AMIT SHANBAUG
Many
of the top property developers in metro cities like Mumbai and Delhi
have come out with a new marketing strategy to lure potential buyers.
They are offering warranties on the houses they sell, similar to those
offered by manufacturers of electronic appliances like TVs and
refrigerators. The warranty period ranges from 1-3 years on all
electronic appliances in a fully-furnished apartment, to as high as 10
years for waterproofing of flats. The Maharashtra Chamber of Housing and
Industry claims that nearly 80% of its members are offering such
guarantees across the country.
However, is this warranty a
convincing reason to buy a flat at a premium? Most real estate experts
don’t believe so. Here’s why.
It’s the appliances, not apartments
Most warranties being advertised
by developers are for the appliances that come with a semi- or
fully-furnished flat, not much on the construction-related aspects of
the house. While offering appliances with apartments is nothing new, the
only difference is that a few builders have started handing out the
warranty cards to buyers when they take possession of the house. “The
developer purchases these products from various companies, which offer
their warranties. The builder merely passes them on to the customer as
his own,” says Pankaj Kapoor, managing director of Liases Foras, a real
estate research firm.
A significant construction-related
guarantee some developers have begun to offer is on the paint job.
However, many reputed paint companies already offer a warranty of 5-7
years, subject to a minimum quantity of paint purchased by the builder.
The warranty includes shade fading, growth of fungus and algae on walls,
flaking and peeling of paint. The company maintains records of the
customer warranty electronically and issues a warranty identification
number.
Even if the builder offers other construction-related
guarantees, say, for waterproofing, these come with the building, not
individual apartments. “In the case of warranties on construction
materials, the buyer should ask for relevant documents from the
developer and scrutinise the level of accountability implied,” says Om
Ahuja, CEO, residential services, Jones Lang LaSalle India.
No extra cost for developer
The builder is only offering convenience in terms of providing access to guarantee papers.
You are anyway entitled to warranties on products that come with the
house, such as electrical wiring, switchboards, appliances like CFLs and
ceiling fans, kitchen chimneys, exhaust fans and bathroom fittings like
branded taps.
So, is offering warranties just a gimmick? The
builders want you to believe otherwise. “Most top developers want to
protect their reputation, so they opt for branded material. The
guarantees are a genuine effort by builders, not a gimmick to sell their
projects,” says Boman Rustom Irani, chairman & managing director of
Rustomjee Group.
However, the fact is that when a home owner
wants to use the warranty, he will have to approach the manufacturers.
The developer could wash his hands off any defects later. The only
solace for buyers is
that the guarantee may mean it is a
better product than an unbranded one. “Appliances covered by manufacturer warranties tend to be of a better quality,” says Ahuja.
Cash discount is better
While
most such warranties are offered for fully furnished premium projects
and projected as being free with the apartment, if the builder offers
these at a premium, ask for a cash discount instead. This may work to
your advantage in two ways: you get to buy what you like, even at a
lesser cost, and something that suits your needs.
Besides, the
builder has low incentive to buy the most energy-efficient appliances
since it is you who will pay the bills, not him. The motivation for the
builder is minimising investments and maximising returns, and he is more
likely to choose not-so-efficient appliance at a lower cost rather than
an expensive five-star one. The large number of investors today is also
a reason for minimising the cost on appliances. “When an apartment is
being bought just as an investment or to rent it, the owner would want
the builder to install cheaper appliances.
This is because the maintenance cost is minimal if the flat is locked
up, or the tenant will pay the charges,” says a Delhibased real estate
expert.
Before you buy
Another important factor to be
kept in mind is whether the construction is suitable for all the fancy
appliances on offer. For instance, a fully air-conditioned apartment
requires proper
sealing of doors and windows and your electricity bill may go up if
this is not done. Similarly, if the chimney in the modular kitchen is
not powerful enough, you will have to spend more on getting it cleaned
more frequently.
Source: times of India 26/11/2012
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