Do you know what due-diligence is? Read this if you are a potential home buyer
Buying a property in India is like taking a leap of faith. You have to part with your hard earned money and it still may not serve the purpose. Most often, home buyers depend on the banks to do the due diligence, which is extremely important before buying a property. But does that suffice?
Santhosh Kumar, International Director with
While many believe ready to move in apartments are a better and safer bet than those under construction, one still has to be cautious before buying such a property. According to Kumar, verifying the developer’s credibility is of utmost importance.
“Get all details pertaining to the developer’s credentials. Of particular importance is the developer’s delivery track record of past projects. There are many aspects that directly affect the level of risk, but are never revealed to buyers. The required information needs to be assimilated at a local level, preferably by someone who has been residing in the locality for a while,” he explained.
In the case of under-construction properties, it is always better if a property broker is involved. However, if it is being bought from the builder directly, it becomes imperative for the potential buyer to do his investigation through the locals in the area.
“The buyer needs to establish whether the builder has free and clear ownership of the land on which the project is being built. An agreement between builder and the original owner of the land is not sufficient,” explained Kumar.
Seek requisite documents
One of the most important documents that every buyer should ask for is the IOD (intimation of disapproval), a set of instructions that every developer has to follow in order to build his project in a legal way.
AdvertisementAccording to developers, if a buyer is investing in ready to move flats, a buyer should ask for the approved drawings of the project, the completion certificate and a clear land title. Ensure that the property is free of litigation and any kind of associated debt. Also, establish the existence of a proper society. If one is buying a second-hand property, proper transfer and re-registration should be done before hand over. The documents required for registration of a residential flat, apart from the sale deed, will include a letter from the society that reflects the number of floors in the building, the year in which the building was constructed, the apartment's built-up area and the number of lifts in the building,” he noted.
On the other hand, while investing in a new project, a buyer must be careful about the ownership of the land, on which the project is being built. “The buyer needs to establish whether the builder has free and clear ownership of the land on which the project is being built. An agreement between builder and the original owner of the land is not sufficient,” explained Kumar.
Apart from these, the buyer should also remember to do his due diligence pertaining to applicable condominium documents, service contracts, and all construction-related documents including warranties, as-built plans and specifications among others.
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