FAQ

Freehold

• The freeholder of a property owns it outright, including the land it’s built on.
• If you buy a freehold, you’re responsible for maintaining your property and land, so you’ll need to budget for these costs.
• Most houses are freehold but some might be leasehold – usually through shared-ownership schemes.

Lease hold

• With a leasehold, you own the property and its land for the length of your lease agreement with the freeholder.
• When the lease ends, ownership returns to the freeholder, unless you can extend the lease.
• Most flats and maisonettes are owned leasehold, apart from in Scotland where there are very few leasehold properties.

Apartment

A residential space in a multi-unit building is called a flat. If you are wondering what apartment is, then it is nothing but the American synonym of flat. Apartment term is also used for flats that serve certain purpose, such as, a flat given to an employee for stay during the work period is called apartment. There are some other types of apartment too. Duplex, Triplex and Penthouse.

Villa

The luxurious counterpart of a row house is called a villa. This property opens directly to the street; the main area and the street are separated by a veranda which has no functional use but used most of the times for gardening, car-park or other utility. Though villa is an individual unit of residence, the floor plan is fixed.

Row House

A Row House Can be defined as a single-family dwelling unit arranged in a row with a minimum of three dwelling units attached to each other by a common wall with only front, rear and interior open spaces. The first and the last of these houses are usually larger than the middle ones.

BSP

Basic Sale Price of Apartment is nothing but the product of basic rate per square feet rate with the area of the property in square feet. To arrive at the final price of a property the buyer should add all other charges. 

EDC

Stands for External development charges. These charges are levied on owners for development of different infrastructure required. External Development or services include the following: Water supply. Sewerage

IDC

These fees are collected by the government so that they can carry on the development of the area where the township is proposed and in its vicinity. Internal Development Charges (IDC) in Real Estate: These are the charges that are parallel to the EDC charges and again these are charged by the government.

IFMS

At the time of possession of commercial or residential properties, buyers are generally liable to pay a number of extra ‘burdens’ known as additional charges. One of the significant among them is the IFMS (Interest Free Maintenance Security) charges. IFMS is a collective sum of money levied from the buyers/investors of a residential/commercial project by the builder, under a separate account.

The builder will keep the money under their custody, till a RWA (Residential Welfare Association) is enacted in the residential project, following which the builder will transfer the account to the association. However the interest for the money will not be passed to the association and will be in favour to the buyers. Mostly, RWA’s will be set up at least a year after the project is delivered.

Registration fee is a term which refers to a sum of money required to enrol on an official register. It is generally intended to defray the cost of administration but may include damage deposits or taxes. The term particularly refers to a fee levied on property transactions by state governments in India. Other than this there are Local Authority Charges for Water, Electricity, etc. Ex.. in Bangalore customer has to pay BWSSB, BESCOM, BBMP/ BDA charges etc. This may differ from City to city. In addition to this Customer has to pay Maintenance Charge, Clubhouse Charge, Service to Backup etc. to the developer. Which is a part of maintenance.

There are different stages in the Construction They are termed as Soft launch, Prelaunch, under construction, Based on the Stage of the Construction.

A certificate of occupancy is a document issued by a local government agency or building department certifying a building's compliance with applicable building codes and other laws and indicating it to be in a condition suitable for occupancy. This is very important for many purpose for loan and other legal purpose.

An under-construction property can be divided into three parts, vis-à-vis its cost components. The first part is the cost of the land, on which neither VAT nor service tax is applicable. The second part is the cost of materials. According to the Supreme Court’s decision, in the case of Raheja Development Corporation vs the State of Karnataka, this can be deemed a part of the work contract and thus, is liable for VAT. The third part is the cost of construction, which largely involves labour charges and can be treated as a service that is rendered by the builder to the purchaser. Therefore, service tax can be levied on this component

Down Payment Plan

Popularly abbreviated as DPP, this scheme will demand buyers to remit 10 % of the total amount of the apartment as a down payment during the time of booking. 80-85 % of the remaining amount should be paid within 30 days after the date of booking. The remaining amount of 5-10 % shall be paid at the time of possession, which also includes registration charges, stamp duty and additional charges etc as mentioned to you. In this plan the Equated Monthly Instalment (EMI) will commence from the time of booking. The benefit of DPP is that buyers mostly have chances to settle the transaction 10-12 % lower than the estimated cost of the property. The major drawback is that in case of any delay in construction activities, the buyer will have to patiently wait, even after full payment.

