In my previous article, I had discussed the various nuances of a Real Estate purchase transaction, especially in an under construction project. There are five important dimensions that need to be evaluated before one should put his hard earned money in any project. I had discussed the first dimension – the Project itself, in my previous article. Continuing from where I last left, I shall this time list out few most important parameters that a buyer should evaluate w.r.t the Developer of the project before investing his money in the project.
Let us discuss the Second dimension of Real Estate Property transaction – The Developer/promoter/Company.
- 1. Is the developer RERA registered??
- 2. Enterprise Detail of developer’s – Whether it is
partnershipor proprietorship company; articles of registration and pictures of promoters?
- 3. The advertiser financially sound? What is the debt on the company? Is the debt being serviced? Is the company under financial stress and consequently seeking recourse under the IBC or any settlement scheme with the banks?
- 4. Is the developer registered under the State Apartment and Property Regulation Act??
- 5. Past Record – Details of the projects developed by him in the last 5 years. There deliveries in terms of timelines and quality.
- 6. Audited Balance sheet and IT returns of the promoter/company for the preceding 3 Financial Years.
- 7. Sponsor got his Project Accounts audited within 6 months after the end of every financial year from a CA?
- 8. Promoter about himself made all necessary disclosures and furnished all Affidavits on the public platform (website of RERA), as required by the law?
- 9. Names of the Architect, contractors, structural engineer and the top management team hired by the promoter. Their background and reputation.
- 10. The organizer/company should not be mortgaging or creating a charge on the property after the execution of the agreement of sale.
- 11. An advertiser has not transferred or assigned his rights and liabilities to a third party.
- 12. Endorser has obtained all such insurances as required by the law viz, on title and construction, and has transferred all benefits of the insurance to the allottees.
Col. CVS Sehgal is a Real Estate Coach and a regular blogger #Cvs_speaks.