Can crowd-funding be exercised to assist developers in the completion of their projects? Is Mumbai ready to emulate this Americanised idea?
Recently, there was news about a real estate developer in the United States being crowd-funded by his buyers when he ran into financial deficits and was unable to complete his project. The apartment buyers in that project came forward and contributed according to their capacity and helped the developer complete his project, so that they can get the possession of their apartments. This strategy not only helped the buyers as they were able to move into their property (for which they had already made the initial payment for) but also helped the developer greatly, as he was able to complete his project, raise more capital when buyers moved in and was also able to keep the faith of the buyers intact by giving out a clear picture. This incident brings to the fore an important question: Can crowd funding as a concept is introduced in Mumbai? We asked a few Mumbaikars about the same and got several different responses. Here's a look:
Arun Parikh, a Mumbai-based investor, says, "This seems unlikely. The general public in Mumbai is wary of fake builders who gather money and grab land parcels. In case such a concept ever gets implemented, people will be highly sceptical about getting their money back. Also, they would doubt whether their apartments would ever get completed once the money gets contributed."
Vaibhav Dubey, a production manager for films and TV, feels, "Such a scenario is very unlikely in Mumbai, as there exists a credibility issue with developers. One can never be sure (even after contributing) whether he will ever be able to move into his own home. Buyers should ideally go in for ready-to-move-in homes and not get stuck with under-construction properties."
Avantika Kukreti, a media professional, shares, "With many projects coming up in and around Mumbai, people, though spoilt for choice, are confused. Then, there are so many news updates about projects being delayed and possessions taking time. I have experienced it personally, as we booked our flat in 2006 and got the possession in 2014. I think as long as the developers can't keep deadlines, they simply can't be trusted."
Tushar Upreti, author, film-maker opines, "Crowd-funding is a great way to infuse life into projects that are facing a financial crunch. Many real estate projects shut down in the metros due to a lack of funds. Crowd funding is a win-win situation for both, buyers and sellers, where they come on one single common platform to turn dreams into reality, without involving a third party (financerbanks)."
Siddharth Sharma, an IT professional, adds "This is definitely possible in India and even in Mumbai. Maximum Mumbaikars are office-goers. They book a house and start paying the EMIs to the developers with a notion that they will get the possession of the apartment within the stipulated time. If the possession is delayed, the payment towards the rent is increased. So, if by crowd funding, the rental cost does not increase for a long time, then, it is something that should be taken up."
Source - TOI
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