I have witnessed many home and commercial real estate buyers, paying cheques for new apartments, condos, residential plots, offices and retail spaces in upcoming mixed used developments. Most of the potential buyers sign the Buyer Seller Agreement, without going through the contract, (this is a very common sight especially in India). A Buyer Seller's Agreement is an important document while transecting to buy a property. This agreement holds all the clauses, terms and conditions and legal implications, for the buyer and the developer, should there be a default from the either sides. During the process of buying and negotiating to acquire a property, as buyer you should be aware of all the clauses which protect your rights, and the clauses which safeguard the developer. Don't forget, this is your hard earned money, going in some one else's pockets. A typical Buyer Seller's Agreement is meant to protect the rights of the developer and the buyer.
Some of the important point you should consider, before signing on the dotted lines, are as under:
1.The time frame of the project
2.The payments terms and clauses
3.Interests, penalty, default charges for a buyer
4.Approvals, sanctions, obtained by the developer to undertake the development
5.Approved layout plans and drawings of the project
6.Title and ownership of the project
7.Is the development being out sourced
8.Is the land clear of loans / mortgages, where the developer proposes to undertake the development
9.Source of funding .i.e. (J/V, equity funded, partnership development etc)
10.Special clauses towards changes in building plans / floor space area etc
11.Clauses on refund of payments in case the development fails or is not completed
There are many more clauses in the Buyer Seller's Agreement, apart from the few mentioned above. I have known many people, who invest and buy property availing funds through banks and financial institutions. Believe me, it's a nightmare for these buyers when the developer delays projects for one reason or the other. Sometimes, the buyers are left with no option but to continue living on rented accommodation, also repaying the banks or the financial institution against the home loan. The buyer's are left hanging mid way, at the mercy of the developer. This leads to a financial stress on the buyers and should be strictly avoided.
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