#property terms

There are various terms involved when it comes to real estate sector. One of such terms which you may have heard is ‘common area’. As the name suggests, a common area is that area which is common to every resident is Charged by all the residents of a complex of apartments. A co-owner of the common areas is every property owner in a project. It belongs equally to all owners.

Now let us get in detail about it:

If a developer company offers you the super-built area of a house, the entire area, including the common areas, is included in it. As per the RERA Act, 2016, common areas include:

The entire land for the real estate project, or if the project is developed in phases and registration under the RERA is sought for a phase, the entire land for that particular phase.

Staircases, elevators, staircase and elevator lobbies, fire escapes, and common entrances and exits of buildings.

Common terraces and basements, parks, play areas, open parking areas, and common storage spaces.

The premises for lodging of persons who are employed for the management of the property, including accommodation for watchmen and ward staff, or for the lodging of community service personnel.

All community and commercial facilities as provided in the real estate project.

Installations of central services such as electricity, gas, water and sanitation, air-conditioning and incineration, and systems for water conservation and renewable energy.

Water tanks, pumps, motors, compressors, fans, ducts, and all apparatus connected with installations for common use.

Other portions of the project necessary or convenient for its maintenance, safety, etc. and in common use.

Not only RERA but Apartment Act also have some guidelines for common area:

Before the association of allottees takes over, the developer is responsible for preserving common areas.

The responsibility for the common area maintenance falls to all members of society.

The landlord is liable for the maintenance of the common areas in the case of commercial property.

When it comes to an area that is shared by all there are various questions attached to it. SBP Group offers you answer to all your queries as follow:

Who’s responsible for the maintenance of the common area?

All occupants are equally accountable for open areas and their maintenance. The Real Estate Act (RERA) specifies that it should be the responsibility of every allottee to make payments to maintain the property and the premises. All citizens collect a stipulated fee and this goes towards operational expenses undertaken to protect the community areas.

Can it be possible to inherit and pass common area?

It is possible to inherit or transfer common areas and facilities by sale, mortgage, lease, gift, or swap, along with an undivided interest in common areas. This inheritance of such property will be defined in accordance with the law of succession.

If you are not using common areas and services, do you pay maintenance charges?

According to the Apartment act, ‘No apartment owners may exempt themselves from liability for their contribution towards the common expenses by waiver of the use or enjoyment of any of the common areas and facilities or by the abandonment of their apartment’

In simple words, ‘yes’ it is mandatory for all to pay maintenance charges.

How can common areas be identified?

Information on the property on which the building was constructed and the common areas and amenities must be included in the sale documents of the apartment and its registration papers. It should also note whether the property is freehold property or leasehold and whether the lease period is a leasehold property. It should also include the percentage of an undivided interest in the common areas and services relating to the apartment. It must also explain the restricted common areas and services.

Is it possible to sell common roof rights through a developer?

Giving or selling exclusive rights to the terrace or rooftop is an unethical activity in a housing society. All other common terraces belong to a resident unless the terrace is attached to a unit. A terrace, if inaccessible from common areas, is private. It is not possible to buy or sell common terrace space and is, thus, not included in the floor area ratio (FAR). Buyers may contact the consumer forum or even bring a civil lawsuit against the contractor if a developer participates in such unfair practices.

Can we use a common area for other purposes?

For other purposes, common areas may be used but not ‘converted’ by an entity for some other use that serves his/her personal interest. For instance, it won’t become a parking spot if someone tries to park a car in the common area. Residents, both tenants, and owners should refrain from invading common areas, since there are many co-owners lawfully, and your actions should not prohibit them until and unless you have special authorization from the apartment association.

What happens in the event of apartment destruction?

If an apartment project is damaged or demolished and the apartment owners do not intend to restore, rebuild or repair such a property, the property shall be considered to belong to the common owners of the apartment and the undivided interest in the common ownership of such property shall be the percentage of the undivided interest previously held by that owner in the common ownership.

