Are ready-to-move-in homes the answer to your homebuying woes?

 Are ready-to-move-in homes the answer to your homebuying woes?

Ready-to-move-in (RTMI) homes are becoming increasingly popular due to their convenience.  But what are the other benefits of choosing such a property, and is it the right option for you?  Let’s find out

The popularity of RTMI homes has increased, with many buyers drawn to the immediate possession’ aspect.  “An RTMI home is one that a buyer can move into immediately after purchasing it because it has already received an occupancy certificate  (OC) from the relevant municipal authority.  Once the property is found to have complied with approved plans and an OC is received, it becomes ready to move in and can be handed over to customers as is, “ explains Ram Raheja, managing director of a Mumbai-based real estate developer.

The trend of RTMI homes started before the implementation of RERA (Real Estate Regulatory Authority), where many developers, particularly in the Delhi-NCR region, did not complete their projects as promised.  “This led to numerous buyers suffering significant losses as they had to pay their EMI (Equated Monthly Instalments) without receiving possession of their homes.  Such instances occurred mostly in speculative markets where developers sold homes in projects with little or no actual construction taking place,” reveals Akash Pharande, managing director of a Pune-based real estate developer.

Why do buyers prefer RTMI homes?

A common issue with under-construction projects is delayed possession or unfinished projects.  “This often leads to homebuyers losing their hard-earned money, which they have invested in the project.  As a result, they are left without a home and are forced to pay hefty sums to stay in a rented apartment,”  notes Himanshu Jain, VP - sales, marketing and CRM of a construction company in Mumbai.

The benefits

Buyers can take advantage of the ‘immediate possession’ aspect, and they can be confident that they are getting precisely what they paid for.  According to Pharande, “They can also save on rental expenses that they would otherwise incur if the property was still under construction.  Developers also benefit from faster sales of RTMI units, which helps them maintain their cash flow.”

Another advantage is that the buyer can inspect the finished apartment for quality of construction and amenities.  “Furthermore, there are reduced chances of any legal disputes as all documents are in order,” adds Jain.

Moreover, RTMI homes are easier to finance, “Banks tend to approve loans more quickly for projects that have received an OC because the home is a collateral.  Such homes cut down on GST expenses, requiring the buyer to pay for stamp duty and registration charges only.  Buyers can immediately claim yearly income tax deductions on the repayment of the principal component of EMI, resulting in savings,” informs Raheja.

Consider the pros and cons

The cost of RTMI homes is higher due to the convenience factor.  “However buyers of such homes are generally not allowed to make any changes to the structure or layout.  Furthermore, some older projects completed before implementing the Real Estate (Regulation and Development) Act (RERA) in 2016 may not be covered by its regulations.  As a result, the promoter may not be liable to provide information on a public platform, which raises concerns regarding grievance redressal and accountability of the seller in case of any discrepancies,” informs Jain.

As such, it is crucial to research an RTMI property before investing in it.  “This includes conducting background checks on the builder, assessing the quality of construction, verifying legal formalities, and obtaining possession details.  The buyer should also ensure that the property is sold based on carpet or built-up area, as it directly affects the maintenance and purchase price,” concludes Jain.