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For those who are not aware, it was a harrowing time for all customers of Apple A Day Properties last May 2011.
The majority were NRIs, who were seeking the help of Chief Minister Oommen Chandy after they fell prey to one of the biggest real estate frauds in the state. Apple-A-Day Properties' a builder based in Kochi, reportedly collected over Rs. 100 crore from buyers which included 125 Indian expatriates in the Middle East.
The company offered villas and apartments in the heart of the city of Kochi at attractive rates. It used the goodwill of a couple of its completed projects to rope in buyers, but after it missed many deadlines for its 11 new projects, customers cried foul. Some NRI's who invested over Rs. 45 lakh each in the project did not see completion even after 5 years of the project. The firm's Director and Managing Director went underground after the company allegedly went bust. Source: NDTV
So the real question is. How does an NRI or any investor avoid such traps and scams. Please refer to our checklist below for common mistakes.
1. Nominate or appoint a real estate consultant - Most NRIs in question were not able to track the progress of the fraudulent project. This is where services of a respected real estate consultant comes into picture. They can keep you updated about the progress of the project and even deter you from buying one if there are hidden dangers.
2. Financial Leverage - Most real estate projects which run into trouble do so because of financial leverage. Real estate being a sector with high working capital requirements, most projects are financed by banks. A project approved by a reputed bank like SBI or HDFC etc. itself shows that the bankers have done due diligence with respect to payback period etc. This actually makes it a lot safer for the investor to know that the project would be completed on time.
3. Credibility of the Builder - Credibility of the builder can be ascertained either via quality ratings like ISO or ratings by CRISIL. If none of these are available, then one of the ways is to ensure everything related to the project documentation is in place before you make the payments. A real estate consultant can help here with going through the papers. You could also refer to the past history of the builder.
4. Timeliness - Variations of around 6 months etc in completion. are common in today's real estate scenario due to lack of funds availability. Anything beyond this should raise a doubt or two in your mind about possible date of hand over. Some reputed builders in Kerala like Skyline and SFS maintain a great track of timely completion.
5. Safety over Price - If Safety is more important than price, one could look at a project which is ready for hand over within 3 to 6 months. This means than you would have to pay about 15 to 20% more than launch price , however you can be safely assured of the completion of your project.
Nandanam Consultants can help you overcome a lot of these difficulties with prudent advice and regular communications via newsletters and emails so that you can avoid such traps in the real estate market.
The majority were NRIs, who were seeking the help of Chief Minister Oommen Chandy after they fell prey to one of the biggest real estate frauds in the state. Apple-A-Day Properties' a builder based in Kochi, reportedly collected over Rs. 100 crore from buyers which included 125 Indian expatriates in the Middle East.
The company offered villas and apartments in the heart of the city of Kochi at attractive rates. It used the goodwill of a couple of its completed projects to rope in buyers, but after it missed many deadlines for its 11 new projects, customers cried foul. Some NRI's who invested over Rs. 45 lakh each in the project did not see completion even after 5 years of the project. The firm's Director and Managing Director went underground after the company allegedly went bust. Source: NDTV
So the real question is. How does an NRI or any investor avoid such traps and scams. Please refer to our checklist below for common mistakes.
1. Nominate or appoint a real estate consultant - Most NRIs in question were not able to track the progress of the fraudulent project. This is where services of a respected real estate consultant comes into picture. They can keep you updated about the progress of the project and even deter you from buying one if there are hidden dangers.
2. Financial Leverage - Most real estate projects which run into trouble do so because of financial leverage. Real estate being a sector with high working capital requirements, most projects are financed by banks. A project approved by a reputed bank like SBI or HDFC etc. itself shows that the bankers have done due diligence with respect to payback period etc. This actually makes it a lot safer for the investor to know that the project would be completed on time.
3. Credibility of the Builder - Credibility of the builder can be ascertained either via quality ratings like ISO or ratings by CRISIL. If none of these are available, then one of the ways is to ensure everything related to the project documentation is in place before you make the payments. A real estate consultant can help here with going through the papers. You could also refer to the past history of the builder.
4. Timeliness - Variations of around 6 months etc in completion. are common in today's real estate scenario due to lack of funds availability. Anything beyond this should raise a doubt or two in your mind about possible date of hand over. Some reputed builders in Kerala like Skyline and SFS maintain a great track of timely completion.
5. Safety over Price - If Safety is more important than price, one could look at a project which is ready for hand over within 3 to 6 months. This means than you would have to pay about 15 to 20% more than launch price , however you can be safely assured of the completion of your project.
Nandanam Consultants can help you overcome a lot of these difficulties with prudent advice and regular communications via newsletters and emails so that you can avoid such traps in the real estate market.
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