Going to Take Possession of an Apartment, Building or Plot?
This is a little lengthy ‘write up’, but not even a miniscule of the long years of hard work and earning which go into purchase of real estate. It is better to earn a little less and rather devote more time in spending it wisely. It is written from a layman perspective.
It is a great day in the life of anyone to take possession of one’s own apartment/plot. Amidst all the excitement and joy it carries (especially the first self -owned roof) there are possibilities of exploitation of this feeling by those in the property trade i.e. the builders, promoters, brokers and others. RERA is as revolutionary an enactment as RTI. It comprehensively covers and effectively regulates the entire journey of property procurement right since the booking stage till its completion, registration and occupancy by the purchaser with quick and effective remedies. It is heavily tilted towards safeguarding the interests of the allottee or the purchaser. However, there is a strong need for the Purchaser to remain alert on certain issues at various stages to bring about effective claims against any wrongs before RERA or even consumer courts. A general stage wise check list is presented below for use by our readers. The check list is prepared with the purchase of a constructed apartment in mind the reader may use as relevant for plots, duplex or independent houses. The issues and suggested check list is given herein below
Around the Agreed Date of Possession- Simultaneously with the stages of payment, be on a look out for the date of possession mentioned in the agreement. If the builder/developer has not sent the offer letter of possession, communicate with him in writing preferably through e mail and registered/speed post both calling upon him for completion of the project and offering the possession. The communication should also be used to make a tender or offer of making the payment in order to show capacity of the purchaser to fulfil his part of the obligations in the contract. Mind you this is just an offer contingent on fulfilment by the builder of his obligations and agreed terms.
On receipt of Offer Letter for Possession- This is usually the letter which is provided in the Builder- Purchaser Agreement. The first document that Purchaser should ask on receipt of Possession Letter is the copy of ‘Occupancy Certificate’ of the project issued by the competent authority. Provisions for issue of the same have been provided in the newly enacted RERA Act. If the same is not issued and if the Purchaser is keen make a ground check himself or even to make a cross verification then he should proceed with the following.
Payment of a substantial payment by purchaser to builder is usually linked to offer of possession. ‘Offer Letter for Possession’ means that construction is complete in all respects as agreed. It has been a malpractice by the builders to issue such letters to demand and recover full amount from the purchaser without fulfilling the requirement of completion of all the construction work in totality. The first step on receiving such a letter is to make a visit to the site with the construction specifications, facilities’ details and photographs of the sample flat and then check the following points and take photographs of the deficiencies with a newspaper of the date appearing somewhere in the photograph to prove the date on which deficiencies are noticed:–
i. Whether entire construction of the apartment and the tower housing it, is complete in all respects externally and internally, including vehicle parking?
ii. If the project has phases, whether all construction activities in the phase having the offered apartment, are over?
iii. Whether external development including the parks, children play areas and sports facilities as promised, external lighting, boundary wall, security gates, maintenance and security staff work space, play areas, club house, community facilities, water supply and storage systems, sewerage disposal and sanitation provisions, piped gas fittings, electrical fittings for receiving supply from State Electricity Supply Agency to individual towers and apartments with space and provision for meters, power back up if promised, are in a ready to use condition.
iv. Whether there is ready availability of water and electricity supply.
v. Whether project or the phase in which possession is offered, has been given completion certificate by the concerned Government department.
If the purchaser is satisfied on above mentioned points he should proceed to check the apartment internally, if not, then a written communication preferably through e mail and registered/speed post should be made as soon as possible. It should be cleared mentioned in said letter that the apartment and/or the external development is not complete in all respects with a reference to the agreed/promised date for possession. The purchaser should point out specific deficiencies and shortcomings on ground against the scale of specifications, quality of material and workmanship as mentioned in the agreement. Photographs of deficiencies may also be attached for better record.
This opportunity should also be utilised to make a reiteration of tender or offer of making the payment immediately on fulfilment of the agreed terms and removal of deficiencies. No full or part payment agreed to be made on offer of possession should however be made until the project is totally ready and liveable from Day -1. Sometimes promise is made for early completion of external development by the builder with a demand for pro rata reduced payment by purchaser. This is mostly a trap since it is rarely possible to exactly ascertain the cost which will actually go into making the Project complete in all respects.
On Offer of Possession and Project Stated to be Ready on Ground as per the Agreement– Purchaser should make a recheck of all the points on aspects mentioned in paragraph (b) above. If the apartment is ready as promised by the builder and occupancy certificate as provided under RERA stands issued for the project, then Purchaser should ask the builder of a letter or fresh offer of possession confirming that all agreed construction is complete and deficiencies pointed out have been duly rectified and attended to. This letter would carry a fresh date and actual offer of possession would be counted from this date. On receipt of this fresh communication, Purchaser should initiate a written communication as done earlier seeking settlement of accounts. Under RERA the builder is now required to pay interest in case there is delay in possession from the agreed date. In most cases and likelihood, RERA is likely to award the interest in case of such delayed possession from the date of instalments paid by the Purchaser/Allottee. This factor needs to be kept in minding while negotiating or settling interests to be paid by the builder.
