Buying an under-construction flat in a society in India is among the big investment decisions for many home buyers, and there are several important factors to consider before making such a purchase. Whether or not it’s a good idea to book a flat in an under-construction site depends on a number of factors, including your budget, needs, and risk tolerance.
Home buyers purchase under-construction properties due to reasons like;
Lower price: Under-construction flats are often priced lower than completed flats, as the builder has not yet incurred the full cost of construction and development. This can be a good opportunity to save money, especially if you are buying a flat in a popular location or with a high demand.
Flexibility: When you book a flat in an under-construction society, you may have the opportunity to customise the layout and finishes of your flat to your liking. This is not always possible with completed flats, as the builder may have already made these decisions.
Appreciation: The value of your flat is likely to appreciate over time, as the construction is completed and the society is developed. This means that you could make a profit if you decide to sell your flat in the future.
However, like advantages, there are risks involved with an under-construction property, like a delayed project.
There is always the risk that the construction of the society may be delayed. This can be due to a number of factors, such as bad weather, unforeseen site conditions, or financial problems with the builder. If the construction is delayed, you may have to wait longer to move into your flat. This is the biggest reason for delayed projects in Delhi-NCR region where buyers are waiting for their dream homes for many years and fighting legal battles.
Overall, whether or not to book a flat in an under-construction society is a personal decision. It is important to weigh the pros and cons carefully before making a decision.
Here’s a comprehensive list of things you should know and consider:
Builder’s Reputation: Research the builder’s reputation and track record. Look for reviews, speak to previous buyers, and check if there have been any legal issues or disputes with the builder. However, this should not be the sole factor to buy a property as many popular real estate developers have failed in recent years and their projects are stuck.
Project Approval and Licences: Ensure that the project has received all necessary approvals and licences from the local authority and government bodies. Check for environmental clearances, land title, and land use permissions.
Project Location: Evaluate the location of the project in terms of accessibility, proximity to schools, hospitals, markets, public transportation, and future development plans in the area.
Project Plan and Layout: Review the project’s architectural plans, layout, and floor plans to ensure they match your requirements. Check for open spaces, amenities, and green areas within the society.
Legal Due Diligence: Hire a legal expert or lawyer to conduct due diligence on the property. Verify the builder’s legal ownership of the land and ensure there are no pending litigations or disputes.
- Check the total cost, including the base price, additional charges like maintenance, parking, and taxes.
- Understand the payment schedule and make sure it aligns with your financial capability.
- Be aware of the penalties for delays in payment and possession.
Construction Timeline: Get a clear understanding of the project’s expected completion date and whether the builder has a history of delivering projects on time.
Builder-Buyer Agreement: Carefully review the builder-buyer agreement, including clauses related to possession date, penalty for delays, and the scope of changes or customisation allowed. This document will be the basis of communication with the builder. It’s essential to get it read by a real estate expert so that you have a fair understanding of the agreement.
Quality and Specifications: Understand the quality of construction materials, fixtures, and finishes that will be used in your flat. Ensure they meet your expectations.
Payment Plan: Check if the builder offers a construction-linked or time-linked payment plan. Understand the payment milestones and their timing.
Loan Approvals: Ensure that the project is approved by banks and financial institutions for home loans. This is crucial for securing your financing.
Legal Compliance: Ensure the project complies with RERA (Real Estate Regulation and Development Act) regulations. The builder should have registered the project with the local RERA authority.
Amenities and Common Areas: Verify the promised amenities and common areas such as parks, parking, clubhouse, gym, and security arrangements.
Maintenance Charges: Understand the maintenance charges and how they will be calculated. Ensure that these charges are reasonable and fit within your budget.
Legal Documentation: Ensure all legal documentation, including the sale deed, possession letter, occupancy certificate, completion certificate etc. are in order before making the final payment. Remember, some of these documents are granted by the authority only after project completion.
Home Inspection: Before taking possession, conduct a thorough inspection of the flat for any defects or unfinished work. Ensure that the builder addresses these issues and communicate your concerns in writing.
It’s essential to be well-informed and conduct thorough due diligence when buying an under-construction flat in India to protect your investment and avoid potential legal or financial issues in the future. Consulting with a real estate advisor or legal expert is highly advisable throughout the process.