While I was browsing www.bestechgroup.com for details of Bestech Parkview Altura, I landed on the company’s webpage which listed down the following about the project –
- License No. 22 of 2012 dated 27-03-2012 issued by the authorities
- Building plans approved 21-03-2016
- BR 3 and Environmental clearance received
And right below was the following statement – any interested party can visit the firms’ office at Gurgaon to go through the approvals of the project and all relevant documents. Throughout my career in real estate I have always thought to myself why do real estate firms treat the project files as sacred or so to say even the buyers think these documents are not so easy to procure. However the truth is that every buyer has the right to satisfy his curiosity, doubts and apprehensions by going through project documents. In fact all the lenders to the company (on the specific project) or to the buyers (mortgage purposes) go through the approvals, project title and other relevant documents before funding the property*. So most of the times real estate buyers end up relying on the brand recall of the developer, their marketing pitch or the fact that leading banks are providing funds against the property. Very peculiar to India many real estate decisions are driven by emotions and inspired by those in know how i.e. friends and relatives. Bestech Group which has launched its first residential project at Gurgaon after a gap of 3 years goes a step ahead by inviting the interested buyers to their office, scan the papers, seek answers all this over a cup of tea or coffee.
In my discussions with the management of Bestech I was informed that Parkview Altura was “soft-launched” in the month of April 2016 only after all building plan approvals were in place. For those who have tracked the Gurgaon real estate market, Bestech’s home ground, they would know that a project before it is launched has to conform to the following –
- Land acquisition or development rights
- Letter of Intent from Director Town and Country Planning
- Approvals process including environmental clearance
- Building plan approvals
The above is for illustration purpose only as the long list of approvals includes height clearance, tree cutting, storm water & drain department, structural plan amongst others. Every Indian market has its own peculiarity and these approvals aren’t uniform and one has to approach various departments to seek permissions. Thereby the process can take a long time as well.
The Delhi NCR property developers especially those at Gurgaon for years followed aggressive sales strategy of “pre-launch”, “soft launch” and then formal launch. Several buyers and investors used to be lured by much lower prices at “pre-launch” and “soft launch” phases, but there was a catch. In many cases these two phases preceded the building plan approvals, the formal go ahead from authorities, which meant the buyers were at significant risk of project not being approved in time and in worst cases “never”. There are other scary stories in this market where projects were pre-launched by certain real estate developers at the second stage itself i.e. on receiving Letter of Intent. In extreme cases some projects were pre-launched anytime between stage 1 and 2 as listed above**. For those who are new to this process followed at Gurgaon a buyer/ investor would not be allotted any unit number or be awarded a formal sale letter at these stages, since building plan approvals aren’t in place. Despite the Haryana Government putting an end to the risky practices of “pre launches” before project approvals the menace didn’t really stop.
Bestech Group has stayed away from such practices which mar a healthy business relationship and puts buyers at risk. Like one can easily see in case of Park View Altura, the developer “soft launched” the project only after receiving all approvals. Work has recently begun at the site and in any case interested parties can request Bestech for review of approval documents. The much discussed Real Estate Regulation and Development Act, 2016 (RERA Act) once implemented makes it mandatory for real estate developers to possess all approvals before going ahead with project marketing, sales and construction. The RERA Act will require real estate developers to upload all the information on a project i.e. its land, insurances, approvals and construction updates on the website of the relevant RERA authority. Even before RERA was proposed Bestech has been following authorities’ guidelines to the hilt including the norm that asks developer to deposit 30% of the customers’ receipt in Internal Development Works (IDW) account and the same is periodically audited by DTCP. Their strict adherence to policies and guidelines is one of the reasons that in any conversation with the Bestech team we always find them confident about being a dominant player even once the regulations get stronger.
If one were to scan the Bestech Group’s web portal they would not only see project details but also construction updates, approval status of new projects and corporate information. In preparation to complete compliance with RERA Act Bestech Group has institutionalised best practice of sharing important documents with interested parties. The Governance at the firm is also one of the reasons for it to be backed by leading domestic and foreign institutional investors.
*there is no assurance that the due diligence performed by the institutions can be entirely relied upon. There have been instances that even financiers have erred in vetting documents
** based on discussions with real estate developers, intermediaries and buyers in Gurgaon real estate market