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Important Things You Should Always Check

 

RISHABH, a young, urban professional earning a seven-figure salary, fell in love with a swanky pad on the seventh floor of a premium building. Impulsively, he decided to buy it.

He rushed to give the builder a booking amount and made his secretary oversee things since he didn't have the time.

Result: not only did he not get the house, he also lost his money in the bargain.

Rishabh, who had all the time to get multimillion-dollar deals for his clients, failed when it came to the deal of his dream house.

Why? The builder had approval only for six floors! Rishabh hadn't asked for a Plan Approval and Commencement Certificate.

The bank rejected his loan. The builder refused to return the money.

Here is a checklist for you if you plan to buy property.

i. Who owns the land?
Find out if the land is freehold (owned by the builder), or leasehold(leased to the builder by someone else). A leased landowner sets his own terms, and may charge a premium on the lease when it comes up for renewal. This will be an added and unanticipated expense for you.

If you want to buy property, confirm whether the builder is legally allowed to carry out the construction. If you need to, seek professional assistance to make sure the builder/ developer has a good title to the land.

While buying land, check details such as the survey number and village and registration district of the property, since these details are required for registration of the sale.
Check for these papers:
a. Consent certificate of:

* Society
* Income Tax authority
* Municipal Corporation
* Authorities of Urban Land Ceiling & Regulation Act

b. Intimation of Disapproval

c. Commencement Certificate

d. Occupation certificate

Photograph: Nick Ut/Associated Pressii. More paperwork!
We have heard of instances where several floors and, sometimes, entire buildings across metros have been razed to the ground. Don't let this happen to you.

An Intimation of Disapproval specifies the conditions regarding the building construction. If the IOD is issued for one year and the construction is not completed by then, it needs to be revalidated.

A buyer needs to verify if an IOD has been issued. And, if so, the terms and conditions stipulated in it.

Then, of course, there is Rishabh's undoing, the Commencement Certificate, which permits the builder to construct the building. This is valid for a year and needs to be revalidated subsequently.

Rajiv Sabharwal, Head, ICICI Home Loans, says, "The customer should ensure the builder has requisite Floor Space Index. He should have the CC issued by Municipal Council and approved plans up to the floor where he is buying a flat."

iii. And the agreement of sale!
Once you have verified documents, get into an agreement with the builder or the developer. You must ensure the conditions are spelt out clearly, so that problems arising out of ambiguity don't arise.

This agreement should specifically mention flat number, wing and floor of the building, amenities provided in the flat, terms of payment, date on which the possession of the flat will be given, etc.

"Check the carpet area (the actual area you get), in addition to built-up or super built-up area," says Sabharwal.

Ensure you add the following charges to the agreement of sale.

In a new construction
~ Water connection charges
~ Electric meter charges
~ Development charges
~ Clubhouse charges

If you are buying secondhand
~ Property tax
~ Society charges
~ Water charges
~ Electricity bills
~ Society transfer charges

Clear any previous encumbrances and loans on the property if any.

iv. Almost there!
Once the agreement is finalised, pay off the stamp duty on the agreement. Insist on getting an Occupation Certificate before occupying the flat to eliminate any problems.

Make sure you get all your original documents. Do ask for photocopies of all title deeds related to the property to be purchased.

Phew! I am sure you are thinking this is going to take a lifetime. Well, not really.

If you builder is straightforward, this stuff should be easily available.

But yes, real estate is not about instant gratification and impulse purchase. That is only for chewing gum!

Source: Money Control

By vayaM CS