Things to keep in mind for Home Buyers when Project Delays

The thought of owning one’s own home itself is satisfying. Home-buyers prefer investing their savings or earnings into a home hoping that they will get timely possession and facilities as promised by the builder. However, the facts on the ground are different. Property consultant JLL India said the average delay in NCR projects is more than 2 years and the all-India average is around 18-20 months.

The real estate sector witnessed a slowdown in recent times on high inventory levels, diminished demand and limited liquidity, which led to fall in sales and kept buyers away. However, experts believe that home buyers will return to residential investment with the changes in the economy and various government initiative to protect home buyers.

“India’s residential property market has been going through turbulent times for past few years. However, things are looking up now with changes in the economy and various initiatives announced by the government,” Ashwinder Raj Singh, CEO – residential services, JLL India said.

Shveta Jain, managing director, residential services, Cushman & Wakefield said, “The implementation of the Real Estate (Regulation & Development) Act is in full swing. The regulation aims at restoring confidence among the end users in the sector through several initiatives. Among other provisions, the aggrieved party has a right to demand the amount paid with interest (at prescribed rates) in case of failure to give possession. In case of non-withdrawal, the buyer shall be paid interest for every month of delay. It also provides for the establishment of speedy dispute resolution mechanism and the option of approaching the Consumer Courts at the district level for redressal of grievances.”

Jain said prospective buyers can still opt to invest in delayed projects provided there is a renewed visibility in terms of achieving revised timelines because of a fresh source of funding, change in management, etc.

Below are the 5 points that buyer should keep in mind while purchasing a house:
Goodwill of the brand: A thorough background-check of the builder in terms of the number of projects completed, time taken to complete a project and the quality of construction will help in assessing the execution capability of the developer.

Real value of property: The prospective buyer must determine, with the help of brokers, neighbourhood, registrar’s office, whether the price of a property is commensurate with existing market values. One must choose a broker who is experienced and informative, while being objective throughout the process.

Legal Aspects of Purchasing Property: Buying a property in India involves a great amount of paperwork and diligence, and the lawyers should be well equipped to handle the entire process. Lawyers should conduct due diligence to verify the ownership of title over the property, or any encumbrances over the property.

Buyer Agreements: One must pay great attention to the buyer agreement as it holds all the clauses, terms and conditions and legal implications, for all parties involved. During the process of buying and negotiating, a buyer should be aware of all the clauses which protect the rights, and the clauses which safeguard the developer.

Project approvals: The buyer should receive a list of approvals that the builder needs to obtain, that includes building plans and approvals from various regulatory authorities. Structural safety certificate, No-objection certificate by the civic authority, environment clearances, bank approvals, urban land ceiling certificate, commencement certificate and title deed are some approvals that need to be received by the builder. Non-compliance of these may not only result in delay in project completion, but even altogether scrapping of the project

Area: While the new law has laid down ‘carpet area’ as the basis for residential purchases; buyers should ensure that they are paying only for the carpet area and not the super built-up area which was being considered earlier.
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