Bengaluru market is vibrant now with numerous new projects added to it coupled with the renewed interest of the buyers. The realty market of Bangalore has flats for sale in almost all the upcoming areas of the city and as the demand of the market is second to none, it had the least number of unsold stock. Needless to say, the real estate market of Bengaluru caters to all sections of the society with construction of different categories of buildings like row houses, apartments, villas and others. Thus, there are different categories of builders, small and large as well as reputed and ill reputed ones in and around Bengaluru. Whether the buyer buys through own funds or through financed options, one should be cautious as home buying involves many complicated issues and there is no dearth of litigation in the real estate industry.

Project Selection
The builder’s credentials have to be verified and it’s better to see the earlier projects of the builder and talk with the residents regarding the construction and the builder’s past record. The prices of similar projects in the area has also to be cross verified and evaluated to ensure, you are being priced fairly or not. One must also check the zoning clearances, water supply connections, provision for parking, and litigation display boards, if there is any.

Title Clearance
Most of the projects which do not get completed or lay incomplete due to litigation are mostly related to title issues. The prospective buyer can pay a token advance to the developer and procure the master file consisting of the copies of the entire land documents and then the search for the title should be done independently and the Title Search Report (TSR) should be brought. One can also procure a detailed encumbrance certificate (EC) from the sub-registrar’s office.

Approval of the building plans
No matter, where the project is located, whether it’s inside Bengaluru or at the outskirts, the project has to be duly approved by the Bengaluru Development Authority (BDA), BBMP, BIAPPA, according to jurisdiction and not by any Panchayat. The approvals should have A Khata only of the entire land and the individual flats. The most prudent approach is to check the approved plans and the A Khata in the BDA office as there are many fabricated plans available in the market.

License to construct, CC and Govt. clearances
The builder’s license from the BBMP or BDA has also to be checked to see whether the builder is a licentiate holder. The floor plan has to be checked to see the adherence of the construction with the approved plan. The buyer should verify the Commencement Certificate (CC) issued by the BBMP and also check whether clearances from BESCOM, BWSSB, Pollution Control Board, fire services and other approvals have been taken from the competent authorities.

Any loans procured by the builder
It is fair to find out if the builder has any loan from the bank and has submitted the original documents to the bank as a mortgage on the basis of which, the bank would have issued a letter of “No Objection” for the release of the undivided share of Interest (UDS) of the constructed area on the land. It should also be ensured that such mortgage transactions are registered and reflects in the encumbrance certificate (Form 15). Or else there is a probability of the builder procuring multiple funding from other banks who can claim and take possession of the apartments.

Periodic visits
The purchaser should visit the construction project periodically to oversee that the construction of the project is as per the plan, quality fittings are provided, and are according to the time lines prescribed in the agreement. The buyer should insist that the builder provides a copy of the CC to the purchasers issued by BBMP. The builder is supposed to obtain the OC (Occupancy Certificate) from BBMP within three months of the completion of the project without which, the builder would not be allowed for the water and electricity connections as per the BBMP by-laws.

The Builder’s Indemnity
The builder is supposed to give an indemnity bond and a “letter of undertaking and affidavit” which affirms that the builder will construct as per the approved plans and the Completion Certificate (CC) would be obtained within three months of the completion of the project.

MOE in case of joint construction with Owner
If the developer constructs the building jointly on a loan for construction, it is right on the part of the developer to make the landlord a part of the Memorandum of Entry (MOE), so that they can’t deny the liability of the loan later.

Do the checks
It is prudent to get the document of MOU with the builder to be vetted by a lawyer, as the terms and conditions are mostly in favour of the builder. Do not forget to check the carpet area which should be according to the agreement and should be duly checked and verified.

Key Takeaways 

• Whether the buyer buys through own funds or through financed options, one should be cautious as home buying involves many complicated issues and there is no dearth of litigation in the real estate industry.
• The builder’s credentials have to be verified and it’s better to see the earlier projects of the builder and talk with the residents regarding the construction and the builder’s past record.
• The buyer should verify the Commencement Certificate (CC) issued by BBMP and also check whether clearances from BESCOM, BWSSB, Pollution Control Board, fire services and other approvals have been taken from the competent authorities.
• If the developer constructs the building jointly on a loan for construction, it is right on the part of the developer to make the landlord a part of the Memorandum of Entry (MOE), so that they can’t deny the liability of the loan later.

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