Planning to give my plot for developing apartment

Q: Hi all, I need your suggestion. I own a big house with 6 bedrooms. It is our ancestral property which is quiet old now. There is a builder who I know, he has offered me that if I agree, he will demolish the house and develop an apartment community and he promised to give me few of the flats. Land will be in my name only. What do you say? Is it better to do that or is there any problem with it..

sagar, Kolkata

28th January 2013

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Sagar, even when builder gives you the flats once they are ready, before taking possession you should check that all the taxes have been paid and there are no pending dues. No building violations must ever be mentioned in the agreement. Once the proper verification process is completed, only then you give General Power of Attorney to the developer.. Finally, the builder will have to set up an apartment owners association and formally hand over the building to the association. The clearances and documents should be handed over to the association as well. A formal agreement and hiring a lawyer is essential when a landowner is allowing a developer to develop his plot.

Siddharth Rana, Pune

5th February 2013

Comment

Generally the apartments given and amount paid to land owner will be in the ratio of 70:30. If the total land cost is Rs 3 crore according to market rates, then 70 percent of it would be given in the form of apartments and the rest through cash or other forms as per the mutual agreement. During the development process, the landowner may have to stay in rental accommodation and in that case, the builder only bears the rental and other expenses of owner until the flats are given possession.

Suresh,

4th February 2013

Comment

Sagar, even though you are not doing registration, signing of an agreement between you and developer is must. And the agreement should clearly include all the key points like how much land will be developed, prevailing market rate, total number of floors and apartments that will be developed, number of flats/floors to be given to the owner, cash to be given to the owner, the date of completion of construction, the date of possession, and other points.

Jeet Bhaskar, Delhi

30th January 2013

Comment

Hi Sagar.. Kaushik is right, it is quite common. And it is good idea, both parties get profit in this kind of deals. In this kind of deals, the builder offers few apartments and some amount as compensation to the owner based on prevailing market price. But you have to be very careful in making agreement for this type of investment. Take help from a layer while doing the agreement.

Ravindra Singh,

29th January 2013

Comment

Nowadays this kind of joint venture developments have become common. Since there will be no plots available in prime city areas, the builders look for such old houses which can be demolished and build apartment in its place..

Kaushik Bardia,

29th January 2013

Comment