Reading a developer before you sign

When an under-construction purchase goes wrong in India, it is rarely because the corridor was wrong. It is because the developer did not deliver, delivered late, delivered something other than what was sold, or ran out of money halfway through.

Most of what you need to form a view is publicly available and takes an afternoon.

Start with the RERA registration

Every qualifying project must be registered with the state authority, and the registration carries information the sales team will not volunteer.

• The declared completion date. Compare it against what you are being told verbally. They differ more often than you would expect.
• The approved plans and specifications. What is registered is what is promised. Anything shown to you that does not appear here is decoration.
• Quarterly progress updates. Registered developers are obliged to file these. Read the last several. A project filing consistent, detailed progress is behaving differently from one filing the minimum.
• The promoter's other registrations. This is the useful part. Look at their previous projects on the same portal and compare declared completion dates against what actually happened.

Look at the financial position

For a listed developer this is straightforward, and for a private one it requires more work through filed accounts. What you are looking for:

• Debt relative to the scale of what they are building. A developer running many simultaneous projects on heavy leverage is fragile to a slow sales period.
• How many projects are open at once. Ambition is not the same as capacity.
• Whether sales in their existing projects are moving. Under-construction development is funded substantially by customer receipts. A developer whose inventory is not selling has a cash problem before they have a construction problem.
• Any insolvency proceedings, defaults or credit rating changes.

Visit a completed project, not a sample flat

The sample flat is a marketing instrument, built by specialists to a standard the actual project may not reach. A handed-over project by the same developer, ideally three to five years old, tells you everything the sample flat conceals.

What to look for when you get there

• How the common areas have aged. Lobbies, lifts, corridors, external paint, water ingress.
• Whether the promised amenities exist and function. Clubhouses that were rendered and never built are a recurring theme.
• What the maintenance charge actually is, versus what buyers were told it would be.
• Whether the developer handed over maintenance to a residents' association, and how that went. This is frequently where the relationship sours.

Then talk to residents. People who bought from this developer and have lived with the result for years will tell you, unprompted and at length, what the experience was.

Read the builder buyer agreement properly

Not the brochure. The agreement.

• The completion date and the grace period. A generous grace period on top of a distant date is a long time.
• Compensation for delay, and how it compares to what you pay if you are late.
• The payment schedule. Construction-linked plans align your money with progress. Time-linked plans do not, and transfer risk to you.
• Carpet, built-up and super built-up area, and which one the price is calculated on.
• What can change without your consent, including specifications, layout and common areas.
• Cancellation and forfeiture terms.

The short version

Check what they promised on a previous project and what they delivered. Check whether they can pay for what they have started. Go and look at something they finished. Read the contract rather than the brochure.

None of this is sophisticated. It is simply work, and the reason it is worth doing is that the alternative is discovering the answer over the following five years.