How carpet area definition changes in RERA

How carpet area definition changes in RERA

It’s a grim reality of realizing how unscrupulous builders and developers have conveniently juggled the terms of super built up area and built up area with little mention of carpet area.

The real estate industry would conveniently use the super built up area and the built up area to market a house or an apartment to gullible home buyers who would get a shock upon handover to discover that they had been sold a much smaller apartment or home. A large number of disappointed homeowners knocked on the doors of consumer courts for justice.

These fraudulent activities made the RERA sit up and take notice. The RERA took action and made it mandatory to mention the carpet area in all real estate dealings.

There was also an element of homeowners not being clear about the differences between built up area, super built up area, and carpet area and the lack of clear knowledge was exploited to the hilt by builders and developers.

The Real Estate Regulatory authority (RERA) is a body that is dedicated to helping real estate buyers’ interests and is not duped by loopholes in the system. The RERA also establishes appellate tribunals to hear appeals and arrange for the speedy redressal of disputes.

What is a Carpet area and how is it different from a super built up area

The carpet area, as the name suggests, is the area in a house where a carpet can be spread. It is the usable area of a house including kitchens and bathrooms and also the internal walls. The carpet area does not include verandas and terraces.

The super built-up area, on the other hand, comprises the carpet area, the built up area, and a portion of the common area on an apartment floor including stairways, landings, and lobbies which are common to all residents.

On average, the carpet area of a house is 70% of the super built up area. This means that under the RERA law was passed, homeowners had been paying 30% extra. It can also be interpreted that homeowners discovered that only 70% of the area they thought they had purchased was usable by them.

It had become a regular practice of Real estate builders and developers to show the super built-up and trick their customers into believing the houses to be bigger than they were.

Carpet area under RERA

The RERA (Real Estate regulatory act) has made it clear that the carpet area of a house is the entire area from inside the external walls. Even within the external walls, the carpet area does not include terraces and balconies even if they are for the exclusive use of the residents of that particular house.

Mandatory disclosure of Carpet area and its impact

The mandatory disclosure of carpet area, as directed by RERA will have a far-reaching impact. The initial changes will be in the modus operandi used by realtors, developers, and promoters to market houses. As they will have to specify carpet areas, the focus on common areas such as lobbies, staircases, and vents will reduce.

Developers and builders will redesign the homes they sell to have more carpet areas so that they can maximize their earnings. Customers and home buyers, armed with detailed knowledge and a deeper insight into the subject of floor area, will compare rates per sq ft to the actual carpet area and will question higher rates.

Real estate dealers and developers used to charge extra for corner apartments that have a slightly larger carpet area. But they would rarely offer a discount to slightly smaller flat and adjust the smaller area by focussing on extra sq ft from the built up or super built-up area. With the mention of carpet area becoming mandatory, homebuyers can now pay the exact amount based on the actual carpet area that they shall be getting.

Another impact of the RERA ruling will be the change in the apartment and home design. While real estate developers and builders will now have no option but to increase their rates per square feet, they will now reduce wastage of space in common areas such as lobbies and air vents and will try to incorporate the maximum area of a building into the carpet area. Naturally, home buyers will be benefitted from this modification.

How it will help home buyers

The new ruling by RERA (Real Estate Regulation Act) will benefit home buyers the most. They will now have an increased and detailed understanding of the minor yet impacting differences between the carpet area, built up area, and super built-up area. Homebuyers can also physically measure the carpet area to be doubly sure of what they are buying.

The modifications in price in case of change of the Carpet Area

The RERA (Real Estate Regulatory Authority) directive is not just limited to make the mention of the carpet area mandatory. There is also a rule that if the actual carpet area is reduced at the time of handover, the difference has to be refunded by the developer to the buyer.

On the flip side, the home buyer will have to pay extra if the carpet area increases. But there is a relief given to the buyer in the form of the increase being restricted to 3% only.

Real estate law stipulates that the refund from the developer has to be made within 45 days along with interest. In the case of an increase, the developer needs to inform the buyer beforehand and ask for the increased amount during the next due payment. In both cases, the same rate per sq. ft will be used to calculate the increase or decrease in price.

Carpet area, super built-up area, and real estate scams

Real estate builders and developers had a field day in the days before the regulations of RERA came up. Most real estate developers, even well-known developers, would charge for apartment costs on the basis of super built up area and promise affordable homes. Disgruntled buyers would discover later that they had in fact purchased small flats.

Real estate developers have always known that even the standard amenities in a housing complex such as swimming pools, landscaped gardens, parks, gymnasiums, and jogging tracks make up 30-35% of the project cost and the ruse of using super built up area was a common ploy to help them recover the cost of the amenities, sometimes even at a profit. This led to several scams followed by bitter acrimonious disputes between the developers and home buyers.

But RERA came into the picture. Scams are now a thing of the past. Over and above, home buyers are now more aware, cautious and can examine everything carefully, even the fine print of an agreement.

Carpet area in the post-covid-19 world

Carpet area has now become the new norm. Homebuyers now know that the carpet area is 30% less than the super built up area. The post-Covid-19 era is witnessing a demand for a bigger home. Customers are more aware and real estate developers have also become wary as they have realized their agreements will be thoroughly scrutinized and dissatisfied home buyers will knock on the doors of the RERA.

Maharashtra RERA directs promoters to disclose stock details, carpet area

The Maharashtra state Real Estate Regulatory Authority (RERA) has asked all real estate developers and promoters to provide details about their projects in a set format. The details are to include the number of houses, shops, carpet area, number of units sold, and unsold inventory. Besides transparency and more information to prospective buyers, this information shall also help RERA to detect and prevent unauthorized construction.

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Frequently Asked Questions (FAQ's)

What area should be considered for calculating the registration of my apartment?

The RERA rules are for specifying carpet areas for buying apartments. The same carpet area is considered for calculating the registration. If the documents of your home have a built up area, you should find out the carpet area, or your registration charges will increase unnecessarily.

I am buying an apartment in Akola, Maharashtra. Can I register myself with the RERA for better consumer protection?

The Real Estate Regulation Authority (RERA) has branches in every state and is promoted by the state governments. As you are based in Maharashtra, you can register yourself with the Maharashtra unit of RERA. The website is ‘maharera.mahaonline.gov.in’. Go to this site and register as a citizen.

Do I need to pay the increased amount if the promised carpet area of my flat increases at the time of handover?

You will have to pay the increase in carpet area but there are certain points to take care of. First, the increase in the area cannot be more than 3%. Second, the promoter must give you prior intimation about the increase in area. Third, the increase must be calculated at the same rate per sq. ft as originally agreed.

Can the developer of my apartment charge me for the common facilities in the colony in which my apartment is located?

There is an extra charge for common facilities such as swimming pools, gymnasiums, elevators, and security. Be sure to ask for these during the time of booking your apartment. There should not be a charge for the common hall as the housing society generates funds by hiring the hall for events. In most cases, you will need to pay for parking space if it is covered. Security costs are added to the monthly maintenance bills.

Do I need to pay any project escalation costs before the handover of my apartment?

No, unless there was a clause of price escalation mentioned in the contract at the time of booking your apartment. Present RERA rulings do not permit any increase in the rate per sq. ft. It is recommended to not agree to cost escalation unless the project is delayed. Customers should not be made to pay for delayed projects.