Points to Remember While Buying an Under-Construction Property
Mar 02, 2017 Home Trading Steps
Delayed possession has been a common problem property buyers have been suffering since ages. While a delay of three to four months after the promised date for acquiring possession is understandable and can be tolerated, major problems arise when this delay reaches a figure of a year or more. Due to the recession coupled with high inflation and lack of clear planning, real estate developers have been suffering from the shortage of capital thereby throwing the under-construction projects in complete jeopardy.
There are hundreds of real estate projects in and around metros such Mumbai and Delhi which have either been abandoned or getting developed at snail’s pace. As a result, people who have purchased apartments in such projects have been suffering monetary losses and face an uncertain future. Several surveys have hinted that there lie hundreds of property projects that have been lying unfinished for the past 4 to 5 years. Ineffective handling of Power of Attorney has been the major cause of delay in these projects. At times in projects owned by multiple partners, one of the partners transfers POA to another partner for the smooth functioning of the project. However, problems arise when the partner with POA violates his powers throwing the project into jeopardy. There have been several cases lodged by people who unfortunately have been the victims of such huge delays and as a result, concerned developers had to face the wrath of the court.
It is very important for you to conduct a thorough check of the developer and the project itself on offer before investing your hard earned money. Special care should be taken while planning to invest in an under-construction property.
Some of the checks you may conduct beforehand are:
There are hundreds of real estate projects in and around metros such Mumbai and Delhi which have either been abandoned or getting developed at snail’s pace. As a result, people who have purchased apartments in such projects have been suffering monetary losses and face an uncertain future. Several surveys have hinted that there lie hundreds of property projects that have been lying unfinished for the past 4 to 5 years. Ineffective handling of Power of Attorney has been the major cause of delay in these projects. At times in projects owned by multiple partners, one of the partners transfers POA to another partner for the smooth functioning of the project. However, problems arise when the partner with POA violates his powers throwing the project into jeopardy. There have been several cases lodged by people who unfortunately have been the victims of such huge delays and as a result, concerned developers had to face the wrath of the court.
It is very important for you to conduct a thorough check of the developer and the project itself on offer before investing your hard earned money. Special care should be taken while planning to invest in an under-construction property.
Some of the checks you may conduct beforehand are:
- Look out for the project approval by leading banks.
- Whether the project has approvals such as Commencement Certificate, Environmental clearance, floor plan approval.
- Look out for the project’s APF number.
In case of an unnatural delay in the delivery of the project, the buyer has every right to sue the developer and demand monetary compensation from him. One can also approach consumer courts in such cases. Under the Consumer Protection Act, the buyer can take legal recourse against the seller. Once the buyer puts forth his arguments, the court may ask the concerned seller to deliver the project in a specific timeframe, failing which, he may be tried under criminal procedure code.
Legal Action a buyer can take if he falls victim to prolonged delay in delivery of project:
Legal Action a buyer can take if he falls victim to prolonged delay in delivery of project:
- Consumer court: Bring together all the affected buyers of the delayed project and file a case against the developer under the Consumer Protections Act. Appoint a lawyer for all legal proceedings.
- As per the directives from the Consumer court, FIR can be filed against the developer for cheating buyers.
- You may also seek monetary compensation, refund of money by filing a case in the court accordingly.
So if you are looking to buy an under-construction property do pay heed to these pointers.
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