When a person buys a home, they expose them to various new words, jargon, and terminologies which they may or may not know. As not many people deal with real estate regularly or buy or sell property on daily basis like brokers and real estate agents, people can find difficult to understand what is being told to them. As a prospective homebuyer, it is important to understand the jargon used by real estate agents to prevent costly errors that may hinder your chances of having the right property of your preference. Most of the time, the words and phrases are thrown at us by brokers and realtors leave us looking cluelessly at them. Real Estate Terms like carpet area, built-up area, and the super built-up area mostly evade our realm of comprehension when buying a home, or at least create some confusion.

It is a sad fact, but by charging higher prices, some unscrupulous businesses have exploited this lack of awareness of consumers to their advantage. So, before you talk to your agent next time, it is important that you know about these real estate terms.

These three ways of measuring the area, or the square footage, in any residential building. They may not always sound so different, but there is actually a major differentiation between the carpet area and the built-up area.

But don’t worry, SBP Group helps you by clarifying the distinctions between the three jargon widely used: carpet area, built-up area, and super built-up area:

Carpet Area:

As the name suggests, it is the area that would potentially be covered by a carpet or, excluding the thickness of the inner walls, the area of the apartment. The carpet area does not include the space occupied by communal areas, such as the lobby, elevator, stairs, playground, etc. The actual area you get for use in a residential unit is the carpet area. So look at the carpet area and then make your decision when you are in search of a home because that is the amount that will give you an idea of the actual room in your hands. knowledge about your carpet area will assist you in knowing space available  In the kitchen, bedroom, living room, etc.

Nowadays, many builders do not even disclose carpet area and generally charge on the basis of built-up or super built-up area. Remember that under the RERA (Real Estate Regulation and Development) Act guidelines, it is mandatory for developers to report carpet area of each apartment because the sale price to be determined on its basis.

The carpet area is normally approximately 70% of the built-up area.

Built-up Area:

The built-up area is the area that comes after the carpet area and wall area has been added. Take into account that, the area of the wall does not mean the area of the surface, but the thickness of the unit’s inner walls. The area that constitutes the walls is about 20% of the built-up area and shifts the viewpoint entirely. Other areas required by the authorities, such as a dry balcony, flower beds, etc., also constitute the built-up area, adding up to 10% of the built-up area. So the usable area, when you think about it, is just 70% of the built-up area.

It should be noted that the percentage may differ according to the project or the developer.

Built-up area = Carpet area + area of walls + area of the balcony

Super Built-up Area:

The super built-up area is the combined amount of the built-up area and the area covered by common areas such as lobby, stairway, elevator, shafts, clubhouse, etc. Builders also charge consumers based on this area to meet their construction costs. It is therefore referred to as the ‘saleable’ area. The loading factor, which is the proportion of the common area in the apartment calculated by adding a multiplier (1.25) to the carpet area, is closely related to the super built-up area. This leads to a rise of 25% or 30 % of the total area to be sold. Its value is determined as the difference between the super built-up area and the carpet area. Many developers price the apartment on the basis of the loading factor.

Super built-up area = Carpet Area (1+ Loading Factor)

As described above, most real estate developers used to sell apartments on the basis of a super built-up area, which often consists of a common area. This situation is before the RERA act was commenced. Considering that builders and developers used to price their apartments on the basis of a super-built or ‘saleable’ area, being ignorant of the fundamental distinction between the carpet area and the built-up area because of this many people faced exploitation in past years.

Now let’s take an example for your revision of these real estate terms.

If you have a built-up area of 1,000 sq ft, then the carpet area will be 70 % off 1,000 sq ft, which is equal to 700 sq ft.

If you have a super built-up area suppose is 1200 sq ft, then the built-up area will be 70% carpet area + 10% (areas of wall and balcony). Your built-up area will be 80% of 1200 sqft which is 960 sq ft.

Let’s say a developer applied a loading of 25 percent for an apartment with carpet area of 800 sq ft. Using the formula mentioned above (800*1.25), the super built-up area will be 1,000 sq ft.

Terminologies and jargon of real estate can be confusing if you don’t pay enough attention to it. That is why homebuyers should make sure that they know the basics of it before talking with any broker or agent and if you don’t know about any term don’t be afraid to ask about it.

When a person buys a home, they expose them to various new words, jargon, and terminologies which they may or may not know. As not many people deal with real estate regularly or buy or sell property on daily basis like brokers and real estate agents, people can find difficult to understand what is being told to them. 

