Questions to Ask a Builder Before Booking a New Project

 

Under Construction or Ready-to-Move Flat? Questions to Settle Before You Pay a Booking Amount

You are sitting in the office of the builder and have two choices in front of you. The first one is an apartment in a tower, which is yet to be completed and only in the construction phase. The second one is a completed unit which you could visit right now. The first seems to be a relatively cheap option with the staged payment schedule, while the second is more expensive, but none of its elements leaves to imagination.

Most of the potential purchasers compare these two based on the price. This approach fails to catch many aspects of these two roads since there is a difference in the moment of paying, important papers, risks involved and possibilities of checking the property visually before paying.

What really separates the two

A flat under construction is basically buying something that will come into existence in the future. You have to take your chances with the schedule of the builder, the approved plans and the contract that you are signing. When it comes to an apartment that is ready for you to move in, then your concern would be from "Would it come as promised?" to "Would what I see now be properly documented and in good condition?"

Both have their advantages and disadvantages. Flats that are still under construction offer you more options regarding floors and units, while payments can be made through different stages of construction. Ready-made flats provide you with certainty and immediate use.

Compare the real cost, not the sticker price

Ask for a written cost sheet for both options and compare the totals, not the base rates. It should list:

• Base price and the area of its application

• Floor rise, preferential location and parking fees

• Charges for club or facility membership

• Advance maintenance and corpus fund

• Registration, stamp duty, and other transaction costs which differ from state to state

• Tax applicable

Tax implications may vary in case of a flat that is under construction when compared to the one which is constructed. This is subject to change with time; hence, you should verify the present status from a chartered accountant or the lawyer rather than from the salesperson.

Calculate the cost of waiting. In case of the under construction flat, you have to continue paying rent for the house you are living currently. In case you are taking a loan, then you generally need to pay interest on the amount disbursed till date and EMI starts afterward. In case of the ready flat, you need to make payments at an earlier stage, however, cost of waiting will be low or even absent. Calculate the sum total over the waiting period to decide which one is cheaper.

In case you have filtered down the options on an online platform like Prooperty, then verify that the price mentioned on the platform matches with the cost sheet given by the builder.

Timelines and delay risk

For a ready flat, timing is simple: you can usually move in once formalities and payments are complete. For an under-construction flat, ask:

• What date does possession get registered in RERA?

• What will be the date in the Agreement for Sale, and is there a grace period?

• Which stage of construction is my tower at now?

• What if there is any delay in possession?

An "expected possession" noted during a discussion will not be the same as the date specified in the contract. RERA has provisions that can deal with delay, either in the form of interest or refund, depending on what the agreement specifies and the laws of the state. Check the site as well. The registered date means nothing if there is obvious delay in work.

Paperwork: different stages, different documents

For an under-construction flat, focus on:

• Registration under RERA for the particular tower/phase, as checked in the government authority’s website

• Title documents of the land and, if it is a joint development project, then the terms agreed upon between you and the landowner

• Plans of the building project and the present stage of approvals

• Draft of the Agreement for Sale, especially payment and refund policies

For a ready-to-move flat, focus on:

• Occupancy Certificate and Completion Certificate in case of issuance by your State

• If the flat is in accordance with the approved layout

• Title papers and encumbrances, if any

• Pending payments, like maintenance or utility bills

• How common areas are transferred to the residents' association

"Ready-to-move" is commonly a loose term in marketing. Request to view the occupancy certificate document. It might appear to be ready but still require final approval, and it is common practice for lenders to request such documents. In case the flat is not new but a resale one, then the title deeds of the seller and the no-objection certificates of the society come into play.

The important documents should be legally vetted before making any financial commitments. This is a general article and not legal advice.

What you can verify with your own eyes

A ready flat can be inspected properly, so use that advantage. Visit at different times of day and check:

• Seepage or cracking in walls and ceilings

• Doors, windows, electrical sockets, switches and bathroom accessories

• Pressure and drainage system

• Elevators, back-up power, parking facilities and communal areas

• Road traffic, construction noise or nearby activities

If possible, do bring along an engineer or an interior designer. They tend to spot features that buyers often overlook.

In the case of a flat that is being constructed, you generally get a sample flat and a brochure. Find out how the sample is different from your flat in terms of size of rooms, height of ceilings and quality of materials used. Make sure you have the list of specifications in writing and then match them with the sample flat. Inspect the construction site in order to understand the quality of construction and to know what is being made and what remains vacant land.

Flexibility and choice

Undersold units will be a better option if you have a preference for a particular floor, facing or corner unit as there are many options available. In addition, the payment method may allow you additional time to arrange funds.

Ready apartments offer lesser choices, but at least you can get a sense of reality by looking at the actual view and neighbors. You will also be able to assess the feeling of traffic rush, which cannot be seen from any brochure.

In either case, find out what units are available and whether there is any limited-time offer on discount or payment plan. Read the terms before this period elapses, and not after that.

Living there: running costs and community

The purchase price is a one-time cost, but maintenance continues for as long as you own the home. Ask the same running-cost questions for both options:

• What is the expected monthly maintenance and in what area does it apply?

• What does it include: security, lifts, housekeeping, common electricity, water?

• Are there any additional charges such as for the club, parking, utilities?

• What company manages the common areas and when will the residents manage them?

It will be easier for you to evaluate its maintenance and talk to its current tenants if the building is already constructed. The project under construction may promise to deliver all facilities but may not be able to provide you with a definite time frame for delivering those. Find out about all these charges before making your decision.

Questions to ask the builder, option by option

If the flat is under construction:

• Is my tower registered individually under RERA?

• What possession date will be stated in the agreement and how is the compensation done for any delay?

• Does the agreement mention the specifications and promised facilities?

• At which construction milestone is each payment due?

• Can I see the draft agreement before paying the booking amount?

If the flat is ready to move in:

• Have you got an occupancy certificate, and may I see it?

• Are there any pending dues associated with the flat?

• What are the contents of the deal, like fittings and parking?

• How does the builder manage the defects arising post-handover? There is provision for defect liability under the law, so find out how it's managed.

• When would you transfer the documents and possession letter?

Which option tends to suit which buyer

• An under-construction flat can suit someone who does not need to move soon, can manage staged payments and wants a wider choice of units, while accepting the risk of delay.

• A ready flat can suit someone who needs to move soon, wants to inspect exactly what they are buying, or prefers not to pay rent and loan interest together.

This is only a general pattern. Your finances, timeline and comfort with risk should decide.

Checklist before you pay

• Cost sheet on paper for both the options, containing all the charges and taxes.

• The RERA number has been verified (if under construction) or the occupancy certificate shown (if ready).

• All the title and encumbrance papers have been checked by a property lawyer.

• Possession/handover date agreed upon on paper.

• Draft agreement thoroughly read, cancellation and refund policy known.

• Home loan eligibility and documents needed by the lender are known.

• Flat site inspected, if ready.

Online Research will help you select both types of property side by side. Scouring real estate portals like Property in gurgaon will provide you with a preliminary look at properties, their costs, and their possession status. However, consider it only as a preliminary point of reference and make sure you verify that status with the one at RERA.

Conclusion

The correct option isn’t always the less expensive one or the prettier sales brochure. It’s the option that is low risk and whose risk levels are fully understood and verifiable. Once you have decided that you want to financially commit, make sure that all the vital commitments are put in writing. Compare these written commitments with the source document and seek expert advice when necessary.