Community housing has just started in Nepal. There are over a dozen developers in Kathmandu alone, offering apartments and bungalows ready for settlement. As of now, there are probably more sceptics than enthusiasts regarding community living.
One can hear widespread misconceptions and scepticism towards such housing projects.
It is probably for the first time that in urban Nepal, working class people in their 30s and 40s can fulfil their dream of living in a community with world-class civic amenities and modern facilities. Most residents in a housing colony are professionals, who may be working in multinationals, corporate sector or INGOs and business people who want to live in exclusive communities with better facilities or they could even be retired people seeking a place to live with peace.
However, buying an apartment or a house in a colony can often be more tricky and risky than buying a plot of land and constructing your own house. Though most housing projects market their products as dream offers, the reality could be far from that. Most of our builders have none or very limited prior experience of developing and managing community housing. Government regulations and monitoring are weak and so it may not help you while selecting and buying a house. Some housing projects may have come up without any intention of long-term business, but only to reap the quick benefit from the boom in the property market. Chances are high that if one is not careful, he or she could easily be a victim of unscrupulous builders and property dealers, thus ruining the earning of a lifetime.
What things should we take into consideration while buying a community house? Here are a few suggestions for a prospective house owner, based on the first hand experience of the scribe himself.
1. Do your own survey. Explore your options. Visit as many housing colonies as possible before deciding on one. Do not get carried away by media advertisement and word of mouth. Many people buy house based on the recommendation of a particular friend about the location or design. What works for your friend may not work for you. Consider aspects such as distance between your work and house, availability of children’s school, availability of public transport etc. You can always take the second opinion from friends and family members, but the ultimate decision has to be yours.
2. Estimate your requirement carefully. Are you looking for a flat or an independent house? How big a space are you looking for? How many rooms do you require? What minimum facilities do you expect? Normally in community housing, one does not have the flexibility of creating more space at his will by raising stories or expanding space.
3. Work out on your budget carefully. How much money can you invest from your own sources? How much do you need to borrow? Now a days, many banks offer house loans with attractive interest rates. But it is usually more difficult to obtain loans from banks than one may anticipate. Banks may ask for all sorts of documents, which may be difficult to produce. They may have other issues such as transfer of ownership, income adequacy, collateral and credit terms, which may make it difficult to obtain a loan. Consult your bank, even before you decide to buy the house, whether you can secure loan for the purpose.
4. Ask whether, the builder has had the site design approved by the Town Development Authority and other concerned regulatory bodies. Ensure that the legal parameters such as open spaces, road width, floor area ratio etc. have been followed. For e.g. in some inner parts of Kathmandu, it is illegal to dig deep tube wells, which may result into water supply problem later.
5. As there is no effective third party mechanism to monitor the quality of the construction, it is recommended that you book the house before the construction begins. Ask for a schedule of major works such as the laying of the foundation, concreting etc. Monitor directly or appoint an engineer to supervise the construction. If you want to customise the design, communicate with the builder right in the beginning.
6. Work out the contract in detail with the builder. Do not forget to include terms such as payment schedule, completion of work etc. It is typical of Nepali builders to delay the handover of the property. Put in clear penalty clauses in case of late delivery.
7. There is a widespread practice of offering discounts while buying a house. Such a discount depends on the capacity to bargain by the specific customer. Thus use your network extensively to influence the builder for discounts.
8. Consider the return on investment (ROI) angle while selecting a property. One of the most important aspects to consider while buying a new house is whether there is going to be any value appreciation of the property. You can also have an option of selling back the property to the builder, in case you decide to withdraw your booking at a later stage. Specify this clause in your contract.
9. The builder should be liable for any defects and repair works on the building for a specified period. Ask what the builder’s policy on this issue is. Mention this in the contract.
10. Work out in advance with your builder, the services such as water supply, electricity, waste disposal, security etc. Who provides such services and manages them? What should be the service rates charged to the customers?
These are only some of the important points. There could be more. The key issue is- the customer has to be aware of the potential problems of buying a colony house or apartment.
We are yet to see big times for community living in Nepal. As the Kathmandu valley’s population continues to grow, we need many more housing projects to cater to the growing demand for houses.
Buying a house is a lifetime investment. Let us not make the mistake of choosing a wrong product in haste and regret it later. We do not have to go through the pain of constructing our own dream house any more as we can buy it from a builder. But that is true only when we have carefully analysed and made the right decision while buying such a property.
(Banjara is working in an INGO and is an expert in Management)
source:Banjara,G.B. (2010),"Points to Ponder While Buying a Community House", NepalNews
excellent post by banjara sir
Very helpful tips... hope u will cover few projects and can specify accordingly.