Registration or Conveyance Deed from Builder/Promoter to Purchaser – This usually follows possession letter and is the final stage short of conclusion of the deal. Usually the registration expenses which vary from 6% to 8% of the property value in most states are escalated to additional 2% in most cases in the name of fee or illegal expenses. These are recovered by the builder/promoters in the name of bribe/expenses to be paid to the Registrar and his staff. Purchaser should put his foot down and refuse to pay these illegal expenses. Besides the Government stamp duty and registration charges etc against receipts, there is one more bonafide expenditure which is to be borne by either the builder or the purchaser. It is the deed writing charges which are nowhere near the 2% figure which Purchaser is forced to pay. On payment of Government stamp duty and bonafide charges the builder/promoter is legally bound to execute the registration of sale deed and can’t coerce the Purchaser for the same to yield more money. Refusal by builder/promoter under such a situation is a valid ground for filing complaint both under RERA as well as the Consumer Protection Act. Sale deed has to be presented for registration within 90 days from the date of its execution. Remedy and ways to ensure registration can be further advised on a case to case basis and for advice reader should use our ‘Contact Us’ link for the same.
Moving in to Occupy– This is the last and most enjoyable phase of the journey and is especially exciting for those moving in to their self- owned roof for the first time. It is expected that electrical and water connection has been obtained and supplies are in place. While builder has procured ‘Occupation Certificate’ from competent authority the apartment may not have been checked in as much detail for functionality as an independent unit and therefore before performing the rituals and physically moving in there is a strong need to carry out a physical visit of the apartment and check yourself or with the help of electrician, plumber or carpenter the following:–
aa. Electricals and Electronics–
All the electrical points need to be checked with a test bulb instead of a ‘Tester’ since both positive and neutral points can only be checked with a test bulb.
Check the resistance of the ‘Earthing’ circuit since proper earth reduces the severity of short circuit accidents and offers some degree of protection against burn out of electrical and electronic equipment due to voltage spikes.
If the apartment is fitted with electrical and electronic appliances by the Builder/Promoter then check functionality of each one (fans, geysers, chimneys, lighting, air conditioners) simultaneously for a reasonable period of time to check if electrical circuits are capable to take the electrical load of the apartment.
If power back up is provided then check the same for functionality.
Check functionality of the lift and external electrical fittings.
Check functionality of video doors, chimneys, air-conditioners and procure all remotes and passwords from the person handing over the apartment.
Check if all the split air conditioners or provisions for the same have proper drainage system for discharge water and does not seep into the walls etc.
ab. Plumbing and Sanitary Fittings-
Check the Overhead Tank for cleanliness and overflow protection valves functionality. Builder is responsible to provide all the amenities in a clean and human use-worthy state.
Open all taps and showers of the apartment (including those getting supply from the Geysers) simultaneously to check their functionality with appropriate pressure and zero tolerance leakage/dripping.
Fill buckets and pour into all washbasins in one go to check free flow in the drainage systems. In high rise buildings the length of drainage pipes till the point where they join the other apartments’ common drainage system is very long. In such cases, blockages farther from the apartment go undetected, since the long drainage pipes fill to their volume and provide buffer for exposure of the seeping blockage which might go undetected in few initial buckets of water. In some cases, plumbers forget to remove the plugging (by sacks etc) of flow traps and at times the same get blocked due to uncleaned and unremoved dried cement or other adhesive mix.
Check the washrooms and roof slopes for correctness and accuracy so that all the water on the floors automatically flows towards the flow traps without any patches or puddles of accumulated water requiring propulsion by wipers or human touch.
Check the accuracy and completeness of grouting in the inter se gaps between tiles (both floor and wall), granite slabs and sinks. Gaps and holes in grouting are the root cause of seepage in walls and roofs. Also check filling of all gaps in flow traps near the CP waste pipe lids/covers. Quiet often such gaps cause seeping in water and moisture each time they get filled to the brim.
Check all ceramic and chinaware articles such as washbasins, WCs, bathtubs etc for any breakage or crack.
Check even level fixing of English WCs and proper functioning of their seat covers, soft close mechanisms etc. Also check the functionality of flushing systems to no tolerance accuracy. Also check if the flushing system refills with in a reasonable time and there is no leakage or dripping after full discharge.
Check bathroom glass partitions, looking mirrors etc for proper fixing and door’s operations etc.
ac. Civil Works, Walls, Paints, Polish and Finishing-
Check walls and all surfaces for seepage and finish. Note the deficiencies and below standard/promised finish.
Check grills, railings and handrails for proper strength and fixing upto the specified safe height. Check for missing paints since the same would start rusting in a short while.
Check internal and external surfaces of cupboards, doors and closets for proper polish/paint as the case may be.
ad. Wood Work, Doors, stoppers, locks and bolts-
Check all the doors and cupboards are made up as per specifications in material and workmanship.
