Hidden cost for flat purchasers
Flat purchasers are been charged heavy amount by the builders, just after full payment but just before giving possession letter. The hidden cost includes Society formation charges, maintenance, Electric meter deposit, club membership, parking, electric cable to the building, general amenities, stamp duty and registration fees, society deposit for free maintenance etc.
Many time the purchaser given to understand that the maintenance is just Rs.2/-. But it means Rs.2/- is society maintenance and not property tax and water tax. Together they go beyond Rs.4/- to Rs.5/- per sq.ft. per month. Society formation charges are Rs.500/- one time and reasonable professional fees. In spite of this, many builders are charging Rs. 10,000/- to Rs.15,000/- per flat. Many times the builder has taken money for this purpose but forget to fulfill his obligation. Maintenance of the society has to be paid only after the building gets Occupation Certificate (OC) from concerned authorities. Before the date of Occupation Certificate , Builders are charging poor flat purchasers heavy maintenance. Actually these charges are collected in lieu of development charges, suppose to be paid by the builder to the local authorities. Flat purchasers should pay the maintenance charges only for a period starting from the date of his legal occupancy.
While selling the flat, builder gives promise to provide electrification. It is builder’s duty to provide electricity. Many builders are charging external cable cost which is supposed to be builders promise.
Apart from this, builders are also taking security deposit in the name of society for future maintenance, club membership fees, parking charges etc.
The stamp authorities have fixed values of properties for different localities based on the information accumulated by them.15 While giving possession letter builders are asking registration receipts. Surprisingly, builders do not have anything to ask for it, legally. Agent purposely does not hand over the receipt. And when purchaser requires it, agents charge them Rs. 4000/- to Rs.6000/- for it. Section 3 of the Indian Evidence Act 1872 state that a “Document” means any matter expressed or described upon any substance by means of letters, figures on marks or by more than are of those for the purpose of recording that matter.16 Documents for property transactions needs to be proved to housing finance company and for creating charges thereon.
In all, one should keep in mind the hidden cost involve in purchasing a flat. Also keep in mind that after paying Processing fees, Administration fees, stamp duty on mortgage of document for housing finance, insurance of the property and first Equated Monthly Installments (EMI) to housing finance, obligation towards Stamp Duty and Registration charges and professional fees, society formation charges, external cable charges, internal road development, club membership entrance fees, brokerage etc., has to be paid one time. Society maintenance, Property Tax, Water Tax, club annual maintenance etc. will have to be paid every month.
The hidden surprise are never calculated. It affects the repaying capacity of the home loan borrower who converts into defaulter, later on.
Hidden cost for flat purchasers