Be sure to seek legal advice before signing the contract to avoid any pitfalls. (Representative Image)
Buying a flat is an important financial decision, and it is important to ensure that the builder-buyer agreement is clear, comprehensive and legally sound to protect your investment. This contract outlines the terms and conditions of the transaction, including the payment schedule, delivery timeline, property specifications and responsibilities of both parties. Before signing on the dotted line, it is important to carefully review key clauses in the contract to avoid future disputes or misunderstandings.
Here’s a checklist of the top points to review in your builder-buyer agreement to ensure a smooth and secure home-buying experience.
1. Project Details
Project Name and Address: Ensure that the details of the flat and the complete address of the project are clearly mentioned including the exact flat number.
Size and Carpet Area: Check the carpet area, super built-up area and any common areas.
Expiration Date: Check the expected possession date. Also, confirm penalty or compensation if possession is delayed.
2. Payment schedule
Payment Plan: Make sure the payment plan is clear, including advances, installment breakdowns and due dates.
Escalation clauses: Check for clauses that may allow the builder to increase the price after the contract is signed.
3. Title and Ownership
Land Title: Verify the builder’s title to the land and make sure there are no legal disputes or encumbrances.
Permissions: Ensure that the builder has all necessary approvals including local authorities, RERA registration and environmental clearance.
4. Flat specifications
Construction Materials and Fixtures: Get detailed specifications on materials used in construction, including flooring, fittings and electrical fixtures.
Check Quality: Confirm whether the builder follows the quality standards and whether any warranty is given for materials or equipment.
5. Possession and Handover Procedure
Possession process: Understand the possession process, including handing over keys, installation of utilities and any formalities.
Maintenance Period: Check for the prescribed period during which the builder is responsible for maintenance or repairs after possession.
6. Defect Liability Period
Defect Clause: Make sure to include a provision for repairs or rectification if there is any defect in construction or fittings within a specified period after possession.
7. Change in layout
Modification Clause: Understand the clause surrounding changes to the original design, structure or layout. Make sure the builder cannot make significant changes without your consent.
8. RERA Compliance
RERA Registration: Verify that the project is RERA-registered. The agreement should mention the registration number, and the builder should provide RERA documents.
Delay Penalty: Ensure that penalty clause is included for delay in possession (as per RERA guidelines).
9. Stamp duty and registration
Stamp duty clause: Check who will bear the stamp duty and registration costs—usually, it’s the buyer, but the terms should be clear.
Registration of sale deed: Make sure that the agreement mentions the procedure for registration of sale deed once the flat is ready for possession.
10. Facilities and Common Areas
Common Area Use: Specify the builder’s responsibilities regarding the maintenance of common areas such as lobbies, elevators, and parking lots.
Amenities: Check the mentioned amenities (gym, swimming pool, etc.) and confirm whether they are part of the final delivery or incur additional costs.
11. Legal Jurisdiction
Dispute Resolution: Review the dispute resolution mechanism – whether it is arbitration or litigation and in which court jurisdiction disputes will be handled.
12. Additional Charges
Maintenance Fees: Understand ongoing maintenance charges and whether they apply after possession.
Development Charges: Check for any hidden charges for development or infrastructure costs.
13. Transfer of Ownership
Transfer Clause: Check if the contract allows for transfer of ownership if you want to sell the property before the possession date.
14. Force Majeure Clause
Force Majeure: Make sure the contract includes a force majeure clause, which protects both parties in the event of unforeseen circumstances (eg natural disasters, legal changes) that could delay the project.
15. Builder’s liability
Insurance: Confirm whether the builder provides any insurance coverage during the construction phase.
Breach of Contract: Examine the penalties for failure of the builder to fulfill contractual obligations.
Be sure to seek legal advice before signing the contract to avoid any pitfalls. Having a lawyer review the terms can save you from unforeseen problems later.