14 OCTOBER, 2022

A first-time property buyer often becomes clueless when jargon like carpet area, built-up area and super built-up area and the difference between carpet area and built-up area come up. The marketing brochures also confuse us with such terms. They all may sound similar. However, we must know that the terms are not interchangeable. In this article, we have simplified such commonly used jargon for you.

In India, the cost of a property depends on the total square foot measurement. Thus, while purchasing a property, we must be conscious of what we are paying for. A few years back, the dawn of RERA came as a saviour. Let us understand what RERA is.

What is RERA?

RERA, also known as Real Estate Regulatory Act, came into action in 2016. It brought about numerous changes in property dealings. As a result, it had a tremendous impact on the modus operandi of the developers. Before the implementation of RERA, real estate builders used the terms build-up area and super built-up area for marketing purposes. However, the actual usable area available was different. The gullible home-buyers lacking clarity on the same often landed in disappointment.

The juggling of the terms concluded with the mandatory disclosure by RERA. The monopoly exerted by the builders over corner apartments or large balcony apartments received a blowback. It is now obligatory for all builders to sell property based only on carpet area. Thus, home buyers can make informed decisions when choosing their dream apartment.

Defining Carpet Area

A carpet area is an available area within the walls of a property. Precisely, it is the net usable floor area or the wall-to-wall area. There is a notable difference between the carpet area and the built-up area.

To arrive at the carpet area, we include the following:

  • The area under the internal partition walls
  • Staircase present inside the house

The calculation of carpet area excludes the following:

  • Area covered by external walls
  • Balcony Area
  • Open Terrace Area

We often find that there exists a difference between the promised carpet area and the actual carpet area. It may either increase or decrease concerning the promised area. According to the rulings of RERA, there is a limit of 3% on the increase in carpet area.

Defining Built-up Area

According to the rulings of RERA, the built-up area also includes the area of the walls. For an apartment, the balcony area is also taken into consideration. People often confuse the two. Please note that the built-up area of a house is always more than the carpet area. Built-up area is the total available space in a property, whereas carpet area is the total usable area. It suggests that there is a difference between carpet area and built-up area.

On average, the carpet area is around 70% of the built-up area. Let us consider the built-up area to be 1,500 sq. ft. Then the carpet area will be 1,050 sq. ft.

Built-up area vs carpet area

The Built-Up area varies from 15% to 30% of the carpet area. For instance, if the carpet area is 1,500 sq.ft., the built-up area shall be 1,950 sq. ft.

Super Built-up Area

A housing society comprises the common facilities that residents have access to in addition to the built-up area. The common area is also a part of the super built-up area.

The common areas include areas occupied by:

  • Corridors
  • Lifts
  • Clubhouse
  • Staircases
  • Swimming Pool
  • Gymnasium
  • Lobby
  • Pipe
  • Air Ducts
  • Garden

There is an observable difference between built-up and super built-up areas concerning accessibility. The built-up area of a flat is accessible only to the owner, whereas the common area is open to all the residents.

Super Area vs Carpet Area

If the carpet area is known, the super built-up area is calculated, considering the loading factor.

The loading factor is calculated as the super built-up area minus the carpet area. It is proportional to the common amenities provided in society. The more amenities, the higher the loading factor.

The loading factor generally varies between 20% to 30% of the carpet area. It depends upon the developer and also the location.

For example, if the carpet area is 2,000 sq. ft. and the loading factor is 25%, the super built-up area is calculated as:

2,000(1+ 0.25) = 2,000 x 1.25 = 2250 sq, ft.

If we look at carpet area vs super area, the super area is always more than the carpet area.

Super area vs built-up area

Super-built up area = Built-up area + Proportionate Common Area

Let us understand this by considering an example. In an apartment, two people live on the same floor, but the built-up area differs for both. A person may own a flat with a built-up area of 700 sq. ft., and another may own a flat with a built-up area of 1,400 sq. ft.

Suppose the common area available is 1,200 sq. ft. Now, while calculating the super built-up area, the common area will be divided proportionally in the ratio of 1:2. The common area space available will be 400 sq. ft and 800 sq. ft proportionately. Hence, the super built-up area is proportionately 1,100 sq. ft. and 2,200 sq. ft.

Addressing discrepancies after handing over

As per RERA regulations, it is mandatory for real-estate builders to mention the carpet area in the brochures and also in the sale deed. The boundaries between the terms must be clear to the buyers before making a purchase.

After the handing-over of the property, any discrepancy in the carpet area is liable to a refund.

Conclusion

The lack of clarity on the space-measuring unit is dodged after the implementation of RERA. It is vital to note the subtle yet significant particulars before buying. Gauging the size of homes with a clear understanding of carpet area, built-up area, and super built-up area is crucial. It broadens our scope of understanding while dealing with property managers.

Moreover, it helps us to make a well-aware decision. Once the informed decision is made, taking a house loan is an option to proceed further. While applying for a house loan, one can resort to the housing loan EMI calculator.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.