Home/Buy and Sell/Investment/Looking to invest in a flat located in a gated community apartment present in Hyderabad. The builder has started his business 3 years back. Now he is running multiple projects in and out Hyderabad. Recently the builder has initiated a pre-launch offer for his apartment flat sales. The price mentioned is really good and less compared to other ventures. They haven't got any approvals like RERA and HMDA. They haven't delivered any completed projects yet but few are in construction. Builders said that they will register plot in our name until construction starts and after which they convert to flat on our name.. Should I go ahead wih the builder to purchase the flat and what are the risks and benefits involved in this scenario?
Q.
Looking to invest in a flat located in a gated community apartment present in Hyderabad. The builder has started his business 3 years back. Now he is running multiple projects in and out Hyderabad. Recently the builder has initiated a pre-launch offer for his apartment flat sales. The price mentioned is really good and less compared to other ventures. They haven't got any approvals like RERA and HMDA. They haven't delivered any completed projects yet but few are in construction. Builders said that they will register plot in our name until construction starts and after which they convert to flat on our name.. Should I go ahead wih the builder to purchase the flat and what are the risks and benefits involved in this scenario?
Under Real Estate (Regulation & Development) Act, it is mandatory for all commercial and residential real estate projects to be registered with RERA for launching a project. The objective is to provide greater transparency to the buyer and safe-guards their interests.
The major benefits of buying a RERA approved projects are:
1. The builder will have to quote prices based on the carpet area of the house and not on the super-built-up area. Under RERA, it is mandatory for the builder to mention the carpet area of the property.
2. RERA will protect buyer by ensuring time completion and handover of the project.
Hence, I would recommend, kindly await till the builder gets RERA approval for this project.
RERA approval is mandatory for Builder properties. Else, there is always a risk of project getting suspended in the mid.
Though you get good price in pre launch, you need to go with builder who has track record. Though iam not against purchasing in pre launch, in the current case, you should not. Reason is simple, if the builder is registering land in your name before construction, he expects a development agreement in the favour of builder for construction, else you can't do construction. Once you give development agreement, as per RERA you would also be considered a promoter. In case of any default, you can't raise a case. Against any one. Also victims in turn would raise a default case against you as you are also a promoter. These issues happen when land owner, promoter and builder are different parties. In case off pre launch strictly stick to the companies who has track record, land owned by the company(Not taking development agreement from the land owners), Infrastructure and construction is not delegated to third party.
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Looking to invest in a flat located in a gated community apartment present in Hyderabad. The builder has started his business 3 years back. Now he is running multiple projects in and out Hyderabad. Recently the builder has initiated a pre-launch offer for his apartment flat sales. The price mentioned is really good and less compared to other ventures. They haven't got any approvals like RERA and HMDA. They haven't delivered any completed projects yet but few are in construction. Builders said that they will register plot in our name until construction starts and after which they convert to flat on our name.. Should I go ahead wih the builder to purchase the flat and what are the risks and benefits involved in this scenario?
Sundeep Paruchury
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September 15, 2020
2020-09-15T19:10:00+00:00 2020-12-15T12:32:15+00:00Comment
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Investment
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