Fit-out or shell out

HOUSING: DLF's Aralias experiment pushes its buyers to fulfil their side of promise, else face penalty. Buyers of Aralias, a luxury apartment complex developed by DLF at Gurgaon, are an unhappy lot. They say they have been under pressure from the developer to start interior fittings since last year, much before the structure was fully ready. The Aralias overlooks an Arnold Palmer 'signature' 18-hole golf course and is considered a premium address.

The complex comprises 252 units with apartment sizes ranging from 5,822 square feet to 10,803 square feet. Launched a few years ago, through DLF's strict "sale by invitation only" policy, the average sale price was Rs 2,548 per square feet. All apartments were booked. But the buyers were required to do the interior fittings themselves.

DLF had applied to the concerned authorities for the occupation certificate in September 2006. Following this, the company sent letters to the buyers, or what it calls allottees, to complete their interior 'fit outs' "" interior brick work, plumbing, sanitary work and put up sprinklers and fire alarm systems "" as DLF cannot get the occupation certificate until buyers complete this work.

On September 25, 2006, DLF provided the buyers with six months (beginning September 4, 2006) to complete work in their apartments in order to avoid paying penalties. However, a year has passed and some buyers have still not completed their work. Buyers claim they never took the communication seriously since they felt the construction would take a long time.

"The agreement with the buyers includes a monthly penalty of Rs 1 lakh from the time we get the certificate. Those who did not act on time will now have to start their fit-outs. They will end up causing a nuisance for those who are ready to move in," said a DLF executive.

Some buyers aren't complaining, though. The prices of the property have appreciated so sharply that they wouldn't mind forking out a penalty. "The average buyer's net worth is a few crores. It is sad, but we all feel that we can write off a few lakhs as penalty," said the head of a multinational company and an investor in Aralias.

"Today the market price is nearly Rs 9,000 per square feet. This appreciation will benefit us in crores, which is why it seems silly to fight for a few lakhs," said another buyer.

However, DLF is now claiming that it will get the occupation certificate "any day". As many buyers had not started their fit-outs, the realty company has gone ahead and finished basic infrastructure like plumbing. Making buyers responsible for the interior fittings was an experiment that DLF undertook with the Aralias project.

The company realises that such an exercise can delay the entire project. For Magnolias, another luxury residential project that is adjacent to the Aralias, but far more expensive, DLF has decided to undertake fit-outs on its own.