I'm looking to buy a ready to move flat in Greater Noida West which is in possession from last 3 years but hasn't been registered yet. The owner have possession and allotment letters, so it will be directly transferred on my name when registered. Right now builder's RERA is expired due to some reason and banks have default the builder due to some of there/flat owner Non Payment of EMIs. None of the bank is directly funding to the builder but I've been said if I ask owner to get thr property registered on their name first then I'll get the funding. Now I want to ask is the property good to purchase in this condition. Also, the person who is helping owner to sell the property to me, says they'll buy stamp duty and on top of that thay can get the loan disbursed, RERA is not applicable in that case. Please share your views.
Ans: Understanding the Current Property Situation
Firstly, it's great that you are exploring the option of buying a ready-to-move flat. Greater Noida West is a developing area with significant potential. The property in question has been in possession for three years but hasn't been registered yet. The owner has possession and allotment letters, which is a positive aspect. However, some concerns need careful evaluation.
Evaluating the Legal and Financial Situation
Expired RERA Registration
The builder's RERA registration has expired, which raises a red flag. RERA registration is crucial as it provides transparency and protects buyers' interests. Without RERA, you may face legal uncertainties. It's essential to understand why the RERA registration expired and whether it will be renewed.
Builder's Financial Distress
The builder is in financial distress, and banks have defaulted on loans due to non-payment by some flat owners. This situation indicates potential financial instability. Ensure that the builder can resolve these issues and provide clear title ownership before proceeding.
Steps to Ensure a Safe Purchase
Registration in Owner's Name
You mentioned that if the current owner registers the property in their name first, banks might provide funding. This step is crucial for securing your investment. Make sure the registration process is completed before you proceed with the purchase.
Verification of Documents
Thoroughly verify all documents, including possession and allotment letters, and ensure they are authentic. Consult a legal expert to review the papers and confirm there are no hidden liabilities or legal issues associated with the property.
Financial Considerations
Bank Loan Approval
If the current owner registers the property in their name, securing a loan becomes feasible. However, confirm with multiple banks about their willingness to finance this property. Understand the terms and conditions clearly before committing.
Stamp Duty and Registration Costs
The seller's agent mentioned covering stamp duty and ensuring loan disbursement. Ensure you understand the implications of this arrangement. Verify that all costs, including stamp duty and registration, are transparently included in the purchase price.
Risks and Benefits Analysis
Potential Risks
Legal Uncertainties: Expired RERA and builder's financial issues can lead to legal complications.
Financial Instability: Builder's default with banks could impact property value and future transactions.
Loan Approval: Securing a loan may be challenging due to the current financial status of the builder.
Potential Benefits
Ready-to-Move: The property is ready to occupy, eliminating the risks associated with under-construction properties.
Location Advantage: Greater Noida West is a growing area, which could lead to property value appreciation over time.
Immediate Possession: You can move in immediately upon registration, avoiding delays common with new constructions.
Key Recommendations
Legal and Financial Due Diligence
Engage a Certified Financial Planner and a legal expert to conduct thorough due diligence. They will ensure all legal and financial aspects are transparent and secure.
Confirm Builder's Resolution Plan
Ask the builder for a detailed plan on resolving financial issues and renewing RERA registration. This information is critical for your decision-making.
Secure Bank Loan Pre-Approval
Before proceeding, get a pre-approval for a loan from your preferred bank. This step ensures that financing will not be an issue after the current owner registers the property.
Conclusion
Purchasing a ready-to-move flat in Greater Noida West can be a sound decision if all legal and financial issues are resolved. Ensure the current owner registers the property in their name first. Conduct thorough legal and financial due diligence with professional assistance. This approach will safeguard your investment and provide peace of mind.
By taking these steps, you can confidently proceed with your property purchase and enjoy the benefits of your new home in Greater Noida West.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
