Pre-launch Property vs. Ongoing Project: Understanding the Differences

By LODHA

Every real estate project undergoes distinct stages of development. It begins with conceptualisation and planning, followed by the pre-launch phase. Then, commences the stage where the property is under construction, leading to the ongoing phase, and ultimately culminates in completion and handover.  

Choosing between a pre-launch property and an ongoing project comes with its own set of advantages and considerations, making it essential for potential buyers to understand the differences before making a decision. In this blog, we'll delve into the nuances of pre-launch properties and ongoing projects to help you make an informed choice in the dynamic real estate market.

Before the Unveiling: Pre-launch Real Estate Projects 

Pre-launch projects mark the commencement of a building under construction. At this stage, developers unveil the project's concept and architectural blueprints and often initiate marketing efforts to engage potential buyers. Typically, construction is in its nascent phase, and not all essential permits or funding may have been secured. In essence, a project is considered in the pre-launch phase when a builder introduces it, but regulatory approvals are pending. It's essentially a concept that the builder is presenting for sale. It's important to note that the risk is elevated as approvals are still pending. 

In India, according to the Real Estate (Regulation and Development) Act, 2016, developers must secure commencement certificates and other necessary approvals from relevant authorities before registering themselves and their projects under the Act. Moreover, they are restricted from advertising or marketing projects until they obtain a RERA registration number. As a result, the implementation of RERA has notably mitigated the risk associated with investing in projects without proper approvals. After RERA provides it, all investment advertisements must display a unique project-wise registration number following registration. 

For a list of RERA-approved projects in Maharashtra, go to https://maharera.maharashtra.gov.in/. Select 'Registration' and then 'Registered Projects'. Enter the project name and click 'Search' to retrieve details about its locality, type, status and anticipated completion date. 

Advantages:

- Exclusive Pricing: Early investors will enjoy special rates during the prelaunch phase, often significantly lower than the eventual market price. 

- Early Access: Initial investors are given precedence in selecting units based on factors like the apartment's orientation and floor level. This offers a wider array of choices and allows for greater customisation potential. 

- Appreciation Potential: Investing in properties located in prime areas or boasting distinctive features can lead to appreciable value growth over time, offering a potentially lucrative opportunity for buyers. This potential for appreciation exists not only in the pre-launch phase but also extends through to the possession stage.  

Considerations:

- Risks and Uncertainties: Investing in prelaunch projects comes with inherent risks, including potential delays due to regulatory approval processes, changes in project scope or even cancellations due to unforeseen challenges. 

- Limited Physical Inspection: Buyers must rely on conceptual plans, artist's impressions and the developer's reputation, as the actual property may not yet exist. 

Post Unveiling: Ongoing Projects 

Ongoing projects have advanced beyond the initial phases and are currently buildings under construction. At this stage, developers have obtained the necessary permits and financing and have typically sold a significant portion of the units. According to this Central Act, the issuance of a completion certificate serves as the criterion for projects to be exempted under the Real Estate (Regulation and Development) Act. It explicitly mentions that projects lacking a completion certificate at the time of the Act's notification will be categorised as ongoing. 

Advantages:

- Physical Inspection: While it might be preferable to inspect under-construction projects, most developers, including Lodha, prioritise safety and do not allow such visits. Instead, they facilitate visits to show residences, providing customers with a sense of their future unit. Additionally, regular updates about the construction progress are readily available. 

- Reduced Uncertainty: Under-construction projects offer greater stability as developers have cleared initial hurdles, lowering the risk of cancellation. RERA has markedly enhanced transparency and accountability in real estate. Developers now must provide detailed project data, adhere to construction schedules and allocate funds responsibly, instilling confidence in buyers and ensuring better compliance.