Hiranandani Palace Gardens. Is it worth the risk?
The entry of big time property developers like Hiranandani, Purva into Chennai Real estate market was an exicting news for me. When i first met folks of Hiranandani at a property fair in 2005 at chennai, I was told that they are going to start a project within next 6 months. My wait for nearly 5 months for their project to kick start went in vain. So i moved over to some other property. But i consider my self lucky for not investing in Hiranandani properties.
HIRCO started with a bang in chennai with bigs advertisements in hindu for their new project Hiranandani Palace Gardens.For starters HIRCO is the UK listed company and is not the same Hiranandani in mumbai but its group company. This is Hirco’s first investments in india and they have started their indian story with a Palace Gardens in Chennai.
HIRCO claims that Palace gardens is spread over 500 acres with 250 acres dedicated to residential development, rest being amenities and SEZ. The recent goverment restrictions on SEZ has stopped HIRCO’s sez plans here in Chennai. But the black cloud sorrounding Palace Gardens now is that the major portion of the LAND acquired for this project is in dispute with none other than Government of TamilNadu.
PLEASE CLICK HERE TO READ HINDU ABOUT THIS
I got to know that the following 2 are the main areas under dispute
1. Former Triveni Academy - Economics Offences Wing has interfered wrt the depositors money.
2. Areas surrounding the property, bought from open market at the market price by the developer – Nisssan car factory has been promised this area by the state govt. Some of the areas are catchment areas as described in the DCR book and so not developable.
Coming back to the project.Palace Gardens is located near sriperumbadur and the proposed is mix of G+3 and G+15 complexes.While i hear that they have received approvals for G+3 and awaiting approvals for G+15. Its really a surprise that a company of such a reputation has started booking flats prior to approval. As of now i haven’t seen any cmda approval doc yet and i have asked for the same.
The housing complex is being developed purely on the growth of industries in and near Sriperumbadur. While i am sure that any one considering to buy a flat here would do so as an investment rather than a place to live. I visited the site some time back and lot needs to be done with respect to roads and other essential services. Remember Palace gardens is not exactly on the chennai – bangalore higway.
As far as the price goes, i feel Rs 2400 (Early bird price with Rs 10 up for every floor increase)is way above considering that it takes almost 30 months to complete the project.Not sure if you are aware that maintenance is Rs 2.50 / sq ft. So one has to shell out an average Rs.2000/ month for maintenance (for 1 bhk flat).
Considering the fact that propective tenants come from manufacturing industry, where an average per month
income is Rs.25000, i feel it would not be possible to rent it out above Rs 7000 for an 1 BHK house. It would be a difficult sell for a 2 BHK which comes to Rs 46 Lakhs. I feel people would think twice to rent an apartment with a monthly maintenance of Rs.4000 (2 bhk apartment 1618 sq ft * Rs 2.50 per sq ft), leave alone the rent.
While i am sceptical at this point, not sure how things would change after 2 years. It should attract investors when the SEZ plans take shape within the complex. This is my simple analysis based on the facts best known to me and
While tamil nadu is actively promoting the Mahindra-Renualt-Nissan car project, there is this proposed housing complex which got floated without CMDA / DTCP Approvals for entire project. It again reminds us to be guarded when investing in chennai real estates. Remember Sahara city homes in chennai, which was proposed in 2005 and has not yet started.
Happy Investing
If you like this article, Please comment.
http://www.rediff.com//money/2009/jan/05hiranandanis-problems-at-aim-mount.htm
This means… Hirco sucks and you guys are doomed… good luck if you get it in next 5 years. HIRCO can go belly up also…. they need cash. You guys can give all your salary every month to them. Philip…. Hirco cannot change the way Chennai lives…
The same fraud done at Powai cannot be done in all the places. Thief will be caught one day.
http://www.dnaindia.com/report.asp?newsid=1211582
Let’s not be so cynical. Balcony or no balcony ,it was there for all to see at the start onlyin layout plan.Am convinced looking at the kind of work going on at site.
Am not critical of LongLeat guys to try to have balcony ,but let’s not be so pessimistic about everything around.
