Alerts The Home Buyers
Bangalore Real Estate News
Essential questions that home buyers should ask their real estate developer
Buying an apartment reviews is loaded with risks. From choosing the right builder to ensuring that he is the actual owner of the land on which he is raising the project, there are many issues that you need to look into before deciding to put your life's savings in a builder's project.
What's the land use?
Check the land use of the property on which the project is being developed. The license states what the land use is: whether it is for developing commercial property or a residential property, floors or plots, and so on.
Has land acquisition been completed?
Developers often begin to sell apartments before the land acquisition is over. Any unexpected problems may arise due to which acquisition may not be completed. The developer may manage to buy 80% of the land he needs but get involved in a dispute over the balance 20%. Now, you would get into trouble, if that one tower in which your apartment was planned was to be developed on the disputed 20%.
Does the developer have legal title?
Ask the developer to show you the papers indicating his ownership of the land. Every plot has a unique KHASA number. Ask the builder for that number and check in whose name the plot is registered. You could hire an advocate to conduct the title search. He can also find out if there are any legal disputes over the land.
Are all the approvals in place?
Ask the builder for the license, which is a proof that he has obtained permission from the area's town planning authority to develop the project. Every license will have a unique number. Developers who have get hold of the license often print the license number in their ads. In addition, ask whether the developer has received the following approvals: height clearance (if the building is situated near an airport), building plan, water, environment and pollution checked certificates.
At times, when clearances have not been obtained, the builder makes optimistic projections that they will get them within, say, six months and "In reality, delay in getting clearances is one of the chief causes of project delays”.
What are the conditions of the application form?
In the application form, be observant on the payment plan. Is the builder asking for a large portion of the cost of the apartment at an initial stage of construction? Stick to a construction-linked payment plan. These days many builders & developers offer plans where a considerable portion of the cost has to be paid after possession. Such plans are encouraging to the buyer as they induce the developer to hand over possession at the earliest.
Is there an escalation clause?
In the builder-buyer agreement, builders regularly include a cost-escalation clause. It says that if the cost of building materials or other inputs goes up, the developer reserves the right to raise the cost of the project. Make enquiries regarding the builder's track record: has he implemented the escalation clause in the earlier period? Did he have an authentic reason to execute the clause? Or, decide on for a developer who does not include an escalation clause in the builder-buyer agreement.
When will the project be completed?
The builder-buyer agreement usually says that the project will be completed within a definite period, say, 20-30 months from the start of construction. Nevertheless, no clear starting date is mentioned. You can send an e-mail to the developer and get a written reply from them regarding when the project would start.
Is there a penalty clause?
In case there is a delay in handing over possession, the developer pays a penalty to the buyer, given that the penalty clause is there in the builder-buyer agreement. Find out how much penalty he will pay. Also, when there was a delay earlier, did he pay the penalty or did he find a way to get out of it?
What will be the size of the apartment?
The builder states the size of the apartment in terms of super area. This not only includes the carpet area (the area within the apartment's four walls) but also the parts of the lift, balcony, lobby, staircase and basement. This creates elusiveness regarding the carpet area. Ask the developer for a total breakup of the built-up area and the super built-up area.
What if you don't pay on time?
If by chance there is delay on your part in paying an installment, how much extra time would the builder allow you to pay up? What will be your interest accountability? Will your allotment be withdrawn? What are the provisions of the forfeiture clause? How much money will be given back to you?
In most of these matters, the developer may or may not answer your queries honestly. Speak to the residents in earlier projects to get a hint of how the developer is likely to behave if and when some of above-mentioned circumstances arise.