As a prospective homebuyer, it is important to understand the jargon used by real estate agents to prevent costly errors that may hinder your chances of having the right property of your preference. Most of the time, the words and phrases are thrown at us by brokers and realtors leave us looking cluelessly at them. Real Estate Terms like carpet area, built-up area, and the super built-up area mostly evade our realm of comprehension when buying a home, or at least create some confusion.

It is a sad fact, but by charging higher prices, some unscrupulous businesses have exploited this lack of awareness of consumers to their advantage. So, before you talk to your agent next time, it is important that you know about these real estate terms.

These three ways of measuring the area, or the square footage, in any residential building. They may not always sound so different, but there is actually a major differentiation between the carpet area and the built-up area.

But don’t worry, SBP Group helps you by clarifying the distinctions between the three jargon widely used: carpet area, built-up area, and super built-up area:

Carpet Area:

As the name suggests, it is the area that would potentially be covered by a carpet or, excluding the thickness of the inner walls, the area of the apartment. The carpet area does not include the space occupied by communal areas, such as the lobby, elevator, stairs, playground, etc. The actual area you get for use in a residential unit is the carpet area. So look at the carpet area and then make your decision when you are in search of a home because that is the amount that will give you an idea of the actual room in your hands. knowledge about your carpet area will assist you in knowing space available  In the kitchen, bedroom, living room, etc.

Nowadays, many builders do not even disclose carpet area and generally charge on the basis of built-up or super built-up area. Remember that under the RERA (Real Estate Regulation and Development) Act guidelines, it is mandatory for developers to report carpet area of each apartment because the sale price to be determined on its basis.

The carpet area is normally approximately 70% of the built-up area.

Built-up Area:

The built-up area is the area that comes after the carpet area and wall area has been added. Take into account that, the area of the wall does not mean the area of the surface, but the thickness of the unit’s inner walls. The area that constitutes the walls is about 20% of the built-up area and shifts the viewpoint entirely. Other areas required by the authorities, such as a dry balcony, flower beds, etc., also constitute the built-up area, adding up to 10% of the built-up area. So the usable area, when you think about it, is just 70% of the built-up area.

It should be noted that the percentage may differ according to the project or the developer.

Built-up area = Carpet area + area of walls + area of the balcony

Super Built-up Area:

The super built-up area is the combined amount of the built-up area and the area covered by common areas such as lobby, stairway, elevator, shafts, clubhouse, etc. Builders also charge consumers based on this area to meet their construction costs. It is therefore referred to as the ‘saleable’ area. The loading factor, which is the proportion of the common area in the apartment calculated by adding a multiplier (1.25) to the carpet area, is closely related to the super built-up area. This leads to a rise of 25% or 30 % of the total area to be sold. Its value is determined as the difference between the super built-up area and the carpet area. Many developers price the apartment on the basis of the loading factor.

Super built-up area = Carpet Area (1+ Loading Factor)

As described above, most real estate developers used to sell apartments on the basis of a super built-up area, which often consists of a common area. This situation is before the RERA act was commenced. Considering that builders and developers used to price their apartments on the basis of a super-built or ‘saleable’ area, being ignorant of the fundamental distinction between the carpet area and the built-up area because of this many people faced exploitation in past years.

Now let’s take an example for your revision of these real estate terms.

If you have a built-up area of 1,000 sq ft, then the carpet area will be 70 % off 1,000 sq ft, which is equal to 700 sq ft.

If you have a super built-up area suppose is 1200 sq ft, then the built-up area will be 70% carpet area + 10% (areas of wall and balcony). Your built-up area will be 80% of 1200 sqft which is 960 sq ft.

Let’s say a developer applied a loading of 25 percent for an apartment with carpet area of 800 sq ft. Using the formula mentioned above (800*1.25), the super built-up area will be 1,000 sq ft.

Terminologies and jargon of real estate can be confusing if you don’t pay enough attention to it. That is why homebuyers should make sure that they know the basics of it before talking with any broker or agent and if you don’t know about any term don’t be afraid to ask about it.

