If you do repair work you would be responsible for any leakages that may occur
2) builder will no longer be responsible,for leakages etc for your flat
Implications of such indemnity bond
Hi, I have start my interior work and they are few changes to the flat I wish to make. The major changes is moving the electrical socket and hence chipping of the wall is necessary. They have asked me to sign an indemnity bond on a stamp paper of 500. Can you please tell me the implications of the such an indemnity bond?Will it hamper my resale value — I _____ the absolute owner of apartment - at XXX, do hereby declare that I have taken over the said premises complete in all respects from Prestige Estate Projects Limited, a developer, and wish to make the below mentioned changes inside my apartment. 1) Fixing grills in the room windows 2) Kitchen Counter removal 3) Kitchen dado removal/ cutting 4) Electrical Points/ relocation The Developer's representative has expressed the following on the proposed changes mentioned above: a) Change 1 - There is no objection to the work being undertaken, subject to installing grills on the room windows from the inside. b) Changes 2 & 3 - There is no objection to the work. c) Changes 4- There is no objection to the work, subject to the condition that chasing or grooving of the masonry will not be permitted. Relocation, which can be achieved by using open conduits and subsequently camouflaged by wall paneling, is permitted. Considering the above concerns, I hereby undertake that I alone shall be wholly responsible and fully indemnify against any or all risks / defects / damages / leakages that may arise at any subsequent period due to the works carried out on account of the above proposed changes and also agree that the guarantee / warranty from the builder will cease perpetually for the unit.
Asked 24 days ago in Property Law
Religion: Hindu
First answer received in 10 minutes.
Lawyers are available now to answer your questions.
9 Answers
The builder is right in demanding an indemnity bond in the manner as instructed as these changes are at your risk and that the developer cannot be held responsible and in case o any losses to the developer you may have to indemnify the developer suitably to the ;losses that may occur.
This is a common condition hence you may proceed or you can consult your advocate in the local and proceed as per his advise.
The only clause that involves risk is loss of guarantee. In the first place check in the parent agreement what guarantees are offered. Bank is very much capable of doing mischief of handing the documents to previous owner. Ascertain from expert what risks / defects / damages / leakages are apprehended. Builders do not offer any guarantees to purchasers. But if there are such guarantees/warrantees in agreement, it is not advisable to forgo them.
Signing the indemnity bond means you accept full responsibility for any issues arising from the changes you make, which could limit your recourse against the developer for future defects.This could potentially impact the resale value of your apartment, as prospective buyers may be cautious about modifications that void warranties or guarantees from the builder.
You don’t have to give indemnity bond. You can take appropriate permission only if needed in such internal work you don’t need any permission
Signing an indemnity bond like the one you've described has significant implications that you should carefully consider before proceeding. Here's a detailed analysis of its impact, particularly regarding resale value and liability:
Implications of Signing the Indemnity Bond
-
Liability for Future Damages
- By signing this bond, you agree to take full responsibility for any defects, damages, or risks arising from the modifications, whether immediate or long-term.
- The builder is released from any liability for issues such as water leakages, structural damage, or electrical failures caused by the modifications.
-
Loss of Builder’s Warranty/Guarantee
- The bond explicitly states that the builder's warranty/guarantee will cease perpetually for your apartment.
- This means you cannot claim any free repair, rectification, or compensation from the builder for issues that may arise in the modified areas, even if indirectly connected to other parts of the apartment.
-
Resale Value Implications
- Buyers often seek properties with intact builder warranties and minimal risks of liability. Disclosing the indemnity bond and the modifications might deter potential buyers or lower your flat’s market value.
- If damages from your changes affect neighboring flats, legal or financial claims might arise, further complicating resale.
-
Restriction on Chipping/Grooving of Masonry
- The developer prohibits chasing or grooving masonry for electrical relocation, requiring you to use open conduits camouflaged by wall paneling. This restriction could affect the aesthetic appeal and resale perception of your flat.
-
Impact on Structural Integrity
- The modifications, particularly in electrical wiring, kitchen counter, and dado removal, may have minor or significant impacts on the structural or functional integrity of your flat. If these changes are not performed with proper approvals and expertise, they could pose long-term risks.
Suggestions Before Signing the Bond
-
Consult an Expert
- Engage a structural engineer or interior design expert to assess the technical feasibility and safety of your planned changes.
-
Negotiate the Terms
- Attempt to negotiate less stringent terms in the bond, especially concerning blanket indemnity for all risks and perpetual cessation of warranty.
-
Document Modifications Properly
- Maintain detailed records of the modifications, including before-and-after photographs, contractor details, and certifications of compliance with safety standards.
-
Legal Review
- Have the indemnity bond reviewed by a property lawyer to ensure it does not impose unreasonable obligations on you.
-
Seek Written Clarifications from the Developer
- Obtain written confirmation that the modifications are approved and do not violate building laws, association bylaws, or local regulations.
-
Communicate During Resale
- If you sell the property, transparently disclose the indemnity bond and modifications to buyers and document their acknowledgement to avoid future disputes.
Conclusion
While such indemnity bonds are common for interior modifications, they transfer significant liability to the homeowner. It is crucial to assess whether the changes you are making are worth the risks involved. If you'd like assistance in drafting or negotiating the terms of the indemnity bond, or further advice on minimizing resale impact, feel free to schedule a consultation.
Dear Client,
Actually the indemnity bond asked to be signed hands over full liability of the risk, defect, damage or any structural problems which develop because of modification including the relocating of the electrical point in question totally to you. This will result in losing the builder's guarantee or warranty on your unit forever, and you will bear the costs of future defects like electrical faults, damage to walls, or water seepage because of these changes. While the tie itself has no direct bearing on your resale value, potential buyers may see that it is no longer covered under the builder's warranty and is a negative if it detracts from the structural integrity or aesthetic of the unit. To offset any negative effect, have the work done by qualified professionals using proper materials, and keep all records of work done on the property; this will help reassure any future buyers.
Hope you find this answer beneficial for resolving the dispute.
- An Indemnity Bond is a legal agreement that is used to protect an individual or entity from any potential losses or expenses that may arise from another party's actions or negligence.
The contents given in the said bond is one sided and in favor of the builder , and hence you should take services of a local lawyer for the drafting the indemnity bond.
