Mumbai: Auction bid a flop show: flat buyers dejected

Buyers, who bought houses in Vidhi Realtors's Malad project about 4 years ago, are fighting for their refunds

The flat buyers in Malad were on Tuesday left disappointed when not a single bidder showed up for the public auction of a plot owned by Vidhi Realtors. Tehsildar Office in Borivli had called for bids for a 2173.12 square meters of land, which is partly encroached by slum dwellers, as part of the recovery procedure.

However, no one either expressed interest three days prior to the auction or turned up at the Tehsildar Office at 11 am on August 6. The Maharashtra Real Estate Regulatory Authority (MahaRERA) had last year ordered the Suburban Collector to carry out the recovery process after a handful of buyers of Vidhi Realtors's Gaurav Discovery flats withdrew from the project.

mid-day was first to highlight the plight of the home buyers. On July 8, 2019, this newspaper reported how the home buyers received a part payment cheque of Rs 20 lakh from the developer but it bounced.

'Surprising no one came'

The home buyers feel dejected after the auction turned out to be a flop show. Tehsildar Vinay Joshi has said a new date for the auction will be decided after consultation with the collector.

"As per the bidding procedure, minimum three bidders is supposed to come forward and deposit 10 percent of the valuation (Rs 12.03 crore). However, no one came. We will submit a detailed report to the Suburban Collector soon," he said.

'Unrealistic bid price'

Joshi added, "But it is surprising that not a single bidder came forward." A property expert said "unrealistic" bid price could have been the reason behind the flop show. Senior property Advocate Vinod Sampat said, "Many a times the reserve price is unrealistic mostly because the property doesn't have any sale potential due to factors like encroachment, higher market value assessed by the auction authorities."

"In property transactions, some amount of cash component is also involved on quite a few occasions, which cannot be done in a public auction. Also, people are sometimes reluctant to purchase builders' properties, fearing harassment later. Other obstacles include unwanted court cases. Moreover, the current market sentiment is very bad. There is a need for a proper evaluation and quoting realistic and affordable prices," Sampat added.

'Disappointed'

Sainath Sarode

A dejected Sainath Sarode, an assistant manager in a logistic firm who had bought a flat in Gaurav Discovery, said, "I don't know when this misery will end. I earn Rs 70,000, a month and have to pay home loan EMI of Rs 33,000. I still have to pay Rs 8.50 lakh EMI for the loan of Rs 22 lakh I took four years back". "I am planning to visit the Tehsildar office soon. It is disappointing that no bidder came for auction," he added.

Meanwhile Sarode and others, whose cheque of Rs 20 lakh had bounced, have issued a notice to the developer.

Lawyer speaks

Advocate Godfrey Pimenta, who represented the buyers said, "In the depressed market conditions, most of the property buyers have sighed away from making an investment in real estate. Due to liquidity crunch, there are no bidders."

According to Pimenta, "The need of the hour is that MahaRERA should at least ensure that incomplete projects like that of Vidhi Realtors' should be handed over to the association of flat purchasers. They should also ensure that the projects are completed and the remaining flats sold, so the money from these sales can be used to repay buyers, who have withdrawn from the project."

Catch up on all the latest Mumbai news, crime news, current affairs, and also a complete guide on Mumbai from food to things to do and events across the city here. Also download the new mid-day Android and iOS apps to get latest updates

"Exciting news! Mid-day is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest news!" Click here!