Consider Project Delays Before Investment
Several projects witness high demand as soon as they are announced by the builders. A significant number of projects also start selling when they are in an under-construction phase. However, projects get delayed. This hits the home-buyers very hard financially. It is, thus, imperative for buyers to keep a close check on various aspects of a project before investing. Though various reasons can be attributed to the delays but eventually the buyers have to suffer. Various methods can prevent home-buyers from getting caught with delayed projects.
Reasons for project delays
1. While most reputed builders tend to build and deliver projects on time, a few small developers stretch their projects beyond the promised delivery dates. This delay can even stretch up to one year. This is majorly due to funding issues. There are many developers who only depend on funds from home-buyers. In its absence, builders are not able to fund building construction costs during various stages.
2. Many times, builders submit documents to the municipal authorities that are not detailed enough. As such, these projects do not get approved leading to delays.
3. Developers also state that late payments from home buyers on several occasions also lead to delays in project delivery.
4. Project construction and delivery in India is still unregulated. Without a regulatory body, constructions go unchecked. This leads to several project delays.
How to avoid getting trapped
A home buyer can avoid getting trapped into investing in delayed projects by doing some homework. While one cannot predict the delays in projects, one can take certain precautions before making investments.
1. Check the track record of the builder. Compare the previous construction works of the builder and see for project delays. Also, try to do a first-hand check of the project quality by visiting a completed project premise of that builder. Talk to a few home owners who are residing in the project regarding the quality of construction and services provided by the developer.
2. Buyers can ask for a copy of all the approved documents and map of the project, stamped by the municipal authorities. When in doubt, it is good to get these documents verified either at the municipal office or by a legal expert.
3. Buyers should ensure that the project is funded by a well-known nationalized bank with the required approvals.
A draft of the Real Estate Regulation Bill has been proposed at the Centre. The bill promises to regulate the construction and delivery of the projects. But, until the bill becomes a reality, home buyers must use due diligence before getting trapped into investing in delayed projects.