Guys I went to the site yesterday and have seen good progress on the G+3 constructions. Understand the sensitivity of the 1BHK guys but please do not get carried away by some comments that are posted here and use your judgement. After all the decision for making the investment by each one of us is after studying the layout in the beginning. Thanks
Great! Have they reduced the prices yet?
Aaron….
Are you an investor or are you a cinic??
What do you mean by “GREAT??”
If you are an investor you would not want the price to come down!!
I suppose you are one of the guys who lamented and debated for a while and now want the price to come down so that you can buy ??!!
You are such a sad soul….
Aron,
Builders are negotiating for sure if you are really planning to buy. they are cash starved now and need buyers..
its turning into buyers market also if you sign the contract make sure you have the terms favourable for you and not builders..
good luck.
senthil.
Thanks Senthil ! For the sane answer. If you too are an investor then hope folks like you are my neighbors. I was just saying “Great that Bala could visit the site”. Some of us are not able to do that. I was actually one of the first investors in HIRCO and I don’t care if the prices come down. I think the place and the concept are great.. a few hundred rupees per sq. ft in the short term will not make much of a difference..in the long-term the place has a bright future. Just wanted to see if these guys will actually reduce the price.
Kishore,
please just go and check the spelling of “Cinic” and come back and comment on others !! B.t.w if you are an investor even if you do not get the short term return on your investment you did one good think by investing…you’ll make sure your next generation will have a better ability to spell as I hear HIRCO school is probably going to be based on ICSE syllabus. That is worth more than any monetary returns..trust me.
aron, the builders will definitely reduce price you don’t have to ask thats the reality.. its good that project is coming good..lot many projects are getting delayed because of greedy developers and fewer buyers… people going to stay and enjoy the atmosphere don’t have to worry about the price drop..
Any idea what is the approx. reduction per sq. ft. at HIRCO? Just curious. I think last I heard they were quoting 3400 per sq. ft.
I went to meet couple of builders building in K.K Nagar area still the price hovers around 6500 sq ft and 3bhk flat works around 85 laks .Builders in chennai are still not reducing their price. Please be cautious as still the price needs to reduce before making a decision.
Guys ,I went to have a look on the progress at the site.
Although for the building (Claredon 1) ,where I bought a flat , has not started but the speed & magnitude of work seems awesome & impressive
Hope HIRCO would further expedite the work with raw material prices at bottom & they can make more money.
Did anyone on this forum sign the agreements? After a lot of pressure from me, they amended my agreement last week and asked me to visit their office to sign the same. As per the sales rep, the handover date was mentioned as Sep-2009 and the penalty was 1%(one-time penalty) of the total price of the apartment with a buffer period of 6 months for the builder. So as long as Hirco provides the apt by Mar-2010 they need not pay penalty. I thought hard about this joke of an agreement, and conveyed my intention to cancel my booking yesterday. I was immediately sent a cancel deed, which I was asked to sign on a Rs.100 stamp paper and courier the same along with all the original allotment letters, receipts etc. Again the cancel deed is one sided and it states that I am completely ok with Hirco selling the apartment to another customer. There was absolutely no mention about the refund of the amount that I paid. The sales rep told me that I will get my refund once Hirco resells the apartment. I inturn asked for either interest on the amount I’ve paid or the profits that Hirco will get when the resell, for which she flatly refused.
Please share your thoughts and your experiences. I think it is extremely important that agreements are fair and two-sided. Its my opinion that there should be a penalty amount for every month after the builder misses the deadline.
All these builder agreements are onesided thats why i am asking everyone to give a eyeball on what they sign.
in this market hirco might take months to resell your apartment or even if they have buyers they might not sell yours as they have to payback to you.. instead they will sell other properties first .. and yours might be last to get sold.
also the agreement is unfair in that you might not know if and when they sell so it will be tough to get your money from them. check with a lawyer or consumer redressal forum for guidence so that you can get it faster. or if you have any buyer take it with you make it sign and get your money..
builders as i have said is all interested in selling and getting money from you . no customer support or ethics to deal with.
