Due Diligence When Investing in Property!!

While constructing some builders take advantage by creating more carpet area by constructing more than in the sanctioned plan, such temptations should be avoided as such buildings could be declared illegal later. And orders for demolition of such building can also be passed.
It is therefore very important to look for the ‘Completion Certificate’ while buying an apartment.
Provisions should be made for sufficient parking, a lot of disputes arise since builder violating the bye-laws may construct additional floors, falsely promising parking availability to buyers.

Queries to be made before any transactions;
• Is the project approved by the sanctioning authorities?
• Is any Bank funding the project?
(Projects with approved bank funding are generally encumbrance free, as the bank does its own due-diligence before sanctioning a project loan)
• Past record of the builder/ developer in terms of delivery.

Other points to be diligent about;

• Relevance of costing vis a vis other projects in the vicinity.
• Connectivity of the Project, now and in the future.
• If you are going through a broker, take his or her commission into account before arriving at the final cost. Take into considerations the one time deposit on possession and monthly expenditure for maintenance and other taxes.
• Make sure to get some commitment from the builder for timely completion of the project.
• Take legal advice for the title deed of the property.
• NOC from the builder or the apartment society to make sure that the property can be sold without any hindrance.
• Take advice from a wealth manager, to decide upon the ownership to minimise upon the taxes payable.
• Last but not the least, pay relevant stamp duty and register the property.
Well, with the above pointers sorted out let’s make investment in properties confidently and as risk free as possible, so that the buyers reap the fruits of investing in the Real Estate Industry.

6 thoughts on “Due Diligence When Investing in Property!!

  1. Anant Swami

    Interesting article! A couple of points may be considered:

    1. “Occupation Certificate” is more important that a completion certificate.
    2. Banks do not do sufficient checking of documents from the point of view of the purchaser. They do their legal check for their own safety. So purchaser should do his own check. “Buyers Beware”!!
    3. RERA is missing a mention. RERA will help to bring clarity.


    1. blog.stratumventures.in Post author

      Thank you very much for taking time out to read the article. Appreciate your inputs, yes Occupation Certificate is more important than Completion Certificate and only ‘OC’, dictates that the building has been completed in all respects and can be occupied. The legal possession of the Flat by the Owner is valid only with the Occupancy Certificate. Just a mere mention of RERA may not be enough at this point. Will have a series of Articles about RERA shortly.

      Regards and Thanks,
      Naveed Mehdi

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