If you choose a reputed builder when buying a property; you can be rest assured that the property is 100% legal. The problem usually occurs when you choose a builder who is new to this sector and does not have ample experience.
Mentioned below are the red flags that you should watch out for before investing your money:
- Certificates and documents are mandatory requirements when investing on valuables like cars, gold and diamond. Similarly, when it comes to real estate property, documentation and certifications are important as they confirm that nothing is illegal here. Before you buy a property, you will have to sign a number of documents. Builders also need to provide you with a number of agreements. In case you find that certain documents are missing, you can get them from the sub-registrar office or Municipal Corporation.
In addition, a genuine builder will issue an occupancy certificate before you take the possession of the flat. This confirms that your flat is ready to be occupied and has all the basic amenities. In case, the builder is reluctant to provide you with an OC; you should take up the matter with the sub-registrar office.
- Make sure that the house on which you are investing has been built as per the master plan. A slight change in the construction can lead you to a big trouble. This is because of every sq. ft of a residential project requires approval; so anything which is constructed beyond the approved area will be regarded as illegal. You can consult with a lawyer to understand all these details thoroughly and should also get the documents rechecked.
- Are you getting a flat at an irresistibly low price rate; which is even much lower than the market value? If yes, then this should raise a red flag as no one will ever be so kind to offer you something without making any profit. Remember, since you are investing lakhs and crores for the building, you should get a due diligence done. A reputed builder will provide you with all the documents and will sell the flats at the market value. Here, you will not get that advantage of the price but you will be able to stay safe and secured.
- Most of the Indian property buyers opt for a home loan from banks. If the bank refuses to provide you the loan because of the builder; there is a high chance that the property is not legal. Banks usually have their own set of blacklisted builders and they keep on updating the list after doing the due diligence. So, if your loan application gets rejected by the bank because of lack of documentation; then it should raise a red flag.
Besides the threat of a legal battle, an illegal construction can also compromise on your safety as they usually grow in unplanned areas of the cities and there is no consistency in terms of street widths, plot sizes, gross built area, and height.
So, before you invest on a luxury residential property in Mohali or any other Tier II city, watch out for the above mentioned red flags.