Around 1,000 residents of an apartment complex in Thirumudivakkam in the southern suburbs are in a spot, with State Bank of India putting up a club house on the premises for auction over a mortgage default.
The residents paid Rs 1 lakh-Rs 1.5 lakh each for developing the club house as a common property, but, the fine-print of the agreement with the builder showed the property was owned by him. He later mortgaged it against a loan with the bank which decided to hold the auction on August 28 after he defaulted on payments.
A Moorthy, president of the residents association, said most flat owners were senior citizens who paid a sizeable sum for the ‘Royal Club’. “The builder took funds from us saying it was for construction of the club house, but we did not get ownership. We don’t know what to do now,” said the 62-year-old.
While the builder couldn’t be reached for comment, the association’s complaint to SBI hasn’t got a response. TOI also studied documents related to the case.
P Balaji, counsel for the residents, said the builder, while selling the flats, insisted on payment of membership fee for the club house. “They got an estimate sheet, promising 22sqft to each resident. But, the residents did not check the agreement which clearly mentioned the builder was owner of the clubhouse,” Balaji said.
Now, despite the property being auctioned, the residents can’t claim money from the auctioned sum. “We can only prefer a criminal complaint,” Balaji said.
Legal experts who vetted the documents said the residents could file individual suits for compensation, but that such cases could drag on for years.