Following are the surprise/extra charges being asked for in the region at the time of possession. We discuss what are they and what can possibly be done to deal with them:
Water and sewer charges at 15k to 20k:
UP Apartment act clearly states “The promoter shall pay all local taxes including house tax, water tax, sewer tax, until and unless subleases have been executed in favour of the apartment owners”.
So, unless and untill this is specifically mentioned in your BBA, this burden can not be passed to buyer before sub lease is executed.
Labour cess at 19 to 22 psf:
We have discussed Labour cess at length previously.
Labour cess has to be charged at 1% of construction cost equally distributed among all units. This is paid to local labour department.
The transfer of this burden is debatable.
Dual electricity meter charges at 20k to 30k:
Has to be borne by the buyer.
However, this being pretty standard can very well be mentioned as part of Builder buyer agreement (BBA). Builder, however, to make the deal sound reasonable, do not mention this explicitly in BBA.
Advance maintenance charges (AMC) for 3 months to 2 year at 1.8 to 2.5 psf:
This is different from IFMS.
This is the amount which is utilized for maintenance till an owners association is formed.
This has to be paid but the declaration deed (as per UP Apartment act) has to specifically mention the tentative maintenance charges at time of handover.
Interest to buyer @ 18% or 24%:
This interest on delayed payment by buyer is seen to catch the buyer unaware.
Most of the interest is either due to delay from bank or due to some approval delay due to which buyer holds back the payment.
For settlement at time of possession, ensure you keep all communications with builder regarding reason for holding back payment intact.
If you see in a practical way, interest due to delay from bank will practically be (per annum interest for delay e.g. 18% – home loan interest %) i.e. around 6% to 8%. Hence, that burden is still bearable provided its legible.
Additional charges like Communication system, Gas pipeline set up, sinking fund etc:
This amounts to another 10k to 25k.
If these facilities are mentioned as part of specs, the same shall not be charged and court has given rulings against invoking such charges.
Sinking fund is just another way of asking maintenance over and above the AMC.
Before you pay, get a list of things that builder plans to implement over and above promised amenities and facilities under this.
VAT @ approx 4%:
In Faridabad and Gurgaon and few other states in the country, builders are demanding VAT as well. However, since there is a court stay on collection (for concluding the exact applicable VAT), builders are demanding bank guarantee instead.
Consumer courts have given judgments against charging of escalation cost as the delay is never due to buyer. This is the case even if such one sided clause that talk of escalation cost exist in BBA.
Farmer compensation/Increased land cost charges:
This has to be necessarily routed through court as builders will try their best to transfer this to buyers.
Last updated: May 22, 2015 at 15:58 pm