The Under-Construction Trade-Off
Under-construction property in Pune offers a genuine price advantage — typically 10–15% below ready-to-move pricing — and the potential for capital appreciation between booking and possession. But it comes with risks that ready-to-move buyers never face.
This guide names those risks clearly and shows you how to reduce each one through due diligence.
Risk 1: Builder Delay (The Most Common Problem)
In Maharashtra, approximately 35–40% of under-construction projects are delayed beyond their RERA-registered completion date. Delays range from 3 months to 5+ years. The cost of a 2-year delay:
- Pre-EMI payments on the disbursed amount for an extra 2 years (on ₹50L disbursed, ~₹3.5L interest)
- Continued rent payment if you haven’t moved in (say ₹20,000/month × 24 = ₹4.8L)
- Inflation-adjusted interior work costs rise during the delay
- Opportunity cost of capital deployed
How to assess delay risk:
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RERA completion date: Check mahareranew.mahaonline.gov.in for the registered completion date. If it’s already been extended once, treat as a high-delay-risk project.
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Builder’s track record: On the same RERA portal, search the builder name and find all their registered projects. Check if those projects delivered on time. A builder who delivered 3 out of 5 previous projects late is likely to delay again.
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Construction progress vs timeline: Visit the site. Is the construction stage consistent with what it should be, given how long ago the project launched? A project launched 18 months ago should have at least the lower floors cast — if the site is still at plinth level, the timeline is already compromised.
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Banker’s assessment: Apply for a home loan before booking. The bank’s technical team will assess construction progress and often flags projects where progress is behind schedule.
RERA delay compensation: Under RERA, if a builder delays beyond the registered completion date, buyers are entitled to interest at the SBI MCLR + 2% on the amount paid — running from the agreed possession date until actual possession. Many buyers don’t claim this. It’s your right.
Risk 2: Quality Variation from Brochure to Reality
The glossy brochure shows marble flooring, branded fixtures, and beautifully proportioned rooms. The actual flat may have vitrified tiles instead of marble, a different bathroom brand, and walls 6 inches thinner than the visualisation implied.
How to protect yourself:
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Read the specifications sheet in the sale agreement — not the brochure. The legally binding specification is in the agreement. Brochures are marketing, not contracts.
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Ask specifically: Tile brand and grade, bathroom fitting brand (Jaquar/Kohler vs unknown), kitchen fitting grade, electrical wiring (ISI-marked copper wire? specify gauge), door frame material (solid wood vs hollow-core).
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Model flat caution: Model flats often have better-quality finishes than what’s included in the standard package. Confirm in writing which finishes are standard and which are upgrades.
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Compare to a delivered project: If the same builder has a completed project in Pune, visit it. Talk to residents about quality. This is the most reliable indicator.
Risk 3: RERA Non-Compliance and Project Stalling
The nightmare scenario: builder stalls construction, defaults on bank loans, RERA registration lapses, and buyers are left with a half-constructed building and no clear path to possession.
How common is this in Pune? It happens — primarily with smaller, overleveraged builders who took on too many projects simultaneously. Large listed builders (Kolte-Patil, VTP, Paranjape, Godrej Properties, Mahindra Lifespace) carry significantly lower stalling risk.
Pre-booking checks:
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Builder financial health: Public listed builders have audited accounts. Check their debt levels and cash flow. Private builders are less transparent — rely on their track record.
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Escrow account: RERA requires 70% of buyer funds to go into a project-specific escrow account usable only for that project’s construction. Ask the builder: “Which bank holds the project escrow account?” If they can’t answer clearly, it’s a red flag.
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Construction finance: Is the project funded by a reputable bank (SBI, HDFC, Kotak)? Bank construction finance means the lender is monitoring progress — reducing stalling risk. Ask the builder who their construction finance partner is.
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Avoid inventory rush: Builders offering extreme discounts to close bookings quickly may be desperate for cash. Normal discounts for early booking are 3–7%. More than that warrants scrutiny.
Risk 4: Title Issues Discovered After Booking
Under-construction properties can have title problems that emerge during the bank’s legal appraisal — disputed land, agricultural conversion orders not properly obtained, layout approval issues.
Avoid this by:
- Get the bank’s home loan sanction letter before paying any significant amount. The bank’s legal team will flag title issues.
- Engage your own property lawyer to check the development agreement, land title, and layout approval — not just the RERA registration.
- Verify the builder’s ownership of the land (or their development agreement with the landowner) through the Sub-Registrar records.
Risk 5: GST and Hidden Costs
For under-construction property, GST of 5% (1% for affordable housing under ₹45L) applies. This is in addition to the stated price. Some builders quote “base price” excluding GST, floor rise charges, parking, and preferential location charges (PLC) — all of which add 8–15% to the base price.
Get the all-in cost in writing:
- Base price per sqft
- Floor rise charge (₹50–200/sqft per floor above ground in some projects)
- PLC (corner flat, pool-facing, road-facing: ₹100–500/sqft extra)
- Parking (₹3–8L extra)
- Stamp duty and registration (6%)
- GST (5%)
- Maintenance corpus (₹25,000–1L)
A builder quoting ₹9,500/sqft base price may deliver an all-in cost of ₹12,000–13,000/sqft after all charges. This is legal but often not communicated clearly.
Risk 6: Change of Specifications After Booking
Builders sometimes change approved plans after bookings — adding more units on a floor, changing the layout, reducing common areas. Under RERA, buyers have the right to cancel and get a refund if material changes are made to the approved plan without buyer consent.
How to track: Keep a copy of the approved RERA-registered plan. Compare it to the RERA portal periodically. Any approved plan change will show on the portal. If you notice a material change, consult your lawyer immediately.
The Due Diligence Checklist: Pre-Launch/Under-Construction
Before Paying Anything
- Verify RERA registration number at maharera.mahaonline.gov.in
- Check RERA completion date and compare to builder’s promised date
- Search builder name on RERA portal — check all previous projects’ completion record
- Verify land title is clear (development agreement or sale deed in builder’s name)
- Confirm layout approval from PMC/PCMC/PMRDA
- Ask for the name of the construction finance bank
- Visit an existing completed project of the same builder
Before Signing the Sale Agreement
- Read the specifications sheet (not just brochure)
- Get all-in cost in writing (base + PLC + floor rise + parking + GST)
- Verify possession date and penalty clause for delay
- Confirm which amenities are included in which phase
- Check what constitutes “force majeure” (some clauses are unreasonably broad)
- Engage your property lawyer to review the agreement (₹10,000–15,000 fee)
After Booking
- Get home loan sanction (bank’s legal appraisal adds second layer of title verification)
- Save RERA certificate, sale agreement, payment receipts in cloud storage
- Monitor RERA portal every 6 months for any plan change filings
- Document each payment with the builder’s acknowledgement
- Visit site every 3–4 months to verify construction progress
The Bottom Line
Under-construction property in Pune is not inherently risky — but it requires active due diligence that ready-to-move buyers can skip. The 10–15% price discount is real, but so is the delay risk. Stick to RERA-registered projects from builders with proven on-time delivery records (check publicly on the RERA portal). Get the bank’s sanction before committing significant funds. Read the sale agreement — every clause. Done correctly, an under-construction purchase from a reputable builder captures both the price advantage and the appreciation between booking and possession.
