Tuesday, August 19, 2014

Smart Tips for Smart Buyers: Don't let your Real Estate Developer or Builder trick you

We all look forward to getting our own homes but waiting endlessly for it is a real pain. In cities like Delhi, Gurgaon and Noida, home buyers have been waiting for more than five years to get their flats delivered! So, what are our rights, as home buyers?  Take a look.

Tips for Home Buyers: What to check before you book your new flat

1. Has your builder got all required permissions from the local authority? 

2. Can the builder share with you a copy of the Commencement Certificate? 

3. Have a host of other approvals that fall under the category of Intimation of Disapproval (IOD) been complied with?

4. Get an expert's opinion on the quality of construction and interact with other residents. 

5. Put in your request for any modifications in writing and explain your valid reasons for doing so. Keep your tone friendly and neutral. Your point is to get the home of your dreams, not to lock horns with the builder who is working on it.

6.  By law, you are entitled to get a free parking space but make sure you confirm this before booking your flat.

Tips for Home Buyers: What to incorporate in the Buyer-Builder Agreement

1. Incorporate a clause relating to compensation for delay in delivery. If the builder delays, you still have a water tight contract that safeguards your interests. Send your builder prompt gentle reminders of the delay and keep copies of your communication with you. The point is, if you ever have to take the matter to court, you can prove that you were not a dormant stake holder. 

2. Ask if your builder can offer maintenance-free period and state the duration of such period. If yes, the key members who form the housing society, should ask in writing for the builder to deposit the money in advance to cover the maintenance charges for the said free period.  

3. With technology at your finger tips, make collaboration the focal point of your communication. You can start a Google group to keep filing the latest updates and to get information from everyone else too. It's a great way to socialize with your 'would-be neighbors' but don't go overboard with sharing personal or financial information. 

Keep this tip in mind: The best way to safeguard your interests as a home buyer is to incorporate maximum clarity and transparency in your agreement with the builder, with each party's roles, duties and responsibilities clearly explained. 

Send your feedback & queries to sanram77@gmail.com. You can also follow Sanand on Twitter and ask your legal queries on Sanand Ramakrishnan's GooglePlus page.


SG said...

Thanks for the important info. I like it. As I said previously, you really are doing pro bono work.

I have a question. (Not that I am trying to get a free legal advice. HaHaHa.)

There is a builder in Bangalore. He was building 2 BHK flats (1500 of them) for a dirt cheap price. After 2 years, he said he ran out of money because of raising costs of materials. Now he is asking additional 50% of the original amount to finish the construction. Many flat owners have filed a suit in courts.

My question is – even if the flat owners win the case and the builder does not have the money and the judge put the builder in jail, the flat owners will not get their flat. So what is the point in suing. Is there any alternative?

Any suggestion? Would appreciate. Thanks.

Rajesh said...

Real useful tips.

Sanand said...

@SG - Thanks for reading and sharing your thoughts, much appreciated.

The Judge will decide on the basis of several factors that surround the case - such as the initial plan, the delivery timeline, the follow ups thereafter on a case to case basis, and the agreement that was drawn with the flat buyers, whether the builder is justified in raising the cost, etc.

Apart from all this, the court will also look into the details of documents presented by both parties, evidence, and volumes of important precedents etc

It would not be correct for us to deduce what the court will finally decide because each case has its unique strengths and weaknesses and cannot be generalized on the basis of external or general factors mentioned in the outline of your query.

However, one can note that when the court does decide, it will take into account what the builder is liable to pay and list the alternatives in case of bankruptcy.

Hope this addresses your query:)

Sanand said...

@Rajesh: Good to hear you found it useful. Thanks,buddy!