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What Are The Things to Be Undertaken While Making a Sale Agreementt?

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What Are The Things to Be Undertaken While Making a Sale Agreementt?

Last updated: December 7 2013
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  • What Are The Things to Be Undertaken While Making a Sale Agreementt?

    Friends,

    What are the points/things to checked in the construction agreement and sale agreement. Is it mandatory for buyers to sign the construction and sale agreement with the builder. The builder has given me the survey number and patta number. I have verified it through the govt's land record eservices's website. Apart from that do I need to check any thing?
  • #2

    #2

    Re : What Are The Things to Be Undertaken While Making a Sale Agreementt?

    Originally posted by Naadodi View Post
    Friends,

    What are the points/things to checked in the construction agreement and sale agreement. Is it mandatory for buyers to sign the construction and sale agreement with the builder. The builder has given me the survey number and patta number. I have verified it through the govt's land record eservices's website. Apart from that do I need to check any thing?
    Sale agreement is for land (undivided share) the builder is selling you.
    You have to look out for UDS. This is the most important information in sale agreement.

    Construction agreement is for the dwelling unit the builder is constructing for you. You have to look out for plinth area, percentage of common area in super built-up area, specifications (Type of tile used in each room, number of phone and electrical points, brand and quality of sanitary fittings, etc...), amenities (piped gas, genset backup, swimming pool, clubhouse, no. and type of lifts provided, specification of common areas, parks, tennis court, visitor car park,etc..), car park allotment details, association rules, etc...

    Construction agreement is important because you'll get a clear idea of what you are spending money for. If builder agrees to provide jaguar/equivalent in agreement and ends up giving low quality fitting, you can point out agreement and get it rectified.

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    • #3

      #3

      Re : What Are The Things to Be Undertaken While Making a Sale Agreementt?

      Originally posted by Love4land View Post
      Sale agreement is for land (undivided share) the builder is selling you.
      You have to look out for UDS. This is the most important information in sale agreement.

      Construction agreement is for the dwelling unit the builder is constructing for you. You have to look out for plinth area, percentage of common area in super built-up area, specifications (Type of tile used in each room, number of phone and electrical points, brand and quality of sanitary fittings, etc...), amenities (piped gas, genset backup, swimming pool, clubhouse, no. and type of lifts provided, specification of common areas, parks, tennis court, visitor car park,etc..), car park allotment details, association rules, etc...

      Construction agreement is important because you'll get a clear idea of what you are spending money for. If builder agrees to provide jaguar/equivalent in agreement and ends up giving low quality fitting, you can point out agreement and get it rectified.

      Just to add a couple of more points to what L4L has mentioned, in the agreement you will also have the tentative handover date and the compensation policy due to delays. Not sure if this has really helped anyone, but thats a standard norm and you must know your rights as an consumer.

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      • #4

        #4

        Re : What Are The Things to Be Undertaken While Making a Sale Agreementt?

        Thanks L4L and vingori.

        Few mins back I saw one more post in this forum where a builder has increased SBU without increasing the carpet area. How this is covered in the construction agreement.
        Can the builder raise the price in the middle of the project due to increase in the price of raw materials? Will there be any clause for this in the agreement

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        • #5

          #5

          Re : What Are The Things to Be Undertaken While Making a Sale Agreementt?

          There will be a standard clause in agreement that certain deviation may occur due to practical difficulty arising during construction which may require slight alteration. Even CMDA accepts certain deviation as long as it is within tolerance level. However some builders misuse this provision to recover their losses.

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          • #6

            #6

            Re : What Are The Things to Be Undertaken While Making a Sale Agreementt?

            Guys, did you all notice something really important that appeared in newspapers recently related to sale agreement....

            Issue:
            The builder intends to build additional floors in Mumbai after several years due to clause the flat purchasers had signed in the builders-agreement while purchasing their flat.

            Though the case came favourable to the owners/ association...it had to survive lot of legal implications....but who know how the laws will keep changing in the future...

            And IMPO sale agreement is almost as important as a brochure/floor plan....I believe word/caution need to be spread to RE amateurs and even experienced buyers.......

            Detailed Web Link 1
            Detailed Web Link 2

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            • #7

              #7

              Re : What Are The Things to Be Undertaken While Making a Sale Agreementt?

              Experts, I just read threads in this forum related to "Future FSI Utilization" clause in the sale agreement by few major builders (and still many builders do not have such clauses) in Chennai currently........

              Clause Example (Excerpt):
              ".....With respect to the utilization of the un-utilized / additional F.S.I., the Company shall, at all times have the right and entitlement to raise additional storeys and / or make additional extensions in the said Project and construct additional blocks on Scheduled Property at any time here after....."

              1. Is it not a real "threat" to buyers.......As a thumb rule should such projects be ignored?

              2. With such clauses.....How will the future-redevelopment be? Will it be in the control of Builders?

              3. After construction is over for a block can the builder build few floors after few years.....?

              4. If future FSI is being used to construct additional floor in a existing block will it cause the "UDS" to decrease for those blocks......?

              5. Is this clause only put by few builders or common with all builders....?

              6. If the builders uses such a clause does that mean he owns part of land too? (or) even with out the builder owning land share in the project can frame such clauses.....

              7. Aren't there any law like Tamil Nadu Apartment Ownership Act or authorities like DTCP/ CMDA that prevents this kind of happening?

              Could you please throw more light on this on a worst-case-scenario and common-real-time scenario?
              Last edited November 5 2013, 03:36 PM.

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              • #8

                #8

                Re : What Are The Things to Be Undertaken While Making a Sale Agreementt?

                I am going with an A class builder, but i realise that he needs 2 agreements to be signed- the sale agreement, and also the development agreement- as the landowners will also be involved in this. Needed to know if this is a common practice of getting 2 agreements signed. Thanks.

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                • #9

                  #9

                  Re : What Are The Things to Be Undertaken While Making a Sale Agreementt?

                  Buying a house? 5 tips before signing the 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.

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