5 Things Home Buyers Need To Know In The Builder-Buyer Agreement

When home buyers have found the apartment they want to buy and obtained a home loan, the battle is only half won. It is quite probable that you are not equipped to decipher the builder-buyer agreement. 

For example, you might find the advertised pre-launch prices very attractive and end up paying much more than you had expected. It is also possible that you estimated the space according to the built-up area mentioned in the builder-buyer agreement, only to realize that the carpet area is much less.

A 21-member committee, formed by the upper house of the Indian Parliament or the Rajya Sabha, recently invited feedback from individual home buyers and owners, organizations and institutions on what they expect in the builder-buyer agreement.

While the government is yet to act on the feedback submitted, PropGuide looks into the most pertinent questions related to the builder-buyer agreement:

• Which are the matters in which home buyers expect greater clarity in the agreement?
• How would they deal with such conflicts?

'Minor deviations' in the approved Building Plan

While buying apartments in India, many home buyers think that the builder has deviated from the original building plan approved by regulatory authorities. When the Rajya Sabha committee invited feedback, buyers said that they wanted the area spent for convenience shops in residential projects to be restricted to 5% of the total area.

The government allows minor deviations from the original building plan, but because it is not clearly defined what minor deviations mean, home buyers are often not sure what is in store for them. The government intends to allow minor deviations if there are engineering constraints.

Home buyers believe that developers and their brand ambassadors should be held responsible for deviations in the building plan. But, builders argue that if the government does not clearly define what the phrase “minor deviations” mean, this would lead to endless conflicts with buyers.

The size of the apartment

Presently, builders charge home buyers for the super built-up area of an apartment, which might include the lobby, lifts, common area, stairs and other amenities. But, few buyers know that the carpet area in residential projects is often 15-30% lesser than the super built up area. Even when they know that this is so, it is still not clear how less the carper area would be till the completion of construction.

At present, home buyers can include a clause that stipulates that builders cannot lower the size beyond a certain point. Home buyers can also speak to people who had bought apartments in earlier projects of the same builder. But, there should be greater clarity in such matters.

Specifications of the apartment

Buyers often notice that builders charge more than their advertisements often suggest. At times, builders would charge more if the specifications change during the course of construction, or if there are cost overruns.

It is true that some states allow home buyers to inspect documents that builders had submitted to regulatory authorities. If there are changes in such specifications, home buyers can legally proceed against developers. But, this is not true everywhere in India.

Additional costs

Builders often charge a greater amount for maintenance, electricity, water car parking and other services than they had mentioned in the agreement. Builders often do not have the complex legal knowledge that is required to decipher the builder-buyer agreement. Builders often do not know whether the government had sanctioned the alterations in building specifications.

The schedule and approvals

Even though builders often promise to complete the construction of a residential project in India within a specified period of time, they often stretch this period. Moreover, builders have to procure various approvals and documents like the building completion certificate and occupancy certificate from various regulatory authorities. Such approvals and documents are necessary for registering the property, and for entering transactions later.

In many cases, buyers often notice that the builder had not obtained the necessary approvals. Home buyers expect greater transparency in such matters.

While the government looks into these issues, you must start with this list to push for more clarity in the builder-buyer agreement when buying homes.