Always focus on construction quality

Builders boast about the high standard of their work. It is easy to evaluate the quality of a builder by choosing to work with large, established developers. Construction quality is largely dependent on the reputation of the Builder. Brand builders are known for their quality construction and have trusted contractors who ensure quality control throughout construction.

Norms and practices -They adhere to standardized construction norms that do not change from one project to the next. The builder prohibits contractors from using cheap accessories and fittings. They only use quality fittings and provide maintenance contracts to well-respected facilities management agencies. It is good to inspect older projects of the same Builder if you are considering investing in one.

You can judge the construction quality by various parameters such as its architectural design and interior design quality, brands used for bathroom fixtures and paints, and the brands used to install them.

A building’s exterior

A building’s exterior may show signs of a weak foundation by having cracked walls. Indications like small cracks in the walls, creaking doors or windows, uneven or misaligned floors, and creaking or sticking doors or windows reflect poor finishing. Walls, the other component of the project, is relatively easy to comprehend. It will be difficult to nail a nail into the walls if the construction quality is good.

When searching for a property currently under construction, make sure you view more than the one-bedroom flat.

Poor construction, finishing or design may lead to a rejection of the property. You should also review the past projects to determine their quality and track record. But what if the Builder is new and this is his first project? You should check to see if any of the Builder’s projects have been approved or denied by a rating agency. To assess the quality of the construction, you can visit the site with a civil engineer.

2. Are there any bank tie-ups between the Developer/Builder and Banks?

Developers prefer to tie up with Banks and other non-banking finance companies. The Builder must provide his title papers and all relevant approvals to the bank in this tie-up process. The bank also examines the balance sheet of the Developer Company and its directors. The bank panel advocate conducts the title search, and they check all approvals.

The Builder’s experience in real estate is also important to banks. You should ensure that at least two banks have approved your project in the country and two of the top Housing Finance Companies before you sign a contract.

3. The land can be useful for commercial or residential purposes?

The local development authority issues these types of approvals. You should check the property documents to see if they have residential construction approvals. If the building is commercial, ask the Builder for commercial approval. Next, check the property’s title to see if the Builder is the plot owner where the building is being built or if he is merely a developer on that plot with the owner being someone else.

The investor must check if Both of them have signed a landowner-developer joint agreement.

Validity of the title papers

Remember the agreement must be a valid one. Most developers who are well-known don’t give their title papers to buyers. Because they are well-respected in the market, they don’t need to show buyers all title papers. They need to inform purchasers that many banks have approved the project and that their lawyers have reviewed the chain of documents.

Survey number -If the Builder has never been in the business before, ask him to show you the paperwork that proves his ownership. Each plot is assigned a unique number called khasra/survey number. Ask the Builder to provide this number and verify that the plot has been registered in the correct name. You can hire the services of a legal expert to do the title search. He will also be able to determine if there are any legal disputes over the land. And ensure there are no encumbrances.

4. All approval Letters from Concerned Departments.

Any developer who starts a project must obtain approvals from several departments. He also needs to get documents like the map approval letter from the concerned town planning agency/development authority. Ask the Airport Authority of India if the Builder has obtained any other mandatory approvals regarding the building plan, pollution and water, environment, and height clearance.

5. Is the Land Acquisition Complete?

Developers often sell apartments before the land acquisition is complete. The acquisition may be delayed due to unforeseeable circumstances. While the developer might purchase 80% of the land he requires, he may fight for the remaining 20%. If 20% of the land is under dispute where the proposed construction is to commence, this will be a huge issue.

Payment terms and clauses

6. Pay attention to the Payment Plan of the Builder.

The payment plan plays an important part in flat buying. If you decide to switch to a construction-linked plan in the middle of your contract, many developers will charge a penalty. Decide which plan is best for you from the beginning. If the project is delayed, cancelled, or postponed, you will be responsible for the full amount.

7. You should check if the Escalation Clause is in place.

One day, a customer approached the bank and asked for a loan of 2 lakhs more. the bank had given a loan of 20lakhs against the price of the flat, which was 25lakhs. On inquiring about the reason additional loan, as the flat was already available for registration, the buyer said the villa cost was increased to 285,000 against a sale consideration of 255,000. This was due to an incorrect measurement of the villa at the time of the agreement to sell. The actual villa size is larger than the size stated in the agreement. The buyer was willing to approach a consumer court.

Cost Escalation terms – However, ongoing through the agreement, it was clear that the Builder had included a cost escalation clause in the agreement to sell. So the buyer has to pay an additional cost. Many builders include a cost-escalation clause within the contract to sell. This states that if building materials or other inputs go up or there is a chance of an increase in flat or villa area, the Builder may raise the flat price.

Profile of the builder –

It is important to inquire about the track record of the Builder regarding whether he has implemented an escalation clause. Was there a legitimate reason for him to implement the clause? What rate will the charge be to make up the difference if the flat’s area increases? It will be at the current rate or the original booking rate. You can choose not to pay the escalation fee and instead opt for a developer who does not include it in their sale agreement.

8.  Find out the date of completion of the project

Most reputable builders will mention the date of possession. A particular month is usually mentioned with the year, such as March 2021. Developers often state that the project will be complete within 30 to 36 months after the construction begins. Some blocks with maps approved earlier will be available for possession sooner than others. The completion date of the project is also mentioned.

Causes for the unforeseen delay in Construction

Sometimes construction delays can occur due to reasons beyond the control of the Builder.  These could be strikes of labour, an insufficient supply of building materials or labor, etc. Ask the Builder for the completion date. Ask the Builder what the penalty is for delays in the project. Find out if he completed his previous project on time. If not, did he pay any penalties to customers or found a way around it.

9. Is there a penalty clause?

Project delays are common, and completion of all projects on time is always a challenge. Some builders offer compensation for delayed possession transfers but it is not something you can count on. The penalty amount you pay will not be as high as the EMI. You would pay the entire cost of the property.

However, the compensation you receive will only apply to the base price. This does not include parking fees, club memberships, or any other additional costs.

 Penalty clause and payment – Some builders will offer you a monthly income equal to the estimated amount based on the location of your project. A clause is often added to the agreement so it  protects the builders from any claims by the buyer in case of project delays. Some builders have a maximum amount of compensation they will pay. The majority of agreements include a clause that states that they are not liable if factors beyond their control delay the project.

In some cases, cheques for penalty charges issued have bounced. It is difficult to get compensation from the Builder. Your best option is to prevent this from happening.