The happiest moment during property purchase is when a buyer receives a letter from builder to receive possession of property. A buyer is so enthusiastic that he receives possession of property without going through the basic checklist. These days due to the slowdown in the real estate market, almost all the projects are getting delayed. I highlighted the reasons for delay in my post, Why under construction projects gets delayed?. A buyer is so frustrated over a delay that he accepts possession of property on as is where is basis and what is there is basis. This approach may land a buyer in trouble in future. Whenever you receive communication from builder to receive possession of property, As a buyer you should not act in a haste. It is important to ensure whether the property is ready for possession or not. In many cases, the property is registered before the builder offer possession of property. The registration is based on sale agreement or the UDS in the property. Such a situation is not favorable for buyers. Builders offer possession of the property on take it or leave it basis. Therefore, i always suggest my clients to register property only at the time of possession of property. Let’s check the imp points
Possession of Property – Basic Checklist
(a) Occupancy Certificate or Completion Certificate
As and when you receive communication reg possession of property, the 1st step is to demand occupancy or completion certificate from the builder. The common tactics used by the builders is that they have already applied for completion or occupancy certificate. Please note that application for OC or CC does not ensure that local town planning authority is obliged to issue the same. In case of more than 5% deviation, local town planning authority may deny OC or CC to the project. If the OC or CC is still not issued then a buyer may refuse to receive possession of property. A buyer may send a written communication to the builder that he/she will accept possession of property once the OC or CC is issued. It is very much legal to demand OC or CC before possession. A builder cannot force possession of property if the OC or CC is not issued by the local town planning authority.
(b) Physical Inspection of the property
In many cases, a buyer is NRI or stay in some other city. It is very critical to physically inspect the property before accepting the possession of property. These days the not so good construction quality cause a dispute between buyer and the builder at the time of possession. Water seepage is one of the most common issues. If the buyer cannot physically present for possession then he may send his friend/relative to physically inspect. Don’t accept the possession till all the issues/repair is completed. Normally builder insists on taking possession of property and promises to address the concerns afterward. A buyer should not budge.
(c) Project is Complete
This is another major problem and common tactics by builders to get 100% payment. The amenities and other common facilities are incomplete at the time of possession. The builder hand over the possession to all the owners and association has to run after him to complete the project. In many cases, i observed that project remains incomplete. The association completes the project. Therefore, a buyer should not accept the possession of property till the project is complete. The excuse from builder’s side is that flat is ready and buyer should not bother about common amenities. Always remember that you are also paying for common amenities not only for your flat. If you take the possession then there is no guarantee that project will be completed.
(d) Delivered What is being Promised
At the time of possession, you should ensure that flat is being delivered as promised in written agreement. You may measure the carpet area and also check the tiling / flooring. In some cases, the builder also promises add-on like the chimney, premium fittings etc. It is advisable to pull a copy of an agreement with the builder and check what all was promised. After you receive the possession of property no one will listen to you.
(e) Written Communication
As a thumb rule, all the communication with the builder should be in writing. In one of the case, the builder offered possession of property to one of my client Ms. Sheetal Sharma. He also raised demand note for final disbursement. She orally communicated to the builder to fix certain issues including repairs etc before she accepts possession. To her surprise after 3 months builder imposed a penalty on her for the delay in final disbursement. She didn’t have proof that flat was not ready for possession. The payment was delayed because of this. It is advisable to keep all communication in writing with the builder.
(f) Final Disbursement
Normally 5% to 10% payment is due at the time of possession. You should pay or disburse this amount only at the time of receiving possession of property. Sometimes builders demand to post dated cheques or promise to complete the project by XYZ date. You should not fall in such traps. After you are satisfied with the quality, condition, compliance part and property registration then only final payment should be released. Be assured that you are seeing the builder or his representative last time at the time of making final payment :).
(g) Conditional Possession of Property
Last but not the least. Sometimes the circumstances demand that the buyer has to accept the possession of property though he is not satisfied on any one of the accounts. In such cases, you can clearly mention on the builders copy that you are receiving conditional possession of property or under the protest. You should specify conditions to be fulfilled by the builder like any pending repairs or OC/CC is not handed over. In short, possession is subject to fulfillment of certain conditions from builder’s end. If there is a delay in the project then you can always mention that compensation is due from builder’s end for the delay. By doing this, you can always follow up with the builder in future else as i mentioned that oral commitments have NO VALUE. In an extreme case, if buyer takes the legal route on any such issues then you can prove that it was informed to the builder.
Hope you liked the post !!!
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