Published By The Daily Star on September 02, 2014 (Link Above)

This week Your Advocate is Barrister Omar Khan Joy, Advocate, Supreme Court of Bangladesh. He is the head of the chambers of a renowned law firm, namely, ‘Legal Counsel’, which has expertise mainly in commercial law, corporate law, family law, employment and labor law, land law, banking law, constitutional law, criminal law, IPR and in conducting litigations before courts of different hierarchies.

I am willing to purchase an apartment in a costly area in Dhaka city. However, from my friends and families I have heard about lots of problems that they have faced with the developers. This is very common in our country.  Before I can invest my very hard earned money for buying an apartment what papers and documents shall I check and what shall I do to avoid any future problem. I would really appreciate your valued advice.

Thank you very much for your query and it is good to know that you are following the ‘your advocate’ column. It is unfortunate that many buyers have been experiencing difficulties with their developer companies while buying apartments. I would like to highlight some important points which every buyer shall ensure before entering into any purchase agreement with the developer, which may substantially reduce the possibility of future disputes.

As we know in the ordinary course of business the developer initially gives an allotment of the apartment to the purchaser through an allotment letter upon receiving booking money. Thereafter, the developer enters into an agreement with the purchaser whereby the purchaser undertakes to make further payment as per payment schedule of the said agreement. Once the payment is done and the flat is handed over the flat is registered in the name of the purchaser.

Before entering into such agreement or even before paying any money, you must check the reputation of the Developer. You shall visit some other projects completed by that Developer. After checking the background and reputation of the Developer you need to check the title of the land where you are intended to purchase the flat. It is very important to inquire about the chain of ownership of the land and other papers and documents, i.e. the title deed of the landowner, Bia Deeds, all Khatians, Mutation etc. and to investigate whether any case or dispute is pending with regard to the property.

It is also very important to check the approval/plan of RAJUK to construct building thereon. You have to also check the Deed of Agreement executed between the landowners and the Developers and the Irrevocable General Power of Attorney executed in favour of the Developers by the landowners. It may be wise to see the REHAB membership certification of the developer as well. You need these documents to get checked by a lawyer to ensure that all the terms and conditions are in order and would not construe against the interest of the Developer.

If all the documents are found in order then you can proceed to pay booking money and execute the agreement with the Developer. In this situation to avoid any future complexity, we suggest you to carefully read the agreement line by line to see that the terms are reasonable and acceptable to you. In most of the cases, the developers prepare very sketchy or one-sided agreement. Amongst other clauses, particular attention shall be given to the followings:

i)        Verify the spot in order to ascertain peaceful physical possession of the Developer.

ii)    Fix the full and final price. See the parking cost, utility cost, registration cost and other cost so that you know what you have to pay from beginning to end. Carefully read the price enhancement clause, if any.

iii)    Incorporate very clear clause regarding handing over date and date of registration.

iv)    Insert the specification of all products/fixtures to be supplied by the Developers for your flat and common fixtures etc. If there is any alteration keep the provision of adjustment.

v)    Check the compensation clause in case of delay in handing over.

vi)    Get the Money Receipt with requisite revenue stamp against every payment.

vii)    You need to check whether there is any cancellation Clause and if so whether it was solely designed to protect only Developer’s interest. In many cases   the developers are suddenly cancelling the allotment for the simplest failure of the purchaser. Also check the refund clause in case of lawful cancellation.

viii)    You need to check whether there is any clause affecting any changed scenario.

ix)    See the warranty or maintenance term after handing over.

x)    Try not to violate any clause of the agreement and adhere to the payment schedule.

xi)    All major communications shall be made in writing and the same shall be received by the developer.

In short, you need to ensure the Deed of Agreement or any other relevant documents are executed by the Developer in favour of the flat-purchaser protecting the flat-purchaser’s right, title and interest over the flat. I hope if you follow the above, you can significantly reduce the possibility of future dispute and problems; and if you face problem a well articulated agreement will guide you through.