23rd July 2009
It is by nature that the history is read but nothing is learnt from it. We all take it as guaranteed that what we read today in the newspaper is a “news” but never think we ourselves sometime can become a news. We read sufferings of others, meet the victims but even then do not learn lesson. For example since more than two decades on international airports announcements are made, on press TV we hear stories of victims, the governments issues precautionary notices to the public, almost every one of us know those found with drugs in Saudi Arabia are beheaded, even then last month families were caught in Jeddah on drug charges. These families took as gift the drugs hidden shoes allegedly from the travel agents. This incident has widely been published in press and on TV but take it lesson from it will not be taken and someone some where sometime again would be kind in taking a gift pack from a friend for delivery to someone in Saudi Arabia.
Same is the case of different scams, financial scams, free allotment of plots on lottery, billions worth inheritance money offers in email, mobile phone congratulations on Awards. We know people lost in the past but in the hope in our case the email bestowing world’s best looking personality in our case might be correct we accept it.
The Overseas Pakistanis (OPs) major problem is cheating them on property issues. This piece is being written on that prospect. First of all it may be remembered it is just a basic pre-cautionary guideline and not any authenticated research work or any sort of advisory high caliber note. The second most important thing not to be forgotten is that the writer of this script is just an ordinary man and not any professional writer. He had been an OP himself for long.
About 10 years back I wrote a piece on this subject in Urdu which in 5-6 weekly installments was published by the Daily Urdu News Jeddah. Unfortunately I do not have a copy of that hence this re-writing is fully based on memories. The most important to be remembered is that writer of this piece has lost his one eye in an operation and in other has hardly 25% reading only visibility. This piece is being scribbled just playing with the key board without any pre-drafting or checking of the scribbled writing. Hence errors and inconsistency in it is expected. Due to above factors there may be many things skipped form the mind hence it is not a complete or exhaustive Paper on the subject.
1. First of all completely and fully avoid booking any property representatives of which company come and visit your country of residence/work abroad. Any booking of property with such developers is definitely to start your headache and loosing of your money.
2. Never every book any property with those developers whose advertisement every 15 minute you see on TV channels. Such 20-25 second advertisement repeated every 30 minute is too costly beyond your imagination. Costs of such advertisements including the visit expenses of their representatives, their luxury hotel stays all at the end of the day you will have to bear in the shape of “price escalation clause” or “development charges”. If your earning is “Rizq-e-Hilal” prefer to remain property-less than booking on lucrative advertisement.
3. Avoid looking at the photographs of decorated drawings rooms, American kitchen etc shown on TV advertisement on colourful brochures. These are merely photographs and when after lot of headache you get physically your flat/house you will definitely doubt on your eye sight if not on the condition of your mind that these are the same things shown on photographs. Do not take even for a single minute the wordings like that the complex have latest dish antenna, internal cable etc. These are worthless things. The most important is you to calculate after how much paying the flat/house will be in your hand. Never imagine it will be in the same cost as announced on TV or printed in a brochure. You must keep your mind ready for triple of that announced or printed amount.
4. Do not be allured on advertised features or photographs that the project has swimming pool, health centre, jogging track etc. Always remember you will have to pay month huge amount on running of swimming pool etc as nothing in the word today is free. Never imagine that since the developer will be paying monthly salary to swimming pool inchrage or its water bill, or repair the jogging track from his own pocket. It will all be for life from your pocket, not small but huge.
5. Do not go on the most-colourful brochures of the project published on high quality glossy paper. This brochure is just an alluring dream and has no legal value in the deal. Please remember these Brochures are one of the biggest income of the Developer. He is more interested in selling you these brochures @ Rs. 350 or Rs. 500/- than selling of plot/flat to you.
6. If you wish not to be fooled then the first thing when you wish to own a flat/house is buy a Brochure, tear off the Application Form from it and throw away rest of the coloured-photographs. This will save you from future mental torture.
