What are some questions you should ask a builder / seller?

There is a common maxim in Latin “caveat emptor” or “let the buyer beware”.  A descriptive meaning of this as per Wikipedia is “the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made”.  This is applicable in real-estate deals also, where the onus is on the buyer to ensure that the property under consideration meets the “quality and suitability” of the buyer.  Since a buyer’s prerogative is to have a legally compliant property, it is therefore prudent that the purchaser ask for and get satisfactory answers about a property, not just at the time of putting down a booking amount, but even more relevant when getting into an Agreement Of Sale.

So what are some of the questions you should ask a builder / seller, when considering whether to invest in that property or not?  Read on:

(i) Is there any litigation pending on the Property?: Don’t be lulled into thinking “Why would someone put a “litigation pending” property for sale?”, remember Caveat Emptor?  So go ahead and ask this question because any defect in title, or pending legal proceedings is a gateway to litigation hell.  It may at times even bring a project to a standstill if a court’s stay-order is passed.

(ii) What are the “non-builder” costs involved?: Yes, the builder might have spelt out the final figure for your dream home, but what about other costs that are not related to the builder; like VAT, Service Tax applicable, corpus funds to be paid to association, registration fees and legal fees for the execution of the Sale Deed, Khatha / Mutation transfer fees, fees paid to Electricity & Water Boards, etc. Please note that sometimes they can add up to more than 10% of the actual cost paid to the builder, so do not take this lightly.  Depending on the builder, the area, and stage of construction, you might be in a position to negotiate these into the payment schedules.  So do not leave any stone unturned.

(iii) Are necessary sanctions and approvals taken from the jurisdictional authority for the project?: From a construction perspective, it is important to know whether a project has all the required legal approvals in place from the appropriate jurisdictional authorities. There have been instances wherein the approval has been taken from the Village Panchayat Authority, whereas the actual competent authority for according such sanctions was some other government body thereby bluntly violating the construction norms. Some quick checks you should do based on the construction status is to ask for Commencement Certificate [if project is under construction], or Occupancy Certificate [if the construction is complete.  For a complete list of questions to ask in this regard, download the RealDocs Mobile App, and click on the QuickCheck tab.

(iv) How much is the built up area? An important question if you are considering a gated community [like an apartment or villa complex], where the builder charges you on a rate per square-foot basis.  So what is the square footage you will be paying for? Well, this is an often confusing question, as there are various terminologies related to “area”.  Typically, the builder will charge as per “Super Built Up Area”.

Super Built Up Area [SBA] = Built Up Area + Common Area

Built Up Area is the Carpet Area of your home + walls within that area + balconies + utility areas, etc.  “Common Area” is typically calculated taking the total “common area” of a property such as lobbies, lift shafts, stairways, etc., and apportioned to your Built Up Area.  It is in your best interest to understand SBA, because then you’d know how much of the amount you are paying for a property is actually going towards your living space, and how much is being “shared” by the rest of the community.


(v) Cancellation Charges? An often ignored question, that becomes pertinent and critical should you decide on cancelling after making a booking deposit, or even after signing an agreement.  These charges are usually set by the builder, but nothing should stop you from negotiating this charge, plus the associated payment schedule of such a refund.

We hope these insights help you while you invest in your property. Check out the rest of our blogs for informative property related articles.

RealDocs Team

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