Save Home Buyers from one of the Biggest Financial Disaster
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An appeal to ensure buying a home is a pleasant experience in future for all the families, hard working persons & future generations unlike today. An appeal to save 35000 families from becoming loan defaulter & lose their hard earned money, just because company fail to delivers with no checks & balances in place, seemingly with an intention to cheat. Request you to sign the same so that rule of the law prevails & in future corporates behaves more responsibly.
Challenges in front of aggrieved home buyers of Jaypee in Noida & G Noida:
Jaypee Associates Ltd, with hardly any fear of Indian judiciary due to long judicial process, they are neither giving possession of flat after collecting around 90% of value nor refunding the money as per the agreement.
1. Flat buyers are facing the major financial agony due to delay in delivery on two fronts: a. Most of families have taken bank loan and they are being forced to pay EMI & rent both (or fund EMI by putting this flat on rent) b. Pay EMI (with heavy interest amount on each month) and also pay income taxes, as income tax rebate on home loan is not available till possession.
2. Due to any circumstances, if a flat byer cannot pay EMI, he / she has two options: a. Sell the flat and repay the loan. Even this option is not available. No transactions are happening in the market. Reason: uncertainty in delivery, bad reputation of builder. Value of asset has actually diminished. b. Seek refund from the company. Legal binding as it is part of agreement, wherein company is on default. This is also not an option as company is not responding, even if you wish to forget the interest or mental agony.
3. As per economic theory, the value of the investment is diminishing every year (say 10%) and hence every family is losing 6 to 10 lacs every year, It is like 3000 Cr is being lost by 35000 families every year delay on this project investment of 30K Cr.
Hence there is an urgent need for the Supreme court of India to
1. provide relief to these buyers due to non-performance of the company & various authorities (like NOIDA Authority, Auditors, Banks, which kept on approving the projects for home loans) and
2. Establish support from all stake holders at reasonable terms to avoid the erosion of value.
Hereby, attempting in creating the first draft to map all stake holders and possible enablement / support from them to make it win-win.
Stake Holder Mapping
Buyers / Customers (Status: RED)
• Life time savings of the family are at risk
• Losing on Income Tax rebate on home loan, while forced to pay EMI or Unable to pay EMI
• Losing 10% of its investment value every year of delay (6 to 10 lacs per year)
Government / Tax Collectors (Status: RED)
• Noida Authority losing registration collection (Est 1500 Cr @ 5%)
• Losing or delay in service tax collection (Est 900 Cr @ 3%), every one year delay is a further loss of 10% of tax revenue
Judiciary (Status: RED)
• Saves precious time of Judiciary as Justice is delivered on similar case
• All cases can be clubbed at one place, as anyway it will reach to Supreme Court. It will also save precious money of builder & buyer, who are already under stress
Environment (Status: RED)
• Concrete jungle till it is completed. Precious natural / environmental resources will be lying idle, will stuck in legal battle
Employee / Employment (Status: RED)
• Project employees loses their jobs & earnings. Employment is already in bad shape in construction sector.
• Future employees during habitat also loses the employment opportunity
Dealers & Market (Status: RED)
• Complete loss of business & earnings, Zero transactions in the market
Government also loses revenue
Company / Shareholder (Status: Yellow)
• New Investor / management may take over
• Some loss to share holder (Short term or long term)
Banks / Debtors (Status: Green)
• Est 30 Thousand Crore debt on Company
• Have first right on assets of the company. Will Restructure & recover
• Will forced buyers to pay loan or sell their assets at distress rate. (Est 15 thousand Cr)
Possible Enablement from Various Stake Holders:
• Approves the framework & decides with reasonability for all stake holders
• Club all cases at one place & save precious time & cost of all stakeholders
• Establish a quarterly monitoring team (Say under Shri Lodha ji)
• Decides on Compensation due to delay at project level, once all towers delivered in Wish Town or after 2 years
Company / Shareholder
• Introduce inclusive management, publish monthly progress report & follow order in true spirit
• All flats needs to be delivered first and all other amenities like clubs to be delivered later or after 2 years
Buyers / Customers
• Prioritize & focus on flat possession
• Provide Support in working capital (project wise or Tower basis), through interest free loan (Ex 1 Lac per flat) in a escrow account
• Relief to company by foregoing part of compensation due to delay, as per supreme court order
Banks / Debtors
• Focus on flat possession & then project completion
• Restructure the company debt & provide short term working capital
• Relief to home buyers (Waive 1 year interest & no EMI till possession)
• Setup monitoring team, review monthly achievements
Government / Tax Collectors
• Take quick decision & provide policy decisions in raising the fund
• Allow company to use funds from Yamuna Expressway and bail them out.
• Reinvest 50% of its revenue as interest fee loan (Registration revenue & Service Tax)
Thanks & Regards
(Very tired, worry some Flat buyers of Jaypee Wish Town)
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