Buying a residential property in India? Ensure that the project has the necessary approvals

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When you are out house hunting in India and have made up your mind on a particular project which has just been launched in the market, do ask the developer or your agent to get you a copy of all the approvals that are necessary to commence construction.

There are many instances all over India where a developer starts sales and even raises demands for the first 20 or 25 percent of the total flat value even before the basic sanctions are in place. This is an unethical practice. Look for these few primary approvals before you sign out that cheque:

1) The municipal corporation/ development authority building plan sanction for the proposed development. Check for the number of floors and blocks that the authorities have approved. Are you booking a flat in a block or on a floor that is not approved yet? We would suggest you stay away unless you are completely sure that the developer is reputed and would get that approval in a stipulated time frame committed to you on paper or would refund your money with compensation as mutually agreed between the both of you.

2) The airport authority clearance if its a high rise building. Check if this is applicable in the area.

3) The environmental and pollution control board clearance.

4) The fire department clearance

Another quick way to know if all the clearances are in place is to find out if the project is approved for home loans from reputed financial institutions. Look for an HDFC approval as a thumb rule. If that is in place, you can happily sign out that booking cheque. Sometimes, projects have legal clearances from financial institutions and await submission of their approvals for getting the final clearance from institutions like HDFC. Ask your home loan agent to give you a clear picture. Remember, they have much more at stake funding customers for the project than you have as an individual, so what comes from the home loan dude is dependable information.

If you have doubts or need a clarification, politely ask the developer. Sound out all your doubts in your conversation with the developer or your agent and go ahead only when you are completely satisfied. Regulations, people and governments are constantly changing cogs in the equation and there may be setbacks while seeking approvals even for big developers. Keep that in mind. Your money is safer in your bank than with a project that is not approved!