PRECUATIONARY MEASURES BY PURCHASERS FOR PROJECTS UNDER CONSTRUCTION

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There is every need to ensure that the documentation of the property proposed to be purchased, is legally valid and enforceable in Law. In case of a ready made flat or house, this process may be little bit easier, but in case of projects under construction there needs strict due diligence.

A broad guideline on the steps to be taken in right direction for this task, is the following:

The first thing one should do, in case of projects that are still under construction, is to make sure that the builder has all the necessary approvals in place, without which it would be considered illegal. The first of these, is the necessary permission to develop the land into a residential complex. For such development, the Builders need to get approval from the Competent Authority of the Government for conversion of agricultural land or land specially designated for industrial purposes into land for residential area. In case, if the builder has gone ahead without obtaining this approval, the entire project is illegal and it is very risky.    

For obtaining conversion of land, it also need several clearance from  environment and other departments such as fire, safety, municipal administration,airport authority, telephone department, etc. In addition to these, the builder should ensure that his project does not interfere with the urban and town planning and that the entire project has unrestricted access to road and other public utility services.

Secondly, the purchaser should find out, whether the builder has necessary authority to transfer the undivided share of land to each flat owner and the entire plot to the Society of Apartment, on completion of the Project.

Lastly, the purchaser should never forget that there may be many a slip between the ‘blue print’ and the actual ‘final product’. In general, the developers tend to charge a premium for additional features, such as ‘swimming pool’ or ‘designer furniture’ etc. However, unless you ask the builder to incorporate all the promised features in the Agreement and make provisions for penalty in case of non-ful filment, you stand on shaky ground. Also, watch out for the fine print, because the builders may slip in a clause in the agreement and may claim that they reserve the right to alter any of the promised features.

As an adequate precaution, please take a look at the approved construction plans and ensure whether they match with things which were promised to you.  You can ask the builder to show you the requisite permits/approvals obtained from the concerned authorities. While the approved construction plans have to be mandatorily displayed at the construction site at all times, all the important approvals should be made available at the builder’s office. As per the provisions contained in Transfer of Property Act and Maharashtra Ownership of Flats Act, a seller is required to disclose all facts relating to the property, which include various permissions secured by him. In case the builder refuses to do so, a prospective buyer has recourse under the same acts.   

In addition to these documents, you should also take a look at the Commencement Certificate for Projects in Mumbai. As the name itself suggests, this Certificate is given to the builder to begin construction, only after ensuring that the builder has obtained all therequisite clearances.