Buying a property is often the biggest decision of one’s life. When buying a property, it is often a practice to buy an under-construction property because they are available for a lower price especially when one is planning to move in a while later.
However, when buying an under-construction property, it is essential to do proper due diligence.
Buy Only RERA Registered Properties
Homebuyers should invest in RERA-registered properties only. The Real Estate Regulatory Authority (RERA) has made it mandatory for developers to register their projects, provide all project-related disclosures and approvals, and regularly update project completion status and timelines. It ensures that the rights of homebuyers are protected and empowers them to assert their interests in the face of adversities.
To verify builder credentials, prospective homebuyers can visit the RERA websites of their respective state. “By navigating to the designated section, users can input relevant details such as the project name, builder name, or registration number to access requisite information. This online platform provides transparent access to crucial information, empowering homebuyers to make informed decisions regarding their real estate transactions,” says Vimal Nadar, senior director and head of research, Colliers India.
Verifying the project's legal compliance is crucial. “Key documents include the RERA registration certificate, land title deed, approved building plans, and permissions from local authorities such as environmental clearances and commencement certificates. Additionally, confirm the property’s encumbrance certificate to ensure it is free of legal disputes,” says Rajesh Pandey, principal partner, Square Yards.
It is advisable to consult a legal expert to thoroughly review these documents before proceeding with the investment.
Option To Seek Compensation
Buying housing units in RERA-registered projects provides homebuyers access to grievance redressal mechanisms and the legal right to seek compensation in case of project delays or low-quality work. As per Section 18(1) of RERA, if the promoter delays the possession of a property or fails to complete the project within the agreed time as mentioned in the sale agreement, he shall be liable to return the amount received from the buyer in respect of the apartment/property or plot, along with the due interest. The interest imposed is 10 percent of the amount invested by the buyer.
“In case of project delays, homebuyers can withdraw from the project and claim a full refund along with interest within 45 days. Alternatively, if the buyer wishes to continue, they can seek compensation for the delay as well,” says Nadar.
To safeguard yourself, ensure the builder has a strong track record. “Additionally, consider a project-specific home insurance plan to mitigate potential financial risks associated with delays,” says Pandey.
