24/02/2015
BUYERS BEWARE! - Eliminate risk while buying a home
S Narendra
Verify Builder's Credentials, Periodically Inspect Construction & Ensure Papers Are In Order
The Bengaluru real estate market is vibrant, with builders cater ing to all sections of the society with apartments and villas of varying categories -built up area ranging from 650 sqft to 10,000 sqft and price Rs 30 lakh to Rs 10 crore plus. There are nearly 500 residential projects underway in and around Bengaluru adding around 60,000 new units. Once the buyer has decided on the location and budget either through own funds or housing loan -care and caution have to be exercised. For, buying apartments involves many intricate and complex issues.
SELECT THE PROJECT
Verify the credentials and credibility of the builder, the quality of construction, facil ities offered and prices of similar apartments in the area. Keep in mind the zoning clearances, water supply, parking space and litigations display boards, if any .
TITLE CLEARANCE
Once the builder and the project are identified, ensure title clearance of the land -most litigations are on account of title issues resulting in incomplete projects. Pay a token advance to the builder and get the master file consisting of copies of the entire land documents and then independently get the `Title Search Report' (TSR) done. You can also get a detailed encumbrance certificate (EC) from the sub registrar office (SRO).
BUILDING PLAN APPROVAL
The layout plan in general and the building plan of all apartment projects has to be approved by the BDA and not by any pan chayat or CMC even though the project may be coming up on the outskirts of Bengaluru. The ap provals will have A khata only (en tire land and individual flats).
Check if the construction is as per the approved plan as builders tend to violate Floor Area Ratio (FAR) and build extra flats without ap provals. It's prudent to check the copy of the approved plan, A kha ta at the BDA office, as many fab ricated plans are in the market.
LICENCE TO CONSTRUCT
Check whether the builder has obtained proper licence from the BBMPBDA to construct the property . FLOOR PLAN Check the original plan approval with the floor plan approval of the apartment to ensure there are no deviationsviolations.There have been instances where the approved plan shows the apartment on the first floor, whereas it is actually constructed on the second floor as an extra floor -named “mezzanine“ -which is unauthorized.
COMMENCEMENT CERTIFICATE (CC)
Verify if the builder has obtained proper CC from the BBMP .
GOVT CLEARANCES
Obtain copies of clearances from Bescom, BWSSB, the pollution board, and fire service besides approvals for digging bore wells from competent authorities.
LOANS TAKEN BY BUILDER
Find out whether the builder has got any loan.The original documents of the land would be mortgaged to the banks who will have to issue a “letter NOC“ for release of the undivided share of interest (UDS) of the landconstructed area.
Also ensure that such mortgage transactions are registered and reflected in the encumbrance certificate (Form 15). Otherwise, there is a possibility of the builder getting multiple funding from banks which can take possession of the flats.
DON'T MISS!
Periodic visits: Purchaser should visit the project site periodically to ensure that the construction is as per plan, time schedule based on the agreement, and quality fittings & fixtures are used.Completion Certificate: The purchaser should insist and ensure that the builder provides a copy of the CC issued by the BBMP.Occupancy Certificate (OC): The builder has to obtain OC from the BBMP within three months of completion of the project obtainment of completion certificate. Buildings without OC are not entitled to power and water connections.
INDEMNITY OF THE BUILDER
Since the project takes 24 months to 48 months for completion, an “indemnity bond“ and “letter of undertaking and affidavit“ should be taken from the builder confirming that construction will be as per the approved plan and the completion certificate will be obtained within 3 months of the completion of the project.
LAND OWNER TO EXECUTE MOE
If the project is under joint development and the builder has taken a loan, it is desirable that the landlords are made part of the Memorandum of entry , so that they cannot say later that they were not aware of the loan.
LEGAL DOCUMENTATION
Be cautious while executing the agreement with the builder.Read and understand the implications of conditions in the agreements since they are normally in favour of the builder with very little scope for legal recourse. It is prudent to have a legal consultant to vet the documents.
The buyer cannot go wrong if h***e follows the above safeguards, and thus prove the proverb “fools build houses and wise men live in them“, wrong.
DON'T PAY MORE FOR LESS
Flat area: Get the apartment measured to verify the carpet area.Builders sell on the basis of super built up area, which includes balconies, common utilities such as swimming pool, gym and staircases, due to which the carpet area gets reduced drastically.Normally, the difference is around 15-20 %: an apartment with a super built up area of 2,000 sqft generally has a carpet area (actual usable area) of only 1600sqft.
KEEP A RECORD
Master File: Maintain a “master file“ consisting of all documents such as copies of receipts of installments paid, title search report of the projectflat, plan approval copy, agreement of sale and construction, commencement certificate, and the “Occupancy Certificate“.
Feb 24 2015 : The Times of India (Bangalore)
