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Heard of falling buildings before? Tragic incidents due to poor quality of construction are now becoming rampant in some of the emerging countries of the world. When developers cut corners in construction, lives of those lost in the accident are a stark reminder of the graveness of the situation.
On 24 April 2013, more than 100 people in Bangladesh lost their lives and scores were injured when a commerical building crashed at 9am during peak work hours. A similar building crash in 2005 also killed close to 70 people in Bangladesh.
In India, building collapses have sort of become the norm across many parts of the country in the past decade. In recent years lives have been lost in Pune, Mumbai, Faridabad, Thane etc. Some dont even get reported. The worst one off late was in Thane when more than 70 people died on April 4 2013. These incidents are not just limited to commercial buildings but also residential ones which increase the devastation.
As a buyer how do you protect yourself from such tragic incidents?
Check for Credibility. Consult experts.
Check for Credibility. Consult experts.
For one, incidents of such nature happen due to a nexus between builders, engineers, contractors and municipal authorities. The other is because people dont go the extra mile to check for credibility of the builders and consult experts.
"Fewer than 5% of the customers we speak with understand or can make meaning of the specification of a project as available on the builders brochure or website", remarks Mr.Ramachandran, our CEO
Pay attention during Construction.
The second observation is that customers rarely visit projects during the construction phase and do not have much know how if they see something wrong in front of their eyes. For most customers, visiting a project site ends when they make down payment for a booking and then they just go in to occupy the project 2 or 3 years down the line.
The second observation is that customers rarely visit projects during the construction phase and do not have much know how if they see something wrong in front of their eyes. For most customers, visiting a project site ends when they make down payment for a booking and then they just go in to occupy the project 2 or 3 years down the line.
Due to this some realize the hard way that all that glitters is not gold. In Kochi, an apartment complex which was recently completed had customers fuming. The reason: builder did not deliver on their promise and the customers had to rue their judgment. Even basic things got missed out and dreams of a comfortable life turned into nightmare for many of them when they got saline water for drinking or taps dried up overnight, lifts stopped midway through, and parking space for cars were found non-existent.
Sub Contracting and Liquidity Crunch.
The worry is that even some large builders having in excess of 30 projects to their name can cut corners in the interest of cost or due to faltering liquidity. The most recent case of liquidity crunch hitting real estate is that of Century Real Estate and Mantri Realty promoted by Sunil Mantri group where the builder stopped paying interest on a loan to SE Investments, a Non Banking Financial Instituiton (NBFC) starting Jan 2013.
Sub Contracting and Liquidity Crunch.
The worry is that even some large builders having in excess of 30 projects to their name can cut corners in the interest of cost or due to faltering liquidity. The most recent case of liquidity crunch hitting real estate is that of Century Real Estate and Mantri Realty promoted by Sunil Mantri group where the builder stopped paying interest on a loan to SE Investments, a Non Banking Financial Instituiton (NBFC) starting Jan 2013.
Most builders when they start out, do one or two projects to get experience. When they transition over a period of time to a larger builder, having more than 10 projects, they spend about 40% of their per project costs in a quarter for cost of materials, contract and labor, around 5% on marketing and sales, between 10 to 40% per quarter on land acquisition and 5% on miscellaneous expenses. The rest are profit margins.
This transition means that the focus might shift from building quality projects to upping the number of projects under their name by subcontracting the construction to third parties. Thereby land acquisition and sales of new and unsold projects takes on priority over delivery of current projects. Thus builders who do not manage current projects well run the risk of tarnishing their reputation when the subcontractor does a poor job of construction. Eventually customers who invest hard earned money can end up with poor status of amenities or even worse poor quality of construction that shows up in 5 to 10 years time.
The Life of an Apartment Building. Need for Regulation.
This transition means that the focus might shift from building quality projects to upping the number of projects under their name by subcontracting the construction to third parties. Thereby land acquisition and sales of new and unsold projects takes on priority over delivery of current projects. Thus builders who do not manage current projects well run the risk of tarnishing their reputation when the subcontractor does a poor job of construction. Eventually customers who invest hard earned money can end up with poor status of amenities or even worse poor quality of construction that shows up in 5 to 10 years time.
The Life of an Apartment Building. Need for Regulation.
"A good apartment construction can give it a life of anywhere between 40 to 80 years or more depending on its quality. However most customers do not have an eye for detail or are not educated enough to spot the subtle differences in construction between two similar projects of well known builders. The differences only emerge 5 to 10 years down the line when maintenance costs shoot through the roof due to poor quality", remarks our CEO.
Without adequate maintenance, buildings could develop cracks and become unstable in as low as 20 years due to poor construction. Proper regulation is the only way that this menace could be curbed. Until then its best to consult experts and not just rely on your own judgement. As someone said, half knowledge can be worse than ignorance.
Without adequate maintenance, buildings could develop cracks and become unstable in as low as 20 years due to poor construction. Proper regulation is the only way that this menace could be curbed. Until then its best to consult experts and not just rely on your own judgement. As someone said, half knowledge can be worse than ignorance.
