Who is a good builder?
Who is reliable?
Who is transparent?
Who gives the requisite information with simplicity and clarity?
The projects that a builder orally mentions would be highly tempting. But when it comes to specifics, it would be totally mind-boggling. Then, is it an uphill task to identify a good builder? May be! But according to the president of Federation of Flats and Housing Promoters Association., R. Manishankar, it would be possible to find out a good and reliable builder provided we follow the basic guidelines while approaching one for buying a flat. Manishankar provides the following inputs:-
A good builder will, not only, proudly mention his various projects but also immediately give the address to enable you to see for yourself for your complete satisfaction.
Alternatively, a builder who is not professional, will claim that he has done innumerable projects but will hesitate to give the address. He would rather evade that question from the start.
You must check out the credibility of the builder in the CIBIL forum.
Before deciding to buy a property, you must visit one or two flats constructed by the builder and satisfy yourself in terms of both outer and inner construction patterns and whether they are as per general norms and quoted specifications.
You are required to collect the builder’s sales tax number, service tax number, pan number etc. and check out whether he has paid the taxes and filed the returns promptly so far.
Some builders may not give their own pan card number but someone else’s. You must duly verify the correct status and also whether he has his office, duly registered as per rules.
You need to further check out whether the builder has obtained any loan and settled the same on time. This verification can best be done with the help of CIBIL organization.
All the above-stated criteria should be carefully attended to. Otherwise, you will land in unwanted problems. For example, a builder has so far completed 50 projects. Let us assume that you book a flat that comes under his 51st project. In the meantime, the builder is charged with some offences committed in his earlier project, as a consequence of which there is every likelihood that his 51st project would also be either terminated or suspended as per legal provisions. prevention is better than cure!
Cheque is the best and correct mode:-
It is always wise to give full amount by way of cheque only. Some builders may suggest that a portion of the value to be given by cash - meaning black money transaction. Such a type of transaction needs to be totally avoided because, in case, the said property faces a legal issue after registration of this property, any compensation payable to the current owner would be equivalent to the actual sale value of the deed only and, in effect, will have to forfeit the amount given as black money in the form of cash. While giving the cheque, you must ensure to fill up the name of the builder, name of the real estate company and account number in the cheque so as to prevent the builder from collecting and misusing the same to suit his convenience. In case the builder collects two different cheques and if he deposits in two different accounts, then also you may face unwanted legal issues.
Should an issue crop up?:-
Simple solution is to approach the concerned association meant for builders. If you give a complaint they will definitely look into the matter whether the builder is a member or not. If nothing is possible, you can lodge a complaint with the police.
The builder should have obtained all necessary approvals from Government authorities like CMDA, DTCP, Corporation/Municipality approvals in respect of the land and the construction of the building. He should provide all originals for verification before the sale deed or agreement is entered into.
Recently the Central Govt has announced the implementation of RERA Act which has come into force and the builders where ever required have to implement and act as per the provisions of the Act and this Act has been enacted to provide protection to the buyer and regulate the Real estate sector which is more unorganised.
A good builder would have obtained approval for each floor and left 4 to 5 ft open space on all 4 sides.
A transparent builder would clearly indicate the total cost of the flat including the amounts payable towards service tax (if it exceeds 12 flats), EB connection, drainage connection, corporation water, registration amount and car parking etc. Some builders would not reveal the entire cost in the beginning itself lest the buyer should hesitate to buy.
Mandatory clauses in the Agreement should also be taken care of. Accordingly, an agreement is a ‘must’ in the case of a flat to be constructed by the builder.
It should be on Rs.20/- stamp paper.
You must ensure that the agreement is executed on a stamp paper and not on the letterhead of the builder.
Specific details such as total area in sq.ft.,no.of floors, payable amount including additional cost, measurements of open space on all four sides and when the flat would be handed over etc. should be clearly incorporated in the agreement.
In case of any penalty payable by the builder, as committed, on account of delay in handing over, should also be included in the agreement.
The possession should be handed over to the owner within 15 days from the date of making full payment.
Again a good and trustworthy builder would take care to explain all points mentioned in the agreement. In the event of any sudden rise in the cost of materials like cement, half of it would be borne by the builder. If the builder is otherwise, he will simply transfer the burden to the buyer.
A good builder would also honestly share the information pertaining to the type of wood, tiles, measurements of bathroom doors, washbasin, its model, size, company etc. in the agreement itself. Alternatively, an unreliable builder would generally say that it would be a standard one and a good one.
Similarly, the height of the room which should be normally 10 ft. should also be mentioned. Some would provide 9 ft. only.
A good builder would, on his own,will hand over the original receipts of EB and metro water connection. In case he fails to hand over the same, you must remind him to do the same at the time of registration.
Ideally a builder should have his own office. Some builders complete the entire deal, only from the hotel in which case, access to the builder in due course would be very difficult.
A reliable builder would provide individual water tank for each flat owner.
The allotted car park will have to be certainly mentioned in the agreement with relevant details.
A good builder would incorporate the UDS (Undivided Share) for each owner in the agreement without fail.
Last but not the least is that a good builder would collect the cost from the owner in instalments proportionate to the completed work and not demand the entire money in the beginning itself.
All said and done, a buyer should never be complacent once he gives the money and entrusts the job with the builder. An alert buyer would and should periodically visit the site and be watchful until completion of work in its entirety.
(This article originally appeared in Nanayam Vikatan earlier and now reproduced and updated by P S Ramamurthy)