7. First read the Price. As a counter check show this price to some one in your home or to some colleague to re-read. Mostly you will find price written like “price of the flat Rs. 10,000 excluding development charges”. In this shape development charges have not been mentioned or disclosed by the company which could be Rs. 20,000 or Rs. 30,000. Hence this word excluding development charges should be the first naked electric wire shock to you. Some time at the end of word “excluding development charges” or just near the Price in very thin font there would be an asterisk mark @ or # which is usually given in text books showing that an important Note or Reference about the test was on the bottom of the page. If you go to the bottom it would be written like “estimated May 2007”. This means the price of the flat/house mentioned or written they calculated was in May 2007 on which they are selling it to you in July 2009. These two things (a) Estimated (b) May 2007 are most dangerous. As soon as you have booked the plot, flat or a house, paid the advance payment just after two three months you will receive a letter that since by now material prices or labour costs in the market have increased, new taxes imposed, currency re-adjusted etc hence the price of Rs. 10,000 has been revised and it now stands at Rs. 25,000 and you immediately pay Rs. 15,000 as first installment to this revision. After you have paid this amount on the jugglery of May 2007 to July 2009 technique, do not think your headache has gone. That price increase for the past. This price will keep increasing as the law allows and you have agreed to the price escalation.
8. The other sword will remain hanging on you and no body can tell you definitely how much would be at the end of the day the total development charges.
9. It must be remembered that a Developer/Building has more interest in getting your booking cancelled rather than completing the project. At least I am not aware of if any such private project during the last 25 years has ever been completed timely. The more the delay the more free income for the Developer hence on one ground or the other excuse the completion will keep lingering on. During 70s to 90s there had been two three very good developers how though as usual delayed the projects but acted on the true terms and condition. One is believed in Lahore. The best performance shown in this regard was when the House Building Finance Corporation built flats/houses for Overseas Pakistanis and the other in old days KDA completed similar houses in Gulistan-e-Jauhar and flats in Gulshan-e-Iqbal. DHA is a exception to all above but a lot is now a days being read through letters of editor but generally its performance is good but middle class like me can not afford it.
Cancellation more important:
10. It may be remembered the Builder will get more benefit in canceling your booking rather than completing the project. The reason is on one excuse or the other mostly “not timely payment” he will cancel your booking by deducting from your money paid and sell the same flat/house/plot to another new buyer soon to cancel his and sell to some other new one. This circle will keep going on for some long time. How it is beneficial to the developer/builder is explained in later paragraphs.
Have Read Terms & Conditions:
11. The first and the most important to be remembered is that buying a property is a very sensitive issue under which both the buyer and the selling are supposed to fully in clear terms know exactly where they stand. It applies not only in the case of property but even eg. on purchase of Defence Savings Certificates etc. One must fully understand before signing the Form, the whole pros and cons. Even often the highly educated do not understand the critical, stylish, sugar coated language of such Forms hence every one of us must at least from some other get an advice before signing any Form.
12. In case of purchase of a flat/house from the developer building in 95% case the applicant gets a colorful brochure showing coloured photographs of different portions of the flat/house when it will be completed. This is in fact a photograph of temporarily decorated house some where else. Either in the Brochure as a detachable or as a separate there will be a page titled “Application Form”. This application form is the biggest tool in the hands of developer/building to keep you under pressure and keep extracting from your pockets. This Form in 95% cases will contain entries like name of the applicant, address, ID Card No. occupation, salary etc half of which information is just to fool. At the end of the Form there is a very small sentence but the most lethal doze and the mother cause of all your future sufferings – a sentence reading “I have READ and UNDERSTOOD terms & conditions”, I will pay timely, will abide by these terms and conditions prescribed including those proposed by the developer/builder from time to me and conditions, the finger will go to the entries on the Application Form reading, name, occupation, salary etc.
13. In some cases there would be two three explicit undertakings on the Form reading like “the buyer undertakes to pay timely all the installments”, the buyer undertakes to do this and that etc. But no where it will even a single line would be what in return the Seller is to do. The sale and purchase of a property whether from a Developer/Builder or from a person is invariably under a written agreement signed by both. In this agreement both sides explain their individual side of obligations and responsibilities. Even in case of a person selling his personal house in the agreement undertakes to deliver the vacant and safe peaceful possession of the sold house to the seller. But in the case of Developers/Builders the reading of those lines shown as terms and conditions will indicate nothing whatsoever if he Builder too is to do anything or not. All the terms written will show only what the purchaser is to do. As such it is very important to be careful.
