Basic terminology of Real Estate
The Real Estate Regulation & Development Act,2016 is an act of the parliament which seeks to protect home – buyers as well as investors in the real estate industry. The Real Estate Act makes it compulsory for all residential & commercial projects where the land is over 500 sq.mt or eight apartments.
No project can sell without RERA registration. Builders have to use 70% fund project development & construction. They can use only up to 30% fund for other than construction activities like employees salary, marketing expenses etc.
Super Built-up Area:
Super area is also known as the saleable area. Super built-up area includes built up area plus common space like balconies, satires, lift, lobby area, swimming pool, shaft, club area etc.
Built up area includes carpet area plus wall area. Wall area is almost 10% of total carpet area.
Carpet area: It is the area where we can lay the carpet. It is the area enclosed within the wall area. Carpet area is almost 70-85% of the super built-up area. It differs from project to project.
FAR means Floor Area Ratio. Floor area ratio (FAR) is the ration of a building’s total floor area to the size of land upon which it is built. FAR is the relationship between the total usable floor area where the building was permitted to construct & total area of land where building stand. FAR indicates the density of locality. Higher FAR means more density.
Formula for FAR = (gross floor area) / (area of the plot)
FSI means Floor space index. FSI is regulated by Directorate of Town & Country Planning (DTCP) department. DTCP regulate the FSI value based on the type of building, city zone, amenities etc.
Formula for FSI: FSI * plot area= Built up area.
Builder-Buyer Agreement: It is an agreement between Builder & buyer. It is a legal document that lays down all term & conditions. In builder buyer agreement all details mention like applicant, co-applicant (if any), total cost of property, payment plan, price, unit no, tower name, floor, penalty clause etc. When we apply for a bank loan, builder buyer agreement is the most essential document.
It means property to mortgage. It is a legal agreement that conveys the conditional right of ownership on the property by its owner to the lender as security for the loan. Any legal property can be a mortgage.
T M means Transfer memorandum is important in transactions related to leasehold properties. TM is official permission granted by local development authority to the owner of the property to transfer his ownership from the property. Local development authority charged a certain amount to complete this process. The TM is required during sale or transfer of leasehold property.
It refers to construction linked payment plan. When you buy a property you get an option to select a payment plan. CLP is linked with the construction of the building. Payment demand is generated as per construction of the building. After opting this payment plan, no need to pay the entire amount together. It goes in installment.
Flexi payment plan:
Flexi payment plan mix of down payment & construction linked payment plan. In this plan initially, you have to pay more after that it works as a construction linked plan.
Subvention payment plan gives you the freedom to pay EMI till offer of possession. Till possession interest of EMI is paid by the builder. Here you have to very conscious because subvention plan is always time linked. But builders make promises you not to pay EMI till offer of possession. So always get this commitment in writing. This payment plan cost you higher than CLP.
Offer of possession:
After getting the completion certificate & occupancy certificate, builder offers you possession and demand for final payment. As you complete all dues builder start finishing you flat & handover you with committed fittings & fixtures. Normally it will take 30-45 days from offer of possession to handover the flat.
There are certain charges buyers have to pay at the time of possession. Mostly builder charge Lease rent, IFMS, dual meter charge, extra power backup charge, IGL connection charges, water connection, & 1-year advance maintenance charges.
Lease rent is the charge which is collected by the builder but it has to pay local development authority body.
Interest-free maintenance security is charged by the builder & after formation of RWA/AOA builder transfer entire amount to them. This amount is used for the maintenance of society.
External Development Charges are collected to develop external part of society, like a park, garden, kids play area, sports zone etc.
Internal Development charges are collected to develop external facilities like, lift, lobby area etc.
It means fire fighting charges.
preferred location charges. It will be based on location like park facing, road facing, corner unit etc. sometimes builder charges plc based on floors too. In north India, as we go lower floors PLC are higher. But In Mumbai, as we go higher floors, plc charged higher.