Monday, 8 March 2021

5 Things To Check In The Builder-Buyer Agreement

 Purchasing a property is quite a big decision. It takes months or even years in some cases to find your dream house. After an extensive market survey and bargaining when you finally manage to seal the deal, remember to go through the sale agreement carefully before signing on the dotted line. Once signed you will be bound by the agreement and you will not be able to counter anything on it. It is pertinent to note here that sale agreement is not a standard contract and there might be some clauses that can land you in trouble, hence it is advisable to scrutinize the agreement minutely.

There are a number of complaints against fraudulent sellers who delay in delivering the possession or commence the project without obtaining the requisite approvals. Here are the five most important things that every buyer should look for in his builder-buyer agreement-

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Completion certificate- When the builder hands over the house to you, the builder also needs to provide you with a completion certificate. A completion certificate is issued by the municipal authorities stating that it complies with the approved plan. You need this certificate for the registration of your house and other government facilities. In case your agreement is silent upon the provision of completion certificate ensure that there is a clause in your builder-buyer agreement which directs the builder to give you the completion certificate while handing over the house to you.

Delivery of possession clause- Pay attention to the delivery of possession clause. For instance, if your agreement states that the builder of the apartment will offer possession of the apartment within 60-90 days from the start of construction, it does not state any fixed date for delivery of possession. The commencement of the construction is entirely the discretion of the builder. To save yourself from such anomalies ensure that the agreement provides a fixed date of the delivery of possession.

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Protection from any changes in the building plan- The developer cannot change the building’s plan without the written consent of the buyer. So a lot of developers take the buyer's consent beforehand only. Look for this clause in the agreement and ensure that the builder takes your consent each time he plans to amend the building plan.

Related Article : Action against Builder for Delayed Possession

Indemnity clause in the sale agreement- This clause is very crucial for the builder as it provides indemnity (security or protection against loss or financial burden) against any legal dispute or legal defect in the property. Ensure that the clause mentions that in the case of any legal dispute in future the seller will compensate the buyer in case of any loss incurred by the buyer at then prevailing market rate.  

Right to opt out of the agreement- As a buyer, you should have the right to call off the deal under certain circumstances without being penalized. For instance, if the buyer fails to provide the statutory documents required by the buyer or if the buyer finds any legal defects in the property before execution of the sale deed or any such situation.

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It is advisable to get your sale deed reviewed by a lawyer experienced in real estate transactions to protect yourself from any sort of delay in delivery of your property or any other legal hassles. 

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