ft or 36 Rs/sq ft (Annually) that too comes with number of "If" and "Else" clause.

• There is a grace period of XX months before the delay penalty starts. No official date announced till now, only response is "it will be as part of the agreement".

• If you have opted for some modification in the apartment then you will not be eligible for delay penalty. It's not clear how adding an electrical point in some room can delay apartment from the owner side?

• The delay penalty will be settled once all the payments dues are paid from owners. Why this cannot be settled with other pending payments from owners?

Is shortage of Sand, Cement and labour the real cause of project delay or this has become a habbit of Brigade?

Now let's explore whether shortage of Sand, Cement and Labour are real cause of delay. It can be partial reasons for the delay may be for few days but certainly not for an year.
If there are real shortage of resources then

• Why did Brigade started Phase 2 booking?

• Why did Brigade started booking of commercial areas?

• Why did Brigade started booking of other projects (Brigade Gateway, Brigade Petunia, Brigade PalmSprings, Brigade Paramount)?

• Why did Brigade started booking for "K" block when they didn't had even approval due to high tension wire? Finally poor owners have been requested to shift to other blocks.

It's greed, greed and greed.

If there are shortage of resources then complete projects which you have committed to the customers. The fact is that Brigade has spread their wings in different directions ,have taken payments from the owners and have delayed the projects. If you do some math Brigade is hardly getting a hit because of delay in the projects.

After taking feedback from different forums of Brigade projects it was found that even other Brigade projects were delayed for an year. They share the same pain and frustration which we are going through.
One should also take feedback from different forums and share the experiences.

Brigade Gateway - Feedback from Brigade Gateway Google group
Brigade Millenium - Feedback from Brigade Millenium Yahoo group
Brigade Gardenia - Feedback from Brigade Gardenia Yahoo group

I also request owners from different projects to share their apartment milestones. Here are the important milestones of Brigade Metropolis.

First person to book the Brigade Metropolis apartment - July 2004
Allocation of apartment starts - June 2005
Brigade Metropolis project launch - January 2006
Request for signing the agreement - Started in January 2006 but very few people got request but majority of the people got started getting requests after April 2006.
Tentative Possession Date - Few blocks in Jan 2009 and few in Mar 2009 (note - this is still tentative)

I can see lot of cocked eyebrows asking whether Brigade is building Taj Mahal in 4 years? Brigade has failed to meet each and every milestones from apartment allocation to signing the agreement. Umm, I may be wrong there was one milestone which they met every time. I've received bi-monthly requests for payments on time every time.

Delay has now become a habit of Brigade. When I move around in the city, I see the advertisement on Billboards "Upgrade to Brigade". Now owners have started questioning why should we "Upgrade to Brigade"? Is it because you delay the project for an year and then you pay 3 Rs/sq ft as compensation that too with number of clauses.

It's high time that owners of delayed projects should come forward , unite themselves and fight for their rights. Builders take people for the ride because we allow them to take us for the ride.

Read below news on compensation for late deliveries.

Source - TOI
Builders should compensate for late delivery of flats

Many property aspires buy an under-construction flat for the convenience of slab-wise payment and lower rates. But is it such a good idea? A Mumbai consumer says her flat’s possession has already been delayed by six months. Like her, scores go through the harrowing wait for possession when housing projects-even those of reputed builders-get delayed unexpectedly. To add to their woes, consumers complain that builders rarely offer compensation, leave alone actually doling it out.

Kirti Bhatt of Ahmedabad’s Consumer Education & Research Centre, says: "In case of delay, the builder is liable to refund the amount paid with interest (for the period of delay) as there has been a breach of contract." Bhatt says Gujarat Ownership Flats’ Act, 1973, for instance, mandates builders to mention the possession date in the agreement. "Default would attract penalty under both Consumer Protection Act and the Flat Act," says Bhatt. Some states have such acts in place to protect the common man, as "housing is a state subject". Maharashtra has a similar regulation under Maharastra Ownership Flats’ Act (MOFA), 1963, says Mumbai consumer activist Jehangir Gai.

Now, consider the financial implications of delayed possession. A Mumbai consumer who was promised his flat in June 2007 says, "My agreement document clearly says that in case I intend to return the flat over delayed possession, the builder will refund the original amount with 9% interest." However, he calls this an impractical solution. "Prices have more than doubled since we booked the flat, so giving it up for just 9% interest does not make sense." Besides, he says, the interest rate on borrowed money has seen a steep rise. During the unfortunate wait, buyers lose out in other ways too. One, if they don’t own another property, they have to stay put in a rented place.

