DHA Valley files to be merged with Bahria Town Karachi – the details

It is a regular practice with Bahria Town to cancel allotments of plots for which owners fail to make payments on time. In order to discourage property buyers and investors from delaying their payments, the developers just simply block these properties. A blocked property cannot be sold and nor can its payment plan be retrieved without Bahria Town’s permission. That’s how strict Bahria Town is when it comes to instigating principles.

Late payment issues in Bahria Town Karachi

In Bahria Town Karachi, which currently is one of the most happening real estate developments of the city, thousands of people with payments pending for their property files are facing this situation right now. But Bahria Town isn’t completely oblivious of the concerns of its investors; it has offered them a solution that is a file merging option – a not-so-new practice for the developer. But what makes it different or unique this time? Well, for getting Bahria Town Karachi files unblocked this time, the owners are required to merge DHA Valley plot files.

Using the DHA Valley tool

DHA Valley is one of the many projects Bahria Town failed to. By offering people to merge DHA Valley files in their payments due for plots or files in Bahria Town Karachi, the developer is looking to hit two birds with one stone. With this merger, the developer will be left with lesser number of files to adjust in DHA Valley while simultaneously giving a way out for the owners to get their files unblocked.

The background

The story started last Friday when the real estate agents of DHA Valley met Bahria Town Director Sales and Marketing Shahid Mehmood Qureshi. These agents had major reservations on the slow business activity seen in the sale and purchase of DHA Valley plot files. Qureshi proposed that Bahria Town offers an adjustment plan for the properties cancelled in their Karachi project. Bahria Town CEO Malik Riaz was contacted via video link to get an approval on that. Riaz had no issues with accepting the offer, and approved it. Please note, Bahria Town is yet to issue a circular in this regard.

In the meeting it was decided that Bahria Town will allow merging of 5,000 DHA Valley files.

Soon afterwards, a sudden rise was noticed in demand for cheaper files in DHA Valley. These files are essentially of those blocks of which the location hasn’t been revealed because Bahria Town never purchased land for these blocks. Before buying activity begun, these files had a market rate below their launching price. The preference was based on the fact that when merged with  Bahria Town Karachi plots, their launching price is to be adjusted. By all means, buying these files was more profitable.

What lies beneath?

Before you – the DHA Valley file holders – get excited about this offer, considering it to be the exit you have been long waiting for, Bahria Town isn’t buying anything from you. My sources have revealed that many of Bahria Town’s registered agents have already stacked their inventory with just about the required number of DHA Valley files to cater to the property owners who have payments pending in Bahria Town Karachi. This makes me wonder why the offer was made in the first place. Could this be just to create some business activity for the agents complaining about lack of demand? Yes, I am inclined to think this way.

The case study of Bahria Greens

While talking to a registered Bahria Town Karachi dealer, I learnt that the developer got rid of its Bahria Greens Lahore’s file by offering a similar offer in the past. The offer was for Bahria Town Karachi, and it was made for the same reasons. But the developer cancelled its Bahria Greens project and the file merging offer was meant to get rid of these files and calm the owners down. So now with Bahria Town not accepting money to adjust remaining balance for the blocked files but DHA Valley files only, could DHA Valley be also cancelled? We are yet to find that out.

Determining premium

For the file-merging option, the property agents who have procured the required number of DHA Valley files will now ask for a premium. The premium cannot go beyond a certain figure primarily because the people who need these files might also have budget constraints. The asking profit on DHA Valley files resting with Bahria Town’s agents can perhaps not go beyond the amount the developer cuts in the case a buyer asks for refund.  The calculation is tricky because people have paid different amounts to Bahria Town for their respective properties.

So far, it is unclear how many files in Bahria Town Karachi have been blocked due to delayed payments. Similarly, we don’t know how many DHA Valley files these agents have purchased already. But we do know that patience of DHA Valley property owners has been tested again. Let’s see for how long they can bear it.