Construction Linked Plan

Abbreviated as CLP, this plan will demand to pay 10-12 % of the total amount from the purchaser at the time of booking. The rest of the amount will be paid in instalments linked to different stages of construction. The major advantage is that buyers are comparatively getting more time in accruing the money for their home. In case of home loan, this plan will allow buyers to only pay pre- EMI on the interest of the loan. The plan is beneficiary for buyers as they can avoid the worry over any delays in possession. However, if you are taking into account of the interest part to be paid for the loan, buyers are bound to pay more interest in CLP and in this case it is wise to choose DPP. But if the builder throws you more than 15 % of reduction in DP plan, it would be right to choose DP plan than the CLP plan.

Flexi Payment Plan

Flexi payment plan is mostly open for mid stage construction properties. In this plan, buyers need to pay 10 % of booking amount followed by 30-40 % within the next month. The next 50-40 % will be remitted in the similar way of construction linked payment plan, followed by the last 10 % during the time of possession. If you are a financial expert who intends to sell the property after years, this plan suits you. This plan gives ample freedom for buyers as they don’t need to suffer more on the stress of allocating money. The shortcoming of this plan is that buyers are not likely to get any discounts as compared to DPP plan.

Subvention Plan

This plan is relatively a new payment plan where buyer will be financed by bank. Prior to paying 15 to 20 percent as the booking amount, buyers will apply for a home loan. The buyers don’t need to pay the EMI’s till a fixed period of time. In this plan the builder will pay the interest of the loan (not the principle amount). There are several benefits for this plan:

• The plan is ideal for those who live in rental apartments as they have enough time for accruing money.
• Basically, the buyer will own the property without paying any EMI’s to a fixed period of time.
• Banks will release bank loans at reasonable rates. Since associated with a bank, customers can also feel secured.
• Buyers can also expect higher ROI as prices normally hikes after 2-3 years when construction ends.
• Builders will fasten the project to escape from more payments as interest to bank which also benefits the buyers.
• Banks also benefit as they get a pool of clients within a single project as their customers

Sol

There are many government online portals where you can find the details related to the License and Approvals of the Project. Since the revolution of digital media common man can easily find out the details and related approvals of any project. RERA, Local Authorities Approvals like BDA, BBMP which varies from the Cities.

Possession Linked Payment Plan is a desperate attempt from a builders to offload inventory. Builders are playing with psychology of the customer by projecting Possession Linked Payment Plan as 80:20 scheme i.e. Pay 20% now and rest 80% at the time of possession. Most of my readers misunderstood Possession Linked Payment Plan as 80:20 scheme. Let me clarify that Possession Linked Payment Plan is not a 80:20 scheme. In 80:20 Scheme, 20% down payment was made by the buyer and rest 80% was paid by the bank (Home Loan contribution) even before the construction was completed. 

The builder pocketed 100% payment in advance thus exposing bank to high risk. Though builder was supposed to bear the interest cost still it was cheap source of fund for builder as builders borrow at commercial rates of 15%-18%. The risk of default was very high in this scheme in case of any dispute between either of 3 parties. RBI came down heavily on 80:20 scheme and banned such schemes in Sep, 2013. In short, Possession Linked Payment Plan is not a 80:20 Scheme.

This is first stage of the project after getting permission for development of the project from local authorities. EOI- Expression of Interest the document which will be taken by Builder from the customer at the time of soft launch or Prelaunch of the project.  Official Launch is the time from which construction of the project starts. 

Possession of the project is just the date at which the project is available to move in This can be mentioned at the time of launch, usually this date varies and depends on various factors, Availability of Raw material, Workers etc This also influence the Cost of the project. 

Yes, as per RERA rule If a project is delayed, which has become the sector norm today, developers are required to pay 10% interest to the buyers on the invested amount as against the Rs 5 to Rs 10 per sq feet penalty contracted in the sales agreement. It may be noted that a majority of developers are currently charging 12% to 18% – going up to 36% in some cases – interest from buyers for any delay in payment, while they themselves usually pay in the range of Rs 5 to Rs 10 per sq ft even in case of a luxurious project, which is not a fair deal to buyers. 

• Sale Deed
• Title Deed
• Approved Building plans
• Completion Certificate ( Newly Constructed)
• Commencement Certificate( Under-construction property)
• Conversion Certificate( If agricultural land is covered to non-agricultural)
• Khata Certificate (especially in Bangalore)
• Encumbrance Certificate
• Latest Tax Receipts
• Occupancy Certificate

Low Rise building is one which have only a few stories

High Rise buildings is one whose height is above 35 Meter or number of floors in that building is above 15 Floors.

