Regulating Developers & Brokers-What About Regulating Buyers & Owners?Case of Aashish Bansal


By qubrex, Section Ask Questions
Posted on Wed Jan 13, 2010 at 03:16:20 AM EST

For a lively discussion on this story please visit and participate at www.GurgaonScoop.com - Aashish Bansal - Infosys, Texas

There is much news about regulating builders and developers and also about regulating brokers , and their response. And all this was highlighted during the Pravasi Diwas where the Govt promised NRI (Non Resident Indians) that they would sort out the real estate sector for them.

Enough attention is being given to regulate the developers and brokers to fix the Indian Real Estate Market, but what about regulating the buyers/owners/tenants also? There are bad brokers who must be regulated, and bad builders who must be regulated, but isn't it naive to believe that there are no bad buyers or owners of properties? Doesn't the bad behaviour of these small number of buyers and owners affect how brokers and developers address the general market. It does, and any attempts to fix and bring transparency in real estate dealings must deal with the whole chain of developers, brokers, and real estate clients.

And it is hard to understand why and what do some brokers and developers do, unless you understand what clients they sometimes have to deal with. Just like many clients have horror stories to tell, every broker and developer also has many horror stories to tell, and we are no exception. Over the years we have dealt with all sorts of people, and most of them have been good and fair - Indians at their core are still majorly decent people. But some of them are neither fair nor decent. And to illustrate the point we would like to share one of our stories. Hope it will explain why there is need to regulate the whole troika of developers, brokers, and clients if we are to ever fix the real estate market.

Our story starts with an NRI landing in India with his wife and daughter to spend holidays, and probably buy a property in India. Owner of many properties, the NRI contacts a broker and also gets his mother in India to explain to the broker what his various needs and expectations are.

As Aashish is going to be in India only for 2 weeks, it is urgent to get him up-to-date on the various options very quickly. He works for a renowned Indian IT company at a high position, so target is high end properties. Details of Aashish Bansal (cache here) confirm that the United States has been good to this NRI, who has moved up in life and is now ready to buy into some prestigious property. After talking to him some properties are shortlisted, and then arrangements made for the keys and showings.

It is important to understand that when a buyer/owner/tenant cheats they don't have to be strangers. We have known Aashish for over 5 years when they bought a 3br in Atlantis from us. Since then his aged mother and father would call on us for stamppapers and notaries, free advice on documents and agreements, even getting their driving licence and passport renewed. Once we even made two trips from Gurgaon to Army headquarters in Delhi so that Ashish's brother-in-law could be sent the form for applying to DSOI club (Defence Services Officers Institute) in Palam Vihar.

On January 02 Aashish Bansal and his family were taken to the DLF Aralias on the Golf Course, Laburnum Villa and a Laburnum apartment, and then a tour of the World Spa 4br and 5br. He liked the World Spa. So on Jan 04 a tour was arranged to show him a World Spa penthouse and a 5br. On Jan 06 he wanted to see Orchid Petals for his brother-in-law, and a 3Br and 4BR were shown, and tour given of the Golf Course Extension Road. Raisina was way too far off. On January 07 DLF Pinnacle was the destination. He liked it. So calls went out to many owners to see if they were interested in selling. Some confirmed apartments were not of choice. After more discussions we then took them to Bestech Parkview Spa on January 08.

(Click on "Full Story" for more.)

Parkview Spa seemed to appeal to the family. So we called the Marketing Manager from the head office of Bestech. He came to the sample flat and answered all their questions. He also gave them the actual stock of what was available - a penthouse each in C, D, and G tower, and a 3715sqft unit. The price tag for D block penthouse was approx 3 crore.

The manager1 invited them to the head office for negotiations and best price, and to seal the deal. But they dallied. Wanted time to make up their mind. The manager1 then offered to provide the printed the specs of the penthouse and other details to us the next morning, which we could then give to the Mr Bansal.

The next day at the appointed time we went to the Bestech Offices to pickup the spec sheets and penthouse details, and then drop them at Aashish Bansal's home. He could then make a decision immediately, or his parents (to whom he had given the Power of Attorney and who are living in a penthouse in Unitech Palms) could buy on his behalf - if he decided to buy this.

But, to our utter shock we found out Aashish had come earlier in the morning to Bestech, introduced ICICI as his broker, and had already done the booking for the D tower penthouse. We had been left out in the cold, and manager1 who had come and had actually sold them on the project was also left out too.

So the actual people who worked on the deal including manager1 got cold-shouldered, while ICICI and manager2 got all the credit - is it fair? If Aashish Bansal had not liked the 10 properties we showed him, but chosen an 11th property, we would not have held a grudge against him. That is a part of our business. But to buy the exact property, a penthouse in D Tower of Parkview Spa that we showed first, that we provided all details of, that we got company executives to describe to him, by dumping us and introducing a dummy broker is clearly cheating.

We talked to the senior company executives. There was no dispute that we got the client into the sample flat, we introduced them to the company, we helped sell the flat. We deserved the brokerage. But they were in a tough position - the client had cheated us, and had cheated their manager1, but he was holding cheque for a penthouse worth 3 crore that the company could ill-afford to refuse. The executives said the company would hold the booking till later that day, and credit it to us if Aashish would call and tell them to mark us as his broker. The price would remain the same for him.

We called Aashish and he took the phone, said he was busy and would call back later. Called his mother and she said the same. They just would not attend to us. Later in the evening he returned our call, and said he thought there was nothing wrong in what he did. And by that time in the evening it was too late to do anything about getting credit for the booking. The same night he boarded a plane with his wife and daughter to Plano, Texas. The next morning he must have woken up in Texas, and we woke up holding the bag back in India.

What recourse does a broker in India have? A few can get the actual, or threat of, violence to work for them, but mostly you have to let it go.

It is strange that in the US some people learn to play by the rules, but in India it is okay for them to bring their daughter to India after years and teach her that it is perfectly acceptable and so easy to shaft the locals. She will be back in coming years with this lesson about dealing with Indian property brokers, and implement the same next time too. And another thing she would have learnt is how to score free taxi service in India. The family of Aashish always came to see the properties in a big group - Aashish, his wife, his daughter, his sister, her husband who is a Colonel in the Army, their son, and Ashish's mother. And obviously they would not fit in the Santro that they own, so they would spill over and sit in our car. Why pay Rs 800 per taxi per day when your friendly broker will come to your house and pick you up. Then the broker will get you access into all these gated places, act as a guide giving you the pluses and minuses,and then drop you back home - all for free!

The lady executive, and partner in our brokerage firm, who arranged everything for Aashish Bansal and his family was heartbroken. Could not eat for two days and still feels sick at the mention of their name. But, in time you get over it and learn to move on.

Should there not be regulation that protects brokers from clients like Mr Aashish Bansal of Infosys?

The Indian real estate market does not have easy fixes. You can't transplant rules from other countries without modifying them for Indian conditions. And most important, just regulating the developers and brokers, without doing the same for the buyers/owners/tenants, will not fix the problems in how and why the market operates the way that it does.

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