Allmotment letter/Builder Buyer agreement checklist – Fresh and Resale

For any flat that you buy from builder directly in fresh or resale (through seller in case of resale), certain documents binding builder and buyer to an agreement have to be signed.
It is imperative that these documents be checked prudently before signing.

Original/First buyer checklist:

An original buyer needs to compare the promises he/she was given at the time of booking with allotment letter. He/she also needs to make sure there are no surprises within the agreement:

1) Is possession period same as promised during the booking?
2) Ensure all existing dues of original buyer are cleared and there is no mention of the same in agreement.
2) Is their an additional grace period associated with the possession date?
3) What is the reference date against which possession date is calculated – booking or allotment date?
4) Has builder included a clause for escalation charges?
5) Has builder included contractor issues and other non acts of god under the definition of force majeure?
6) Does the payment plan match with your plan and total amount?
7) Does the floor plan match the one shown to you at the time of booking?
8) Does the site plan match the one shown to you at the time of booking? Make sure your unit is highlighted in the site/cluster plan.
9) Is there any clause allowing for increase in area of flat? If yes, there should be a tab on the extent to which area may change.
10) Check specifications. They should match the ones shown to you at the time of booking. Ensure words like equivalent and standard are not introduced as part of the agreement.
11) If you are looking to sell off in short term, check transfer clause. Whats the transfer charges builder is expecting for first transfer? Make sure its not open ended.
12) Has builder included (or put the burden on buyer for) any additional charges like Government introduced charges, taxes, electrification, water, sewer charges etc.? Generally government taxes and surcharge are borne by buyers but charges like electricity and water meter should be specified upfront.
13) What does agreement state of interest in case of delay of payment? It should ideally be no more than 18% pa. Ensure it doesn’t have a clause putting entire delay possession penalty at risk if buyer delays even a single installment.
14) Verify that delay interest to be borne by buyer is from due date and not from demand letter generation
15) Verify there is no unreasonable cancellation clause. Sufficient time of three months shall be given before cancellation of the unit.
16) Check the number of months for which builder will seek the maintenance charges for at the time of possession. If the number is not provided, ask the builder to provide the details in some other written form at least.
17) What does the agreement have to say on common area/club usage? Ensure builder does not exercise exclusive right to the same.
18) Post real estate regulatory bill is passed(assuming it gets passed this winter season), builder has to disclose information about its overall plan with number of floors along with carpet area of the flat. Same has to be verified by the buyer post implementation.

Resale buyer checklist:

In case of resale, builder generally gets a supplementary agreement signed by the buyer.

1) Ensure all existing dues (to builder and bank if any) of original buyer are cleared and there is no mention of the same in agreement.
2) Ensure that in builder buyer agreement/allotment letter, name and credentials of the seller matches.
3) Verify that builder has not reset the reference date for possession in the supplementary agreement.
4) Is their an additional grace period associated with the possession date (in original allotment letter and supplementary agreement)?
5) Has builder included a clause for escalation charges?
6) Has builder included contractor issues and other non acts of god under the definition of force majeure?
7) Does the payment plan match with your plan and total amount?
8) Does the floor plan match the one shown to you by broker/seller?
9) Does the site plan match the one shown to you by broker/seller? Make sure your unit is highlighted in the site/cluster plan.
10) Is there any clause allowing for increase in area of flat? If yes, there should be a tab on the extent to which area may change.
11) Check specifications. They should match the ones shown to you by broker/seller. Ensure words like equivalent and standard are not introduced as part of the agreement.
11) If you are looking to sell off in short term, check transfer clause. Whats the transfer charges builder is expecting for first transfer? Make sure its not open ended.
12) Has builder included (or put the burden on buyer for) any additional charges like Government introduced charges, taxes, electrification, water, sewer charges etc.? Generally government taxes and surcharge are borne by buyers but charges like electricity and water meter should be specified upfront.
13) What does agreement state of interest in case of delay of future payment? It should ideally be no more than 18% pa. Ensure it doesn’t have a clause putting entire delay possession penalty at risk if buyer delays even a single installment.
14) Verify that delay interest to be borne by buyer is from due date and not from demand letter generation
15) Verify there is no unreasonable cancellation clause. Sufficient time of three months shall be given before cancellation of the unit.
16) Check the number of months for which builder will seek the maintenance charges for at the time of possession.
17) What does the agreement have to say on common area/club usage? Ensure builder does not exercise exclusive right to the same.
18) Post real estate regulatory bill is passed(assuming winter season), builder has to disclose information about its overall plan with number of floors along with carpet area of the flat. Same has to be verified by the buyer post implementation.

Please share any more item in the agreement that you feel should be verified before signing the document.

Comments/Feedback invited.

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Last Updated on April 17, 2015 by Go4Reviews