Dreams of homes in India turn sour

A group of Indian expatriates plans to take legal action against companies that allegedly took their money for apartments that were either never built or have been delayed.

Apple A Day investors and a Dubai legal consultant meet with Kerala chief minister Oommen Chandy to take up homebuyers' issues.

DUBAI //Indian expatriates who face indefinite construction delays on flats in their homeland are warning people to thoroughly investigate builders before buying at property shows.

Anxious investors have gone on radio to caution buyers to invest their money wisely.

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The warning comes after more than 100 non-resident Indians paid tens of thousands of dirhams to two Indian developers for low-income and budget residential apartments or plots in the southern state of Kerala.

Today, investors in one of the developers, Apple A Day, and a Dubai legal consultant are meeting the Kerala chief minister Oommen Chandy to take up homebuyers' issues.

"We are going to Kerala to meet the chief minister," said Hashik TK, a legal consultant with Universal Legal Associates in Dubai.

"We will request the minister to allow the formation of a special investigation team to help recover the money invested by Apple A Day investors from the UAE and the Gulf."

Investors said they paid large amounts of money after viewing presentations of the residences at property exhibitions that routinely tour the Emirates.

Angry homeowners, who have invested between 600,000 rupees (Dh49,328) and 2.4 million rupees, are now frustrated by delayed projects, unconnected utilities and unresponsive developers.

They plan to file a lawsuit against Apple A Day and the other company, Star Homes.

Twelve families met last weekend in Zabeel Park in Dubai to discuss taking legal action in India, and another group of expatriates, mostly from Abu Dhabi, have formed a committee for action against Apple A Day.

The Indian media reported police were looking for Apple A Day officials, who are accused of obtaining money from investors with no evidence of construction taking place.

Attempts to reach Apple A Day officials were unsuccessful as their telephones had been switched off.

"They sent me an e-mail later saying the plot has been registered," said Krishnakumar Narayanan, a factory manager who invested up to 700,000 rupees on a plot and two units Apple A Day was to develop.

"They promised to send a copy of the title deed. However, they kept delaying it. The Indian government should regulate the builders who are promoting abroad."

Mr Narayanan has lodged a complaint with the Kerala police. He urged expatriates to verify the status of property and demand a copy of the title deed to ensure the developer had acquired the necessary permission, in the absence of a regulatory law in India.

Simi Joseph, another Apple A Day investor, has filed complaints with Indian authorities. Ms Joseph has yet to see the site of a two-bedroom villa after paying 950,000 rupees two years ago.

"It is a real nightmare for me and I hear only excuses from them," said Ms Joseph, a secretary. "They have ignored my calls and e-mails.

"I have only seen pictures of what it will look like. When I go to India, they keep delaying taking me to the site. I struggled to make this money and now I'm in a pathetic situation."

Star Homes is playing down investors' fears and promises apartments will be delivered soon.

"Four of our five projects are nearing completion," said Ajay George, the managing director of Star Homes. "They will be handed over by the end of the year. We have been in touch with all our investors and have offered alternative solutions since there has been a delay."

About 120 clients, including more than 40 from the Gulf, had invested in the developer's Star County project in Kochi. Construction was stalled in March 2009 because of "recession, lack of funds and numerous legal notices", the company said.

Star Homes has told customers they can cancel their booking and opt for a full cash refund. "We have also offered them the option of cancelling now and rebooking apartments in the same project, which will be ready by December 2012," a company official said.

The response has done little to calm the fears of buyers, who complain of unanswered phone calls and e-mails, and the strain of their funds being locked up in the unbuilt properties.

"I booked an apartment in a property show held in Dubai," said Gafoor Ahmed, a sales executive who paid nearly 1.3m rupees for a three-bedroom flat developed by Star Homes in Star County. The apartment was scheduled to be ready in June last year.

"But when I visited Kochi earlier this year to check on the progress, I was shocked that they had only laid the foundation for the apartments," said Mr Ahmed, who spoke about his experiences on an Indian radio station in Dubai last week.

Dr Abraham Mathew, an ear, nose and throat specialist, paid 1.5m rupees for a three-bedroom apartment developed by Star Homes in Star Meadows, about 15km from Kochi.

"Who can calculate how much money we have lost?" asked Dr Mathew. "People buy a house once in a lifetime. This is the most terrible thing. The main thing is we want other people to be aware so they don't fall into such traps."

Other investors are withholding payments until their apartments are ready to be occupied.

Joshi Chacko paid up to 650,000 rupees and will make the final payment of 150,000 rupees on his South Star apartment only when the utilities are connected.

"They keep postponing giving us the apartment with basic facilities needed," said Mr Chacko, a property manager whose apartment is otherwise ready.

"They promised permanent connections in six months, so I have said I will pay in six months."