Key Takeaways from the Agreement Between Bahria Town Karachi and Jamat-e-Islami
After a series of meetings and exhaustive discussions with the consent of stake holders, Bahria Town Karachi and Jamat-e-Islami have finally reached a resolution on March 09, 2020. An agreement was signed between both the parties which addressed virtually all the concerns of the affectees of Bahria Town Karachi.
As we already know that Bahria Town Karachi has performed rather badly over the past one year due to its flawed policies which damaged its reputation. Thousands of affectees had to run social media campaigns and lodged protests before Jamat-e-Islami took up this matter and engaged in meaningful discussion with Bahria Town in order to resolve the issues peacefully.
Key participants of the meetings include Malik Riaz Hussain from Bahria Town, Haji Muhammad Iqbal from Ary Group, Hafiz Naeem-ur-Rehman from Jamat-e-Islami, Nawaz Khokhar former Deputy Speaker National Assembly, and others.
Furthermore, in order to resolve outstanding issues and any disputes in the future, a committee has been formed which includes Mr. Haji Muhammad Iqbal as Bahria Town’s representative, and Advocate Safi ud Din as representative of Jamat-e-Islami.
A Quick Review of the Issues
Before we discuss the important takeaways from the agreement, it is pertinent to give a quick rundown of those issues which caused JI to join the affectees.
Following is the list of issues which needed to be addressed:
- Imposition of 35% additional development charges
- Forcing members to apply for possession
- Refund issues
- Relocation of affected plots
- Delay in development work in certain projects
The imposition of 35% charges and forcing members to apply for possessions had caused much panic in the market, which affected the market negatively and sale purchase activity had almost halted.
Demanding additional charges in the name of infrastructure development didn’t go down well with the members, and it was rejected outright. Potential buyers/investors lost interest due to these additional charges that would increase the cost of a property. So, the members demand withdrawal of additional development charges.
Furthermore, those who applied for refund last year couldn’t get their money back due to delays in the process and receiving post-dated checks from Bahria Town. Some checks even bounced due to lack of funds in Bahria Town’s account.
Thousands of members were recently relocated from affected precincts to new precincts, i.e. 60, 61, 62, 63, but their locations weren’t disclosed. So, people still do not know if they have plots on ground or still they are holding worthless papers.
Key Takeaways from the Agreement
After we go through all the points discussed and agreed on, we can say that half of the issues have been resolved but the major half is still pending resolution. All the matters related to forceful possessions and refunds are partially resolved, while the issue of 35% additional charges is still under discussion.
We will go point by point to discuss each issue and find out if the agreement is meaningful in terms of resolution to key issues of the affectees.
1- Refund Issue
Bahria Town has agreed to refund 100% amount to all those members who want their money back. The refund process will be completed within 6 months starting from 2nd March 2020. In case of failure to refund in 6 months, bahria town will be bound to pay premium at the same rate which it imposes itself on late payments.
The refunds will be issued in the following sequence:
- Members holding bounced checks will be given refunds
- Members holding post-dated refund checks will be cleared
- All those files which are under process will be given refunds
The booking forms of Bahria Town Nawabshah, Icon Tower, Tariq Road Tower, Opal and Hoshang Pearl Towers etc, will be adjusted in the existing projects of Bahria Town Karachi, or they will be refundable as per the policy.
On the face of it, the refund issue seems to have been resolved. The refund policy applies to all the old and new members of those projects which have not been delivered till date. It includes certain old precincts, Sports City, and Bahria Paradise.
2- 35% Development Charges
Unfortunately, the sword of 35% additional development charges is still hanging on the heads of each old member. Both parties have failed to reach any conclusion in this regard, hence the matter has been deferred for the future.
This particular issue was the most important point of discussions as it caused severe loss of trust between members and Bahria Town. The society is still adamant to impose these charges while relaxing the payment schedule, whereas the members have been mounting up resistance against these unjustified charges.
The committee will hold further meetings to discuss this outstanding issue and try to reach a consensus soon. Until then, these charges have been deferred for unspecified period.
3- Forced Possessions
Bahria Town will not force members to apply for possessions for next 4 years. Those who have already applied for possessions will not be liable to pay maintenance and non-utilization charges until they start construction of their house.
Owners of ready villas, apartments and Bahria Golf City will be required to apply for possessions within 6 months from 2nd March 2020. In case of non-compliance, maintenance and NUF charges will be applicable on Villas and Golf City. The allotment, however, will not be cancelled in any case.
4- Relocation of Affected Plots
Bahria Town has already relocated about 14500 affectees to Precinct 60, 61, 62 and 63. The location of new precincts will be disclosed within one month, and allotment will be given within 3 months.
Remaining affectees of Precinct 25a, 26a, 28, 29 (a,b,c,d), 32 (a,b,c,d) and 33 (a,b,c,d) will be given replacement within bahria town. Similarly, members of Sports City and Bahria Paradise will be adjusted within Bahria Town, preferably within their specified areas.
Those affectees who do not want to wait can apply for refund, and their 100% amount will be refunded within 6 months.
5- Development Issues
There are 12 towers of Bahria Heights, i.e. A, B, C, D, E, F, G, H, I, J, K and L, for which bahria town has received full payment. Bahria Town has agreed to complete pending work on these apartments within next 6 months to one year time, and hand over possessions.
All pending projects of villas including precinct 23a will be completed and handed over within next 12 to 18 months.
For overseas affectees, Bahria Town will handover plots within next 3 months. In case of apartments/villas unit, it will be handed over by next 18 months.
Miscellaneous Issues
There are some more important points pertaining to future actions of Bahria Town that were discussed and agreed between the both parties.
Following are those points:
- Bahria Town will do its best to regularize its project land and transfer ownership to its members
- No additional land is available in Bahria Paradise and Sports City to adjust the affectees, however if land is made available in future, affectees will be adjusted. Otherwise, they will be adjusted in some other part of Bahria Town where land is available.
- Bahria Town will release the revised master plans of Bahria Paradise and Sports City showing the existing land in possession of society.
- Bahria Town will not launch any new deal at less than market prices. Moreover, Bahria Town will not launch any project on the land which is marked disputed today and where affectees are not getting their plots.
- Bahria Town will not change location and numbers of plots, villas and apartments of existing members.
- This agreement can be presented in the court of law if relevant issues are raised on any judicial forum.
- A dedicated Cell will work under Chairman Bahria Town for any issues arising in the future.
You can download a copy of the documents attached below to check all points of agreement:
Conclusion
As we understand, a few issues related to refunds and forced possessions have been resolved but there is no timeline given to accommodate remaining affectees of old BTK, Paradise and Sports City. Moreover, the most important issue of 35% development charges is still unresolved.
Even though Bahria Town has tried to address all burning issues of the members, yet it seems to have failed to meet the expectations. It will require some more sincerity and quick actions on part of Bahria Town to regain trust of investors, or else the deplorable situation of its Karachi project can take much longer to improve.