Check proper fixing, functioning and placement of accessories such as door stoppers, tower bolts, locking devices etc.
Check all fittings of modular kitchen if provided by the Builder for proper functioning and operation. Check each drawer for smooth operations in all cupboards and modular kitchen.
Check internal cleanliness of all cupboards by opening each one. Look out for dried Fevicol/adhesive material, sawdust, screws etc.
Simultaneously with the checking of above mentioned points, prepare a detailed list of deficiencies, take photographs and take up in written communication, e mail etc with the Promoter/Builder for immediate rectification. In the said communication specify a reasonable time by which Builder should rectify the same failing which the purchaser shall be constrained to have the same rectified on his own at the cost, expenses and damages to be paid by the Builder. Delay/refusal by the Builder would give rise to cause of action before Consumer Courts and/or RERA.
A few important Definitions and interpretations from RERA:–
Carpet Area- means the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.
Explanation— For the purpose of this clause, the expression “exclusive balcony or verandah area” means the area of the balcony or verandah, as the case may be, which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the allottee; and “exclusive open terrace area” means the area of open terrace which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the allottee;
(i) the entire land for the real estate project or where the project is developed in phases and registration under this Act is sought for a phase, the entire land for that phase;
(ii) the stair cases, lifts, staircase and lift lobbies, fire escapes, and common entrances and exits of buildings;
(iii)the common basements, terraces, parks, play areas, open parking areas and common storage spaces;
(iv) the premises for the lodging of persons employed for the management of the property including accommodation for watch and ward staffs or for the lodging of community service personnel;
(v) installations of central services such as electricity, gas, water and sanitation, air-conditioning and incinerating, system for water conservation and renewable energy;
(vi) the water tanks, sumps, motors, fans, compressors, ducts and all apparatus connected with installations for common use;
(vii) all community and commercial facilities as provided in the real estate project;
(viii) all other portion of the project necessary or convenient for its maintenance, safety, etc., and in common use;
“External Development Works”—External development works” includes roads and road systems landscaping, water supply, seweage and drainage systems, electricity suply transformer, sub-station, solid waste management and disposal or any other work which may have to be executed in the periphery of, or outside, a project for its benefit, as may be provided under the local laws.
“Internal Development Works”- means roads, footpaths, water supply, sewers, drains, parks, tree planting, street lighting, provision for community buildings and for treatment and disposal of sewage and sullage water, solid waste management and disposal, water conservation, energy management, fire protection and fire safety requirements, social infrastructure such as educational health and other public amenities or any other work in a project for its benefit, as per sanctioned plans;
Completion Certificate – means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws;
Occupancy Certificate- means the occupancy certificate, or such other certificate by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity;
Interest for the purpose of RERA– means the rates of interest payable by the promoter or the allottee, as the case may be. Explanation.—For the purpose of this clause—
the rate of interest chargeable from the allottee by the promoter, in case of default, shall be equal to the rate of interest which the promoter shall be liable to pay the allottee, in case of default;
the interest payable by the promoter to the allottee shall be from the date the promoter received the amount or any part thereof till the date the amount or part thereof and interest thereon is refunded, and the interest payable by the allottee to the promoter shall be from the date the allottee defaults in payment to the promoter till the date it is paid;
Family– Includes husband, wife, minor son and unmarried daughter wholly dependent on a person;
Garage- a place within a project having a roof and walls on three sides for parking any vehicle, but does not include an unenclosed or uncovered parking space such as open parking areas;
Immovable Property– includes land, buildings, rights of ways, lights or any other benefit arising out of land and things attached to the earth or permanently fastened to anything which is attached to the earth, but not standing timber, standing crops or grass;
a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or
a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or
any development authority or any other public body in respect of allottees of—
(a) buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or
(b) plots owned by such authority or body or placed at their disposal by the Government, for the purpose of selling all or some of the apartments or plots; or
(iv) an apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its Members or in respect of the allottees of such apartments or buildings; or
(v) any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or (vi) such other person who constructs any building or apartment for sale to the general public. Explanation.—For the purposes of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the persons who sells apartments or plots are different persons, both of them shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified, under this Act or the rules and regulations made thereunder;
Prospectus- means any document described or issued as a prospectus or any notice, circular, or other document offering for sale or any real estate project or inviting any person to make advances or deposits for such purposes;
Real Estate Agent- means any person, who negotiates or acts on behalf of one person in a transaction of transfer of his plot, apartment or building, as the case may be, in a real estate project, by way of sale, with another person or transfer of plot, apartment or building, as the case may be, of any other person to him and receives remuneration or fees or any other charges for his services whether as commission or otherwise and includes a person who introduces, through any medium, prospective buyers and sellers to each other for negotiation for sale or purchase of plot, apartment or building, as the case may be, and includes property dealers, brokers, middlemen by whatever name called;
Real Estate Project- means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartment, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto;