From various sources such as newspapers, social media, and colleagues, we have learnt about a few cases where the developers failed to deliver the project on time, there were legal disputes or deviations in the houses from what was promised. This has been a cause of concern for quite some time now. Since purchasing a house is a huge choice nothing should be left on a chance. The buyer should do his Due Diligence and seek the help of a real estate agent to avoid any issues in the future.
Verification of the project
- In Due Diligence Agency gathers and verifies the copy of the main documents such as a copy of intimation of disapproval (IOD) and commencement certificate (CC) from builders to review and recommend a new project.
- Collects and study the copy of the approved drawings of the under-construction project and make suggestions accordingly.
- Does Due Diligence to ensure that the land is free from legal disputes and related debt.
- Also exmine the copy of documents related to water connection, power connection and occupation certificate to ensure that the deal will be transparent.
- Confirm whether the property in question is mortgaged with the lender (such as a bank or housing finance companies) or not. If so, they ask for an NOC (no opposition certificate) from the lender.
Verification of the price of the home
- They verify the total cost of home inclusive of all additional costs
- perform stamp duty verification to validate whether the amount given by the builder is on the super-built area or carpet area.
Improtant Points need to be check
- registration fee whether the cost given by the developer is on a super-built area or carpet area.
- Floor rise: the cost with the builder
- PLC fees: the amount with the builder
- Infrastructure development costs (IDC): the prices with the developer
- External development costs (EDC): the prices with the developer
- Parking fees: the fee with the builder
- Society and association membership: the fee with the builder
- Electricity and water charges: the cost with the builder
- Power backup fees: the prices with the builder
- Lease Rent one time: the prices with the builder
- Interest-Free Maintenance Security (IFMS): the prices with the builder
- Fire Fighting Charges (FFC): the prices with the builder
- EEC: the prices with the builder
- space in storage rooms and lawns: the valuation with the builder
The agency does Due Diligence to verifies these charges with the builder and asks to be included in the builder-buyer agreement to avoid a future escalation of the price.
Verification of other essential elements
- Monthly maintenance costs
- Ratio of the carpet surface to the super area
- Delivery date and what will be the penalty if the project is delayed?
- Penalties for deviation in the size of the house
- Who will be the supervisory authority and legal dispute authority?
- Possibility and ratio of credit availability.
The bottom line is to carry out property & builder assessment, verify the fees, legal terms and get them included in the sale contract.
So, friends do your due diligence and ensure that the professional real estate agency or lending institution performs all these services ensuring that your lifelong savings are invested in the right property.