YOU just got news that your home loan has been approved and you are on your way to see an existing model of your future home. Your heart is pounding with excitement, but wait, the tedium of paperwork is not over yet. You need to ensure that your agreement with your builder has no unforeseen loop holes that can plunge you in a legal mess!
Here are five essential steps you need to take to avoid such situations.
Aspect 1: Cost of your dream home
There are various costs attached to the owning your home besides its cost. The cost covers basic utilities like electricity, water, parking space, various taxes and in certain instances the registration charges as well. These may come as part of the deal or may be charged under separate heads. Make sure all these costs are factored into the final price you pay.
Safety points
- Scan the agreement with great care for all these charges
- Get the agreement ratified with a real estate lawyer to see if there are any hidden or missed out charges. So, you can have an upfront discussion with the builder and have the document corrected.
- If the extra charges are for alterations made to the original plan, ask the builder for the sanction letter provided by government authorities for such alterations.
Aspect 2: Size of the house
Look for the specifications in the agreement that defines the size of the house. This should be clear and specific. Also, look for a clause that says ‘…the plans, designs, and specifications are tentative and the developer reserves the right to make variations and modifications….’ This might mean that you may agree for a certain size, but the builder can give a different size.
Safety points
- Do a thorough check on the builder to determine his track record in project delivery. The way the builder has handled the past projects should serve as a measure to how your project is going to turn out.
- Discuss with your lawyer and think about including another clause that provides a definite range to the maximum and minimum size beyond or below which the builder cannot venture.
Aspect 3: Carpet area
Carpet area is the space where it’s possible to lay the carpet. It does not take into account the area of the walls and balcony. When you include these areas as well to the carpet area you obtain the total built up area of the house or apartment. Additionally, if you include common spaces like lobby, lifts, stairs, garden, swimming pool etc., then its termed as the super built up area. The actual carpet area is bound to be around 20 to 30 per cent lesser than the super built up area.
Safety points
- Always base your purchase decision on the carpet area of the flat.
- Double check if this area is specified in the agreement.
- Discuss with your builder and the lawyer to make sure it’s possible to include a termination clause if the final construction of the house has a carpet area lesser than what is specified in the agreement.
Also read: Home for rent? Here's a checklist
Aspect 4: Completion of construction and date of possession
During the realty crash that occurred in the recent past, there have been several instances where projects have not been completed on time. Though agreements have a tentative date of possession it is important to for you to check this aspect of the deal.
Safety points
- Monitor the progress of the construction and keep a regular tab on it.
- Follow up with the builder if you find the progress painfully slow and request him to step it up. Keep in touch with the builder as the work progresses.
- Establishing a society with other buyers in the case of an apartment complex, will ensure that things happen at a decent pace from the builder's side.
Aspect 5: Completion certificate
When the project is completed and the house is delivered to you ensure that the builder provides you with a completion certificate. This certificate provided by the municipal authorities authenticates that the building complies with the approved plan and obeys all government norms and specifications. This certificate is critical for the registration of the house and to complete other legal formalities.
Safety points
- Make sure the agreement has a clause that indicates the certificate will be handed over to you on completion and hand over of the house/apartment.
- Again a society could help move things faster if the builder is laid back about this aspect.
Apart from the above mentioned aspects an overall quality check on the construction, society management etc. are important. Ensure these aspects are also covered in the agreement. Be aware and clued on about what you are getting into before you sign the dotted line.
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