Real Estate 1O1 > Under Construction Flats: Your Gateway to a Brand New Home

Under Construction Flats: Your Gateway to a Brand New Home

The only thing we think about under construction flats is whether the extra cost we will be paying for a newly built ready-to-move-in flat will be worth it or not. It will have a fresh fragrance of the paint and airtight fitting of the modular pieces, and the inflation won’t factor in either. Well, this is just one of the many dimensions you need to open your senses for. I am here to help you with the five senses, but make sure you open your sixth sense as well. Pro Tip: visit our flats to have it done, or mail us at

Advantages of Buying Under Construction Flats

  1. Cost Advantage: Under-construction flats are typically priced lower than their ready-to-move-in counterparts. The difference can range from 10% to 30%, making them a fantastic option for budget-conscious buyers or first-time homeowners.
  2. Potential for Appreciation: As construction progresses, the value of your flat increases. So, by the time you move in, your investment has grown! This makes under-construction properties a smart financial decision, especially for those with a long-term perspective.
  3. Customization Options: Some developers might allow customization options during the initial stages of construction. This could be anything from choosing between modular kitchen layouts to selecting preferred flooring options. Having a say in shaping your future home adds a personal touch!
  4. Modern Amenities Galore: Developers are constantly innovating, and under-construction projects are often at the forefront. Expect the latest amenities like rooftop gardens, swimming pools, or even co-working spaces – features you might not find in older, ready-to-move-in buildings. The flats now offer the latest amenities – from smart home features to eco-friendly initiatives.
  5. Flexible Payment Plans: Developers often offer attractive payment plans for under-construction properties. These plans are spread out over the construction period, easing the financial burden compared to the hefty down payment required for ready-to-move-in flats.
  6. Brand New Bliss: Move into a completely untouched space. No wear and tear, no inherited repairs – just the joy of a fresh start in a spanking new apartment. Plus, with modern construction, you’re likely to benefit from energy-efficient features and the latest building codes.
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Financial Benefits of Purchasing Under Construction Properties

  1. Lower Maintenance Costs: Since everything is brand new, you can expect a significant reduction in maintenance costs for the initial years of owning your flat.
  2. Lower Initial Investment: The staggered payment plans offered by developers significantly reduce the initial financial strain compared to a ready-to-move-in property that requires a hefty down payment.
  3. Developer Reputation: Choosing a reputable developer with a proven track record of completing projects on time is crucial. Look for developers with a history of high-quality construction and a transparent approach to communication. I mean look nowhere, but us. Meanwhile, call us on 08047109111.
  4. Construction Timeline: Be clear about the expected completion date and understand the potential for delays. Delays can disrupt your moving plans and cause inconvenience. Factor in a buffer period when making your plans and ensure the developer has a clear penalty clause in case of unforeseen delays.
  5. Tax Benefits: It can be done on the interest paid during the construction period.
  6. Legal Agreements: Ensure all agreements with the developer are clear, concise, and legally sound. Have a lawyer review any contracts before signing. 

Demystifying RERA: Guide to Safeguarding Your Dream Apartment

Real Estate (Regulation and Development) Act, steps in as your superhero. Enacted in 2016, RERA brings much-needed transparency and accountability to the real estate sector, particularly for under-construction properties. 

Imagine buying a car with a blurry picture and a vague promise of delivery. Sounds absurd, right? Well, that’s how under-construction property purchases often felt before RERA. Now, developers are mandated to register their projects with the RERA authority, making crucial information like project plans, approvals, and carpet areas publicly available. This empowers you to make informed decisions based on facts, not fancy brochures.

RERA Guidelines for Under-Construction Flats

Register their projects with the RERA authority. Disclose all project details like carpet area, amenities, and completion timelines. Follow a standardized format for agreements. Deposit 70% of the collected funds from buyers into a separate escrow account, ensuring timely project completion.

  1. Booking Amount: You can pay a maximum of 10% of the property value as a booking amount. This secures your interest in a particular flat before the formal agreement is signed.
  2. Agreement and Initial Payment: Once you’re happy with the terms and conditions, a sale agreement is signed. You can then pay a further sum, but this cannot exceed 10% of the total cost. This effectively caps the initial payout at 20%.
  3. Milestone-Based Payments: The remaining 70% of the cost is paid in installments linked to specific construction stages. For instance, 15% might be due upon completion of the plinth level, followed by installments as each floor is constructed.
  4. Safety Net – Separate Account: To further ensure financial security, RERA mandates that 70% of the funds collected from buyers must be deposited in a separate escrow account. This money can only be withdrawn by the developer to cover project expenses, and only after achieving pre-defined milestones.
  5. Delay Dilemma? Not Anymore: Facing delays in project completion? RERA lays down a mechanism for compensation from the developer for such delays.
  6. Dispute Resolution Made Easy: Disagreements with the developer? RERA establishes a fast-track dispute resolution mechanism, saving you the hassle of lengthy court battles.

Payment Schedule for Under-Construction Properties According to RERA

RERA also dictates the payment schedule for under-construction properties. Typically, it’s linked to construction milestones. For example, a certain percentage might be due upon foundation completion, another during the framing stage, and so on. This ensures that the developer utilizes the funds for the project’s progress.

The Real Estate Regulatory Act (RERA) mandates a stage-wise payment schedule for under-construction properties, bringing transparency and safeguarding buyer interests. Here’s a breakdown of the typical payment structure:

Initial Payment is the booking amount, which is typically around 10% of property value & paid to reserve the unit. 10% paid upon commencement of construction activities; and 15% after completion of the plinth level (foundation and basement). This signifies a significant structural milestone. In the Subsequent Stages (Indicative), 2-3% per Floor Completion Payments are progressively released as each floor (or a few floors) is completed. This incentivizes the developer and assures the buyer of construction progress. 5% on Completion of Finishing Work to be paid. This covers stages like plastering, plumbing, and painting, signifying nearing completion. The remaining 5% is paid upon handover of the property and receipt of the occupancy certificate, as Final Payment.

The specific payment plan can vary depending on the developer’s agreement. However, RERA ensures these plans are clearly defined and linked to construction milestones. Buyers are protected as they only pay as the project progresses, reducing financial risks. Developers receive funds to manage construction without relying on upfront payments from buyers. Home loan disbursements from banks are also often linked to construction milestones, ensuring the buyer’s funds are used for the project’s development.

Factors to Consider When Investing in Under-Construction Flats

If you’re planning a home loan, ensure the project is approved by banks and financial institutions. This provides an extra layer of security and eases the financial burden. Carefully evaluate the payment plan proposed by the developer. Can you manage the installments comfortably? Are there hidden costs or penalties associated with delayed payments? While you might envision living happily ever after in your new flat, consider potential future scenarios and plan an exit strategy. Will the flat be easy to rent out if you need to move? Is the location desirable for resale? Schedule regular visits to the construction site. This allows you to monitor progress and identify any potential issues early on.


What are the risks associated with under-construction flats?

There’s a possibility of project delays, and in rare cases, project abandonment.

Can I pay a higher booking amount than 10%?

No, RERA restricts the booking amount to a maximum of 10% of the property value.

What happens if the developer delays the project?

RERA mandates compensation from the developer for delays in project completion. The specific terms are outlined in the RERA Act and may vary by state.

Can I withdraw from the agreement after signing?

Yes, but there might be penalties involved as outlined in the sale agreement.

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