Hidden cost for flat purchasers

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.





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4 thoughts on “Hidden cost for flat purchasers

  1. Everyone knows about the illegal activities of the builder. Government as wll as the law is totally in favour of the builder. Inspite of so many irregularities being committed, its never the case that the builder is punished. Its only the poor common man, who after putting all his might into purchasing a roof over his head, who is always at fault. When will times change?

  2. Govt. has already increased stamp duty and registration fees by 25% from this year, so they should thoroughly check the irregularities from the end consumer.

  3. A comprehensive legislation is required to protect the rights of the purchasers of apartments. Builders have enormous financial clout, but consumers have numerical strength . Lobbying the law makers for such a law is the only solution.

  4. Q
    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. 

    UQ

    The points made in the above quoted extract from the write-up call for a careful reading and incisive understanding.
    As rightly pointed out, there could be no charges for maintenance collected by Vendor from Purchaser for any period prior to the date of ‘legal occupancy’. In other words,  be it  a payment either on a monthly or other basis as agreed, or if there be an advance deposit made but to be adjusted against the cost of maintenance, then such an adjustment is illegal, if done  prior o the crucial date of ‘legal occupancy’.

     On the  concept of ‘legal occupancy’, now the legal position is beyond any doubt; in that, any occupancy of a ‘flat’ (  or of an apartment) cannot be considered ‘legal’ , That is so, even if  for any reason or under any circumstance, such an occupancy is allowed by Vendor, even to a willing purchaser,  before Vendor  has in his possession an ‘occupancy'(often known as  ‘completion’) certificate;   and every purchaser is duty bound to agree to an occupancy, only after satisfying himself by seeking and obtaining a copy of the said certificate. Incidentally, its  Original is one of the several legal documents which Vendor, as he is legally obligated , must handover – in the case of  of a ‘flat’ to the housing society after it is  formed and registered, and if it be an apartment, after the registration of the ‘owners’ association’ , strictly as per the applicable law.

    In practice , however,  both Vendor , often individual purchaser also- mostly driven by selfish considerations, never care to recognize or abide by the referred  rule of law. So much so, it is the said rule of law that becomes a casualty.

    By and large, it is mostly , not only the recalcitrant attitude of Vendor, but also  the callous or ‘chalta hai’ attitude of any purchaser requires to be blamed for proliferation or perpetuation of such or many more irregularities of same kind obtaining for long in the realty sector.

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