Property is one of the most significant investments a person makes in their lifetime. The risk associated with the property is significant due to its high value. As a result, every step of the property investment process, from selecting the right location and budget to narrowing down the right property, must be approached with extreme caution. Aside from the property itself, many other factors—such as your monthly expenses, savings, and lifestyle—are influenced by how cautiously you make your decision.
In this article, we’ll walk you through an important aspect of property investment: selecting a trustworthy builder. With numerous cases of buildings collapsing, construction quality is a major concern. It is therefore critical that you select a safe builder’s project to be your home. The following are key points to remember when evaluating the developer.
Is the developer RERA-registered?
In order to protect home buyers, the central government enacted the Real Estate (Regulation and Development) Act of 2016, which regulates the real estate sector. Except for a few states that are still in the process of implementing the RERA, it is now in effect in all of India. The RERA Act requires developers to register with the regulatory body. This is a license that indicates that the developer is dependable and will use quality construction methods.
The body has detailed strict regulations in place to ensure the safety, compliance, and interests of homebuyers that developers must follow. This includes using high-quality construction materials, obtaining certification that the project is structurally sound, and so on.
Developers who are not RERA registered pose a threat because they are illegal. There is a good chance that these developers do not have all the necessary permissions in place. There is always the possibility that in the future, the court will order the local body to demolish the building due to litigation or construction issues.
Are you selecting a reputable builder’s project?
Know the builder’s reputation and the value his brand commands. There are numerous developers who are listed companies and can be trusted due to the brand that they represent. However, it’s a good idea to do your research about the developer and understand his track record.
Experience that he carries
He has previously worked on the following projects:
Pricing for his projects: premium or affordable?
Quality of Construction
Is there any project litigation or stalled projects?
Does the developer have any debt?
Ongoing projects.
Brand presence in the country.
His projects’ typical delivery cycle, including whether possession is given ahead of schedule, on time, or delayed.
Site visits-while this was once common, developers now discourage site visits during construction due to safety concerns. However, you can inspect from the outside. If there are few to no people working on the project, it is a sign that the project is in financial trouble.
Check developer feedback online
One of the simplest ways to get an initial impression of the developer is to read his reviews online. There are numerous online forums, groups, and social media interactions that can help you learn more about the developer. You can consider conducting your due diligence based on these findings, though many of the reviews may be fake. So be cautious in your investigation.
Project appreciation for his previous projects
Price is one of the most important indicators of whether a developer is reputable or not. Check out the price appreciation his previous projects have achieved. This will help you determine whether he is a sought-after developer whose projects can be trusted with your hard-earned money.
Is the project occupied, or are the flats mostly for investors?
As part of your due diligence, enquire about the developer’s previous projects’ occupancy rates. The absence of people indicates that the project lacks basic facilities. If more and more people prefer and stick with that project, it indicates a good developer.
Is the developer a member of the developer’s association?
Prior to the implementation of the RERA, developer associations such as CREDAI, MCHI, NABM, BAI, and others began working to transform the unorganized real estate sector into one that is organized. These bodies ensure that transactions are transparent and help with grievance resolution. A developer who is a member of such bodies prioritizes these objectives, which is a good sign.
Get answers to your questions from the developer.
There are no small or silly questions. Since you are investing a large sum of money, it is in your best interest to have all of your questions answered by the developer. When scouting for a project, enquire with the developer about things like
- The total area of the project
- Title deed of land acquisition
- RERA registration number of the project
- Encumbrance certificate
- The project approval certificate from the local body
- Blueprint of the project that is approved by RERA
- Date of project inception
- Date of project completion
- Amenities to be included
- If there is any future development as part of the project, will amenities be shared?
- Brands that will collaborate with the developer on fittings and fixtures
- Technology to be used in construction–whether MIVAN or not?
- Will the developer provide a warranty on the project he has constructed?
- Is the developer offering any schemes, such as a subsidy scheme?
Check the Financial Stability of the Developer
Although RERA requires that a developer have an ESCROW account where project funds are deposited and used solely for project purposes, you do not want to be in a situation where the developer cries foul and declares bankruptcy. It is worth noting that this phenomenon is more common in redeveloped projects than in new ones.
What can you do if you’ve chosen a reputable developer and the project has stalled?
While the likelihood of such an event occurring is extremely low, there have been cases where projects belonging to reputable developers have become stuck. In such cases, it is recommended that you take the legal route and contact the state’s RERA body, which will assist you in resolving your complaint.
When investing in real estate, you should conduct extensive research on the developer and the project you intend to invest in. If you see any red flags, you should not proceed with the investment. Remember that non-RERA registered developers may offer you properties at a lower price than the market rate, which many people are easily enticed by. However, if you fall into this trap, you risk losing your property.
