In this age of layered complexity, how CAN buyers be aware?
From wikipedia : Generally, caveat emptor is the property law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods.
The phrase Caveat Emptor arises from the fact that buyers often have less information about the goods or service they are purchasing, while the seller has more information. Defects in the goods/service may be hidden from the buyer, and only known to the seller. Thus, the buyer should beware.
The modern trend in the US, however, is one of the Implied Warranty of Fitness that applies only to the sale of new residential housing by a builder-seller and the caveat emptor rule applies to all other sale situations (i.e. homeowner to buyer).
In the UK, consumer law has moved away from the caveat emptor model, with laws passed that have enhanced consumer rights and allow greater leeway to return goods that do not meet legal standards of acceptance.
I ask :
In India how can Caveat Emptor be enforced when:
– Public records are so difficult and onerous to obtain?
– Court cases take 30 years to be heard?
– Various government agencies act in conflicting ways, sending different signals to innocent consumers?
Let’s consider the Campa-Cola case:
Suppose I wanted to buy a flat in one of the now known ‘illegal floors’ that the Supreme Court has clearly demanded to be demolished.
Assume that this is the dialog between seller Mr. Sharma and myself:
Alok: “Mr. Sharma, I understand that there is a legal problem of ownership in these flats in the building compound?”
Sharma: “Alok, there is no problem. It’s just a long court case that is going on and on and will be settled in our favour.”
Alok: “And what makes you so sure?”
Sharma: “Boss, I’m paying electricity charges for my flat for years! Check out these bills! How can BEST supply electricity to a flat that’s illegal??”
Alok: “But I understand that the water you get in the building is all from tankers! There is no BMC supply because of the illegality?”
Sharma: “No Alok. It’s a silly issue between us and the BMC. The builder got into some fight with them.”
Alok: “But what about the court case?”
Sharma : “It will be in our favour. Also, the building has LOTS of FSI. If required, we will convert that FSI to adjust for these flats. You see how redevelopment is going on? It will apply to us also…”
Alok: “I’m not still convinced…”
Sharma: “Let me convince you by making you meet my neighbour who has a BANK LOAN to finance his house!! Now, banks won’t give loans to illegal flats, right?”
You get the drift. This sounds amateur but it illustrates the CONFUSION that can be created in a Buyer’s mind.
Think of innocent, helpless old couples and families being the buyer… how much can they question and riddle around?
TO MAKE BUYERS BEWARE, why doesn’t the Govt:
– Issue press ads in the newspapers stating which buildings are ILLEGAL?
– Post court notices outside and inside building compounds alerting buyers?
– Have all govt. agencies speak one language?
– Create ONE DILIGENCE agency (like a Sebi) that either ticks a building and its flat Green or Red?
– STOP all banks from lending money to finance flats that may be illegal?
I mean just read the misguided promises made by the Chief Minister when the matter blew up last few weeks! WHY didn’t he say, “Sorry – you guys are illegal”…? WHY did he ‘promise’ asking the Attorney General (who he didn’t!!!) ????
How does an Indian buyer beware when the government is committed to creating confusion , or is at worst NOT EVEN AWARE???