How to choose a reputed developer?

Check out points to remember when booking a property.

Saroj Sharma is currently looking to purchase a second property. While he is clear about his budget, location, and configuration, he is uncertain about one crucial aspect—choosing the right builder. “The last time I bought a 2 BHK property in Kharghar, Navi Mumbai, in 2006 for Rs 15 lakh, the Real Estate Regulatory Authority (RERA) did not exist, and the real estate market was unorganised. I had to rely solely on word of mouth. The amount spent then was significantly less compared to the over Rs 2.5 crore properties for a similar configuration that I see now.”

Echoing this, home buyer from Mumbai, Akila Raghuram notes, “Property costs increase with configuration. Investing in an under-construction property can be advantageous due to attractive offers and subvention schemes. With such significant sums involved and many properties in Mumbai undergoing redevelopment, a builder’s track record is crucial. Opting for a non-reputed developer is not advisable, and even reputed developers sometimes encounter issues.”

This issue is not unique to Sharma and Akila. Many homebuyers struggle to determine which developer is reliable and which project to choose. This guide outlines how to shortlist a developer.

 

Is the builder RERA registered?

As a rule of thumb, do not consider any developer whose project is not registered with the Real Estate Regulatory Authority (RERA). The RERA, established in most Indian states, protects customer interests. Its directives favour customers, and any issues faced will be directly addressed.

Once you confirm that the developer is RERA registered, check the RERA registration for the specific project you are interested in. You can also review the project’s status for a clearer understanding of its progress and construction timeline.

 

How much do you know about the developer?

  • It is advisable to invest with a developer who has a solid reputation. Developers with a good track record are generally expected to honour their commitments and complete projects on time, minimising customer concerns.
  • Verify if the developer is a member of reputable real estate associations such as CREDAI, NAREDCO, BAI, MCHI etc. that promote organised practices.
  • Review the developer’s past projects to see if they were completed on time.
  • Check if there have been any issues regarding construction quality or customer complaints that led to penalties for the developer.
  • Ensure the developer has adhered to the project plans submitted to RERA. Any deviations should be considered a red flag and warrant thorough investigation.
  • Look for whether the developer’s projects have ratings from reputable agencies like CRISIL, CARE, or LEED certification. These ratings add credibility to the developer’s operations.

 

What does customer ratings say?

Examine blogs, forums, and customer ratings related to the developer and their projects. Ratings above 4.2 are generally considered acceptable. Be cautious if all reviews are positive, as this may indicate fake ratings. Reviews with ambiguous language or those that seem to be generated by chatbots should be scrutinised.

 

Check the builder’s portfolio

Review the developer’s project portfolio to assess their performance. Check the construction status of each project to understand how well they maintain their developments. Observe whether work is ongoing or if it has stalled. This will give you an idea of whether the project you are considering is likely to be completed on time.

 

Check the staff working with the developer

When visiting the developer’s office or site, ask numerous questions and assess whether you receive satisfactory answers. Well-informed staff, both in the office and on-site, reflect positively on the developer’s operations. A developer who tolerates substandard employees may not deliver a quality project.

 

Check out project reviews

Utilise social media and online property consultants like Housing.com to gather detailed information about the project, including its area, configuration, amenities, location, connectivity, customer reviews, local facilities, and price trends. This information will help you make an informed decision. However, if all reviews are overwhelmingly positive, it may be a red flag requiring further investigation.

 

Has the developer’s project value shown appreciation? 

This is an important metric, as it indicates that people are willing to choose the developer’s project as a resale property even years after its completion. If there has been an increase in property value, attributed to the developer’s work rather than just the location, it signifies that the developer and their brand have some credibility and can be considered.

 

Has the developer got documentation for all his projects on time?

Examine the developer’s track record to see if they have consistently obtained all necessary documents, such as clearances, Occupancy Certificates (OC), Completion Certificates (CC), and No Objection Certificates (NOC), on time. You can verify this by visiting any of their RERA-registered projects. This will provide insight into how they plan and execute their projects.

 

Are the projects developed occupied?

High occupancy rates in completed projects suggest that most residents are satisfied with the development. 

 

Do reputed developers falter?

Although rare, even reputed developers can falter. Sneha Kadam had paid a premium and invested in a township project of a reputed developer in Mumbai. “Although, when I had invested in the project, connectivity was an issue, they had shown growth projections that encouraged me to invest in a 3 BHK in the township city. However, one rain and the entire property had leakage issue. The developer didn’t pay much attention to the quality part of the project as a new building is not the one expected to be braving leakage issues. Since society was not formed and we had to follow with the facility management (FM) team, it was a time-consuming exercise.” 

 

How to tackle reputed developers who may have faltered?

  • Start with documenting your problem and approach the building society, facility management team or the official mail id shared by the developer. 
  • If you do not receive a response, escalate the issue by emailing higher authorities such as the CEO who may look into this matter and acknowledge your concern.  
  • If there is still no reply, consider sending a speed post by government of India. By law it is mandatory to record receipt of the speed post. 
  • Use social media to highlight your issue; developers often seek to avoid negative publicity and may resolve the issue quickly to prevent it from going viral.
  • Attempt a mutual settlement first. If this fails or the developer does not cooperate, you may issue a legal notice or approach RERA or a consumer court, but not both simultaneously.

 

Housing.com POV

Choosing the right developer is crucial in real estate investment, as it impacts whether you choose to stay in, rent out, or sell the property in the future. Reputed developers generally operate in a manner that benefits home-buyers due to their market reputation. While there may be occasional lapses, reputed developers are typically more responsive and committed to resolving issues compared to unorganised developers.

 

FAQs

Should all projects be RERA registered?

Yes, it is mandatory for all new projects to be RERA registered. If a project is not RERA registered, the state’s RERA will issue a notice to the developer.

If there is a fault in the project construction, can home buyers approach developer even after getting the possession?

Yes, under RERA, the developer is responsible for addressing construction-related issues for five years from possession, although this may vary by state.

Should you invest in a project that is not RERA registered if the developer offers a lucrative real estate deal?

No. If a developer is not RERA registered, it may indicate credibility issues, missing permissions, or illegal land use. The project could be at risk of demolition.

What are the necessary things you should check if the developer has fulfilled while proceeding with the construction?

Review the developer’s quarterly progress reports to ensure construction aligns with the approved plans.

Is it mandatory for RERA registered projects to advertise their projects with RERA number?

Yes, RERA-registered projects must include their RERA registration number in advertisements. Failure to do so results in a notice from RERA and a halt in construction.

 

Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com
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