5 things to watch out for in a home agreement

You may have gotten a home loan approved after zeroing down on a house you want to buy, thinking half the work is done and hoping for smooth processing here on. Think again, because once you complete these formalities, you will have to protect your dream from the legal traps your builder might throw your way.
There are a few very important points to consider when you are about to enter into an agreement with a developer.

Here we will take a look at 5 such points you need to remember and also various measures you can take against them.

Actual price of the house

A home agreement details various costs that you will need to bear for buying the house. This would include the cost for utilities like electricity, water, parking space, many kinds of taxes, and in some cases even registration charges. However, the builder may then levy extra charges for any of these.

Tips

• Check the agreement thoroughly for all applicable charges.
• If possible, get the agreement checked by a lawyer for hidden charges and get the anomalies (if found) rectified by your builder.
• If a builder charges extra for altering the original plan, you can always ask for the sanction letter provided by government authorities for such changes.

Actual size of the house

Your agreement would clearly mention the size of the house you are purchasing. However, there would be a clause stating "plans, designs, specifications are tentative and the developer reserves the right to make variations and modifications". Therefore, you may agree for a certain size but the builder can give a different size.

Tips

• Before going ahead with a builder of your choice, do some research about the builder's past projects.
• If possible, talk with other buyers (who have already gotten possession) about problems faced by them.
• Try and include a clause in the agreement stating the minimum and maximum size beyond which the builder cannot increase or decrease.

Carpet area

The area of an apartment or building excluding the area of walls is known as carpet area. This is the area in which literally a 'carpet' can be laid in your house. When the area of walls, including the balcony, is calculated along with the carpet area, it is known as built-up area. The built-up area along with the area under common spaces like lobby, lifts, stairs, garden and swimming pool is called super built-up area.

Carpet area can be 15-30 per cent less than super built-up area. However, you will not come to know the exact size until the constructions have been completed.

Tips

• Purchase a property based on its carpet area.
• Ensure that this area is mentioned in the agreement.
• Try to get a clause included which will ensure that the contract can be terminated if the builder provides a house with the carpet area lesser than what is mentioned in the contract.

Date of possession

The agreement normally mentions a tentative date of possession. However, there have been instances where builders have delayed possession by more than a year.

Tips

• Check the progress of the construction from time to time personally.
• On finding that the progress is slow and the construction is not going to finish by the date of possession, you can always pressure on your builder.
• Forming a society with other buyers sometimes helps a lot in getting things to speed up at the builder's end.

Completion certificate

On handing over the house to you, the builder also needs to provide you with a completion certificate. This is issued by municipal authorities that establish the building complies with its approved plan. You would need this certificate for the registration of your house and other government formalities.

Tips

• If the agreement does not mention the certificate, ensure that the agreement has a clause which states that the builder will provide the certificate while handling over the house to you.
• If your builder delays a lot, putting pressure on the builder along with buyers like you is a good idea.

Besides, there are a few more points - such as the quality of the construction, management of the society - which one should clarify before entering an agreement with a builder. For this, you can try to add clauses to the agreement or form a society to get the builder to meet your demands. Since there is no industry regulator you can turn to any issues you may face during the course of buying your home, it is important that you are aware of what you want and what you are getting.

Disclaimer: BankBazaar.com is an online loan marketplace. All information in this article has been provided by BankBazaar.com and NDTV Profit is not responsible for the accuracy and completeness of the same.
Source: http://profit.ndtv.com/news/your-money/article-5-things-to-watch-out-for-in-a-home-agreement-324145