I had tough time with a builder even after handover.
take care move with caution. let this case be a eyeopener to others in signing any agreement with the builder
Please check the messages from another forum, regarding the sale agreement. Please share your experiences regarding the sale agreement. I am planning to consult a lawyer regarding the same and initiate a consumer complaint regarding this. Its been about 20 months since I booked my apartment and still I am struggling to get a fair sale agreement. These guys have been repeately lying regarding the sale agreement for the last 6 months or so. I’ve reached the brink and I am sure I can get my refund through the consumer courts.
http://finance.groups.yahoo.com/group/Hircopalacegardens/?v=1&t=search&ch=web&pub=groups&sec=group&slk=1
http://economictimes.indiatimes.com/News/Economy/Infrastructure/Hirco_scraps_deal_with_Maytas_Infrastructure/rssarticleshow/3990633.cms
Today I received a call from Hirco customer service asking me to send the cancellation deed along with all the original allotment letter, receipts etc in order to process the refund, provided my apartment gets sold to another customer. I was also told that as per the provisional agreement signed earlier, if Hirco does not receive payment after 15 days from the demand letter date they are free to sell the flat to another customer. I was also informed that I will be charged a transfer fee of 1% of the apartment cost at today’s price and the remaining will be refunded. I think this is a load of crap. I am planning to file a complaint in consumer court. I want everyone on this forum to pay attention to the sale agreement issue. These guys are bullies. I have been trying hard for the past 7 months to get the sale agreement, but they were giving excuses all the time and now they are talking rules that don’t exist. I’ve asked them to cancel the apartment on numerous occassions due to lack of sale agreement and they have sent many emails stating that I need not pay anything further till agreement is signed. Till a month back they were saying that according to their policy they have a 2 year lockin period to cancel the booking. Now apparently they have introduced some new policies which I have stated above. They come up with new policies according to the situation. I booked the apartment in April 2007 and its been a very tough ordeal so far. I have all the facts in favour of me and I am willing to take the legal route to get my refund.
Srini,
Thats what I have been telling in many of my comments.I have read messages in Yahoo group looks like many of your group mates are still day dreaming about getting someyhing like in ‘Powai’. Powai is totally different case. I don’t how very well educated people fall for this kind crap… I can see only one reason greed.
Read the news links below,
http://timesofindia.indiatimes.com/Mumbai/Hiranandani_faces__Rs_2000cr_fine/articleshow/4072968.cms
Do something like the investors below; get the media attention.
http://www.moneycontrol.com/india/news/business/dlfs-chennai-garden-city-projectrocky-grounds/384625
I have booked a flat in warwick II in HPG and paid advance.Till now no news wheather the construction started or when it will finish.Anyone any idea?
I had booked an apartment with Hiranandani Palace gardens Chartwell 1011 and have asked for my money to be refunded.
For the past 1 year I have had a terrible time dealing with this company.
Firstly, the representative kept promising to come to my residence and pick up the initial deposit amount. After about 4 phone calls, he picked it up.
Secondly, as I had the entire amount available, I asked for a payment schedule so that I could invest the money accordingly. Althogh I was given a so called schedule, it was not adhered to.
I was asked to pay the first installment and again we went through the drama of several reminders before the representative came to pick up the cheque.
Then I received the pre-allotment letter which asked for penal interest of Rs 18,000 for late payment!!!!
Several phone calls ans emails later, I received a mail saying that Hirco would waive the penal interest and that I should make payments onn time, forgetting that I had to persistantly call them to collect the cheque!!!!!
two months after the pre allotment letter was signed and handed over to their local manager, I received a mail from Hirco asking me to sign the pre allotment papers and hand it over to their local office in Chennai.
I had to again call their Chennai office and send emails to say that the papers had been handed over two months earlier.
I have been diagnosed with a terminal illness and explained to the local manager that given my state of health, I would like to make proper investments so that payments would not be held up. There was no response other than “I will get someone from my office to call you”.
I have visited the site and I believe that it will take another two years if at all it is completed!
All this time my money is with Hirco earning no interest. They have not been able to keep any of their promises and deadlines and they do not seem to have any liability. The reason for withdrawing from the project is the total lack of professionalism and Hirco not having met their commitments.
Now that I have asked for my money back, they say they will put up the apartment for resale and will get back to me a soon as they find a buyer. Asa local Chennaite, The market conditions are so bad, they may not be able to resell the apartment. So where does that leave us.
I have extensive contacts in the media and I propose that those interested, join me and fight back against these unfair practices through the media. I also propose to get a stay on the entire project. I would like to get the support of some of you who would be willing to talk to the media.
