Pre-launch, a highly-debated
issues in real estate, means raising money from the public for projects which
are yet to get regulatory approval in the form of license and clearances. In
short, it is like selling a house which has not even had its foundation stone
laid. Soft launch is legally permissible, but it is different. When investing,
an individual needs to understand between the two.
While both are meant to attract
investments before a project is actually ready, in the case of pre-launch, a
builder seeks investments even before seeking regulatory approvals are in
place. In case of soft launch, the move follows after receiving all the
necessary approvals.
How can an investor understand
the difference?
One can make it out by the mode
of payment asked for. Since pre-launch is an illegal practice, a builder will
insist on cash payment. An investor should understand that only the amount one
pays in cheque is the actual and official valuation of the property that he is
investing in.
Why then are there takers for
pre-launch?
Investors are often lured by the
significantly low prices on offer. On an average, a property's pre-launch price
is less than one-third the price after actual launch. But since the entire
transaction is through a benami deal, the investor often does not have an
enforceable right.
