Karachi: TI Pakistan moves to court against DHA Karachi, Emaar

[Naveed Yaseen]

MUSHTAQ GHUMMAN
ISLAMABAD (October 06 2009): The Transparency International Pakistan has filed a constitutional petition in Sindh High Court (SHC) against Defence Housing Authority (DHA) Karachi and 'Emaar' for allegedly violating building bye-laws. Transparency International Pakistan had written a letter to Emaar Giga Karachi Limited (EGKL), local office of Dubai-based Emaar, on September 14, pointing to alleged illegal activity of Emaar, ie sale terms of apartments in Karachi Crescent Bay, which "are against the laws of Pakistan," seeking reply within seven days.

The case is fixed for hearing on Tuesday. Transparency International Pakistan argues that in case of failure to pay the regular instalments, builders' penalties are over and above what is allowed by law. In Emaar project Crescent Bay and Meinhardt Project Creel Marina, 30 percent of the unit prices/total price are being deducted although building bye-laws do not permit a penalty of more than 4 percent of the paid instalments in case of cancellation of the unit.

Thus, instead of deducting a penalty up to 30 percent of the value of the apartment (average Rs 9 million) on cancellation of booking, it should be 4 percent of instalment paid, eg if the instalment amount for a Rs 30 million apartment is Rs 5 million, the penalty should be Rs 0.2 million and not Rs 9 million. TIP has requested these companies to refund the excess penalties within 30 days.

Local as well as foreign builders from UAE and Singapore are active in these fraudulent practices in Pakistan. In many cases, builders make bookings for the same unit in the name of multiple buyers thus opening the scope of blackmail of those of the general public who invest with such builders, Transparency International Pakistan added.

Emaar (Crescent Bay) Meindhardt (Creek Marina) as well as DHA Karachi have failed to respond to Transparency International Pakistan letters sent to them. This forced Transparency International Pakistan to approach SHC for redressal. Emaar (Crescent Bay), Meindhardt (Creek Marina) have more than 500 clients in Karachi, and both projects have been on hold for 3 years (Creek marina) and 2 years (EMAAR), but buyers are forced to pay monthly instalments, or else pay penalty of Rs 9 million.

Transparency International Pakistan, in its prayer, has requested the SHC to take action on this petition and eliminate fraudulent practices by builders in DHA Karachi, regulated by DHA, and order that 'the builders in DHA eg Emaar project Crescent Bay and Meinhardt Project Creel Marina and others, charge only 4 percent of the instalments paid by buyer in case of cancellation of the booking either by buyer or the builder, and in case of delay builder shall pay to the buyer interest at the current bank interest rate on all amount to buyer for the period of delay."

It has also been prayed in the constitutional petition that builders should be directed to maintain registers individually showing the number of units/plots booked with the name of every investor against such unit and display such register at a prominent place in their site office for inspection at all times so to eliminate multiple booking.

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