14. As stated above the Builder/Developer’s main interest is to get you book a flat/house and then get it cancelled through hook and crock, sell it to third one and do the same to him and then sell it to fourth and continue so. This way his income keeps increasing. When he has repeated this technique 10-20 dozens time and had got enough money, then he announces another new project with same fanfare and advertisements. When new people book their flats/house in this new project, the money obtained from them is then diverted to the previous project in which you have booked and thus work on your project starts.
15. Under the asterisk (*) or the fine print you have verified and signed on the dotted line that you “have read and understood all terms and conditions and undertake to abide by those rules or those which the company may from time to time prescribe”. By singing this in fact one cuts his own hands. How it effects one can be understood from one single example. A huge advertisement appeared in newspapers selling plots in Hub Chowki area Karachi. This area in fact is near Balouchistan bordering Karachi. Technically speaking it is suburban area to Karachi. The heading of the advertisement as usual was very attractive “Gold in the price of sand”. The total cost of a 120 sq. yds. plot was Rs. 10,000/- as area was deserted expected soon to witness huge industrial development. Thousands and thousands rushed and booked signing on the dotted lines certifying that they had read the rules and regulations. No body cared to think for a minute can a plot just in Rs. 10,000 really be had. No body cared to check is this the net price and is it inclusive of development charges or not. This Rs. 10,000 were to be paid in easy monthly installments of Rs. 700 or so which was very easy and convenient for every one. Having paid the advance and having relayed the news to the relatives about purchase of the plot, all the allottees in next two months received a Notice from the company demanding within two weeks in one go Rs. 17,500 towards their contribution for the Islamic Centre otherwise plot was to be cancelled. What was this? It transpired that the company had a plan to create an international level Islamic centre in the colony for which every member was to contribute Rs. 35,000 in two installments. When people objected that it was not disclosed to them earlier, they were shown their signature having declared that they had read, understood and agree to abide by all terms & conditions. Where were these terms &conditions? In the company’s office file of course. Every one started getting the plot cancelled which the Developer actually wanted and which in fact the buyer should not had at this stage opted for cancellation.
16. As explained above that the main interest of the Developer/Buyer is to book and then get you cancel your flat/house/plot which is the builder’s main big income. As soon as one books a house/flat with a down payment which is always very easy eg Rs. 10,000/- assuming that he is only to pay monthly Rs. 4000/- installment, within two months the allottee gets a demand note from the company asking to pay like Rs. 25,000 towards first installment of Development Charges. Now the allottee cries that this was not told to him but he has actually signed on the dotted line. This is in fact a technique to harass viz seeing the huge to pay one gets the plot/flat/house cancelled.
17. Sending the allottee the above demand notice another technique invariably is used. This is that while the Demand Not is dated say 01 July 2009 with last date for payment by 20 July 2009, this demand note is mailed/posted around 15 or 16 July to ensure it reaches the allottee after the due date so declaring him defaulter his allotment is cancelled. The unfortunate is as generally our society lacks awareness no one cares to keep the envelopes on which such mail comes more safe than the cash payment receipts. Always keep the envelopes in tact attached with the relevant demand note, mark the date on which it was received. This envelope is a tool for protection of your rights.
18. The second biggest thing is one single word which is the second biggest cause of one’s sufferings. In the terms & conditions on the Application Form there will be a very innocent looking sentence that in case the Buyer wishes to cancel his booking he can request the company in which case the company after deduction of 5% or 10% of the “price” will refund him. This word 5% or 10% of “price” looks like a very soft pill but in fact it is a lethal injection. When having your got harassed through designed-late arrival of payment notice, demanding immediate payment of Rs. 17,500 for the Islamic centre, you will wish to get the allotment cancelled then a bomb will be dropped on your heard. Before going to the company for cancellation you will calculate that you so far have paid Rs. 2500 advance and 500 as two installments hence @ 10% Rs. 300 will be deducted from you which is not that bad and will come home with balance Rs. 2,700/-. But when you will reach the company which is already very eagerly patiently awaiting you to cancel will smilingly agree with you for cancellation. On this visit the company would offer you a cup of tea and receive from you application for cancellation. When you will wait for your Rs. 2,700/- you will be asked “OK, good bye”. But where is the money you will be told out of your Rs. 3000 paid Rs. 2000 will be deducted and balance Rs. 1000 will be paid to you when the company finds any new buyer for your surrendered plot/house/flat which practically takes a year or two in most cases. On your correcting that 10% comes to Rs. 300, you will realize how uneducated you were because the word price to the company means the “total price” of the plot/flat which comes to Rs. 10,000 price plus so far Rs. 15,000 development charges and not merely the “price of the plot” or what “you so far paid” namely 10% of paid.
