There are no formal protections against buying property in India from unscrupulous builders, organisers of property exhibitions say.
Buyers beware, say property show organisers
DUBAI // Organisers of property exhibitions say it is up to buyers to scrutinise the track records of builders.
Every year, thousands of expatriate Indians visit property shows where dozens of developers advertise new buildings ranging from middle-income apartments to luxury penthouses and villas.
Buyers must exercise caution when investing large sums of money back home, where there is neither a law to protect investors nor a specific regulatory authority to blacklist builders, organisers say.
Sunil Jaiswal, the chief executive of Sumansa Exhibitions, which hosts the popular annual India Property Show, said while the company aimed to invite only reputable developers, it was not bound to conduct background checks on projects.
"In terms of due diligence it's the responsibility of each and every investor to do their homework properly," Mr Jaiswal said.
"A few things the buyers can keep in mind before investing could be the developer's track record, banks involved, inclusion of delay penalty clauses and the finer print in contracts."
Seminars by lawyers from India and talks on the risks of investment are held alongside the property show.
Dubai's next Indian Property Show will take place over three days starting on June 16 at the World Trade Centre, and feature more than 250 projects from 50 developers.
Non-resident Indians rely on such exhibitions as it allows them to get first-hand information about coming projects at home.
But there are no transparent systems to address buyers' grievances.
India's urban development ministry drafted a bill in 2007 to check malpractices in the property sector and to regulate, control and promote the planned construction, sale and transfer of property.
The bill has yet to be finalised due to changes being incorporated into the draft.
Other institutions such as the Credit Rating Information Services of India rate developers, and the Confederation of Real Estate Developers' Associations of India (Credai) advises investors to beware of "marketing gimmicks".
"People shouldn't just jump at a project simply by looking at brochures," said Najeeb Zackeria, a president of Credai. "They should look at the builder's profile, bank approvals and their background before investing.
"They should not be carried away by advertisements."