Financial Daily from THE HINDU group of publications
Sunday, Jun 12, 2005
Financial Daily from THE HINDU group of publications Sunday, Jun 12, 2005 |
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Industry & Economy
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Real Estate & Construction Property is an intellectual production D. Murali
Avoid lawsuits beyond all things, advises Jean De La Bruyere, a 17th century French philosopher. He felt that litigation can "pervert your conscience, impair your health, and dissipate your property." One simple way to steer clear of unnecessary courtroom battles is to pay attention to paperwork. For help, here is C.H. Gopinatha Rao's new book titled, Model Formats of Deeds & Agreements in Real Estate Transactions and Building Construction. The introduction speaks of tricky situations. For example, what does one do when the original title deed is lost? The seller must inform the prospective buyer, advises Rao. The buyer may then advertise the loss in a newspaper and state that anybody in custody of the title can return it; also, that if anybody has a claim in the specified property he/she has to intimate the advertiser within a month of the advertisement. "If nobody responds then the sale can be proceeded with," opines the author, letting you heave a sigh of relief that there are solutions for such thorny issues. Let's say you've bought the property and plan to raze down the old structure before raising yours. Assuming you have permission from local authorities get into an agreement for demolition. The format suggested by the author begins with this clause: "Only the portion of the superstructure excluding the compound wall of the building is meant for the purpose of demolition and materials recoverable from the building such as wood, pipelines, plumbing, sanitary fittings, electrical wiring including switchboards will belong to the contractor." However, the contractor is explicitly instructed not to disturb the sewerage/ drainage line below ground level; he is also not allowed to upset the electrical main-board with the EB connections. About lifts, the book informs that it is not mandatory to provide elevators for buildings with ground plus three floors or up to a height of 15 metres. However, it is a useful facility, argues Rao, especially because the cost is only about 1.5 to 2 per cent of the total cost of the property. An oft-ignored point is insurance. The agreement format for construction on turnkey basis, as suggested in the book, includes a clause specifying that the contractor must insure against all loss, damages, theft, pilferage, fire or any natural calamities. The policy has to be in the joint names of the owner and the contractor, in that order, and the minimum amount of third party insurance for any one accident may also be specified. "Often advertisements are released associating reputed architects with the projects. However, the architect may no longer be in the picture after the sale of the proposed property, and the execution proceeds at the convenience of the promoter without any involvement of the architect," cautions the author about a common racket. Therefore, verify with the architect and consider including him as a party along with the promoter. Don't forget that "property is an intellectual production," as Ralph Waldo Emerson said. "The game requires coolness, right reasoning, promptness, and patience in the players," he'd add, quite aptly for the big-ticket transactions that property matters usually are. The book can help reduce hassles in your real estate deals.
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