How to choose the right builder when you buy a property?

Property is one of the biggest investments that one makes in their lifetime. Since the value attached to the property is high, the risk associated is also significant. Thus, one has to be very careful at every step of property investment, from choosing the right location and setting the right budget to narrowing down the right property. In addition to the property itself, many other factors—such as your monthly expenses, your savings and your lifestyle—depend on the cautiousness of your decision.

In this article, we walk you through a vital part of property investment: choosing a safe builder. With numerous cases of buildings collapsing, construction quality is a pressing concern. It is, therefore, crucial that you choose a safe builder’s project to be your home. Below are key points to remember while evaluating the developer.

Is the developer RERA registered?

In a bid to protect home buyers, the central government implemented the Real Estate (Regulation and Development) Act, 2016 that regulates the real estate segment. Barring a few that are in process of implementation, the RERA is implemented in all states across India. It is mandatory under the RERA Act that a developer be registered with the regulatory body. This is a license that points that the developer is dependable and will be following quality construction methods.

The body has detailed strict regulations regarding safety, compliance and interests of the homebuyers that the developers have to comply with. This includes use of quality materials for construction, getting certifications that the project is fit to stay etc.

Developers who are not RERA registered are a threat as they are illegal. There is every chance that these developers may not have all necessary permissions in place. There will always be a risk that going forward the court may ask the local body to demolish the building in case of any litigation or issues with construction.

Know more: How to search project on RERA website?

Are you choosing a reputed builder’s project?

Know about the reputation of the builder and the value his brand commands. There are a lot of developers who are listed companies and can be trusted because of the brand that they represent. However, it’s a good idea to do your research about the developer by understanding his track record:

•   Experience that he carries
•   The projects that he has worked on in the past
•   Pricing of his projects –premium or affordable
•   Quality of construction
•   Any project litigation or project that has been stalled?
•   Any debt that the developer has?
•   Ongoing projects
•   Brand presence in the country
• Typical delivery cycle of his projects- whether the possession is given before time, on time or delayed possession.
• Site visits- while this was very common previously, developers now do not encourage site visits during construction owing to safety issues. However, you can inspect from outside. In case you see few to no one working on the project, then it’s a red flag of the project having run into financial trouble.

Check developer feedback online

One of the easiest ways to get the initial idea about the developer is to check his reviews online. There are many people forums, groups and social media interactions that are present online and give you an idea about the developer. You can consider doing your due diligence based on these findings, although many of the reviews may be plugged. So be prudent in your investigation.

Project appreciation of his past projects

Price is one of the biggest barometers to know whether the developer is a reputed developer or not. Check the price appreciation his past projects have secured. This will give you an idea if he is a sought after developer whose projects can be trusted with your hard earned money.

Is the project occupied or are they mostly investor flats?

As part of your due diligence, check whether the developer’s past projects have people occupancy. Absence of people means that the project lacks basic facilities. If more and more people prefer that project and are staying there, then it’s a sign of a good developer.

Is the developer part of the developer’s association body?

Before the implementation of the RERA, the developer’s association body such as CREDAI, MCHI, NABM, BAI etc. started their work in making the unorganised real estate sector into an organised one. These bodies ensure that transparency is maintained during transactions and also aid in grievance redressal. A developer who is part of such bodies gives priorities to these objectives and is a positive sign.

Get answers to all your questions from the developer

No question is small or silly. Since you are investing a huge amount of money, it is in your best interest to get all your doubts clarified from the developer. When you are scouting for a project, check from the developer about things such as

• The total area of the project
• Title deed of land acquisition
• RERA registration number of the project
• Encumbrance certificate
• The project approval certificate from the local body
• Blueprint of the project that is approved by RERA
• Date of project inception
• Date of project completion
• Amenities to be included
• If there is any future development as part of the project- will the amenities be shared?
• Brands that will be working with the developer in terms of fittings and fixtures
• Technology to be used for construction- whether it is MIVAN construction or not?
•  Will the developer give warranty of the project that he has constructed?
• Is the developer offering any scheme such as the subvention scheme?

Check the financial stability of the developer

Although RERA ensures that a developer has an ESCROW account where the project money is deposited and is used only for that project purpose, you would not want to be in a situation when the developer cries foul and declares bankruptcy. Note that more than new projects, this phenomenon is common in projects that undergo redevelopment.

What can be done if you have chosen a reputed developer and the project gets stalled?

While the probability of such an instance to happen is very less, there are cases where projects belonging to reputed developers have been stuck. In such a case, it is recommended to take the legal route and approach the state’s RERA body who will help address the grievance.

Housing.com POV

When investing in a property, you should do a detailed study about the developer and the project that you are looking at investing in. If you see any red flag, do not proceed with the investment. Remember developers who are not RERA registered may offer you properties at less than market rate which many people easily get enticed with. However, if you fall in this trap, you will run into the risk of losing your property.

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