Sucheta Dalal :Financial castles in the air-IV
Sucheta Dalal

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Financial castles in the air-IV  

April 29, 2010

Anand Bhakitiani Group, a small developer in Chandivali near Powai in Mumbai, is offering an assured return scheme for investment in a property that the group is developing, called ‘Shiv Shrishti’. According to market sources, the (planned 15-storeyed) project was initiated four years back, but due to lack of finance, it is still incomplete. The developer has been able to construct the tower only till the third floor (ground plus two floors) till now.


According to the scheme, the buyer has to book an apartment paying 50% down payment and he can exit the scheme after 15 months (which is the lock-in period) with a profit of Rs1,200 per sq ft, if he decides to sell the flat back to the developer.


Currently, the apartments—two bedroom hall & kitchen (BHK) of 1,000 sq ft; three BHK of 1,750 sq ft and four BHK of 2,100 sq ft—are being offered at Rs8,000 per sq ft (plus Rs20/sq ft floor rise premium).


A two BHK costs Rs80 lakh, out of which Rs40 lakh has to be paid during booking the property and the remaining amount can be paid within a year’s time. Moneylife spoke to a broker who is selling these apartments who guaranteed us that it was his responsibility to sell the apartment at Rs9,200 per sq ft after 15 months and hand over the profit to us. He also said that there is no transfer fee required to be paid during the exit for transferring the ownership of the apartments.


The surprising factor is that the broker also suggested that the investors should not waste their money on stamp-duty and registration. The broker is providing an ‘allotment certificate’ on a Rs-100 stamp paper as proof of the buyer’s ownership.

According to the broker, the allotment certificate contains a “strict clause” so that the developer cannot cheat the buyer.

(This is the fourth part of a continuing series) — Pallabika Ganguly

-- Sucheta Dalal