Completion of the Project:
19. The advertisement or the Brochure will very prominently say that the project will be completed with speed in 3 years. 3 years starting from which date? As you will not ask this question likewise the company will too not tell you unless you have actually booked and paid some installments. If a developer says 3 years take it the project after keep revising upward prices will be completed in 06 years if you are lucky. Reason being the same that it is main interest of the company to book you, cancel you, book another cancel him and so on.
20. Every company by law is bound to seek public objections before obtaining Completion Certificate from the concerned development agency like CDA, LDA, KDA. While the company had ample money for releasing daily huge front page colour advertisements in the press/TV at the time of announcement of the project, this time money would get exhausted and a 2 inch by 2 inch classified advertisement in small fonts only to fulfill a legal requirement will be released ensuring you did not read it and file an objection that the company had in the brochure shown US made kitchen sink whereas now it had installed from cheapest local or Chinese brand.
21. Some advertisers/builders/developers to fool would mention in advertisements that if project not completed in time the developer gives Guarantee and would pay to the buyers. Till today not a single example is known if anyone has got any compensation for late completion of the project reason being the that to keep themselves safe these developers keep taking extensions in completion dates from the concerned development authorities who are always ready to oblige the developers. Secondly merely mentioning the Guarantee has no legal standai. A guarantee is something material. Merely mentioning a word I guarantee but what guarantee does not mean anything.
ACTUAL TERMS & CONDITIONS:
22. No developer/builder can sell any house/plot etc without the written permission of the concerning authority like Capital Development Authority, Lahore Development Authority, Karachi Development Authority etc. For obtaining permission the developer/builder submits proper drawings, specifications, building plan etc of the proposed houses/flats together with the terms and conditions including the Price on which it proposes to sell. The concerned development authority approves those terms & conditions after making any amendments if any to confirm with the law, though for paper sake only. One such approved copy of terms & condition is given back to the developer. The developers in 99% cases while advertising and booking of flats/houses never show you this original and that original terms & conditions are the one without even having a glimpse of that one signs “I under read and understood”. The developers/builders disclose you only a few terms & conditions but misleading in the advertisement brochure which brochure is not any legal part of your sale purchase agreement.
23. For about 20 years I struggled on this issue wasting not merely time but in fact quite a lot my own hard earned money in the larger public interest despite being from a lower middle class by arranging such brochures and application forms from Karachi, Lahore etc. I would ask some one from these cities to spare some time, go on taxi on my expense, buy a brochure and send it abroad to me on huge postal expense which I needed only for study. From 1985 to 2000 I must have written not less than 300 letters to each new Prime Minister, each new President, each new Minister for Overseas Pakistanis, MNAs, MPAs, Ombudsmen, or whosoever ever whosoever ever raised any empty voice on the subject. I never got any response. The best hope I had was when the Sindh Minister for Housing and Town Planning was appointed fortunately from educated MQM but my that effort and attempt too went in the drain. My argument and appeal was that no developer/builder be allowed to sell its flats/houses on any application form. Since it is a deal of property hence it be done as is norm through an Agreement signed by both parties. I proposed that there must be a pre-printed Standard Agreement available on stationery shops, or with judicial stationery sellers outside courts or with the concerned development authority which on payment of Rs. 100 or Rs. 200 a potential buyer takes blank, takes it in duplicate to the concerned developer/builder, blank spaces like Price, names of parties, flat number, location of project, completion date etc are filled in, both parties sign, one copy is retained by the buyer and one by the seller. This Standard Agreement would in legal language show what were the responsibilities and obligations each of the seller and the buyer. When this matter went to the Sindh Ombudsman a copy of a “Model