Buying a home is one of the biggest decisions you’ll make in your life.
But how do you know the builder you’re dealing with is legally sound, financially stable, and ethically transparent?
Verifying a developer’s credibility isn’t just about checking brochures or fancy websites — it’s about real due diligence backed by legal checks, regulatory records, and government databases.
In this guide, we walk you through 15 critical steps that every buyer — whether a first-timer, investor, or NRI — must take to avoid legal risks and financial traps.
✅ 1. Check the Builder’s RERA Registration and Compliance
Start with the basics.
Every real estate project that falls under the RERA Act must be registered with the State RERA Authority.
To verify:
- Visit your state’s RERA website
- Search by builder name or project name
- Confirm registration number, promoter details, and start/end dates
- Check for past complaints, penalties, or project delays
Avoid any project that is not RERA-registered. It is illegal to market or sell such projects.
📄 2. Ask for Key Legal Documents from the Builder
A credible builder should readily provide you with the following:
- Land Title Documents and Encumbrance Certificate
- Approved Building Plan and Layout
- Intimation of Disapproval (IOD) and Commencement Certificate (CC)
- Environmental Clearances (if applicable)
- RERA Certificate
- Ownership/Development Rights Documents (JDA/POA, if any)
- Occupancy Certificate (for ready-to-move properties)
Have these documents reviewed by a property lawyer before signing anything.
⚖️ 3. Search for Pending Court Cases and Regulatory Proceedings
Uncover any ongoing litigation involving the builder by checking:
- e-Courts portal for civil/criminal cases
- NCLT database for insolvency proceedings
- Consumer Court (NCDRC/State Commissions) complaints
- RERA tribunal disputes or penalties
If the builder is involved in multiple unresolved cases, it’s a red flag.
🧾 4. Review the Builder’s ROC Records with the Ministry of Corporate Affairs (MCA)
You can check the builder’s company profile on the MCA portal (www.mca.gov.in) using their CIN.
Look for:
- Company status (Active/Struck Off)
- Financial filings and paid-up capital
- Auditor qualifications
- Past directorships or company name changes
- Strike-off notices or non-compliance
This gives insight into the corporate integrity and financial health of the builder.
🏗️ 5. Confirm That the Builder Has Legal Title or Authorization to Sell
Often, builders sell units on land they don’t own directly.
Verify:
- Whether the builder owns the land
- If it’s a Joint Development, check the registered JDA/POA
- Confirm land ownership via RTC/Pahani/7/12 records (state-specific)
- Make sure there’s no encumbrance or mortgage that affects your rights
Buying from a developer without proper title can result in decades-long litigation.
🚩 6. Identify Red Flags That Indicate Potential Builder Fraud
Watch for these signs:
- Builder has no RERA registration
- No clear project start/end timelines
- Overly attractive prices or unrealistic offers
- Discrepancy in names of landowner and builder
- High number of pending consumer complaints
- No physical site office or staff
When in doubt — don’t invest.
🕵️ 7. Understand How to Read a Builder’s RERA Profile
On the RERA website, a builder’s public profile may show:
- List of registered projects
- Status (On Time, Delayed, Lapsed)
- Number of complaints received
- Penalties imposed
- Completion percentages
If multiple projects are delayed, or if projects were withdrawn mid-way, investigate further.
👨⚖️ 8. Consult a Real Estate Lawyer for Independent Verification
A legal professional can:
- Conduct title due diligence
- Review all approvals and agreements
- Vet the builder-buyer agreement
- Compare clauses with RERA compliance
- Issue a legal opinion before you proceed
Never skip this step, especially if the project value is high.
📊 9. Compare Multiple Builders Legally Before Choosing One
Set up a matrix and compare:
- Number of delayed projects
- Type and number of court cases
- Clarity in agreements
- Financial transparency
- Delivery record of previous projects
- Litigation history or settlement frequency
Choose a developer who’s not just famous — but legally dependable.
🧠 10. Look Beyond Marketing: Verify Builder Reputation from Trusted Sources
Don’t rely only on flashy ads or brochures.
Research:
- Real estate buyer forums like IndiaPropertyForum or Quora
- Reviews on Google Business and Trustpilot
- Barred/banned builder lists from RERA or Urban Development authorities
- Word of mouth from previous buyers
- Site visits and contractor interactions
Trust, but verify.
🚫 11. Check for Official Blacklisting or Project Cancellations
Visit:
- State RERA websites – they often publish penalty orders
- Urban Local Body websites (BBMP, BDA, HMDA, MCGM etc.)
- District collectorate or revenue department portals
If a project has been cancelled or blacklisted, you may lose your investment.
📃 12. Scrutinize the Builder-Buyer Agreement Before Signing
Key clauses to review:
- Possession date and grace period
- Cancellation policy
- Refund timelines
- Delay compensation clause
- Arbitration/jurisdiction clause
- Escalation in super-built-up area or charges
Have your lawyer draft or revise clauses to make them buyer-friendly.
🏦 13. Check for Bank Loan Approvals and Mortgage on the Property
If a project is pre-approved by banks, that’s good — but you must still check:
- Whether the land/project is mortgaged to any lender
- Details of the mortgage (registered with CERSAI)
- If builder has defaulted on loans or is under SARFAESI proceedings
A mortgage doesn’t stop you from buying — but it changes the legal process.
🧮 14. Evaluate the Builder’s Financial Strength and Solvency
Find out:
- Has the builder completed other projects with similar scale?
- Is he diverting funds to multiple unrelated projects?
- Is there a visible slowdown in site activity?
- Are employee/vendor payments delayed?
Cross-check with NCLT, ROC, and media coverage.
A financially unstable builder is always a legal risk.
🧾 15. Know the Legal Remedies if the Builder Is Non-Compliant
You can take action through:
- State RERA Tribunal (for registered projects)
- Consumer Court under the Consumer Protection Act, 2019
- NCLT (if builder is insolvent)
- Civil suit in case of fraud, misrepresentation, or breach of contract
Always preserve:
- Receipts
- Agreements
- RERA registration details
- Communication history
📩 Call to Action
Before you invest your hard-earned money, let a legal professional guide you through the process.
At RJ Property Law, we specialize in:
- ✅ Builder and Project Verification
- ✅ RERA Compliance and Background Checks
- ✅ Legal Due Diligence and Opinion Letters
- ✅ Title Report and Property Document Review
Email us at: ranjinijayaram@rjpropertylaw.com
Call us on: +91 80884 17193
Visit: www.rjpropertylaw.com