Thursday, November 10, 2011

Reddygate

This was originally posted in R2IClubForums.

I R2Ied 6 months ago. Immersed myself in the Bangalore Real Estate. Sold my land during the time period. Tried to invest it in a "villa" - twice so far. For good or for bad, both the villas were by the same builder, a tier 1 builder in Bangalore.

Here is my story, in 2 parts.

Price of Reddy 'Villa': Rs. 1.3 Crore
Advance paid to Reddy: Rs. 50,000
Legal documents in DVD: 1300 pages
Lawyer hours spent: 30+
Personal hours spent: 50+
Number of lawyers involved: 5
Sleepless nights: 12
Finding out how Reddy was going to screw you: Priceless

There were six Reddy sisters who owned the land who inherited it from their father Reddy who inherited it from his father Reddy who got it from some other Reddy who we don't know how he acquired the land. (Red flag 1).

The six Reddy sisters enter a joint development agreement with a big name builder to develop row houses. As part of the deal, the six Reddy sisters get 33% of the houses.

There are 58 villas in total. At 33%, those are 18 houses, so each Reddy sister gets 3 houses each.

Now, the eldest Reddy sister is selling one of her property. Her husband Seller Reddy is the one who is acting on her behalf. I interact with Seller Reddy.

The house I was supposed to be buy was #47 in the earlier plans. It was changed to #58 by swapping it with the other #58. There is no documentation or correction submitted to this regard to the Government. (Red flag 2).

The 33% sharing agreement lists what all houses each Reddy sister gets. My house #58 (old #47) is not in the list. The developer dodges the question as to how this happened. So I get all the people in a meeting, my lawyers, developer's lawyers and the Seller Reddy.

Turns out Seller Reddy got some more land after the fact and attached it to the community. As part of this he got 2200 Sq Ft of salable area assigned to him from the developer. When he did the contract, his wife Reddy and the developer unilaterally sign a document. That document is not counter signed by the other sister Reddys. (Red flag 3). The document just says 2200 sq ft of land and does not name the villa. (Red flag 4).

The house he is selling is 2700 Sq Ft + terrace and not 2200 Sq Ft (Red flag 5).

If you approach this as a con job, you will see that the renaming of the house was a slight of hand just to confuse the buyer. The house was in the original approval plan, so that should pass the checks. But the renumbering and making it house #58 of 58 provides them with an out. Even though this house was approved earlier, since the number changed, is it now approved or is it not approved? Why did you make the real last house you built as #47? (red flag 6).

Seller Reddy says he can do all supporting paperwork and get all sisters to sign off and so on. This just seems ripe for litigation. Not worth the fight.

tl;dr - Seller Reddy got cute. By-passed sister Reddys, got an extra house allocated for him, used slight of hand to confuse buyer.

19 comments:

Anonymous said...

Have faith on our law system. Go ahead and buy the villa.Build your family there.eNjoy the life.

If they go to court, it will take 30+ years, by the time you would have severed ties with earth.

Life is all about memories.

Cheers!

Anonymous said...

@Anonymous above,

Nice suggestion. But, what if the seller goes to 'RAI COURT' or some 'SHETTY COURT'. Who is going to protect the buyer.

Things work differently in Bengaluru. Similarly, there are 'KHAN' courts in Hyderabad.

If one smells rat, it is wise to keep away from the deal. Life is more precious than house

Anonymous said...

Good God! Are all properties in Bangalore like this?

Anonymous said...

SCAM is the state pastime in Karnataka. The state is ruled by scam artists. No scamsters get punished. They are taken to court but let free as judges get proceeds of scam.

Anonymous said...

In any sane market prices would collapse to compensate for the high risks relating to defects to title that may completely void your investment. Not in India though.

Of course, I forgot. India is different. RE prices only go up here.

I am sorry.

Anonymous said...

Given Indian history and current attitude + culture. Black money, bribes, Scams, etc etc are part of routine life. No point talking about these. RE is backed by all these good things, so no, RE prices will not fall. BUT.. But, prices of other commodities will rise and quality of life will be down the drain for the people who are bottom of food chain. Anyways, Indians are used to low quality of life (unaware of what real quality of life means is just perception.. ask any Indian!)

Anonymous said...

Doesn't 33% of 58 villas come to 19? Is 18 a new form of "Reddy" calculation?

Anonymous said...

Reddy, Yeddy, Kundimozi & Raja are the top scam artists in south. These have been languishing in jail. There are thousands like these who openly conduct business as usual.

The problem with the system is that the whole system, govt is corrupt. So. if you get scammed. it is your own fault that may be due to greediness

Anonymous said...

Vik:

If you are going to steal posts from r2iclubforums you should at least cite a link to be nice.

san said...

Dear Anonymous

This is the author here, not Vik.

Sorry I should have made it clear. I am the same guy who posted this in R2IClubForums.

I had intended to post another in R2IClubForums and post a link to that post from here.

Unfortunately, R2IClubForums has been hacked by a Paki Hacker group. (Go there please).

I couldn't do that. I will add links to the R2IClubForum posts once the forum is back up.

Anonymous said...

Doesn't 33% of 58 villas come to 19? Is 18 a new form of "Reddy" calculation?

Lol.. maybe a slight of hand by the post author. :)

Just kiddin.

Hacked By PakiGroup or ReddyGroup?
Someone post this to the news channels before this blog gets hacked too. If it makes news we can expect relief.. HOPEFULLY!

Anonymous said...

Author here. Smiles at the slight of hand comment. If the joke wasn't on me, I would be thoroughly amused.

Anonymous said...

@OP,

How much are the hourly fees for the lawyer(s) that you retained in Bangalore? Can u please share? Thanks.

san said...

Anon

It depends on the lawyer. One lawyer I used charges 1% of the sale price. He will walk you from cradle to grave. But it is very expensive.

The other lawyer I use charges Rs.15,000 for document checks. You can add another Rs.15,000 or so for sale agreement, sale deed checks. If need be, they will also send a person to be on your side during registration at sub registrar's office (don't underestimate this).

There is no per-hour charge, typically a bulk fee.

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