Buying From A Builder?
Check out a few vital aspects of the law

THE tendency amongst people is to believe that the promoter is supreme. This thought needs to be displaced. It is always a two way contract. Necessary obligations and liabilities of promoters are prescribed in the Act.
Among the various liabilities of a promoter, he is liable to make a full and true disclosure of the nature of his title to the land on which the flats are constructed/to be constructed. The same is also required to be certified by an advocate with a minimum standing of 3 years. He is obliged, at a reasonable charge, to provide true copies of documents. In any event such documents are to be made available for inspection. He is liable inter alia to make a detailed disclosure of all encumbrances on the land. A builder cannot take shelter pleading lack of knowledge as the word promoter includes the land owner. It is often noticed that plans and specifications are avoided to be provided. The promoter is obliged to give inspection of such plans and specifications, on receipt of a notice of 7 clear days. He is also obliged to give details of the design and material used in the construction of the building including agreements with architects and contractors in this respect. He has to specify the date by which possession of the flats is to be handed over.
The details of outgoings ought also to be provided. As regards amounts taken as advance or deposit, the promoter is liable to maintain a separate account for the same and disburse them accordingly. That is not a part of his profit/income. Non compliance can lead to prosecution and imprisonment of 5 years or fine or both.
The promoter cannot make any alterations in the structures in respect of the flat agreed to be purchased without the purchasers prior consent. Similarly as regards the building in which a person has booked a flat, the promoter cannot make alterations or additions therein unless all the flat purchases in the building consent.
If one goes through agreements under the Act, the manner in which amounts are to be paid by the flat purchasers varies. However the law prescribes the following:

That covers 15%. While section 4 says that no amount is to be taken unless an Agreement is executed, the form prescribes the above amounts as balance amounts, leading to an inference that upto 15% could be taken earlier.
The promoter is obliged to hand over possession of flats only after the completion certificate is received. Possession normally handed over prior to the same under the guise of interiors, etc. would not entitle a flat purchaser to occupy the flat. From the date of handing over of possession, if any defect in the building or material used or unauthorized change the construction is brought to the knowledge of the builder within 3 years, as far as possible, the same shall be rectified by the promoter. 3 years is the mandatory period prescribed in the law. A contract to the contrary is commonly seen. Very often the 3 years is changed to 1 year and sometimes, the promoter shirks his responsibility immediately. He cannot do so. Possession also needs to be construed as per law. Temporary possession for interiors is no possession. If the promoter cannot rectify the defect, a reasonable compensation is due to the purchasers. Authorities have been prescribed in the law to look into such matters.
He is also obliged to provide all details and particulars in the agreement as is prescribed in section 4(1A) of the Act which include the fact that he is obliged to construct as per plans, give a specific date of possession, provide details of the carpet area and details of the balconies, the details and installments of payments, details of the common areas with the percentage of undivided interest in respect of the flat, the details of and the restrictions of use of the flat, the type and nature of the ultimate body to which the property would ultimately be transferred, etc. Such agreements require at least the following annexure:
A title certificate by an advocate, the revenue record like a property card, 7/12 extract, GLR extract, etc. and the plans and specification of the flat as approved by the local authority. While registration is made compulsory under section 4, vide an amendment under section 4A to the Act in 1984, it can be used in evidence, including in case of part performance. The Registration Act got amended thereafter wherein in case of possession under an agreement, part performance could not be pleaded unless the Agreement was registered. However, the MOFA is a special law. Notwithstanding the above, banks do not give loans unless the agreement is registered. In any event, registration becomes knowledge to the world. The security increases, and as per the now followed custom, documents are always registered. This is a step in the right direction.
There are three ultimate bodies prescribed in the Act to which the property is ultimately to be transferred. The most common is a Co-operative Society. The next common system is to declare a Condominium of Apartment Holders and execute separate deeds with each flat purchaser wherein percentage shares of flat purchasers in common areas is prescribed. The third one, which is almost non existent is to form a Company of flat purchasers and convey the property to the Company. In a society or a company, the entire property is conveyed. When such formation for a Society or a Company is to take place, the promoter is obliged to submit the same for formation within 4 months of the minimum number of purchasers have taken flats. Once the formation of the body has taken place, the promoter is obliged, if no time is agreed upon, to convey the same within 4 months of the formation, keeping his right to dispose off all unsold flats. This is a commonly breached provision. In fact breach could lead to prosecution with imprisonment upto 3 years or with fine or both.
A flat purchaser is obliged to pay his outgoings as per the agreement failing which he could be prosecuted and fined upto Rs.2000.00.
Essential supplies (lights in passages and stair cases, water, electricity, lifts and conservancy or sanitary service) cannot be cut off, except for a just and sufficient cause. If wrongly cut off, the same can be restored through Court. In addition, if successfully prosecuted, there is a 3 month imprisonment or fine or both prescribed.
In fact there is a prosecution prescribed for any offence committed by the promoter in the law.