Builder red flags — and the question to ask for each
These are general market patterns that buyers across India report. They are not claims about any particular developer. Spot the move early, ask the right question, and keep your leverage.
1. The “assured return” pitch
A fixed monthly return is offered to make you commit quickly — and may stop later.
Ask: “Show me the return clause in the registered agreement, how it is paid, the TDS, and the lease behind it.”2. Super-area loading
The price is quoted on a large super area; the usable carpet area can be much smaller.
Ask: “What is the carpet area, the super area and the loading percentage — in writing?”3. A partial OC shown as full
A certificate that covers some towers or floors is presented as if it covers yours.
Ask: “Give me the OC letter number and the towers it covers.” Then check with the authority.4. The unit you can’t lock
Space sold without clear boundaries or a lock-and-key unit — common in malls and food courts.
Ask: “Where is my demarcated unit on the plan, and can it be registered?”5. Paying a broker’s account
Pressure to send money to a third party or “channel partner”; receipts later disputed.
Rule: pay only the builder’s official account and take a receipt for every rupee.6. Big payments, no agreement
Large sums collected before an agreement for sale is signed and registered.
Rule: RERA s.13 caps the advance at 10% until a registered agreement exists.7. Paid in full, no registry
Full payment made, but no conveyance deed or title transfer follows.
Ask: “What is holding up registry — OC, authority dues, or something else? Put it in writing.”8. The cash component
Part-payment in cash, sometimes for a “discount” — impossible to prove later, and a tax risk for you.
Rule: banking channels only; keep every statement and receipt.9. The remote NRI purchase
Video calls, decks and WhatsApp promises take the place of documents and site visits.
Fix: independent local verification before you remit. See the NRI checklist.10. Silence after the sale
Responsive before payment; slow or silent after it — then fresh demands appear.
Fix: put every request in writing by email and keep proof of delivery.How an assured-return offer can mislead
The headline number assumes everything goes to plan. Here is what happens to the return when it doesn’t.
| Scenario (₹50 lakh invested, held 10 years, sold at cost) | What is paid | Annual return (IRR) |
|---|---|---|
| As pitched | 12% a year for 3 years, then lease rent of 6% a year from year 4 | about 8.3% |
| If the return stops early | 12% for 1 year only, nothing in years 2–4, then rent of 4% a year from year 5 | about 3.6% |
Swipe the table sideways to see every column.
Before you sign
- Is the return in the registered agreement, or only in a side letter or brochure?
- Who pays it, from which account, and is TDS deducted?
- Is there a registered lease with a named tenant behind it, or only a letter of intent?
- What happens to the return if possession is delayed?
If it has already stopped
- Write to the builder by email asking why, and keep proof.
- Collect the clause, bank credits and TDS certificates.
- Read how the BUDS Act may or may not apply.
- Take advice before accepting any revised “settlement”.
Super area vs carpet area: a worked example
Hypothetical shop priced on super area
IllustrationA shop is sold at ₹10,000 per sq ft on a super area of 500 sq ft — ₹50 lakh. Its carpet area is 250 sq ft. The loading is 100%, so the real price is ₹20,000 per sq ft of usable space — double the headline rate.
TipAlways compare prices per sq ft of carpet area. RERA defines carpet area in section 2(k).
Spotted one of these in your deal?
Stop and verify before the next payment. We can point you to the right record.