More scams by Mumbai builders

Just when we thought that we are aware of most the scams run by the builders, here is one more to be aware of. Not that I am a buyer at these prices, however it is something to consider before making any purchase

Builders hike transfer fee to cover up for lean phase

MUMBAI: With property prices in parts of Mumbai having stabilised, some developers who had sold properties during the slowdown are now charging
an exorbitant amount as transfer fee. Transfer fee is a one-time payment made to the residential co-operative society when there is a case of transfer of ownership. In cases where the society is not registered, which often is the result of owners not in possession of occupation certificates, this fee is charged by the developer. Though a ceiling of Rs 25,000 has been fixed by the registrar of co-operative societies, local developers have been charging as much as 10% of the total price. Vipin Patel, a property broker in central Mumbai’s Parel area, said: “In a well-known residential complex in the area, the per square foot price is Rs 19,000, with an additional Rs 2,500 per square foot as transfer fee. Transfer fee is charged by all developers and in most cases, the buyer pays for it.” The range in the area starts off at Rs 1,000 per sq ft and is as much as Rs 3,000. This is for apartments priced at Rs 15,000 to Rs 22,000 per sq ft. “Several developers had to sell apartments at rates much lower than what was prevailing between the end of last year and the middle of this year. The transfer fee is an indirect way to make up for past losses,” said a high net worth individual. In one particular case in Lower Parel, apartments were sold at prices as low as Rs 11,000 per sq ft to some HNIs. Today, with prices having increased to Rs 14,000 per sq ft, some of the investors are planning to sell their apartments. Here, the developer is asking for a transfer fee of Rs 1,000 per sq ft. Builders, for their part, said transfer fee taken from the buyer and seller is clearly accounted for. “An account is maintained for the transfer fee taken and the money is returned to the society committee once formalities relating to registration are taken care of,” said a prominent developer in central Mumbai. The society can be registered only when 60% of the flats are sold. Vinod Sampat, a property lawyer, said: “There is a lack of transparency as far as developers collecting the transfer fee is concerned and this is a way of extortion.” Mr Sampat has approached the Maharashtra state government against the practice of transfer fee. “The transfer fee is also charged by the existing co-operative societies but it is not as high as what buyers pay in new buildings,” said R Singh, another broker dealing in Worli properties.