Godrej Summit, a residential development in Gurugram by Godrej Properties Ltd is now facing quality and structural safety issues. This is not the first time Gurugram is witnessing major quality issues in its high-rise buildings.
The situation came to light after an independent assessment of the project by an external expert. The assessment revealed the presence of chloride in the concrete used during the project’s construction, which poses a serious risk of corrosion to the steel reinforcement upon contact with water.
Calling their flats unsafe like Chintels, over 700 families of Godrej Summit in Sector 104 in Gurugram had approached the district administration seeking its intervention.
“The quality of the project is as bad as of Chintels. The balconies have been unsafe since day one. The builder always seeks cover under the IIT report, which is more of an opinion than an audit. The builder conducted all tests itself and only took the findings to the IIT for an opinion,” a representative of the residents was quoted by TribuneIndia.com.
To address the concerns of distressed buyers, Godrej Projects Development Limited (GPDL), a wholly-owned subsidiary of the company, has made an offer to buy back apartment units or provide rentals as an alternative solution. However, this offer is subject to customers executing the relevant documentation with the company.
Accepting the “lapses and structural flaws”, the builder had offered to buy back all flats at the basic selling price (BSP) in emails to the residents. The residents were dissatisfied by the buy-back price offered by the developer.
The department of town and country planning (DTCP) in May 2023 had issued a show-cause notice to the developer of Godrej Summit, and sealed two flats one above the other on the third and fourth floors, whose fllor-roof slab had been dismantled. In the notice, the district town planner (enforcement) had asked the developer to explain why structural changes were being made in apartments 303 and 403 of Tower 1 without obtaining a no-objection certificate from the department and society residents.
With Godrej Summit plagued with structural safety and quality issues, the developer has been forced to allocate Rs 155 crore to cover repair and maintenance costs. The allocated funds will not only cover repair expenses but also customer claims and ancillary costs.
The setback has affected Godrej Properties’ financial performance as well. During the June quarter, the company reported a substantial operating loss of Rs 149 crore. Th company attributed the loss to a significant decline in the total area sold, with a staggering 60% drop compared to the previous quarter. The booking value for the quarter also plummeted by 11% from the previous year and 44% sequentially.
The discovery of quality issues with Godrej Summit is sure to cast doubts among investors and potential buyers regarding Godrej Properties’ projects. The company’s reputation as a reliable and quality-focused real estate developer is likely to take a hit.
Godrej Properties now faces the challenge of not only restoring confidence among buyers but also reclaiming its reputation in the market. The outcome of their remediation efforts will be closely monitored by industry experts and investors, as it will undoubtedly shape the future trajectory of the company.
In 2022, the residents of Sector 37 D-based NBCC Green View Society, developed by the state-owned NBCC (India) Ltd, had been asked to vacate their apartments. The decision was taken due to “structural and construction lapses”. An IIT Delhi team had concluded that high chloride levels in the water had led to the corrosion of steel reinforcements and made the towers unsafe.
Earlier, Chintel Paradiso high-rise apartment buildings were found to be unsafe for habitation after roofs of several floors collapsed in a tower. In the project, Tower D is set to be demolished while towers E, F, G are unsafe and need to be vacated.
The district town planner (enforcement) has clarified that the developer of Chintel Paradiso will pay ₹6,500 per square foot (as per the super area) plus the cost of interiors as finalised by the district committee, actual stamp duties, shifting charges and rent till full and final payment of flats to the owners whose flats are in the tower scheduled for demolition. The developer is also offering another option of providing re-constructed apartments.