Allotment Letter: An important tool to buy a property
What is an allotment letter?
If you are booking an under-construction property, you are required to receive an allotment letter from the builder. This letter includes all the details regarding the flat, the payment options and any extra charges that you may have to pay in case of maintenance or additional facilities. It also includes the construction schedule, house plans, delivery date and builder’s liability in case of late completion or problems after possession. Generally, it is issued to you upon payment of the 15 per cent of the property value to the developer.
An allotment letter is an important document meant for the buyer. Generally, while you will be pursuing a bank loan to buy a certain property, the builder/housing society issues the allotment letter to the buyer which includes details pertaining to the description of the property being sold/bought by the two parties.
The allotment letter also includes specifications of the project on the whole. You must discuss any preferences, such as choice of floor or view, before receiving the allotment letter as the options can be included in the allotment letter.
allotment letter also includes about the specifications of the project on the whole. You must discuss any preferences, such as choice of floor or view, of yours before receiving the allotment letter as the options can be included in the allotment letter.
What is the significance of the Allotment Letter?
Allotment letter is vital in availing loan from the bank, as the letter mentions the amount of money which you have to pay to the builder/housing society, so that the remaining amount can be financed by the bank. On the basis of this letter, the bank finances the remaining amount.
Although the general impression is such that the sales agreement holds supreme importance in property deals, the allotment letter comes in when you are deprived of what you were promised.
For example, if on one of the pertinent aspects which is mentioned in the allotment letter, the builder refuses to give adequate documentary proof subsequently, as a buyer you can opt not to make subsequent payments and can demand that unless the builder satisfies the disputed aspect, you will not make subsequent payments. It will legally bind the builder to refund the buyer all the money that has been paid.
