Buying a property from realtor, real estate agent, builder or a developer?
Planning to buy a flat or property? Learn the essential legal precautions before purchasing from a builder, realtor or developer. Check RERA registration, title documents, encumbrance, Buyer Agreement, possession clauses, compensation, litigation history and more with this complete property buying checklist by Advocate Deepak Malhotra.
Beware of unregistered builders, realtors, developers, real estate agent & real estate broker
: If you are planning of buying a builder flat, then before buying a property, check RERA registration number of the project along with its approval from concerned authority of the state like GMADA. Also check the real estate builder, real estate agent, realtor license carefully with its validity, from whom you are planning to buy a flat, villa or any kind of real estate property.
Beware of fake projects started, without buying a land on builder or realtor company name
: Many of the real estate agents try to develop small projects without purchasing a land, by doing joint venture with land owners. Check ownership papers of the real estate land of the realtor, on which the builder has started construction of a sample flat. The ownership may be checked online from revenue land records website of the state or UT. Also check approved maps, approved site plans with specific covered and super are specifications.
Beware of projects started on mortgaged land
: Check encumbrance certificate of the land, to make sure that the project land is free from any loan, encumbrance, lien or mortgages. If land is mortgaged then obtain copy of tri party agreement from the concerned bank.
Beware of builder prior litigation and cases
: Builder company past project experiences must be reviewed and its litigation history must be investigated thoroughly, from the website of NCDRC and ECOURTS . The status and case records could be seen for the past many years, from the column of case status, by inserting name of the builder company.
Beware of depositing token amount without reading apartment agreement
: Temporary sales team employees of the builder, may trap new buyers by saying that whole project is sold, only few flats are left etc. Buyer Apartment Agreement draft copy, must be demanded in advance, before making payment of any booking token amount to any realtor or real estate agent.
Beware of clauses mentioned in buyer apartment agreement
: Few realtors and builders prepare big agreement, which is impossible to read. All the clauses must be read carefully especially penalty clause, penalty for late payment , compensation for delay in possession, possession date, parking and club charges, super area and covered area etc.
Beware of super area and covered area trap to raise price of flat at the time of possession
: Generally most of the builders, realtors mention clause, that area mentioned at the time of booking is tentative and builder has a right to increase it, at the time of possession. This clause must be asked, to be removed otherwise at the time of possession, you may receive a huge increase in price of an apartment or flat.
Beware of payment in lump-sum at start of project
: Always choose a construction linked plan and on each payment reminder, visit and see the progress of project, before making payment of next installment.
Beware of forfeiture clause in the apartment buyer agreement
: At the time of booking a builder flat or buying a property, forfeiture clause must be read carefully and the builder must be asked to delete / alter it at the time of signing the apartment buyer agreement.
Beware of compensation for delay in possession @ 10 to 50 per sq. ft
: Generally builders and realtors charge @15% for any delay in installment along with penal interest. But on the name of compensation, for delay in possession, they mention only @10 to 50 rupees per square feet, which comes to 1 to 2% only. Ask them to put same clause of penalty for delay in compensation. At the time of taking over of possession, a copy of completing certificate must be obtained.
In this way, you can reduce real estate litigation and property disputes with little bit of cautiousness and proper verification.
Read uniques 30 FAQs answered by Property Lawyers in Chandigarh?
1. Can a builder legally start booking flats before purchasing the entire project land?
Answer: Not always. Many projects are launched through collaboration or development agreements. A buyer should verify whether the builder has legal development rights, ownership documents, or registered agreements before paying any amount.
2. Is it risky if a builder shows only a sample flat but construction has not started?
Answer: Yes. A beautifully designed sample flat does not prove that the project has all statutory approvals. Always verify construction permissions, sanctioned plans and project registration independently.
3. Can a builder change the tower or floor allotted after booking?
Answer: It depends upon the Buyer Agreement. Some agreements permit relocation under certain circumstances. Read this clause carefully before signing. Check the property buying checklist and read each clause of the Buyer’s Agreement carefully
4. Why should I search court cases against a builder before booking?
Answer: A builder involved in repeated consumer complaints, RERA disputes or civil litigation may have a history of delayed possession or contractual violations. Past litigation often indicates future risks.
5. Can a builder increase the apartment area after booking?
Answer: Some agreements permit variation in super area. Such increases may result in additional payment. Ask the builder to clearly define the maximum permissible variation. Check the property buying checklist and read each clause of the Buyer’s Agreement carefully
6. Why is the possession date sometimes written vaguely in builder agreements?
Answer: Builders may use phrases like “subject to force majeure” or “expected possession” instead of a fixed date. Such wording can make compensation claims more difficult. Check the property buying checklist and read each clause of the Buyer’s Agreement carefully
7. Is paying a booking amount before reading the Buyer Agreement a mistake?
Answer: Yes. Once the booking amount is paid, buyers often lose bargaining power. Always ask for the draft agreement before making any payment.
8. Can a builder cancel my booking even if I have paid on time?
Answer: Cancellation depends on the agreement. Some contracts allow cancellation for technical defaults or documentation issues. Check the property buying checklist and read each clause of the Buyer’s Agreement carefully (Read termination clauses carefully).
9. Should I verify whether roads and parks shown in advertisements are officially approved?
Answer: Absolutely. Marketing brochures may display proposed facilities that are not part of approved layout plans.
10. Can a builder mortgage the project land after selling flats?
Answer: It depends on financing arrangements. Buyers should verify whether fresh charges have been created and whether lenders have released the specific unit before possession. Always check the Registries, Maps, Bhar Mukt Certificate, Fard etc.
11. Is a WhatsApp promise by a builder legally enforceable?
Answer: It may serve as evidence depending on circumstances, but important commitments should always be incorporated into the written agreement.
12. Can a builder charge separately for basic facilities like electricity and water connections?
Answer: Charges must comply with the agreement and applicable regulations. Buyers should obtain a detailed breakup before making payment. Check the property buying checklist and read each clause of the Buyer’s Agreement carefully
13. Should I verify whether the builder has completed previous projects on time?
Answer: Yes. A builder’s past delivery record often provides valuable insight into future performance.
14. Can maintenance charges be increased immediately after possession?
Answer: Maintenance provisions should be clearly mentioned in the agreement. Buyers should understand how charges may be revised.
15. What happens if the builder changes the layout after booking?
Answer: Significant alterations may require approvals and, in certain situations, consent of allottees. Always verify revised plans before accepting possession.
16. Why should I verify the builder’s company instead of only trusting the sales executive?
Answer: Sales representatives frequently change companies. Legal responsibility rests with the builder, not the individual salesperson. Check the property buying checklist and read each clause of the Buyer’s Agreement carefully
17. Can promotional discounts disappear after I pay the booking amount?
Answer: Yes. Unless the discount forms part of the written agreement, proving the promise later may become difficult.
18. Should I insist on seeing the original approvals instead of photocopies?
Answer: Yes. Original approvals or digitally verifiable certified copies help establish authenticity.
19. Can delayed government approvals affect my possession?
Answer: Yes. Delays in approvals, environmental clearances or completion certificates can postpone possession.
20. Is a low launch price always a good investment?
Answer: Not necessarily. Extremely low prices may indicate project risks, pending approvals or financial issues.
21. Can I verify whether the builder has unpaid taxes before booking?
Answer: Yes. Financial issues involving statutory dues may indirectly affect project completion and should be investigated wherever possible.
22. Why should I compare the sanctioned plan with the brochure?
Answer: Marketing material often contains artistic impressions, whereas the sanctioned plan reflects the legally approved project.
23. Can the builder charge GST or other taxes differently at possession?
Answer: Tax liability depends upon prevailing law and the stage of construction. Buyers should seek a written tax calculation.
24. Is a pre-approved home loan by a bank proof that the project is legally safe?
Answer: No. Bank approval should not replace your independent legal due diligence.
25. Why should I verify whether the builder owns the project trademark or brand name?
Answer: Sometimes projects are marketed under attractive names despite ownership disputes. Verify the legal entity behind the project.
26. Can a builder delay handing over common facilities after giving possession?
Answer: Yes. Clubhouses, parks, gyms and community areas may be completed later unless timelines are specifically defined.
27. Should I verify whether the apartment number appears in all payment receipts?
Answer: Yes. Every receipt should accurately identify your unit to avoid future disputes regarding payment allocation. Check the property buying checklist and read each clause of the Buyer’s Agreement carefully including mentioning of unit number, floor and block etc.
28. Can verbal promises regarding parking become unenforceable?
Answer: Yes. Parking rights should always be specifically mentioned in the Buyer Agreement or allotment letter. Check the property buying checklist and read each clause of the Buyer’s Agreement carefully (Especially Parking Clause).
29. Is it advisable to obtain a legal opinion even if everything appears genuine?
Answer: Yes. A property lawyer can identify hidden legal risks that may not be apparent from marketing documents or verbal assurances.
30. What is the biggest mistake first-time property buyers usually make?
Answer: Trusting advertisements, sales presentations and verbal promises without independently verifying legal documents, approvals and contractual clauses before making payment. Check the property buying checklist and read each clause of the Buyer’s Agreement carefully
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