Buying under construction project? Watch out!

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Pre-launch and under construction prices of apartments are no doubt extremely attractive. In Bangalore, at an average, the pre-launch prices are around 25 to 30 per cent lower than that of a finished apartment. This is the main reason why consumers are open to booking apartments in projects at the earliest. In their enthusiasm to get the best price, consumers are often ready to go in for a buy even before ‘all’ the clearances are in place.

Although one understands the keenness to get the apartment at the price during this stage; there are several aspects that one needs to be aware of when going in for such a buy in Bangalore.

One of the risks at the top of the list is considerable delay due to various reasons.

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Given the inordinate delay in getting clearances, approvals and the various infrastructure requirements combined with different stakeholders involved in construction delay in construction is a definite possibility. What is worse is cancellation of certain floors due to clearances not coming through.

Pre-launch booking is also a way for builders to raise cheaper funds, especially by relatively smaller builders.

Listed below are some of the factors the consumer must look out for:

1- Ask for the IoD (Intimation of Disapproval) and CC (Commencement Certificate) as proof that builder has got all the clearances. As per law a developer is not allowed to take any money from prospective home buyers before getting all the clearances for a project.

2- Ensure the sale agreement or deed includes the clause that the developer will deliver the OC (Occupation Certificate) and A-Khata on completion of construction

3- Ensure you agree to make the payments based on the actual stages of completion

4- Sometimes, the builder might have clearance up to the plinth level or up to say, eight floors, but offers flats at a higher floor, in anticipation that clearance for higher floors will come. However, there is no such guarantee. So, while booking your flat, it is advisable to book only up to the level for which the project has received the IOD and CC.

5- Have a tie up with the bank, so that they release the amount after you check the construction-stage and give them a green signal to go ahead with the payment.

6- Follow the association that has been formed and be active in it to ensure the different stages of construction are delivered as per schedule.

7- Consult a property lawyer for due-diligence of the project. In case the developer makes some changes to the original plan, go though the changes in details specially with regards to how it will affect your and the general look of the apartment. Following, this you may need to re-negotiate the deal altogether or just get a run through by your lawyer ones more.

Source: Bureau