Builder buyer agreement

Mr.Amar,

what are basic i should know before purchase?.

In Delhi NCR, before buying a property, it is important for the consumer to check the reputation and market standing of the developer.Then comes the matter of approvals. A developer needs to get approvals from various departments like the municipality, forest, aviation, environmental etc for his project to ensure that the project does not get stuck in a legal bottleneck later. One way to ensure that all the approvals are in place is to find out if the project has been approved by a bank for lending. This validation is important as a bank will only lend for projects which have all approvals in place. On the legal front, it is also important for the consumer to be aware of the stage of construction, when he will be signing the “flat buyer agreement“. Once this agreement is signed between the buyer and the developer, it gives the right to the buyer to highlight any flaw that he observes in the property during the course of construction. It is always beneficial for the consumer to sign the agreement during the early stages of construction, so that he or she can carry out quality checks on the property as construction progresses.

A buyer should also be aware of the exact location of his apartment. He should know the unit number of the apartment and correlate it on the scale model displayed at the construction site. Consumers often don’t have the complete details of the location of the unit, due to which the developers feel they are free to alter the unit allocations. Besides unit details, the consumer should also have complete information on area of the unit and additional charges to be borne over and above the base price. The buyer should study the plans so as to be aware of the actual usable area of the apartment i.e. the carpet area. He should know how much carpet area and extra area he is paying for. Generally, the extra area accounts for common areas in a project like the lobby area, green belt, parks etc. It has been observed in Delhi NCR that the consumers have to pay additional charges over and above the base price of the project. Such charges are in the form of preferred location charges, club membership fees etc. A consumer before buying the property should be aware of any such charges applicable on his unit and find out if there are any hidden charges that he might have to pay later on. The developer generally sells car parking separately. So the consumer should be aware of the car parking provisions. Payment schedule is also one of the important aspects that the consumer should be aware of. He should understand whether he has signed a time-linked payment plan with the developer or a construction-linked payment plan. In a time-linked plan, a the buyer has to keep paying a money to the developer once in every few months, whereas in a construction-linked plan, t the buyer pays the developer a as construction progresses. Within Delhi, most of the property transactions are secondary in nature, wherein the buyer purchases the property from another owner and not the developer. As  such transactions involve  housing units that are not newly built, the buyer needs to be extra careful and carry out detailed verification before buying. Within Delhi, housing units are mostly built either by Delhi Development Authority (DDA) or local promoters. DDA earlier used to sell housing units on leasehold rights of 99 years, but now it has allowed conversion of leasehold rights to freehold ­ rights on payment of conversion fees. So it is important for the buyer to understand whether the housing unit which he is willing to buy, is a freehold or a leasehold property.

Title of ownership is also an important aspect. The buyer should have complete knowledge of the title record of the property. He should know who the current owner is and if the property is owned jointly or not. Owner- ship details are clearly stated in the “Title Deed“ which should be scrutinised by a lawyer, representing the buyer and a second stage verification can be carried out from the registrar’s office. From the registrar’s office, the buyer can also get information on the number of times the ownership of the property has changed. The title deed needs to be trans- parent, so that the buyer does not face any legal issues from the current owner, or any of the joint owners. The buyer should also get the utility bills scrutinised. Names in electricity bills, water bills, phone bills etc help verify property ownership rights. Utility bills act as a secondary check of ownership to the title deed document.

It is also important for a person to understand the tax dynamics related to the property he is buying i.e. the amount of property tax to be paid every year. On what amount it needs to be paid and that if there are any dues on the current owner. If there is any tax default on part of the current owner it can create problems for the buyer in the future and he can end up bearing the liability of default tax by the previous owner.

Those who are buying property in a society should ensure that the current owner presents a “no dues certificate“ from the society management and get its validity scrutinised by the said society, if the property is sold. As a secondary sale transaction involves change of ownership rights of the property, it is essential for the buyer to document the sale transaction and get the property registered under his or her name at the earliest.

provide me a sample 'BUILDER BUYER AGREEMENT".

Ans. It is alwys prudent to visit a local lawyer so as to get it drafted keeping in view your interests. 
 

Nice Information Mr.Rama

Can you please share the template of few important docs. I have just being interviewed in real estate company. docs like builder buyer agreements, demand letter, notices, possession letter, allotment letter