Proper documentation is one of the most critical step in the process of property acquisition. A promoter should enter into written agreement to sell with each of the persons who are to take or have purchased property. The agreement should contain particulars of the property and also annex related documents.
In case of a property, yet to be constructed, the agreement must contain liabilities of the promoter to construct it according and specifications approved by the local authority. The agreement should also contain possession date, money to be paid, intervals at which installments are to be made, stages of construction, common areas and facilities, percentage of undivided interest in the common areas and facilities escalation clause, penalties or damages payable in case of delay in completion of project beyond the agreed time period. Copy of title certificate, approved plan and specifications with the list of fixtures and amenities including provisions are the few documents that should be demanded with the agreement.
A promoter, while he is in possession and has to pay all out-goings including rent, taxes and interest on any mortgage or other encumbrances, till he transfers the property to the buyers . It is also mandatory for a promoter to convey the land in favor of an association of owners within a specific period of completion of the project. A declaration by the promoter should be there in the sale agreement that he has not entered into any other agreement to sell, lease or license with any other party. It also needs to be specified whether the property is vacant or in possession of any other party other than the seller.
A buyer should ensure that these formalities are taken care of by the builder while entering into a sale agreement.