Agreement” came to me from KDA with the remarks that a “Model Agreement” was already in existence @ Rs. 50 which could be used by any buyer. Either that Model Agreement was deliberately drafted in a very poor language to benefit the builders or it was the work of some legal adviser appointed on “today’s prevailing merit”. I explained to the Sindh Ombudsman that there was a vast difference between a Model Agreement and a Standard Agreement as is the difference between a Railway Timetable Booklet and practically sitting in the train and traveling. Despite being a lower middle class person with lot of family responsibilities I offered the Sindh Ombudsman a sum of Rs. 25,000 that he may depute two of his staffers to approach with disclosing their identity two separate builders with copies of KDA submitted Model Agreements and get the two flats in two separate projects booked in their own name (ombudsman office staffers). And see how the builder will look towards these persons as if having come from some other world. The Sindh Ombudsman did not take any interest in my more than twice extended this offer – I am sure he was aware what the naked facts on earth were. Sometime in between the most glorious 9 March 2007 when My Lordship Mr. Justice Iftikhar Mohammad Choudhary created history refusing to bow on threats and 03 November 2007 when he with his colleagues was sent home, My Lordship Mr. Justice Iftikhar Mohammad on some public interest case observed that the court can not remain silent on public cheating (or some words like that which I do not remember exactly now). This case was that on some plot in Lahore as usual with collaboration of LDA some builder had announced a tall multistory building whereas probably the plot was a small one not suitable for such a tall building hence there was hue and cry from civic minded that those who booked will get loss. At that time too despite my now ill health I addressed the issue to My Lordship (perhaps with same offer that Sindh Ombudsman be advised to book two flats on my money through his staff to test the Model Agreement). I still hold this offer.
24. For a project of say 50 flats or 100 flats these builders book and keeping booking for moths over months. Sometime to allure public all of a sudden they announce “we apologise to the disappointed who could not get flat/house as the project got fully booked same day”. This psychologically increase the public interest. After few months from the same builder on his structure large banners can be seen “a few cancelled plots available”.
25. When you purchase a plot, a flat or a house from any developer, do not be impatient in getting its possession unless you really are in a very bad need to shift and reside or construct a house. It is dangerous. Hardly any month goes by when I do not get two three calls colleagues shy that OPF Islamabad Valley nothing has happened. I always tell them that they should pray ALLAH the great that OPF further delays it for next 5-10 years. I explain them they are still outside working. The land is not developed. Even if it is developed they are not going to construct a house immediately and start living there so why that unnecessary anxiety. I tell them we the Muslims have a belief that whatever comes is from ALLAH and always there is something better in that for us. Yesterday I was reading how even the disease is for good. If OPF Islamabad scheme has been much delayed all of them should be happy and thankful to ALLAH because there is a good from ALLAH in this long delay. I tell them suppose OPF completes all this development this July 2009 and asks you to take possession of your plots what will all you do? Would you people serving abroad come to Islamabad and start constructing houses, certainly not because 80% of those allottees are not residents of Islamabad nor they would on coming back from abroad would settle in Islamabad. What is happening today in the country should not be forgotten. No open plot or unoccupied locked house is safe. The plot or flat is only safe till you have not taken physical possession from the Developer/Builder. As such try your best to take physical possession only when you actually are going to occupy the plot/flat. Prefer paying non utilization charges treating as insurance rather than taking possession till you can hold no more.
26. PS: The above part belongs for buying a house/plot/flat from the Developers/Buildings. The above is not fully exhaustive. As stated above due to ill health this is merely a struggle in the public interest. The above are the scattered points not in consistency and there would be many mistakes or wording/spelling errors as I have just typed playing with key board without looking on the Screen which hurts my eyes. As soon as I could recollect other points I will add.
