Before paying the booking price
for a flat under construction, the buyer should take the total cost of the unit
into account
Usually, a space buyer’s
agreement or flat buyers agreement/agreement to sell is a legal document
executed between the developer of a complex and a prospective buyer of a flat
or unit booked or allotted in an under-construction project. Before paying the
booking price, it is important for a buyer to review and understand the total
price payable by him for purchase of the unit.
Basic vs total sale price
The basic sale price of an
apartment is the base price of a particular unit, calculated per square foot of
saleable area of such a unit. A certain portion of this price is reserved as
earnest money which generally as per the terms of buyers agreement is liable to
be forfeited by the developer in case of cancellation of allotment/booking due
to default/breach by buyer. Additionally, amounts towards preferential location
charges (PLC), external development charges (EDC), charges for internal
development works (IDW), one-time electrification/installation charges etc are
also payable by a buyer. These, together with the basic sale price, add up to
constitute the total sale price of a unit.
EDI, IDW and other charges
A developer is required to pay
EDC and charges towards IDW to the local urban development authorities/bodies
and he usually recovers the same on pro-rata basis from buyers. EDC is payable
towards utilization and repair, maintenance and strengthening of external
development works. These works are undertaken in the periphery of the
colony/area or outside the colony/area. IDW charges are utilized towards infrastructures
works development, which is necessary in the interest of proper development of
a colony. Buyers may seek information from the developer on the method of
computation of pro-rata charges towards EDC/IDW and other related or similar
charges, if any.
Preferential location charges
or PLC
In most projects, there is also
a PLC component for units that have a more advantageous location than other
units in the same complex. The liability to pay PLC arises only if a buyer opts
to purchase a preferentially located unit. Developers may charge differential
rates for units having one preferential location attribute vis-Ã -vis units
having two or more preferential location attributes. Buyers must keep in mind
these chargeable preferential attributes when booking a unit. It is interesting
to note that even if a buyer does not opt for a preferential location and
subsequently the unit turns out to be such, he will have to pay more towards
PLC.
Maintenance charges
For the upkeep of a complex,
common areas and facilities therein, maintenance agencies are often appointed
by the developer. In order to enjoy these facilities and amenities, all
apartment owners are required to pay maintenance charges. Given that
maintenance is a recurring cost and its quantum varies across projects, it is
important to enquire about the rate and method of calculation of maintenance
charges, facilities available and additional amounts payable towards
electrically consumption etc.
Buyers may also check
contributions to be made towards advance maintenance charges, sinking fund and
maintenance security deposit (which may be interest bearing or non-interest
bearing).
Transfer charges
For enabling transfer of
allotment of the property (prior to execution of sale deed/conveyance deed) in
favour of a third party, developers levy transfer charges which are usually
calculated on a per square foot basis. Some developers permit the first
instance of transfer to be free of charge.
Other charges
In projects that offer club/community
centre fecilities, club membership fees may be chargeable and payable by the
buyer for becoming a member of such facilities. Lately, many luxury projects
are offering buyers fully furnished units, as well as units having
specifications that can be customized as per the buyer’s preferences and
requirements for an additional amount.
