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Q.

What is the Due Diligence Process for Buying an Under-Construction Apartment?

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Summary
Due diligence for an under-construction apartment involves verifying RERA registration, checking the developer's title and land ownership, and confirming approvals (layout, building plan, environmental clearance). Review the developer's track record, approved floor plans, and Agreement for Sale terms (possession, payments, penalties). Verify carpet area matches approvals, follow construction-linked payment schedules, check bank approvals, and consult a lawyer before signing or paying.

You should verify the legal status of the project, confirm that statutory approvals have been obtained, and assess the developer's credibility before making financial commitments. Careful examination of project documents and contractual terms helps identify potential risks. You must also ensure compliance with applicable laws, including the Real Estate (Regulation and Development) Act, 2016 (RERA). Below, I have shared the detailed due diligence process for buying an under-construction apartment.

What are the Steps for Due Diligence for Buying an Under-Construction Apartment?

  • Verify that the project is registered with the applicable RERA authority and review the project details.

  • Check the developer's ownership rights and title documents for the project land.

  • Confirm that the land is free from significant legal disputes or encumbrances.

  • Verify approvals such as layout approval, building plan sanction, environmental clearance, and commencement certificate, where applicable.

  • Review the developer's track record, previous projects, and delivery history.

  • Examine the approved floor plans and project specifications.

  • Read the Agreement for Sale carefully, including possession timelines, payment schedule, cancellation terms, and penalties.

  • Confirm that the carpet area, amenities, and common facilities match the approved documents.

  • Verify the construction-linked payment plan and avoid making payments outside the agreed schedule.

  • Check whether financial institutions have approved the project after their own legal evaluation.

  • Review maintenance charges, association provisions, and other recurring costs.

  • Obtain professional legal advice before signing documents or making substantial payments.

Why is Legal Due Diligence Important before Buying an Under-Construction Apartment?

  • Legal due diligence helps buyers identify ownership issues, missing approvals, contractual risks, and possible delays before investing. 

  • It also ensures that the project complies with applicable regulatory requirements and that the developer has the authority to sell the property. 

  • Careful verification minimises the risk of future disputes, financial losses, or possession-related complications while providing greater confidence in the purchase decision.

I hope this helps.

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