Short Summary
Buying an under-construction properties in Chennai can be an attractive investment option due to flexible payment plans and modern amenities. However, first-time buyers and even seasoned investors often make legal mistakes that can lead to financial loss, delayed possession, or disputes with builders.
This blog highlights the most common legal mistakes and explains how to avoid them to ensure a secure property purchase.
Understanding Under-Construction Properties
An under-construction property refers to a building or apartment that is still being developed and not yet ready for occupancy. These properties are popular because they offer:
- Lower initial investment
- Flexible installment plans
- Opportunities for price appreciation
However, legal diligence is critical before making any payment.
Mistake 1: Ignoring RERA Compliance
The Real Estate Regulatory Authority (RERA) ensures transparency in property transactions. Buying an unregistered RERA property can be risky.
How to Avoid:
- Check if the project is RERA-registered on the Tamil Nadu RERA portal.
- Verify builder credentials and past projects.
- Ensure the project details match the official RERA registration.
Why It Matters:
RERA protects buyers from delayed possession, incomplete construction, and financial misuse by builders.
Mistake 2: Not Verifying Title and Builder Ownership
Many buyers fail to check whether the builder legally owns the land. Skipping title verification can lead to disputes or canceled projects.
Documents to Verify:
- Patta and Chitta (for land)
- Mother Deed (ownership history)
- Encumbrance Certificate (EC)
- Approved building plan from CMDA/DTCP
Always involve a property lawyer to ensure all documents are authentic.
Mistake 3: Overlooking the Sale Agreement Details
The Sale Agreement is the foundation of your purchase. Common mistakes include:
- Not including possession date and penalty clauses
- Ignoring payment schedule and milestones
- Not specifying builder responsibilities for approvals
Tip: Ensure your Sale Agreement is drafted on non-judicial stamp paper and signed by all parties with witnesses.
Mistake 4: Underestimating Stamp Duty and Registration Fees
Some buyers calculate costs based on builder quotations alone and forget stamp duty and registration fees.
Key Points:
- Stamp Duty in Chennai: 7% of property market value
- Registration Fees: 4% of property market value
- Include these costs in your budget to avoid surprises.
Mistake 5: Not Checking Approved Building Plans and Permits
Buying without verifying approvals can lead to legal trouble later, especially if the property violates zoning laws or lacks occupancy certificates.
Documents to Check:
- CMDA/DTCP-approved building plan
- Completion certificate (CC)
- Occupancy certificate (OC) for previous constructions (if applicable)
Why It Matters:
Authorities may deny utility connections or approve future expansions only if documents are compliant.
Mistake 6: Not Accounting for Loan or Financing Legalities
Many buyers rely on home loans but fail to understand the legalities:
- Ensure the property is eligible for home loans
- Bank may require verification of RERA registration, title, and builder approval
- Check if the property has any existing lien
Proper coordination with the bank avoids last-minute loan rejections.
Step-by-Step Prevention Checklist
- Verify RERA registration
- Check title, EC, and builder ownership
- Review Sale Agreement thoroughly
- Calculate all costs, including stamp duty
- Confirm building plan, permits, and approvals
- Coordinate with bank for loan eligibility
Following this checklist reduces risks and ensures a smooth purchase process.
Fomra Housing’s Approach to Under-Construction Properties
Fomra Housing follows a buyer-centric approach:
- All projects are RERA-approved
- Verified clear titles for every property
- Transparent Sale Agreements with milestone-based payments
- Legal guidance during registration, mutation, and possession
This ensures investors and first-time buyers experience a safe and hassle-free purchase.
FOMRA Housing Projects
Fomra housing is currently developing and delivering thoughtfully designed residential projects that focus on quality, comfort, and modern living. Explore our ongoing and completed projects to understand FORMRA’s commitment to excellence.
Final Thoughts
Buying an under-construction property in Chennai can be rewarding, but it requires careful legal diligence. Ignoring RERA compliance, title verification, Sale Agreement details, or building approvals can lead to delays, disputes, or financial losses.
By following the step-by-step checklist and relying on professional guidance, buyers can secure their investment and enjoy peace of mind.
FAQs
1. How do I verify if an under-construction project is RERA-registered?
Check the Tamil Nadu RERA portal using the project name or builder registration number.
2. What legal documents should I verify before buying?
Sale Agreement, Patta, Chitta, EC, approved building plan, and RERA registration documents.
3. Can I apply for a home loan for an under-construction property?
Yes, but the property must have legal approvals, clear titles, and RERA registration.
4. What happens if the builder delays possession?
RERA provides compensation for delayed possession based on the Sale Agreement.
5. Is it risky to buy unverified under-construction property?
Yes. It can lead to legal disputes, delays, financial loss, or property nullification.