I have just received a mail from hirco asking me to return all the original documents and receipts in order to cancel my booking at Chartwell 1011.
The joke is they have not indicated when they will return the monies I have paid. They must think that all investors are fools.
I see more of such cases now. resently i read in news paper that builders have formed a forum to resolve issues. try to find that forum and report against the builder to resolve this quickly. Also find whats in your agreement as part of cancellation process.. good luck for speedy resolution to the issue
I am there Ghose, we about 4 friends booked and our money still lying with them for more than a year without interest. No reply and nothing from them. They are adamant and rough and don’t care masters.
Horrifying!..If its the case with such reputer builder, Imagine the scenario of an investment done with small builders..Thnk shd invest only on the projects which can be delivered within a month or so..Ppl should think carefully before taking huge sum of loan for builders! – in any case invester becomes the sufferer!
Guys dont give up & try to fight against such unprofessional treatments..Gd luck
I just received a call from Hirco. I have requested that they do not call me and that any contact should be only through mail. That way there is a record of what transpired. Too often they have said one thing on the phone and and a later date have gone back on what they have said.
I would advice any one dealing with Hirco to do the same.
Is there anyone in Mumbai who is in a similar situation?
If so can you go across to hirco and check out whether the approvals are in place? They tell me that they have received the approvals but i would like to know when the approvals were obtained. I checked with CMDA (Chennai Metropolitan Development Authority) and am told that part of the land is under dispute and that approvals have not been given.
I also propose to take out a large advertisement in all leading newspapers, so that others are warned. I have all the correspondence and papers to back up my claim.
Can I please have the names and apartment numbers of those willing to speak to the press? Please ensure that you have all your back up documents. Please revert quickly so that no more people are taken in by this. Three of my friends are also in the process of pulling out.
There is a news in e-economic times news, very interesting, now DLf is dancing to the tunes of Buyers. Certainly it is now buyer’s market.
News Link : http://epaper.timesofindia.com/Defau…Mode=HTML&GZ=T
DLF may rejig prices to pacify irate buyers
J Padmapriya BANGALORE
IN response to a rare show of consumer activism, India’s realty giant DLF may be compelled to change prices of its 3,493-apartment project in Chennai apart from agreeing to a bouquet of demands to pacify irate home buyers. Nearly 857 buyers, who have booked DLF’s Garden City project in Chennai last year, have come together to seriously negotiate with DLF on issues such as refund of deposits while exiting the project, pricing, access road and registration of undivided share of land. They have sought a scrutiny of the original title documents pertaining to the project.
They are angry over the delay in getting approvals from the local authorities and what they see as DLF’s reluctance to register the undivided share of land as is the norm in Tamil Nadu. There are also concerns over the inadequate nature of the access road. Some of the buyers, about 200 of them, want to exit from the project and were angry when DLF said that they would not refund their deposit money.
A group member said, 200 buyers have submitted their requests for exiting from the project. They say DLF has agreed to refund the deposit amount to facilitate an easy exit and is also planning to come out with an attractive package on Monday evening to retain some of the customers. SIMMERING CLAIMS
CUSTOMERS’ WOES Nearly 857 buyers want to negotiate on refund of deposits while exiting the project, pricing, and registration of undivided share of land.
Seek scrutiny of project’s original title documents.
Angry over delay in getting approvals from local authorities.
Concerned over inadequate access road.
DLF’S HEADACHES
Slowdown in demand and collapse of the credit market
Have to deal with falling stock prices, angry investors and unsold apartments.
It had to cut prices of its prized Bangalore property by at least 30%. Suitable package in the offing
“A SUITABLE package for existing customers is under finalisation and shall be announced shortly,” a DLF spokesperson said in a statement. DLF also said it believes the package will be well received by its customers, it said.
“We are sorry to note that you feel dissatisfied and wish to apologise for the same. We have noted your observation about the lack of communication from our office on the progress of construction etc and will strive to improve on this score,” a letter written on February 12 by K Srikanth, general manager, marketing, DLF Southern Homes said.
