In this article we have covered how the definition of carpet area has been revised under the Real Estate Regulations Act.
Introduction
When a particular industry or sector becomes crucial to the economy, it becomes important for the government to form some sort of regulatory mechanism so that no misappropriation or malpractices occur for individual profit or gain. The real estate industry is crucial to the economy and hence the parliament of India enacted the RERA Act to regulate the market without encroaching too deep into the free market space. In this article, we shall take a look at how RERA defines carpet area and the impact of the change in definition.
Reason for the Change of Definition of the Carpet Area in RERA
To attract the house seekers, for the RERA, the developers often make them fall in the bait by displaying the super built-up area and not the actual space which would fall under the buyer’s authority.
The rising fraudulence due to the undisclosed carpet area has left many buyers to be cheated by their developers as they weren’t delivered what they had been promised. When this got reported to the RERA, certain revisions were made to the existing RERA Act 2016. Now, the developers must disclose the carpet area to the buyers and quote the pricing based on it and not on the super built-up area.
The RERA typically exceeds the actual net usable area by 5%. For instance, if the net usable area of an apartment is 800 square feet, then its RERA carpet area would be 840 square feet.
What are the Types of Area Measures?
The carpet area that is disclosed falls under one of the three categories of property measure. Along with net usable area, the other two types of measures of the property area include built-up area and super built-up area. People often have confusion among these three.
Hence, it becomes crucial to distinguish among these three and recognize the area or space that falls under each category.
The carpet area comprises those areas which are usable flooring space. It includes the flooring space which is bounded within the walls of the apartment. The balcony or verandah is excluded from the measure of the carpet area even if it falls under the bounded walls of the apartment.
The built-up area includes the net usable area as well as the outer and inner walls, and lastly balcony area.
The super built-up area includes the measure of both the net usable area as well as the built-up area. And along with that, it adds the measure of other sections of the building such as stairs, galleries, and lobbies which is usable by all.
What is the Impact of the Changes in the RERA Act 2016?
The RERA complaints reported on developers’ fraudulent behavior have been attended to well enough. The changes made by Real Estate Regulatory Authority under the RERA Act 2016 welcome everyone. This will help to disclose the carpet area without making the buyers fall prey to their false claim on the net usable area that would be available for use by the buyer.
The RERA Carpet area formula follows the inclusion of the area that can be used by the house owners. It excludes the thickness of the wall and the space available in the balcony.
In simple terms, the carpet area has a reckon as follows:
This formula gives an idea of the things that can be included and the parts that have to be excluded to understand the exact carpet area.
- RERA Carpet area Percentage
- RERA Carpet area Percentage is generally 70% of the built-up area, thus excluding the wall of the house. In other words, if the built-up space is 1000 sq. ft., then the net usable area would encompass 700 sq. ft. of the house.
The provision of the RERA Act has made the developers disclose the carpet area that will provide accurate information regarding the same. This will help the buyer to make an informed decision before closing the deal with the builder. It is paramount to note that even if disclosing the carpet area is mandatory for all the developers. It is totally upon the builder to decide if they want to go with the deal based on the carpet area or not. Moreover, this provision from RERA has empowered the end-users as they had been paying a hefty amount. This is for a cramped-up space.
Earlier, the developers had been registering the house based on the super built-up area. While the buyers remained unknown about the actual area that falls under their legal reach. RERA has recognized the developer’s unscrupulous means of tempting the buyers. It has made it mandatory to disclose the net usable area so that the buyers pay for what they get.
What is the Expectation from all the Stakeholders?
The bankers, developers, buyers, and brokers should practice and disseminate the correct information in the most simple form. It includes that the buyers don’t feel cheated later on. The changed definition and information should convey to the buyers.
It must have to be adhered to by the developers so that the buyers and others get benefitted from sealing the deal. The buyers have all the right to know the actual space that will fall under their authority of usage.
Additionally, this will make them reckon with the tax liability and ease the usage of the property site with full rights.
Conclusion
Revisions made in the Act have made the apartment buying process transparent. The experts will appreciate the changes made by the RERA because now the buyers will not get anything less than what they promise to them on an unauthorized document. Earlier, the carpet area will be 500 sq. meter while the buyers will have information of 700 sq. meters.
The changes in the RERA Act have brought more transparency and translucency before striking any deal. This would help the buyers to make use of the available space in the most efficient way.
However, the buyers need to check for the areas carefully and then go for the deal. Also, it is paramount to take note of the measurement of each category and then pay for the property. Any discrepancy in the information and actual space can have reported to RERA.
