Getting the bare minimum

Hidden costs

If you ever thought the dream apartment you have booked comes fully furnished, then you are wrong. Even basic, utility furnishing is not part of the overall deal, cautions Prashanth G N 

An apartment these days comes with just the walls, doors, and very basic facilities like taps, wash basins and commodes. Nothing more. The insides of such apartments are bare with no storing space of any form. Buying an apartment today is to buy a bare apartment. The furnishing will be yours, or the builder’s, in case you agree to pay extra for the same. Even basic, utility furnishing is not part of the overall deal.

Bare apartments are high in the mid-segment category of Rs 30 lakh to Rs 60 lakh. While you pay Rs 30 lakh for the apartment itself, you have to spend an additional Rs 1 lakh to even Rs 10 lakh on furnishing the apartment and turning it into a proper utility space. An apartment costing Rs 30 lakh would actually be Rs 31 lakh, Rs 36 lakh or Rs 40 lakh, depending on the amount you are willing to spend and the extent of furnishing you are willing to take up.

Asked why only bare apartments are handed out to people, a private builder told this newspaper that the cost of raw materials goes up every three to six months and the original budget earmarked for an apartment complex goes up sharply, which means the new, higher budget to provide the same bare apartment will have to be borne by builders. Typically, they pass it on to customers.

Shelling out extra

In case of huge bribes to be paid to officials in the corporation, builders may incorporate the bribe cost within the original cost of the apartment. In case that’s not done, apart from the basic price of the apartment, customers are told to pay bribe, which means customers have to pay extra for the apartment. While the original price would be around Rs 30 lakh, what is actually paid may be Rs 32 lakh, Rs 34 lakh or Rs 36 lakh. The customer has to pay for the rise in raw materials cost as well as the bribe amount.
 
A resident of Nagarbhavi who did not want to be named said: “We had planned to pay Rs 27 lakh to the builder. But when the complex construction was completed, the price of the apartment went up to Rs 29 lakh, and later to Rs 31 lakh, as hefty bribes had to be paid by us to officials via the builder. The builder openly told us that no signatures or approvals would happen if bribes are not paid.

And we have to pay them in cash. Where do we bring money from? Water supply, electricity, revenue officials have all to be bribed. If just one customer spends Rs 2 lakh on bribes, you can estimate the money officials are making, even if the builder doesn’t take a cut. I don’t know if the builder is taking a cut.

The builder says that he is in the grip of officials and that even if he wished not to pay a bribe, he was left with no choice. A complex of 80 apartments at even Rs 1 lakh bribe would mean Rs 80 lakh money to officials.”

If there is relief that atleast the apartment is ready, customers find the insides of apartments completely bare with no wardrobes or storage. Furnishing costs range from Rs 1 lakh to Rs 10 lakh, which the builder passes on to the customer. A customer who bought a flat in Banashankari, even after paying Rs 80 lakh for the apartment, got only walls. “All the other costs, especially furnishing and creating storage space, were borne by me.

In effect, I ended up paying Rs 90 lakh. If you buy an expensive flat and if you assume you’d get all the furnishing readymade, then you are wrong. I took up furnishing as I needed to rent out the apartment. Tenants, paying a monthly rent of over Rs 35,000, would certainly expect superior facilities,” says Paramesh Kumar, a resident of Jayanagar.

Furnishing-heavy

Traditionally, houses are built with some basic furnishing, wood work and a good amount of storage space. Even at the beginning of the apartment culture in Bangalore in the late 70s — when perhaps the first apartment complex, known as Shalimar  apartments, was built — and in the 1980s when apartments came up in Malleswaram, there was the strong belief that other than just the walls, rooms and rest rooms, good storage space and wardrobes were important for the house. So lofts were not uncommon at that time.

By late 1990s and the years after 2000, the new culture of bare apartments began. Any storage space and loft and basic furnishing had to be undertaken by customers, which has escalated the cost. In 2014, this new culture remains. Particularly in the IT and post-IT world, there is no sense of generosity from builders in giving an apartment at a particular cost. The calculations and purposes for which payments have to be made is clear cut to the extent that bribe is factored in as additional cost.

Middle class salaried professionals are the most hit by housing cost escalation. Successful business personalities and high profile executives like CEOs may not worry about the extra cost, but it is definitely a cause of concern for the middle class who take loans and pay EMIs for a long period.