In another communication to an individual flat buyer, Mr Srikanth said that DLF will shortly be announcing a package “which will be attractive to individual buyers and reduce the cost of ownership”. “If you still decide to pull out, we will respect your decision and process your request for refund of advance amount paid by you,” the letter written on February 16 said. DLF’s problems highlight many of the troubles facing realty companies. Stunned by the sharp slowdown in demand and the collapse of the credit market, they are having to grapple with a plethora of issues such as falling stock prices, angry investors and a huge unsold stock of apartments. Many companies had bought land at skyhigh prices in the recent boom. The current rates, on the other hand, are simply not enough to recover their cost of acquisition, forget about making a profit. DLF, recently had to cut prices of its prized Bangalore property by at least 30%. Other realty companies such as Unitech, Parasvnath and Purvankara are similarly hard-pressed and have been forced to cut prices, scrap unviable projects and raise money at high interest rates.
The Chennai home buyers have sought a 25% discount in the price of the project. The DLF letter dated February 12 does not state clearly whether the price will be cut. It only reiterates that the buyers’ sentiment will be kept in mind whenever the company initiates a cut in light of market conditions.
Given the macro-economic climate, consumers, in general, are closely monitoring every penny that leaves their pocket. With the realty slowdown, crash in prices and an uncertain job market, consumers will be looking at easy exit routes from projects that are not yet ready, a realty tracker said.
DLF has sold over 1,500 apartments in its Chennai project in the price range of Rs 2,800-3,200 per sqft. The bookings were done in January 2008 but the company got the approvals from the Department of Town and Country Planning (DTCP) only in February 2009. The booking amount for the flats is in the range of Rs 4-5 lakh. The approximate floor area ranges between 1,200 and 1,938 sqft. The project, which is 3 km off Old Mahabalipuram Road, passes through the Tamil Nadu tsunami resettlement colony and the access road currently is 30 feet wide. Apart from seeking a separate bypass access to the project, buyers feel the road will not be adequate to meet the requirements for at least 5,000 cars that will pass through it, once the project is completed.
“The site has 60 feet road access. Presently, around 30 feet out of this in use. Subsequently this will be widened to 60 feet,” says a DLF spokesperson. The DLF reply is silent on the issue of a separate bypass access to the project. The egroup of DLF Chennai buyers have held several official meetings with company representatives in the recent past apart from writing a letter to the company chairman in the first week of February. A group member says that their collective strength and perseverance has led the company to sit up and take notice of their concerns.
Buyers are also keen on registration of undivided share of land as is the prevailing practice in Tamil Nadu. They have also sought linking of payments to progress of construction as against time-bound payments, equitable penalty clauses for delay on payments by consumer/delivery by DLF and operating of the club by resident members. The DLF reply does not make a formal commitment on linking of payments to progress of construction but has responded favourably to the other two suggestions. DLF, which started taking bookings for the flats early last year, bagged the Chennai DTCP approval only on February 13, 2009. However, the company is confident of delivering the apartments to existing buyers by April 2011.
padma.priya@timesgroup.com
If I do not receive the money I have in full from hirco by March 10, I intend meeting the media by the 15th. I have already spoken to the director of one newspaper and he is very enthusiastic about carrying the news item. I am in the process of collecting rates from 5 newspapers to carry the advertisement.
One friend who has booked an apartment in another building is in Mumbai and has promised to go to the hirco office and check out the approvals
REALM…are you prepared to join this fight with your friends? I am told by highly placed officials that the high rise buildings are not likely to start for another 4 years. So it means money locked up for 4 years!
Mr. Ghose,
Did you visit the site to confirm what you are saying? Who are those highly placed officials?
Hiranandani is one sided. They fail to get approval in time and very much delaying the project. They must get SEZ along with housing, otherwise who will take your house? Hiranandani is responsible for updaing us on the correct status and no more general juicy wordings.
Okay Ghose, we will also think about joining you. Please let me know the plan.
My mail ID is emkalr@gmail.com
Raghu….I have spoken to some of the highest officers in CMDA and I have also asked a top cop to verify the same info from the same office.
I have not been to the site recently as my health does not permit me to do so, but I am tracking the progress. I expect that one of the prospective owners will be checking out the approvals at the hirco office. I am scheduled for hospitalisation in the next two weeks and am therefore planning to give hirco time until 10th March. After that I will go to the media