Building on `flat' rules - II: Happy housewarming

Aarati Krishnan

YOU have decided on your dream flat - one that fits your specifications and your pocket - but do not rush in and book it, yet. Investing in a flat is probably one of the biggest investment decisions. Not only will you be sinking a substantial chunk of your life-savings as down payment, but you will also be committing a portion of your future earnings (if you take a loan) to the flat.

Assuming you have already vetted the builder's credentials, you need to check some specific factors before paying the booking advance:

* Legal opinion on the title deeds: Before the flat, you will have to buy the undivided share of the land on which the flat is going to be built. For this, you must first ascertain that the builder has clear title to the land. Instead of relying on the legal opinion usually provided by the builder's advocate, it is better to get another independent opinion on the title deeds and the supporting documents.

The patta issued by the Revenue Department, the Encumbrance Certificate (that sets out previous mortgages or any other encumbrances on the land) and the clearance certificate issued by the Urban Land Ceiling authorities are some important documents on which sound opinion is needed.

Be sure also to look at the original title deeds and supporting documents.

Absence of a clear title can render your purchasing agreement invalid. If you purchase a flat from a builder who does not have clear titles, you risk having your ownership challenged later.

* Check out the living area: The builder quotes for the total built-up area. It is a misconception that if you pay for a 1,000 sq ft flat, your living area will be as much. It is far less.

The total built-up area includes the external walls of the flat and the flat's share of the common area (that occupied by the lift, stairway, lobby, landings and corridors). Usually, the common area adds upto 15 per cent of the built-up area. If it is much higher, check if it is worth it.

For a better idea of the living space, you must ask for the carpet area, which is the area of the flat excluding the space taken up by the internal walls.

* While you book the flat...

Once sure that the title is clear, you may need to clarify a couple of points with the builder:

* Is the flat built according to the approved plan?

Most builders usually include an architect plan of the flat in the sales literature. However, you need to check if the flat really conforms to this plan. More important, you need to check if the builder's plan has been approved by the urban development authority (for instance, the MMDA in the case of Chennai).

You may need to obtain a copy of the approved plan and compare it with the plan given to you by the builder, both for the area and for the actual design. If there are deviations from the approved plan, you could face the threat of demolition.

* Has the builder adhered to the parameters set down by the metropolitan development authority on parameters, such as permissible floor space index, setback and car parking?

Most urban development authorities have rules for construction of apartments. The most important deals with how many apartments can be built on a specific plot of land (the permissible FSI) and how much space must be left around a block abutting the road (set back).

It may be difficult for you to verify this on your own. But you can obtain an assurance from the builder that he has adhered to the rules laid down by the development authority. Any construction in violation of these parameters runs the risk of demolition later.

You can now pay the booking advance.

* And after that...

You will now have to go through the following steps:

* The builder will register the sale deed transferring the undivided share of land in your name, once you pay the stamp duty.

* You will sign an agreement of construction with the builder authorising him to construct the flat on your behalf.

Go through this agreement thoroughly (with help from a legal expert, if necessary) as it is your only claim to ownership of the apartment.

The agreement of construction needs to set out the following:

* The total cost of your share of land, the stamp duty, and the registration fee.

* The total cost of construction, giving details of the rate per square foot, the built-up area, and the common area.

* The architect plan of the flat.

* What exactly is included in the rate quoted above...the specifications for the internal fittings, doors and flooring.

* The schedule of payment.

* Rights and obligations of both the builder and the purchaser.

* The schedule of delivery - when the flat will be completed.

* Details of who will bear the cost of escalation, if any, during construction. Also if the builder will compensate you for any delay in handing over the apartment.

* Warranties, if any, offered by the builder, after handing over. This specifies whether the builder is willing to rectify any defects in the flat that relate to workmanship or quality of materials used, after you occupy the apartment.

This is but an indicative checklist of what you need to do before buying a flat. For those of you wanting greater details/clarification, there are a number of Web sites that you can look up. For instance:

* www.alacrityhomes.com (the Web site of Alacrity Housing, a Chennai-based builder) provides you with a useful booklet on "Key questions to ask before you buy a flat". This is a must-read for the flat buyer.

* The Web sites of the relevant metropolitan development authority (www.cmdachennai.com for Chennai) will give you a good understanding of the building rules pertaining to your city.

* Realty sites such as www.indiaproperties.com, hdfcrealty.com provide you with a good primer on the basics of flat-hunting, including what to look for in a flat.

Happy housewarming.

(The first part of this article was published on December 9.)

(Concluded)