The builder then sets the terms for payment - 20% advance,
70% for slabs (for a typical G+3 Apartment), 10% after sale deed registration.
After paying the advance (20%), you will apply for a bank loan. If your Credit
Information Bureau (India) Limited (CIBIL) score is good, you will get
immediately loan approved, since in almost all the cases, land records (i,e
sale deed, mother deeds, khata, tax paid receipts etc for land) are clean. The
builder will not let you modify any contents of terms and conditions of either
Sale Agreement or Construction Agreement (or Agreement to build). Builder will
also not entertain any questions, clarifications, doubts etc to be answered or
raised. You will be left with no option but to buy it or look for a different
flat. Since you would have already tried and tired of finalising/searching a
flat, you will not fight with the builder - you will agree to everything. In
most cases, the builder would have constructed all the slabs (or will complete
all slabs within 2-3 months) and will raise the Demand Note for the 70% of the
flat's cost. That is, by this time, you would have paid 90% of the flat's cost.
Builder will use all his tactics/coercion/force etc to get the 70% payment as
per the Agreement to Build. Builder will also put pressure on the bank to
release the payment as per the agreement. Finally, the builder will get 90% of
the flat cost into his kitty within three months of Sale Agreement. This is
where the actual problem starts. Your flat work will not be completed – brick
work, painting, fittings, wood work etc. Since the builder has mentioned
10/12/18 months, he will take his own sweet time to finish it. Also, the total
cost includes: Your flat + lift + generator + electricity meter + common areas
+ All promised Amenities + Registration + Occupancy Certificate + Khata. The
builder will only complete brick work etc for your flat and raise a Demand Note
for the balance 10%. After the release of 10% (totally you would have released
100% by this time), the builder will ask you to go for Sale Deed registration
without completion of all other things except your flat.
You can say, when the bank has sanctioned loan and legal opinion is clear, why
I can’t get Khata? The reason is, bank will sanction loan based on land records
only. Because it is under-construction property and the bank will not see any
building violations in case of under-construction property. Even if they know,
they will not raise any objections, because everything is legal as per the
agreement and payment schedule. The bank will release 80% money just for slabs
only, as per the payment schedule. Banks also know that OC and Khata will
create legal problems for them, they also would like to release all the money
just after the slab work is completed. Even though sanctioned letter explicitly
states that there should not be any violations and builder should obtain NOC
from all agencies, and ‘A’ Khata is required for creating equitable mortgage
(from legal opinion submitted to bank,) the bank coolly ignores the same
because they need the business, which is the biggest for them. The same bank
will not accept your documents or sanction mortgage loan, if you would like to
sell or mortgage (after you occupy the flat). Since you don’t have OC and ‘A’
Khata. The builder will demand 100% money before the building is complete,
because all violations happen only after the slab works. The builder will
construct 1 or 2 floors (pent house etc.), extra which are illegal and hence no
OC will be given to you. When you check BBMP site for ‘Know Your Tax Paid
Details,’ you will still see the land owner's name against the property and
Khata number. This is because original Khata has not been bifurcated into
individual flat owners. Reason: Again, NO OC. (B Khata has no value, though
BBMP collects property tax).Sell a flat by using allindiayellowpage.com.