Why You Should Never Buy a Flat Under Construction

Risks and Real-Life Examples

Buying a flat or apartment is one of the most significant financial decisions a person can make. For many, purchasing an under-construction property seems like an attractive option—lower prices, flexible payment plans, and the promise of a brand-new home. However, the risks far outweigh the benefits. Delays, fraud, poor construction quality, and even project abandonment are just a few of the nightmares buyers face.

This article explores why you should avoid buying under-construction flats, backed by real-life examples and expert insights.

Endless Delays and Broken Promises

One of the most common issues with under-construction properties is indefinite delays. Builders often cite reasons like funding shortages, legal disputes, labor issues, or government approvals to justify postponements. What was promised as a 3-year project can easily stretch to 5, 7, or even 10 years.

Real-Life Example: Unitech’s Gurgaon Nightmare

Unitech, once a leading real estate developer in India, left thousands of homebuyers in distress. Projects like Unitech Grande in Gurgaon were launched in 2007 with a promised delivery by 2012. However, as of 2024, many buyers are still waiting for possession. Legal battles, financial mismanagement, and corporate fraud led to massive delays, with some projects completely abandoned.

Why It Happens:

• Builders divert funds to new projects instead of completing existing ones.
• Regulatory hurdles and environmental clearances cause unexpected delays.
• Economic downturns (like COVID-19) exacerbate financial troubles.

Result: Buyers pay EMIs on home loans while also paying rent, facing severe financial strain.

Risk of Builder Insolvency and Abandoned Projects

If a developer goes bankrupt, buyers are left in limbo. Unlike ready-to-move-in properties, under-construction flats carry the risk of never being completed.

Real-Life Example: Amrapali Group Scam (India)

The Amrapali Group, a major real estate developer, collapsed in 2019, leaving over 42,000 homebuyers stranded. The Supreme Court of India found the company guilty of siphoning off ₹3,000 crores (~$400 million) of homebuyers’ money. Many projects, like Amrapali Silicon City in Noida, remain incomplete years later.

Why It Happens:

• Builders misuse funds instead of completing projects.
• Poor financial planning leads to insolvency.
• Legal battles freeze assets, halting construction indefinitely.

Result: Buyers lose their life savings with no hope of recovering their investment.

Poor Construction Quality and Hidden Defects

When you buy a completed flat, you can inspect the quality before purchasing. With under-construction properties, you blindly trust the builder’s promises—only to discover substandard materials, structural flaws, or safety hazards after possession.

Real-Life Example: Supertech’s Illegal Towers (Noida, India)

In 2021, the Supreme Court of India ordered the demolition of Supertech’s twin 40-story towers in Noida due to violation of building codes. Nearly 600 homebuyers who had invested in these under-construction flats lost their money overnight.

Why It Happens:

• Builders cut corners to maximize profits.
• Lack of oversight during construction leads to violations.
• Buyers have no recourse once the project is completed.

Result: Buyers inherit unsafe or illegal properties, facing costly repairs or even demolition.

Price Escalation and Hidden Costs

Builders often lure buyers with "low initial prices", only to later impose additional charges (parking, club membership, GST hikes, etc.). The final cost can exceed the original quote by 20-30%.

Real-Life Example: Jaypee Infratech’s Price Hikes (India)

Jaypee Infratech, another troubled developer, repeatedly increased prices for buyers in its Wish Town project. Many buyers who booked flats at ₹50 lakhs ended up paying ₹70+ lakhs due to arbitrary cost revisions.

Why It Happens:

• Builders use ambiguous contract terms to justify extra charges.
• Inflation and rising material costs are passed onto buyers.
• Buyers have no choice but to pay or forfeit their investment.

Result: Budgets spiral out of control, forcing buyers into financial distress.

Legal Disputes and Title Issues

Under-construction projects often face land disputes, litigation, or unclear titles. If the builder doesn’t have full ownership of the land, buyers risk losing their property to legal battles.

Real-Life Example: Lavasa Corporation’s Failed Dream City (India)

Lavasa, India’s first private hill city, was marketed as a luxury destination. However, due to environmental violations and land disputes, the project stalled indefinitely. Thousands of buyers who invested in under-construction villas saw their dreams collapse.

Why It Happens:

• Builders start projects without proper approvals.
• Land ownership disputes arise after construction begins.
• Environmental or zoning laws halt projects midway.

Result: Buyers are stuck in legal limbo with no possession in sight.

No Rental Income or Resale Value

Unlike ready properties, under-construction flats generate no rental income and have poor resale value until completion. If the market crashes, buyers are stuck with an illiquid asset.

Real-Life Example: Dubai’s Property Crash (2008-2010)

During the global financial crisis, Dubai’s real estate market collapsed. Buyers who had invested in off-plan properties saw prices drop by 50-70%. Many were forced to sell at huge losses or abandon payments, losing their deposits.

Why It Happens:

• Market fluctuations affect under-construction property values.
• Buyers cannot rent or sell until possession.
• Economic downturns make financing harder.

Result: Buyers lose liquidity and face negative equity.

Stress and Emotional Toll

The constant uncertainty of delays, legal battles, and financial strain takes a heavy emotional toll. Many buyers suffer from anxiety, depression, and family disputes due to the stress of an unfinished home.

Real-Life Example: Noida Extension Buyers’ Protest (India)

Thousands of buyers in Noida Extension (Greater Noida West) have been protesting for years due to 12+ year delays in projects like Logix Blossom Greens and Ace Divino. Many have paid EMIs for a decade without getting possession.

Why It Happens:

• Builders exploit buyers’ lack of legal awareness.
• Weak consumer protection laws in real estate.
• Buyers feel helpless against corporate giants.

Result: Financial and emotional devastation for families.

Always Prefer Ready-to-Move-In Properties

While under-construction flats may seem cheaper, the risks are far too high. From endless delays to outright fraud, buyers face financial ruin with little legal protection.

Key Takeaways:

✔ Ready properties offer immediate possession, no delays, and clear quality checks.
✔ Resale homes are often cheaper, with no hidden costs.
✔ Avoid pre-launch schemes—they are the riskiest of all.

If you must buy under-construction, choose only RERA-registered projects from reputed builders and consult a legal expert before signing. Otherwise, wait and buy only what you can see and touch.

Your dream home shouldn’t become a lifelong nightmare. Buy smart, stay safe.