Saturday 24 January 2015

Before You Pay Any Money to a Builder be alert and How to minimise risks

Check the following things

1.      Scrutinized the agreement for buying the property by the help of a lawyer or a knowledgeable person, so that the builder does not include clauses that are to his advantage and your disadvantage. If it contains any such unacceptable clauses, please have them struck out or suitably modified before you sign the agreement. Do not make any payments unless this is done.
2.      Agreement must not contain any illegal clause.
3.      It Should mention all costs and charges up front
4.      It should mention actual measurable dimension of the flat
5.      The dimension and specifications of the entire building, common amenities must be mention
6.      COPIES OF THE BUILDER’S PROPOSALS AND PLANS, AND ALL PERMISSIONS AND CERTIFICATES from the licensing authority. Depending on the stage of construction, you should get the below outlined documents.


a)    PROPOSAL / LETTER OF INTENT (LOI) submitted by builder to licensing authority
b)    INTIMATION OF DISAPPROVAL / INTIMATION OF APPROVAL (IOD/IOA) given to builder by the Licensing Authority. Legal conditions that the builder must fulfill are mentioned in this document. [Note: Builders start booking flats at this stage itself, without getting any further approvals. They fence off the plot of land, put up banners and advertise in newspapers, and collect tokens and advance payments from investors. In case the project fails to materialize, this money is unlikely to be returned.
c)    NO-OBJECTION-CERTIFICATES (NOCS). NOCs specified in IOD/IOA must be collected by the builder from several authorities such as police and fire brigade, and submitted to the licensing authority.
d)    COMMENCEMENT CERTIFICATE (CC) is received by builder from licensing authority after the IOD/IOA conditions are fulfilled. CC authorizes the builder to commence excavation and foundation work. He can build upto plinth level i.e. ground level, even before getting approval of the plan layouts. [Sometimes, builders continue to put up slabs for 1st floor, 2nd floor etc. even without getting their plan layouts approved. They are confident that it will be regularized afterwards.
e)    APPROVED PLAN LAYOUTS. The plan layouts submitted by the builder and architect are studied by the licensing authority. After required changes are made, these layouts are approved.
f)    AMENDMENTS TO APPROVED PLAN LAYOUTS. The builders commonly submit amendments after getting plans approved, and thus they add extra floors to the already submitted layouts. [Much mischief is played at this point. In the initial plans submitted, the builders adhere to Development Control Regulations concerning Floor-Space-Index and the ratio of open-spaces in the compound, which should be one-third the height of the building. Through the amendments, they break the DC Regulations with the connivance of licensing authorities. Builders also use amendments to alter the common amenities promised to buyers at the time of booking; spaces initially shown as clubhouses or playgrounds may be used for putting up another residential wing in your compound, and flat owners come to know only after they have been built and sold.]
g)     COMPLETION CERTIFICATE FROM PROJECT CONSULTANT. Quite often, an “independent” project consultant is appointed by the licensing authority to oversee the architectural, financial and legal aspects of the project. This agency is however paid for by the builder himself.

h)    BUILDING COMPLETION CERTIFICATE (BCC) FROM THE LICENSING AUTHORITY. This is issued after receiving the Project Consultant’s completion certificate. [Often, buyers on the lower floors are allowed to move into the building even while construction is in progress. Not only illegal, but also dangerous!

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