Both have some Pros and Cons depending on the customers requirements they can choose.

Pros

Less Noise - Residents of High raised Buildings is safe from unwanted noises like Car Honks, Traffic etc…

Better View - Residents of the unit present in Higher Floor can have better view of the surrounding and some times they will be able to watch more that quarter part of the City. 

Privacy - Residents of the Upper Floors have maximum privacy and hence they live happily without unwanted disturbance.

Apart from the above advantages High Raised Buildings have some

Cons

Evacuation - In case of Emergency residents should run from upper floors or they have step up or Step down all the floors right away which is a hassle and can be worst id elevator is not working.

Low Raised Building

Pros

Moving Convenience

This is better option for those who have to move frequently in and out of the residence in the single which become a hectic task in case of High Raised building.

Cheaper

Relatively Lower Floor Apartments are almost Cheaper than those on higher floors. If someone is concerned about the price and not the view from the balcony then Low raised building will be ideal for them.

Cons

Less Privacy, More Noise, Sometimes security Issue may occur like stranger walking into the floors easily.

A residential area is a land used in which housing predominates, as opposed to industrial and commercial areas. These include single-family housing, multi-family residential, or mobile homes. Zoning for residential use may permit some services or work opportunities or may totally exclude business and industry.

A commercial area is real estate intended for use by for-profit businesses, such as office complexes, shopping malls, service stations and restaurants. It may be purchased outright by a developer for future projects or leased through a real estate broker.

Mixed use land is development is in a broad sense is any development which blends well with Commercial, Residential and Office space etc. The Functions of the projects can be physically or functionally integrated with some type of connections between them. Mostly these types of projects will be handled by private developer and Government Sectors or may be a part of Private-Public Venture.

Sol: Lock-in period is the period during which the buyer cannot sell his/her apartment or Unit to anyone else for profit.

Bare shell apartment refers to a property, whose construction is completed and has basic building services in place. However, such properties have unfurnished interiors and lack heating, ventilation and air-conditioning (HVAC) systems,lighting, plumbing, and elevators.

Semi Furnished Apartment is something which is similar to bare-shell apartments with minimum basic facilities. These types of units may or may not have Cupboards or Shelf in all rooms.

Fully Furnished Apartment is a high end of Furnished Apartments where resident can enjoy all the facility of Semi furnished and Furnished Apartment including air-conditioning and Water heaters in bathrooms. The other version of Apartment is that Serviced apartment is just like a hotel which has many amenities, kitchenware and other facilities in room and other partitions of the Unit.

Land Record: Title deed is very important document as it gives details about ownership, rights, obligations, and mortgages on the property. All these factors validate whether the land upon which the project will be developed is been registered properly and rights for the development has been transferred. Home Buyer can ask for the copy of it from the developer and cross check the information with the land record office.

Construction Clearances: Before construction of a property it is mandatory to obtain A ‘Certificate of Commencement’. This certificate is issued by the town planning and engineering departments post the inspection of the basic foundation for a superstructure and building boundaries. At the same time Builder should also obtain the required licenses sanctions and permissions for the map that are required before you can even start excavating.

Approved Planning:It is always better to cross verify that the building plan and the layout plan has been approved and there is no law has been bypassed. In addition to this make sure that flat which you have booked is approved in the building plan. The layout plan should be in accordance with NBC (National Building Code of India). NBC is a comprehensive guideline, a code, for regulating the real estate activities. Green Status is something which is claimed by Some Projects. Green Building Rating System India (GRIHA).

Land Use Certificate:It is illegal to have residential properties on a commercial or industrial zone. You can apply to the concerned Urban development authority and check the certificate to ensure that the property you plan to purchase is in the residential zone. As Cities are expanding due to shortage of available land agricultural land will be often converted for non-residential usage at cost of some fee to the local government. Endorsement order for such conversions will be given by the tahsildars or Deputy Collector of the particular zone.

Master Plan of the Area:It’s a strategic plan that every builder would follow claiming that our project is very close to NH, Metro or any other Public Infrastructure, Do go by the words or adds blindly. It is your responsibility to verify once again whether the details is correct or not. This information would be available easily in Department related to Town planning, City Corporations etc.

No Objection Certificates(NOC’s) : The property should have acquired NOC from concerned Authorities, like Environment, Electricity , Water and other essential government bodies.