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5 terms you must know before buying a flat

 

The price of your flat is usually based on its saleable area. But there are many ways to interpret and calculate the saleable area. This can have a huge impact on (i) the actual area you get, and (ii) your total buying price.

Although these terms are not clearly defined in any statute book, knowing what they mean will help you to:

  • act smarter – by not getting cheated or misled into buying a smaller flat than you expected
  • save money

So the 5 Terms You Absolutely Must Know before buying a home are:

  • Built-up area
  • Carpet area
  • Super built-up area
  • Per square foot rate
  • Loading

First we’ll briefly explain what these terms mean, and then we’ll show you – with the help of an example – how this knowledge can help you to make better decisions…..and save money.

  • Built-up area is the total area measured on the outer line of your flat, including balcony, terrace, etc. It refers to the usable (or carpet area as described below) of your flat plus the area occupied by the walls and columnsof your flat plus a little more.

    In other words, the built-up area will normally also includea percentage of:

  • Balcony and/or Terrace
  • Roof area
  • Mezzanine floor
  • Detached habitable areas such as servant’s room, etc.
  • Columns and Walls
  • If shared with another unit – computed at 50%
  • If not shared with another unit –computed at 100%

Now that you know that the built-up area of your flat includes these additional areas, you will be able to calculate the actual usable or carpet area of your flat.

 
  • Carpet area is the area enclosed within the walls of your flat. It refers to the area inside your house on which you can actually lay a carpetand physically move around. But that’s not all.

    The carpet area also includesa certain percentage of other areas – such as balcony, terrace and verandah – which many people tend to exclude from their calculations. This is one of the most common mistakes you can make when calculating the carpet area – which can result in your ending up with a much smaller usable or carpet area than you expected.

    Depending upon your builder, the carpet area of your flat can be anywhere from 50-80% of the super built-up area (explained below) quoted to you by your builder. Therefore, you should always ask your builder for the ratio of carpet area to the super built-up area.

    The higher the ratio of carpet area to super built-up area, the more space you get inside your flat.

 
  • Super built-up area or saleable area is the total built-up area of your flat (explained above) plus your proportionate share of the common amenities in your building complex.It is also called the saleable area. Proportionate share here refers to the sum total of all common areas divided by the total number of flats in your building complex.

    So the super built-up area includes – aside from the built up area of your flat – these areas also:

  • A percentage of the double height areas and terraces, if any
  • Entrance Lobby
  • Corridors
  • Staircases
  • Lift Shafts
  • Lift Lobby and all other lobbies and landing areas
  • Lift machine rooms, generator rooms, electrical rooms, etc.
  • Gas Banks, Garbage Rooms
  • Club House
  • Security Rooms
  • Indoor Sports Rooms
  • General Toilet Facilities for Servants and Maintenance Staff
  • All other common areas not included above provided they are not separately charged for

Now here’s something important you should know
The Super Built-up Area Does Not Include…

  • Underground sumps and water or septic tanks
  • Compound walls
  • Open to sky walkways and open to sky swimming pools
  • Open sports facilities
  • Weather sheds, inaccessible flower beds, lofts, common open to sky terraces, stairwells, etc.

If you find that your builder has included any of these areas in the super built-up area, you should immediately bring it to his notice – and renegotiate your buying price.

 
  • Per Square Foot Rate is the rate (per square foot) quoted to you by your builder or real estate agent. It is typically applied to the super built-up area to determine the price of your flat.

    The important thing to remember here is that the per-square-foot rate of your flat is normally based on the super built-up area (also called saleable area), which includes not only the carpet area of your flat (i.e. the usable area inside your flat) but also some additional areas of (i) your flat (like balcony and terrace area) and (ii) building complex (like lobbies, staircases, passages, etc.).

  • Loading is the difference between the super built-up area and the carpet area of your flat. It is used to add constructed spaces not exclusively allocated to you. It includes shared areas like lifts, lobbies, staircases and amenities, as well as a part of your terrace and balcony.

    A loading factor of 1.20 means that your builder has added 20% to your carpet area. If your residential project does not have many amenities, the loading factor will be small. In most cases, a loading factor of 1.30 is considered sufficient.

    However, you should know that some builders can resort to very high loading – of 40-50%. This can seriously reduce the carpet area of your flat to almost half of its quoted size. Therefore, it always pays to know in advance the loading factor of your flat.

Now that you’re familiar with the most important area-related terms, you will want to know how knowing these terms can help you act smarter and save money.

How knowing these terms can help you act smarter and save money.

The following example illustrates how easily you can be misled into buying a smaller and costlier flat if you go only by the information provided by your builder (in the blue boxes)– and fail to do your own calculations.

But the calculations we’ve suggested (in the green boxes)will help you to interpret the information correctly and make a well-informed decision that works in your favor.

Example

If you had to choose between Flat A and Flat B, which would you choose? Both flats measure 2000 sq ft and look equally good. Flat A costs Rs. 3500/sq ft and Flat B costs Rs. 3200/sq ft.

If like many people you overlooked the loading factor (or took it for granted) and chose Flat B because it’s cheaper by Rs. 300/sq ft, you would have not only paid more per sq ft but also ended up with a smaller flat.

To understand how, take a look at the example below. Start from the beginning….but don’t miss the three rows highlighted in green.

    Flat A Flat B Comments INFORMATION PROVIDED BY YOUR BUILDER Super Built-up Area 2000 sq ft 2000 sq ft Both flats appear equally big Price / Super Built-up Area Rs. 3500/sq ft

(or Rs. 70 lakh)

Rs. 3200/sq ft

(or Rs. 64 lakh)

Flat B is cheaper by Rs. 300/sq ft or Rs. 6 lakh Loading 40% or 0.4 47% or 0.47 Flat B has a slightly higher loading factor YOUR CALCUATIONS AFTER READING THIS ARTICLE Carpet Area (in %)

(1 – Loading Factor)

60%

(1 – 0.4 = 0.6 or 60%)

53%

(1 – 0.47 = 0.53 or 53%)

Flat A appears slightly bigger from inside

(60% vs 53%)

Carpet Area (in sq ft)

(Super Built-up Area x % Carpet Area)

1200 sq ft

(2000 x 60%)

1060 sq ft

(2000 x 53%)

Flat A is bigger from inside

(by 140 sq ft)

Price / Carpet Area Rs. 5833.33/sq ft Rs. 6037.73/sq ft Flat A is also cheaper

(by Rs. 204.40/sq ft)

Summary

You’ve just seen how a different interpretation or calculation of saleable area can have a huge impact on both your carpet area and your total buying price. You’ve also seen that:

  • More saleable area does not necessarily mean more carpet area
  • Area calculation method can seriously affect your buying price
  • A lower price does not necessarily mean a better deal
  • Per square-foot rate can be misleading unless it is considered with other factors that affect saleable area (such as loading)

What other tips can you think of that buyers must absolutely know about before buying a home? Do let us know – we’d love to hear from you!

 

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