Purchasing your own home is a dream of many people. It is one of the essentials of good living. It is a massive financial decision and one needs to make sure that they invest in a good house. As much as it is important to know the location of the property, the developer whose project you are investing in, the inspection of property and amenities provided along with it, it is also important to know basic terminologies being used while making a purchase decision.

Figures and terminology can be misleading and even deceiving occasionally. To make an informed decision, homebuyers need to understand and get acquainted with the property jargon used by developers. Until you begin the home buying process, getting a basic understanding of significant property terms will make the process easier now and may save you a lot in the future.

If you are new to the real estate market and want to buy a home but aren’t familiar with property terms and concepts related to property, you don’t need to worry about it as SBP Group is here to help you understand all the essentials terminologies before you make any buying decision.

You must have heard about different types of areas while looking for a property such as a carpet area or built-up area etc. These areas usually indicate the space available in the house. Following are the detail information about different types of areas to clear out your confusions:

Carpet area: This is the actual floor area measured from the walls’ inner faces. It means the portion of an apartment that can be carpeted and the balconies included.

Built-up area: This refers to a flat’s total area. The carpet area, the room occupied by the thickness of the walls and ducts, is included. It is usually 10-15 percent greater than the area of the carpet.

Super built-up area: This is the complete ‘saleable’ area, adding markup for open spaces like lifts, staircases, entrance lobby, halls, etc. over the built-up area. It includes all common facilities not specifically charged to the buyer (excluding parking space) but proportionately divided between all the flats. For the super built-up city, the unit price per square foot is paid.

Understanding these property terms for areas is important to know exactly how much area is available for you to stay in. Also, remember that developers are obligated to include/report the carpet area of all units in their brochures and websites. Paying attention to the space offered to you for a living is very important and helps you in making a purchase decision.

Besides that, as we know that buying a property involves a big financial decision and most people rely on home loans to purchase their desired property, you also need to understand financial terms involves with real estate:

The Debt-to-Income Ratio (DTI) is a calculation of the debt repayment capacity of a borrower relative to his or her gross monthly income. In simple terms, the DTI is the gross percentage of all monthly debt payments, divided by the gross monthly revenue. It is a method used by financial institutions and lenders (including mortgage lenders) to estimate the ability of a borrower to make monthly loan payments and repay the total amount.

Loan to value ratio or LTV, provided the market value of your land, is a ratio of the amount of loan that you will receive. Generally, the LTV for a property loan varies from 40 percent to 75 percent of the total value of your property. LTV for a Property Loan tells you the maximum amount of funding that you can get depending on the asset you are guaranteeing. The property is measured here on variables such as its kind: commercial or residential, and occupancy.

Ready reckoner rate – This is the minimum amount at which a house has to be registered in the event of its transfer, it is also known as the circle rate. The declared transaction value or the minimum rate set by the government, whichever is higher, must be registered for a house. The stamp duty is measured as a percentage of such amount.

Knowing these financial terms will help you when you are applying for a  loan as well as when you are finally making the purchase.

Another term which you need to know is “Inspection”, once you have decided on a property you want to invest in you need to make a home inspection. It is a visual and mechanical inspection of a home to detect defects and determine the condition of the home.

Once you have selected a house you want to buy, you need to make sure that every document related or required for purchase is with you. Some of the essential documents you should know about are as follows:

No objection certificate: provided by the local authority stating that the building plans are in order and comply with the guidelines.

Encumbrance certificate: provided by the Registrar of Assurances or the Sub-Registrar ‘s Office after proper verification of the relevant documents certifying that the property is free of all debts.

Occupancy certificate: issued to the builder or owner of a house by the local municipal body indicating that it is suitable for occupancy, after ensuring that the building complies with all permissible building plans and local laws.

Sale agreement: Contains a commitment to transfer the properties in the future, subject to certain terms and conditions. In itself, an agreement to sell does not establish any ownership interest in the property. Therefore, without a conveyance deed, the acquisition of a property is not complete.

Sale deed/conveyance deed: A contract in which the rights of the property are transferred to the buyer by the seller, providing the buyer with full and unquestioned possession of the property.

For every homebuyer, it is essential to know about these documents and to verify whether the developers are complying with all the laws or not. Besides that, if you are interested in purchasing a property you need to know all these property terms and abbreviations used for it so that you can invest in your dream home without any worry.