An under-construction property is one where building construction is ongoing and the project has not yet been completed or received its Occupancy Certificate (OC). Buying under-construction is common in India, often offering lower prices than ready-to-move properties.
Advantages of buying under-construction: - Lower prices: 10-20% cheaper than ready properties - Payment flexibility: Construction-linked payment plans spread the cost - Capital appreciation: Property value may increase by completion - Customization: Some developers allow minor layout/finish customizations - Latest designs: Modern floor plans, amenities, and technology
Risks and considerations: - Delays: Project completion may be delayed (RERA provides protection) - Quality uncertainty: Final product may differ from model/brochure - Pre-EMI burden: Interest payments during construction without occupation - Market risk: Property prices may not appreciate as expected - Developer risk: Financial health of the developer matters
Payment plans for under-construction: 1. Construction-Linked Plan (CLP): Pay in stages as construction progresses (most common) 2. Down Payment Plan: Pay 80-90% upfront for a discount 3. Time-Linked Plan: Payments at fixed intervals regardless of construction stage 4. Possession-Linked Plan: Pay bulk at possession (premium pricing)
RERA protection for under-construction buyers: - Developers must register the project before selling - Committed completion date is legally binding - 70% of buyer money must be in escrow account - Buyers can claim compensation for delays - Project cannot be altered without buyer consent