Two, if they have secured a home loan for the flat, its repayment schedule is treated as pre-EMI (equated monthly installment) till the buyer gets the property’s possession. A buyer is entitled to tax rebate under sections 24 (b) and 80 (c) of the Income-Tax Act 1961, after securing possession of the property and thus commencement of EMI. Till then, he gets no tax relief on the pre-EMI.

Vinod Sampat, advocate and president at Cooperative Societies’ Residents and Users Association, however, draws attention to a ruling that may lend hope to consumers. In May 2007, National Consumer Disputes Redressal Commission upheld a Goa State Redressal Commission order directing a real estate developer to give alternate premises of similar dimensions and in the same locality to the complainant (buyer). This, along with 18% interest per annum, on Rs 1,84,000 paid by him, from August 1991-the required possession date. Alternatively, the builder was asked to pay three times the purchase amount to the buyer-Rs 5,52,000-within 30 days of the order. Sampat adds, "Suppose I had booked a flat for Rs 20 lakh and now it’s worth Rs 50 lakh, I’m eligible for the original flat or alternatively a similar flat in the neighboring area, irrespective of price... When anyone approaches the court (for deficiency in service), its ruling is binding (on the builder)." Sampat also advises filing of a criminal case against the builder for offenses of nuisance and criminal breach of trust.

The reason builders are lackadaisical about compensation, say consumer groups, is because there is no real estate regulator yet. The only recourse available to consumers then, it appears, is approaching the courts. Bejon Misra of Delhi’s Consumer Voice, however, says: "A consumer doesn’t want to get into a legal tangle and just wants his flat in hand. Builders take advantage of this helplessness. " Misra adds, "There is a great need for government regulations for builders in terms of both quality and good practices... Due to the strong influence of property developers within policy-making bodies, a regulator (for the sector) is not coming into force." Mofatraj Munot, former president at Maharashtra Chamber of Housing Industry, however, assures: "The Centre is trying to put in place a regulator. It is in the offing."

Time and again, consumer organizations have warned against purchasing an under-construction property. This advice is all the more pertinent today because delayed housing projects are an unfortunate reality.

Vinod Sampat, president of Cooperative Societies’ Residents, Users and Welfare Association, seconds that housing projects are going slow at the moment, and says, “In this situation, the consumer is literally helpless, especially if a certain portion is paid in cash. But for the white component at least, he can file for deficiency in service on the builder’s part in a consumer court.’’

For now, a consumer court is the only redressal recourse in real estate disputes over delayed possession, quality of construction, and such others. That’s because, despite several representations from consumer groups, the critical sector continues to languish without a single-point regulator. (Things are a lot different in the developed world. Builders in the UK, for instance, even offer a 10-year warranty and insurance cover on property, says consumer activist Arvind Shenoy.)

Since housing is a state subject, each frames its own policies. As an official in the ministry of urban affairs says, “It is (to be) dealt with by the concerned state governments.’’

Bejon Misra of Delhi’s Consumer Voice, however, insists that there is an urgent need at the Central government level to bring in a strong mechanism for the sector. “This has not happened despite promises from the government.’’

A step in this direction was made by the Maharashtra government early this year with the proposed Maharashtra Housing Sector Regulatory Commission Act 2008, which stipulates the formation of a dispute redressal committee. However, it is yet to be passed.

Currently, Maharashtra has the Maharashtra Ownership Flats Act, 1963. The Act mandates a builder to provide 9% interest on the total amount paid for the flat in case of delay, says consumer activist Jehangir Gai. Then, Gujarat has its Gujarat Ownership Flats Act, 1973. Not all states, though, have such an Act in place. The National Capital Region (metropolis areas around New Delhi) does not have one, says D L Desai of Builders’ Association of India.

At an individual level, most property buyers remain reluctant to move consumer court over a dispute. Like, this Mumbai resident who has been waiting for a year-and-ahalf for his flat — without being offered any compensation. As reported earlier in these columns, a delayed housing project is a financial strain in other ways too. The Mumbai consumer, for instance, continues to shell out the EMI (equated monthly instalment) on his home loan even as he pays rent on his temporary accomodation. And, since he is still to secure the flat’s possession, he is not entitled to income-tax rebate under Section 24 (ii) of the Income-Tax Act, 1961. Certified financial planner D Sundararajan, though, says after securing possession, the interest portion on the loan paid before possession will be adjusted over the next five years, subject to a limit of Rs 1.5 lakh. If a property is in a joint name, both holders are entitled to the amount, which works out to Rs 3 lakh.