Pre-Launch Offer for Apartment. What documents to verify?

876 votes

The documents that one should be study prior to purchasing a flat from a builder include the offer letter and brochures and the letter of allotment. As builders use standard forms of contracts for a majority of their purchasers, you could read the terms in the letter of allotment even if one has not been issued specifically to you. Pay close attention to the provisions with respect to interest rates in the event of delay in payment or construction. Further, for an extensive risk mitigation exercise, one may file RTI's to the local authorities in order to ascertain whether the builder has received/applied for the requisite sanctions and permits. Last but not the least, do a thorough search of the consumer forums on the internet to look in to the past record of the builder and his projects.

LawRato LawRato

700 votes

Here are a few things you should keep in mind:-
1. Legality: In every city there are local government bodies authorized to approve maps of any building. You must check the approvals before entering into agreement or contract.
2. Builder Reputation: As a buyer/investor it's your responsibility to check the history of Builder or Developer. By visiting old buildings constructed by the same builder, you will be in a position to decide upon the quality standards followed by the Builder. Generally, all good Devloper companies maintain their complete profile in CD's. Just ask for it before booking the flat. Also by checking the past history you can make a prediction that whether builder will provide the flat on promised possession date or not. You could check up consumer court cases filed against the said builder also.
3. Competitor Work: Before signing on dotted lines, it is very important that the buyer makes a thorough research on the work done by different builders in the same location. By seeing different projects you will be in a better position to make judgement about Quality, Facilities and Price.
4. Features & Specifications: Features are the building facilities and specifications are related to facilities and amenities provided in the flat. Every Builder/Developer gives host of features and specifications to lure buyers. The important part in this regard is to understand which features & specifications are of real use and which are cosmetic.
5. Loan Facility: Generally all reputed builder groups are registered with leading Banks and NBFC's to provide Home Loan facilities to their customers. Whenever any Bank or NBFC approves any project for home loan facility, they provide APF (Approved Project Finance) number to the builder/developer. When customer applies for a home loan, they can just quote the APF number of the project, submit their documents and get loan sanctioned. With APF facility customer is free from the stress of collecting legal documents of the project and submitting them along with his own financial papers. One good thing about project having APF number from leading banks is that this assures you of sound legal & technical credentials of the project.
6. Budget/Add on expenses: Consumer must write down their budget carefully. Property cost is not only the price paid to the builder but there are several add on which you must calculate before finalizing the property. There are add on costs like club membership charges, parking space charges, service tax, stamp duty, registration charges, home loan processing fees, electrification charges, transformer charges, preferred location charges (PLC), etc. Sum of all these expenses is your actual property cost.
7. Area calculations: There are 3 terms which you will come across while buying any residential flat/apartment. These are Carpet area (The area within four walls of the flat), Built up area (The area including carpet area and area occupied by walls of flat) and Super built up area (The area including carpet area, built up area and proportionate of common areas). Generally builder charges on the basis of super built up area and consumer must understand the calculation before entering into the agreement or contract.
8. Price: A buyer must do a complete survey about the prices in location/area in which he is planning to buy the flat/apartment. But there are certain variables which must be kept in mind before you make a decision on the basis of price. These are facilities in the building, specifications of the flat, location, possession date, quality of construction, etc. You must understand that the most economical to buy may not be necessarily the best.

Advocate Shweta Sharma LawRato