Godrej Properties sees the number of flat owners opting for the buyback offer rising to about 200 in the next few months in Gurugram.
Over 100 homebuyers of a residential project of Godrej Properties Ltd (GPL) in Gurugram have chosen a buyback offer from the company after certain flaws were detected in the construction quality of the project named Godrej Summit.
“We hope to complete the repairs by the end of this calendar year. As of now, we have had about 10 percent of the customers opt for the buyback option, so we bought back a little over 100 apartments so far. We expect to see that go to about 200 over the next few months based on current visibility,” Pirojsha Godrej, Executive Chairperson, GPL, said during the Q3FY24 earnings call.
The project has 1,100 residential units housed in 11 towers. The company had in August 2023 announced that it would spend up to Rs 155 crore for the repair work. Alongside it had also announced a buyback for those wanting to exit the project.
Godrej Properties had appointed an external expert to undertake a detailed independent assessment of quality issues discovered in the project. The assessment identified the presence of chloride in the concrete used in the project, which when in contact with water, leads to corrosion of steel reinforcement, the company had said in a regulatory filing in 2023.
Following this, GPL had said that it provisioned an estimated amount of Rs 155 crore towards repair, maintenance, customer claims, or any ancillary costs. The company said that it will, in turn, claim indemnity from the contractors involved in the construction.
According to the information shared by the company, the repair work is going on in full swing and is expected to be completed by the end of this calendar year. Out of the sum announced for repair work, the company has spent around Rs 20 to 25 crore, Godrej said.
According to the company, it anticipates it will spend Rs 100 crore to Rs 200 crore for the buyback. “But we think we will be able to fully recover the money spent because we can resell the apartments once the repairs are completed,” Godrej had said in November 2023.
The company had then said that it had spent Rs 50-odd crore for the buyback of 60 apartments. “We are paying the offer basis at the time of announcement of the last average price for the apartment sold in Godrej Summit or the purchase price for the owner which are over higher out of those two. The average price starts about 6,000 rupees a square foot of the buyback and so far,” Godrej had said in November 2023.
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Homeowners still unhappy
But homebuyers of Godrej Summit told that in addition to the buyback price, the company should also pay interest. “Repair work is going at a very slow pace,” Vishal Gupta, a resident of Tower J in Godrej Summit, told.
“The developer has not yet provided us with the structural safety audit report of the towers, which was conducted by IIT Delhi.” The developer had earlier fixed a deadline of November 2023, which was shifted to June 2024, but now it has been extended till December 2024,” he said.
Another homebuyer and resident of Tower E of Godrej Summit, Bajrang Jain expressed similar concerns and said that the builder has not been able to meet the deadlines of the repair works.
“The developer has been shifting the deadlines,” Jain demanded that the residents who are living in the society should be provided some financial relief by the builder in way of relaxation on maintenance charges.
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Developer’s side
Meanwhile, Godrej Properties in response said their priority has been the well-being and satisfaction of residents. They have actively engaged with the residents of Godrej Summit, to offer collaborative solutions and support throughout the process, the company said.
“We have been committed to closing the ongoing rectification work at Godrej Summit at the earliest, keeping in mind the regulatory restrictions like NGT bans in NCR, which have impacted 40 days since the start of the works. We have proactively offered buyback of their units to customers, offering the higher of the amounts paid by the customer or the market value i.e. average of last six months (prior to June 2023) in the project,” GPL said in an email response.
The response added, “We have engaged the best institution in the country, IIT Delhi, who is guiding us through the rectification process in the project, which is also being supervised by a government-empanelled structural engineer. We are committed to completing the works at Godrej Summit at the earliest possible and have deployed more than 200 labourers at the site for the same. We would again like to assure all our customers that we are working in the right earnest to deliver on our promise at Godrej Summit.”
