‘Builder flats’ are here to stay
Real estate
By Vasu

APPRECIATE them for the lavish foliage peeping through the specially constructed pots of carved kota stone, the Rajasthani jaalis, jharokhas, the elaborate wrought iron work, the lavish use of granite, marble, silver coated bathroom accessories, plastic chandeliers or dismiss them as vulgar expressions of newly arrived money, but ‘builder flats’ are here to stay.

Though Chandigarh has been spared of such construction till now owing to the absence of the Apartment Act, they are an intrinsic part of many other cities. They vary from the penthouse apartments of the super rich constructed in Lutyen’s Delhi, Ludhiana’s Sarabha Nagar and Panipat’s Model Town to dexterously constructed minarets where 100-sq yard plots are converted into apartments going up to four or five stories in areas like Azad Colony, Shiwalik Enclave and JJ Colony. With emphasis on using every centimetre of available space for construction, these flats are usually high on imaginative architecture. Many of them have basements six feet below the ground, several openings on the main road, trellis staircases connecting various floors and so on. What they, however, often lack is adequate basic amenities and agreements on maintenance of common areas.

Usually constructed after demolishing old houses, such property offers an affordable option if one has fixed preferences about the locality one wishes to stay in, says Rajan, a resident of Shiwalik Enclave. Normally a 300-sq yard plot in the enclave would cost around Rs 80 lakh to Rs 90 lakh, even in these recessionary times, he informs. Add another Rs 20 lakh for construction, and only then can one dream of living there. While this may give one an independent house, such a price tag is definitely out of reach not only of the salaried class but even of small businessmen. Ultimately, the area one ends up using is the inner space; the terrace and balconies stay at best under utilised. Thus picking up a builder flat for Rs 25 lakh is a much better option, where one has a similar amount of space for use after spending only one-fourth of what one would have otherwise required to live in the location.

Also in these days of rising crime, flats are definitely a safer option. Though the additional families exert extra burden on the basic facilities, reputed builders do make provisions for additional water and some power back-up.

Normally the smaller properties are purchased wholly or partially from the original owners, who often choose to retain a floor of their choice or prefer a percentage of the proceeds from the sale.

The buyers must inspect the completion certificates and clearances given for occupation by the local municipal corporations and development authorities before considering a builder flat. Most builders try to make an extra buck in contravention of the restrictions imposed on the total covered area. There have been cases when the entire main walls have had to be shifted inwards, due to builders exceeding the construction limit. The other papers that need to be in order are the sale deed, between the developer and the original owner; copies of their agreement; and the power of attorney that entitles the builder to build and sell on the owner’s behalf.

Despite the severe recession in the market, demand for builder flats has not declined much, feel brokers across Delhi. Since they are constructed in heavily populated segments of the city where all infrastructure and facilities are already in place, such flats are obviously amongst the list of must-see properties of prospective buyers.

Where recession has shown its impact, builders are willing to offer better quality and add-ons for competitive prices. For the upper end segment of such flats, the number of buyers are limited. And earlier if 10 such apartments were put up for sale, all were sold but today only the best product is selling, says Ganpat, who has several multinational clients. He builds flats in the preferred areas of West End, Vasant Vihar and Chanakya Puri.

The colonies that were the first to construct builder flats were those with single-storeyed houses, mainly in the resettlement areas. In some areas, even the jhuggi jhompris were converted to flats. Earlier there was a profusion of builders in the market with most property dealers picking up old houses and making huge profits after retaining them for some time. With the sluggish market, there is no profit left in appreciation, rather it is risky to hold on to a building for long, with the only margins coming in from construction and the facilities offered. Thus the business is not so profitable now.

However, the future of such flats is good. With the current housing shortage estimated at 22 million units and slated to increase to 42 million houses by the end of the Ninth Five Year Plan, present-day independent homes will house mini apartments in the future. The estimated funds required for fulfilling this need are pegged at Rs 1.51 crore. With banks and financial institutions easing their lending norms, and the government pitching in with income tax sops for home loan takers, this segment is set to spell good news for the real estate market.