Experts recommend certain safeguards a homebuyer should take to evade getting into dicey deals:
Reputation: The buyer should invariably consider the reputation of the builder and their development history and form a fair idea of the credibility of the developer both in terms of timely completion of work and the quality of their construction.
Progress: It is also important to inspect the construction site and verify the progress of construction and realistically assess whether the project is likely to be completed in the promised timeline. If any information is available on the original delivery date made when the project was launched vis-à-vis the current status, it would also help a fair assessment on the likely delivery.
Legal: In terms of the specific project, it is important to have the property documents checked by a competent lawyer to ensure that the title is clear with no encumbrances, all the approvals are in place and there are no violation of norms and no deviations from the approved plan. This may also be reflected in the type of financial institutions/banks that have approved the project, since these financial institutions/banks conduct their due diligence before lending their name to the project.
Construction agreement: The buyer should also carefully read the construction agreement to vet such details as the type of flooring, specification of fittings in kitchen, bathrooms, doors, windows, exterior and interior wall finish, specifications of electrical fittings, intercom facility etc. so that it meets their expectations and later if there are any deviations they can hold the developer responsible.
Payment schedule: If the project is currently under construction, it is always beneficial for a deferred payment scheme or a construction-linked payment plan rather than time-bound payment schedule.
Additional expenses/Non-apparent costs: Many a times the buyer may not get the complete picture on the total-outgo from the advertised basic selling price, since usually there are several add-ons including floor rise charges, preferred location charges, external development charges, club membership, parking, etc.
Right of the buyer to sell the apartment while construction is on: It is important to understand the right of the buyer to sell the apartment. Since this right is sometimes restricted by the sale and construction agreement and there may be charges to be paid to the developer (sometimes 5% of the total consideration).
Moreover, the buyers must not get confused and misled by various jargons like, ‘carpet area, construction area etc. Some of the developers even include area available for car parking and staircases as total area. The purchaser should pay as per the area that he actually gets. To ascertain the sum he can take the help of a surveyor. The builders generally charge for constructed area or super built up area.
Avoid purchasing property on time schedule payment because in such case builder can delay and the penalty clause charges are very negligible. Banks only approve project on construction link and down payment mode, importantly, the banks have a pre-requisite requirement for keeping the collateral/guarantor amount as an advance given to the bank by the consumer because bank would not leave any exposer or risk in such transaction.
The precautions to be taken are endless but, if a buyer checks and cross checks the claims made by the developer one can safeguard from being trapped by defaulting developers and fly by night operators and not repent to waste his lifetime savings.
