Read the fine print - Things to watch out for before signing a property agreement

Signing a lopsided builder-buyer agreement without careful read can lead to grievances for property buyers, who have invested their life time investment in buying a house. It is imperative for the buyers to understand the nuances of the property agreement and make an informed decision before executing it. Here are some important aspects buyers should look into before signing the property agreement.

Verify documents
l Since an agreement supersedes the application form therefore it becomes extremely important to verify the entire layout, dimensions and payment plan of the property mentioned in the agreement vis-à-vis the booking application. The execution of the agreement confirms that the applicant has undertaken all necessary and required investigation. Thus, the homebuyer should check all the necessary details before signing the agreement.
l Further, post the signing of the agreement by the allottee, it is sent back to the builder for execution by the builder and legal vetting. Subsequently the allottee copy is sent back and the agreement should be re-verified by the homebuyer for any changes at the time of receiving the legally vetted copy. Any inconsistency should be brought to the notice of the builder.

Check the definition of the total price
l Homebuyers should check the components included in the total price of the property and the additional payments required to be made. The total price is calculated on the basis of the super area and on an average includes the parking costs, preferential location charges (PLC), pro-rata share of external developmental charges (EDC) etc,. Some of the components not included in this but payable as per the agreement includes interest bearing maintenance security (IBMS), property registration charges, club charges, taxes, etc. Buyers should confirm that the agreement must include any extra charges, so that the buyer is not caught unawares later.
l Further, in case of any change in the total price arising due to variation in the super area during construction period, gives the buyer the option to object any such change in writing. The autonomy to cancel the agreement and obtain a refund with interest within a stipulated time period lies with the buyer.

Check for penalty in case of delay in payments or possession
l Buyers should check for penalties in case of delay in payment or taking possession. In case of delay in payment, a penal rate of interest may be imposed on the outstanding amount over the delayed period. In case of failure or delay in taking possession, a penal rate chargeable per month calculated on the super area of the property can be imposed. Further, during extreme delays the buyer may loose a right to question or request for amendment of any item included in the work done for the property.
Source: KPMG