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BlogTop reasons for delay in Construction and how to mitigate them

Top reasons for delay in Construction and how to mitigate them

08/10/2022
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Delays in project delivery in real estate are painful. It hurts home buyers, developers, investors, and vendors severely and has led to the closure of business for many developers in the past. Home buyers are forced to wait for long periods after having invested their hard-earned money while still paying rent in their existing houses and Pre EMIs. Delays in residential projects in India are caused by a number of factors, including:
  1. Lack of clear title deeds and land acquisition:
In many cases, developers do not have clear title deeds for the land on which they are building. This can lead to delays in getting the necessary approvals from authorities and potential litigations with erstwhile landowners and third parties.
  1. Logistical challenges:
Distance from the source of material and manpower, restricted timings for construction ( City center locations) Poor roads, water and electricity supply, and other infrastructure deficiencies can lead to delays in construction as well as increased costs.
  1. Lack of skilled labour:
The construction industry in India is largely unorganized and lacks skilled workers. This can result in poor quality workmanship and contribute to delays.
  1. Delay in approvals from authorities:
The approval process from various government agencies can be slow and cumbersome, leading to delays in starting or completing construction projects.
  1. Inadequate financing:
Lack of adequate financing is another major reason for delays in residential projects. This can be due to a number of reasons such as the inability to get bank loans or delays in receiving investment from venture capitalists.
  1. Mismanagement of Funds:
In a few cases, the Developer does not use the advances paid by the customers to construct the project but diverts the same for personal reasons or to other projects. This causes a massive shortfall in Funds in the existing project.
While some of these factors are beyond developers' control, certain measures can be taken to mitigate the risk of delays. These include:
  1. Conducting due diligence:
Developers should conduct thorough due diligence before buying land for a project. This includes checking for clear title deeds and assessing infrastructure availability and logistics.
  1. Hiring experienced professionals:
It is important to hire experienced professionals such as architects, engineers, and project managers who have a good track record in completing projects on time and within budget.
  1. Proper planning and scheduling:
A well-planned and scheduled project is less likely to face delays due to unforeseen circumstances. Proper planning also helps in reducing costs by avoiding last-minute changes that can lead to cost overruns.
  1. Adequate financing:
A line of credit is essential for any construction project and developers should plan accordingly to avoid any last-minute financial crunch.
  1. Regular monitoring:
Construction projects should be regularly monitored to identify potential problems at an early stage and take corrective measures to avoid delays.

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