Buying under-construction property can be serious trouble

Mumbai : Onus of paying the home loan is on the buyer.Two recent court verdicts on land acquisition should ring as warning bells for buyers of under-construction property. A fortnight before, the Supreme Court (SC) quashed the acquisition of 156 hectares in Noida Extension. Yesterday, the Allahabad High Court cancelled the acquisition of 589.13 hectares in Greater Noida.

Property buyers would find themselves in deep trouble because of these two judgments. Many would have taken loans from banks to fund their houses and paid the builders — most likely, only the first instalment.

Loans for under-construction properties are disbursed in three to four tranches. That implies, with a loan-to-value ratio of 80:20, the buyer would have paid his part of the money completely.