• Flat Buyers Cry Foul: Hidden Charges & False Promises
• Godrej Nest Scandal: Homeowners Demand Justice
Unmesh Gujarathi
Sprouts News Exclusive
A major controversy has erupted over Godrej Properties Ltd. and its joint venture with Shivam Mega Structure for the Godrej Nest project in Kandivali East, with several flat buyers accusing the company of unethical business practices, non-transparent dealings, and violations of contractual agreements. The allegations, brought to light by concerned homeowners, point to hidden charges, misleading commitments, and potential financial irregularities, raising serious questions about the company’s credibility.
Sprouts Newspaper’s Editor-in-Chief, Unmesh Gujarathi, has taken the lead in investigating these allegations, exposing a disturbing trend of real estate malpractices that could have long-term implications for homebuyers and the industry at large.
• The LUC Tax Controversy: A Misleading Demand?
One of the central allegations involves Land Under Construction (LUC) tax, a charge imposed on homeowners after they have already made 95% of their payments. Buyers have reported unexpected demands ranging from ₹2.5 lakh to ₹5.5 lakh, depending on the size of their flats.
Legal precedents, including a Supreme Court ruling in 2019, have clearly stated that LUC tax is not applicable to flat buyers and should be borne by builders. Moreover, any amount collected post-2010 was ordered to be refunded to developers. Despite this, Godrej Properties and Shivam Mega Structure have allegedly passed this charge onto buyers, raising suspicions of revenue loss to the government and potential tax evasion.
Unmesh Gujarathi, in his detailed analysis of the case, highlights how this practice not only exploits homeowners but also reduces the official property value for stamp duty calculations—benefiting the builder at the cost of the government and customers alike.
• Breach of Trust and Misleading Sales Tactics
Flat buyers have also accused Godrej Properties of making false promises during the sales process. Sales representatives assured buyers that the final cost was fixed, apart from a minor additional fee of ₹12,000-₹15,000 at the time of registration. However, once agreements were signed, additional charges were introduced without prior consent.
Legally, a contract is based on offer and acceptance, meaning any unilateral change to an agreement without the buyer’s consent constitutes a breach of trust and potentially even a criminal offense. Unmesh Gujarathi points out that most buyers, relying on the company’s reputation, did not scrutinize the 100-page legal agreements at the registration office—placing full faith in the builder’s integrity.
• Structural and Safety Concerns
Beyond financial exploitation, buyers have raised serious concerns about construction quality and project design flaws, including:
1. Reduction in podium levels – Promised features were altered post-sale, affecting overall project aesthetics and functionality.
2. Inadequate parking spaces – Some parking spots allegedly require a crane for proper vehicle placement, making them practically unusable.
3. AC duct design flaws – Copper piping for air conditioning runs 3 feet below the ceiling, forcing homeowners to install false ceilings and lose storage space.
4. Unapproved design deviations – Certain safety features, like water sprinklers, have reportedly been ignored, despite regulatory requirements.
5. Subpar interior quality – Window locks, sliding doors, and electrical fittings are reportedly of low quality, contrary to earlier assurances.
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• Manipulation of RERA Regulations and Occupancy Certificate (OC) Concerns
Buyers have accused Godrej Properties of exploiting RERA regulations by:
– Taking project deadline extensions without informing buyers.
– Forcing buyers to sign undertaking letters before granting possession.
– Collecting maintenance charges before project completion, even as builders continue using essential utilities like water and electricity.
– Obtaining the Occupancy Certificate (OC) through questionable means, as many flats are still not ready for possession.
• Whistleblowers and Lack of Corporate Accountability
Internal sources claim that ethical whistleblowers within Godrej Properties have raised concerns about these practices. However, instead of taking corrective action, the management has allegedly ignored complaints, prioritizing short-term financial gains over the company’s 127-year-old reputation.
A senior project official, when confronted by buyers, reportedly admitted that many of these issues were caused by the sales team’s false commitments—but refused to take responsibility, deepening concerns about corporate ethics.
• Government and Regulatory Intervention Required
Given the gravity of these allegations, affected flat owners are considering legal action against the company. Some have already filed RTI requests with the BMC to verify the legitimacy of LUC tax claims. Initial responses indicate that there is no official LUC tax category, and that the charge may have been wrongly imposed.
If these allegations prove true, Unmesh Gujarathi believes that regulatory bodies like SEBI, RERA, and the Ministry of Housing and Urban Affairs must intervene to protect homebuyers and prevent further malpractice.
• The Path Forward: Will Godrej Properties Address These Issues?
As the controversy unfolds, homebuyers are demanding a transparent audit of the Godrej Nest project, a refund of illegal charges, and strict action against those responsible for misleading buyers. They have also urged the company’s Board of Directors to take immediate corrective steps before the issue escalates further.