Realty sector in turmoil: Flat buyers from builders involved in other project worried

Kochi: The Supreme Court order to raze illegal flats at Maradu and freeze the account of their builders has plunged the real estate sector in the state into turmoil. The order to freeze the accounts will have a cascading impact on buyers who have invested in ongoing projects of the builders of the controversial Maradu apartments.  

Although members of the building industry including those belonging to Confederation of Real Estate Developers Association of India (Kerala Chapter) remained tight-lipped, the apprehensions were palpable.

The impact of the verdict will not be confined to the 357-odd apartments in Maradu, said a builder. “The verdict has come at a time when the industry is passing through one of the worst recession with huge inventory of finished apartments remaining unsold. The order for demolition and freezing of accounts will certainly accentuate the situation,” he said.

In the present circumstances it would be better to change the profile of my real-estate company into a demolition company than remain a builder, said another builder in lighter vein.

“If all buildings in the state facing Coastal Regulation Zone (CRZ) rule violations in the state  are subjected to demolition then the building industry can shut shop and do something else,” he pointed out.

The Kerala Coastal Zone Management Authority (KCZMA) has identified 66 buildings comprising residential and commercial properties as violating the CRZ rules. The state chief secretary Tom Jose the other day had pointed out the violations in the state totalled a staggering number of 1,800 buildings.

The order of the apex court is expected to have immediate and long-term impact on the flourishing apartment construction industry as it will create bring a question mark about the fate of other buildings violating CRZ rules. A section of apartment owners in Maradu are on record that they would demand the demolition of all buildings in the state flouting the CRZ rules.

Demolition of flats from October 11, says civic body
An official meeting held at Maradu Municipality on Friday decided to start the demolition of the apartment complexes Golden Kayaloram, H20 Holy Faith, Alfa Serene, Jains Coral Cave and Holiday Heritage that have been ordered to be demolished by the Supreme Court, from October 11.

The meeting attended by District Collector S. Suhas, municipal secretary and Fort Kochi RDO Snehil Kumar Singh and six engineers from Kochi Corporation and Maradu Municipality decided that mechanical method be used to demolish the flats rather than using explosives.

“We have got quotations from experienced companies and we will consult the state government and decide whether there needs to be only one company to demolish all flats or more than one company be entrusted with the task,” said Snehil Kumar after the meeting.

He also said that steps will be taken not to cause any inconvenience to people residing near these flats during demolition. If the companies entrusted with demolition demands, those residing near will be relocated to other areas.

A total of 15 companies responded to the expression of interest floated by the Maradu Municipality to demolish the flats. Five of them were not considered as they did not meet the criteria.

Representatives of six firms met and made presentations before the officials today which included those engaged in demolition using explosives and in the mechanical way. The municipality has chosen the mechanical method as it is having limited adverse impact. The municipality has time till October 9 to select firms for the demolition.

The Municipal Secretary said that contract will be signed with firms that can execute the task within the deadline. By October 3 the eviction and relocation of the residents is expected to be completed after it is started on September 29. It was not decided how to undertake the eviction – by force or without, he said. The responsibility of removing the rubble will be with the firm that undertakes the demolition but the municipality will provide the space for dumping the same and the site has not yet been decided.