The pillars of your dream home

The pillars of your dream home

Date : 03 Aug, 2019

Post By Sankul Nagpal

 

The real estate business is an ever-growing and ever-expanding sector in India. And with new players coming into the business each day, the diverse options and alluring projects can take a toll on your hard-earned money if you are not careful. Purchase of property in India can prove to be a monetary disaster if you are unaware of the correct legal procedure to be followed. Thousands of homebuyers in India experience the disaster of delayed possession and face mental agony as well as monetary loss.

While some of us invest in finished and ready to move in flats, many of us choose to invest in under-constructed projects and properties owing to their comparatively economic rates and prospects. 

In cases where the investment is placed in an under-constructed or unfinished project, an allotment letter serves as a crucial document during the purchase of your dream home.

An allotment letter is provided by the builder or developer to the prospective buyer of an under construction project once the buyer pays 15% of the property value to the builder or developer.

The importance of an allotment letter in property purchase

Firstly, the allotment letter contains the facts and figures about the prospected property and its various details. This means that the allotment letter elaborates on the construction details, plans, architectural details, as well as other technical aspects of the project/property along with clearly mentioning the amount of money to be paid to the builder upon delivery or completion.


Furthermore, in cases of unfinished projects or properties, it serves as the only document which is used as a valid and legal proof of property transaction. It is a vital document in availing finance facility from leading banks, as the letter mentions the deal amount which is payable to the builder so that the remaining value can be financed by the bank.

Many a times, the developers or dealers fail to provide the promised amenities in the final delivery. In such cases, an allotment letter serves as a legal and valid proof of the amenities promised.

In fact, the importance of an allotment letter and its role in the purchase of property is so much, that it has been held by the MAHARERA Tribunal that an allotment letter also enables the homebuyer to seek a refund of any booked flat with interest under Section 18 of the RERA Act, 2016

What does an allotment letter contain?

Amongst the various details that an allotment letter chalks out about an unfinished project or under-constructed property some of the key details that an allotment letter contains are:

  • Details about the payment options, details of the flat or property, terms of construction and delivery, construction schedule, amenities promised by the developer or builder like parks, gym, auditorium, public temple, shops etc. Additionally,  an allotment letter also mentions the final payable to the buyer inclusive of taxes and the promised delivery date along with the builder’s liability in case of delayed possession and/or completion. 

What is an agreement to sell? 

Another crucial aspect of the purchase of property in India is an agreement to sell. An agreement to sell is basically an agreement entered into by the promoter or developer and the allottee.
An agreement to sell is an agreement to sell a property at a future date. It contains the terms and conditions of any prospective contract of sale. Any violation of terms of an agreement to sell can result only in a suit for damages and breach.

Some of the main clauses in agreement to sell are details such as:

  • Name of both the parties, the date and place of execution of the agreement, the consideration amount, mode and the time of payment, the conditions on which possession shall be delivered, the rights, obligations, and liabilities of each party along with the proportion of expenses to be met by each party.

The execution of an agreement for sale needs to be witnessed by two people from both the parties- one from the purchaser’s side and one from the seller’s side.

What is a conveyance deed?


A conveyance deed is another crucial document that is required when there is a transfer of ownership of any property from one person to another. The term deed means a written legal contract that binds the parties to its terms and can be proved in the court as evidence. 

There is a slight difference between the terms conveyance deed and sale deed, both of which are used interchangeably. Sale deeds are a subset of conveyance deed, which means all sale deeds are conveyance deeds but not Vis-a-Versa.

Importance of Conveyance Deed in Property Purchase


The importance of a conveyance deed can be known from the fact that in order to become the absolute owner of the property, one must possess a conveyance deed. The presence of a valid conveyance deed can protect us from the fraudulent transfers of the property. This document can be easily used as evidence to prove the ownership rights over the property. Finally to register the property in the Government records, one must have a conveyance deed.

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