by | Mar 19, 2020

Reading Time: 7 minutes

Investing in a new Plot, Flat or a constructed House is one of the most crucial decisions of your life. This is probably because it is an idea you have been nurturing from a very young age and secondly, any investment in an immovable asset requires spending a huge chunk of our hard-earned money so, a lot of caution and restraint is required during the entire process.

I have bifurcated this topic- Top things to know before purchasing a property into 3 parts (Part 1- Plot, Part 2- Flat, and Part 3- Constructed House on a Plot) just so that the readers are at the liberty to choose to read about what is just relevant to them. Also, some of the details in these series of blogs are specific to the Real Estate market in Indore but most of the content can be used to understand the Real Estate market in general.

Buying and owning a plot in Indore gives you the flexibility of building a house as per your requirements by factoring and contemplating with patience- the design, choosing the right contractor, and also arranging the finances required to build the house. But at the same time, it involves a certain element of risk. So, let’s look at the Top Things to know before purchasing a Plot:

  1. Location: If you have visited any Real Estate Fair/Exhibition in Indore in the recent past, you would have come across many plotting development projects. These real estate projects in Indore are generally located within 10-15 km of the city centers’ radius and in locations where the infrastructure (viz. The roads, metro, bus transportation) is still in the developing phase which is the reason why these plots are less expensive than the ones which are located in the city. But, the ones in the city are scarce and extremely expensive. So, distance from important landmarks viz. Schools, Shopping complexes/malls, Entertainment centers, Banks, etc. should be kept in mind while purchasing a plot.
  2. Title ownership: Let us jump straight into some of the not-so-complex technical jargon. While buying a plot, it is extremely important to verify the title of the land parcel. So, let us look at this point a bit carefully:
    Any land parcel, whether big or small will have one or many landowners. We must know who the landowner(s) is/are. These Real Estate agents in Indore or any other city often rush through this point and tend to keep it vague, but this is undoubtedly one of the most important points to keep in mind.
    One can ask whose name is in the title of the land or who will execute the sale deed/registry of the property?
    Once it is established as to who will execute the sale deed, it is also equally important to check whether the landowner’s title documents are clear i.e., whether or not the land is encumbered.
    Encumbrance means that if the land is mortgaged or any loans have been taken against the land. This is an important check since, after you have purchased the land you find out that the land parcel is encumbered, then, in that case, someone else can claim rights to the land.
    So, my advice is to always consult a Real Estate lawyer or a Real Estate Consultant in Indore (or specific to the region where one wants to buy the plot) who can verify the land records for the past 15-30 years at least and give you a comprehensive report duly attested by him/her. This ensures that the title of the land has been thoroughly checked and there are no surprises later on.
  3. Nature of Land: There are two types of Land use in Madhya Pradesh (Indore), namely: Agricultural and Non-Agricultural (commonly referred to as NA).Â
    Agricultural lands are generally available for throwaway prices and this might seem very lucrative. But, one has to first convert that Agri land to Non-Agricultural (NA) land before any construction can be done on the piece of land. Land diversion is the process of converting Agricultural land to NA land. The process costs in terms of both money and time and hence should be avoided if our goal here is to build our own house. So, one must ask the salespeople/agent to show the Non-Agricultural order.
    However, just because the land has NA status, does not mean that one can start using it for residential purposes. There are various types of NA lands viz. NA Commercial, NA Industrial, NA Tourism, NA- Residential, etc. So, If a plot is NA Industrial, then one can build a manufacturing unit or a warehouse but cannot use the same for the residential purpose of the common person. So, what we require is an NA- Residential plot.

    Beware of Sale Gimmicks like Proposed NA Scheme/Plots
    Salespeople often lure customers by saying that the plots are available on Proposed NA land. And, it is a good deal now to take advantage of the low prices as once the NA-residential order is passed for the land then the prices will rise. To this, I always say that there is a lot of uncertainty in life and no one can predict the changes in local by-laws since there are a lot of variables and factors which are out of control of every person hence, Stay away from such deals.
    So, in conclusion, ask the salesperson to show you the NA order papers. Have a look at it yourself and do not fall for the promises like we will obtain the same in a week or a month. Stay away from such deals.
    It is important that we get into the finer details of the things since the devil is always in the details.

  4. FSI or FAR of the land: FSI– Floor Space Index also known as Floor Area Ratio (FAR) means how much construction can you do on the plot. For example, if you have a 50ft*20ft plot, it means that the total plot area is 1000 sqft., and if the FSI/FAR of the plot is 1.5, then you are eligible to construct a maximum of 1500 sqft. which can be done on 2 floors (750*2 floors or any other combination), 3 floors (500*3 floors or any other combination), or n floors. It will of course not be possible to construct 1500 sqft. on the ground floor since the plot area available to us is 1000 sqft.

    Note: FSI/FAR can be even less than 1. So, if you’ve have a plot area of 1000 sqft. and the FSI of the plot is 0.25, then you will be permitted to construct only 250 sqft., such is the importance of FSI/FAR.

    Real-life scenario:
    Let us take for example that there are 2 plots which are of the same size (1000 sqft), but both the plots have different FSI, let’s assume that their FSI is 0.5 and 1.0 respectively and you want to construct your home on the plot(s).
    Plot A (0.5 FSI)- You can construct only 500 sqft. home i.e., a 1 BHK or 1 BHK with a kids’ room.
    Plot B (1.0 FSI)- You can construct 1000 sqft. home i.e., a 2 BHK or even a 3 BHK.
    This means that in the case of Plot A, although the plot may come at a cheaper rate, you will have very less construction margin and whereas in the case of Plot B, you will be able to construct much more even though the plot rate might be expensive.

  5. Absolute Sale Deed (Final Registry) and Date of Possession: While purchasing plots in Plotting Development projects, one should procure a document in writing as to when the Sale Deed or the Final registry will be done and by which month/year the possession of the project can be obtained. In the case of plotting development projects, Execution of Sale Deed and the Date of Possession may be on different dates.
    With regulations like RERA, it is also important that you enquire about the RERA registration number of the project and also track the project timeline and the project status using the State/UT RERA website. Also, you can look into details of the real estate builders in Indore using the RERA database. In case a project does not have a valid RERA registration number, then it will be wise not to invest in the project straight away.
  6. What is the price of the plot? While purchasing a plot in Plotting Development projects in Indore, apart from the per square feet rate, one needs to ask about the additional maintenance and other charges (generally electricity, common lighting, etc.) which will be added during the purchase of the plot.
  7. What amenities are provided in the project? Generally, to buy a property in the Real Estate market in Indore it is important to enquire about the amenities which will be provided in the project viz.
    • What is the provision for Electricity- Whether MPEB connection will be given?
    • What is the provision for Water- Whether a central water tank will be available and whether water will be supplied from some other source? Also, it is good to ask whether Narmada water will be supplied in the project.
    • What about the access roads inside the project, what is the width of the internal roads? Note: 1 lane as per Indian road is equal to 3.75m/12.3ft. So if the access road is 25 ft wide, it means that it is more or less a double lane, which is sufficient.
    • Boundary walls and Gates in the project: Whether a boundary wall is present across the whole project and where the entry and exit gates are present. Also whether provision for security guards at the entry gates will be done.

If one is successful in keeping in mind all the above points, the (s)he will be successful in securing a great deal that is safe and secure.

Author- Sarbojit Dutta

Civil Constructions, Home Interiors & Renovations!

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