Things to check before signing a preconstruction agreement

This is one of the most important one for investors, the assignment clause allows you to sell your property before it’s even constructed. Before signing an agreement, double check if there is any cost associated with the use of assignment clause in future.

Capped Development Charges: Development charges are paid to the city by developers and builders further charge it to the buyer and amount is mentioned in builders’ agreement. Before signing, check if development charges are capped or not? Best practice is to have development charges capped so that in any situation you’re covered.

Lease during occupancy: This clause is very important, usually there is several months gap between interim occupancy and final closing. During this period, you’ve to pay monthly fees to the builder and if you do not have this clause then you can not lease the property, which means you’re losing money every month.

Maintenance per sq ft: It is important to check maintenance per sq ft. as it will help you to estimate overhead for your property.

Mortgage Pre-approval: Developer requires this to satisfy its lenders and reduce the risk of default at the time of closing. However, this approval will not have any material impact as it will only be valid for 90 days and you’ll have to seek fresh approval from the bank at the time of final closing.

To know more speak to our expert Vinny Soni @ 647 680 0777

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