PURCHASING FROM AN OWNER:
27. There is an other angle of OPs sufferings. An OP comes to know about sale of a house or he finds such an opportunity during his visit to Pakistan. In both case due to being handicapped having no much time he just looks at the house being sold, the locality, the price more particularly friends telling him it is a good opportunity as the seller needs money hence he is selling at a discount price. The trouble starts when after having done everything one fine morning he gets a news from the family that someone has filed a case in the court or has threatened that the house belonged to him.
28. In this the thing is that one house is sold to many. Sometime the blank file of a house is sold to many. This is deliberately done and the mafia/activists mostly try to find an OP the best to select as their next victim in this trade.
29. Due to my ill health, as I can not write fully I would just give a basic guideline which will protect you 50% your rights if not full. Whenever you are going to buy a flat/house/property from an owner, the first and the most important two things never forget to perform. The first is personally visit the concerned development authority eg LDA and check the File of the concerned property. Even after having see the File do not trust your eyes. Remember one thing such professional cheaters have deep in-rods in such offices hence the File shown might in most likely case be a fake. After having seen it immediately under registered mail/fax (not courier) address a letter to the concerned Sectional Incharge giving reference of today’s visit and requesting them to confirm you in writing that the seller is a genuine owner and that the property has not attachments.
30. The other important thing to be done is that immediately release in two prominent newspapers of your city two advertisements, one in English and one in Urdu, as Public Notice stating that you have decided to purchase so and so property from so and so and if anybody has any objection, claim, lien, attachment, interest, he/they must inform you or the concerned Department Authority within 07 days of publication of the Notice. This will save you from many headaches from any future claimants with whom the dishonest owner/seller might have already made sale agreements without your knowledge. This is the best legal protect. Forget to eat your dinner but do not forget to perform this.
31. OPs residents of villages have their own sort of problem. When the news reaches the village that Abdul Latif the elder son of Chacha Rahim is coming from Saudi Arabia, the scheme how to get his money starts. The two houses away residing Chacha Bukoo starts telling in the street that he is shifting to other village or his other big house in the village hence he wants to sell his this old small house or plot. When “Tiffa putter’ comes home Abbai Jee tells “Tiffay, Chacha Bukoo is in need of money, plot is of very good nature near to our home, it is a chance why not you take it may be one day Masee Barkatay our next neighbour one day sells her and thus we will have three side by side plot and make one big house”. Tiffa putter gets big glittering dreams and empty his pocket. The family is happy that now they have two plots and start counting the days when Masee Barkatay may also sell her so three plots are combined. It is 3 or 4 months Tiffa Putter having come back on duty in Saudi Arabia that he gets a letter (now mobile) that Massee Barkatay or the left side of the purchased plot resident Chacha Fathoo has filed a case under “Haq Shufa” claiming he had the pre-emptive right of purchase of the said house plot. This is all done by design. I am aware of my own knowledge how every third village resident abroad has the same or similar story to tell. How to over come this, INSHALLAH to be continued if ALLAH gave health.
32. Even if you buy a house/plot from a near dear relative, always get yourselves save by inviting public objections as explained above. Never treat that since you are purchasing from a relative or even the brother hence the exercise is waste. No, you must remember that any third party may have and at a later stage file objection.
POWER OF ATTORNEY:
33. One very important item is Power of Attorney. During the last 20 years I came across dozens and dozens of cases people blindly signing on Power of Attorney and one day finding themselves in hot water. Only last month one approached me that he signed a power of attorney in faour of his trusted friend in Faisalabad for his house. Today he finds his house has been sold in addition that a court notice has come for him to appear as a Bank has filed case for non payment of loan installment. The text of a power of attorney comes from Pakistan which in 90% cases is taken from typists/Munshis sitting outside courts. This text is copied over copied and is uniform. It contains three dozens types powers being given in one power of attorney. For example ABC gets a text from Lahore which he gets typed in Saudi Arabia, gets it attested from Pakistan Embassy and sends it back to his relative in Pakistan. ABC gives power for sale of his plot but this power of attorney text contains eg “Mortgage” which in other words means ABC has given power to his relative that he can also pledge his plot to a bank or any other institution and get loan. In brief, do not sign the Power of Attorney coming from Pakistan already typed or text sent from there. Get is read by some educated, really educated not merely degree holder, and give power only to that extent which is your dire need.