Indian Express (Express Estates) - March, 2006

Also, if a resident makes structural changes inside the house then builder can’t be held liable for damages that occur after that. Any damage to the wiring due to an external agency- such as a power surge from the MSEB – is also excluded from warranty. All these clauses have been put down in writing to safeguard the interests of the customers who have a genuine warranty claim.

Since everything is in writing, the warranty is a legally enforceable contract. In case of a dispute between a builder and a resident, the Pune Builder and Developers Association (PBDA) will arbitrate on the matter. “What the PBDA decides will be legally binding on us. This gives the customers a fast-track response as opposed to a litigation which is expensive and slow,” says Gera . However, it is important that residents do not close down their legal options. The PBDA is essentially a forum packed with builders and realtors. That may lead to a clash of interests in case of a builder-resident dispute.

Real estate consultants feel that the warranty offer raises the comfort level of homebuyers. Mansoor Polan, proprietor of Maria Real Estate consultants and treasure of the Estate Agents Association of Pune, says, “ A written warranty is an assurance of quality to the customer,” he says. Manoj Desarda, proprietor of Desarda Estates, says that the move is market driven. “Customers are now more aware about the need for better maintenance,” he says. But Vipul Thakkar, marketing head, Hermes, brushes it off as a marketing gimmick. “If you want to maintain a standard of quality then you don’t need to give it in writing,” he says. Hermes takes care of seepage and structural problems even after five years of giving the house to the customer.

Lalit Kumar Jain, chairman of Kumar Builders, feels that a builder’s reputation is a warranty in itself. “I wouldn’t call it a marketing gimmick, it is only a marketing tool,” he says.

Does warranty add to the cost of a house? The law says it shouldn’t. Builders say it doesn’t. But logic says it is not possible that it wouldn’t. Most builders claim that warranty does not make the house more expensive. The warranty is more of a value-added service that builders are providing to customers voluntarily without charging anything extra. “It is a service which comes with the house. The cost of the property doesn’t go up because of the warranty,” says Jain. Both Gera and Agarwal feel that a warranty is a promise of good quality, which can’t be measured in per sq ft terms.

At a time when the real estate sector is booming and all kinds of entrepreneurs have jumped into the fray, the warranty being offered on houses by some builders is to be lauded. It is a small yet significant step in protecting the interests of the buyer. What is especially noteworthy is that although the law provides for a three-year warranty, Gera developments and Brahma Builders have voluntarily extended it on their projects to five and seven years respectively. Hopefully other builders will take a cue and follow suit.

Gera Developments is one of the leading real estate developers of western India with projects in Bangalore besides Pune, having completed premium commercial and residential projects are being taken up in a year, Gera said