Guide to Real Estate Jargon
As if the home buying process isn’t nerve-wracking enough, we are often bombarded with confusing and never-heard-before real estate terms. Wouldn’t it be great to have a list of such terms handy so that you are well-prepared for your next house-hunting trip? Yes, of course it would be, which is why we bring you some of the most commonly used real estate jargon:
Carpet Area Carpet area is the functioning area within the walls of the home unit. To put simply, carpet area is the area that can be covered with a carpet. Usually, in large housing societies with common amenities, the carpet area can be as small as just two - third of the built-up area. The carpet area for a rectangle room can be calculated by measuring the width and length and then multiplying the two numbers.
Built-up Area This includes the carpet area and the area occupied by the walls, corridors, basement, lobbies, lift area, staircases, etc. When purchasing the property, you pay for the built up area but occupy only the carpet area. For example, in case of a terrace, usually half of the terrace area is considered as chargeable area for different purposes. In this case the built-up area is carpet area + area of walls and ducts + half the area of the terrace. Built-up area is normally 10% more than the carpet area.
FSI (Floor Space Index) Floor Space Index or Floor Area Ratio (FAR) is the total covered area on all floors of all buildings on a plot divided by the area of the plot. Basically, this is the buildable area of the plot.
FSI is subject to regulations by municipal and other authorities. A number of factors like location, population density, etc., are considered for an acceptable FSI. Before buying a flat, make sure you are aware of the maximum permissible FSI in the locality and that your builders are adhering to the rules.
Premium FSI refers to the permission to construct an extra floor by paying a premium. This helps builders better utilize space where the price of land is excessively high, resulting in added value for the buyer.
For example, if the plot area is 10000 square feet and the FSI allocated for the area is 1.5, the total buildable will be 1.5 x 10000 = 15000 square feet.
Stamp Duty Stamp duty is a tax collected by the government and is paid to get the stamp paper on which the sale deed is written and signed by both the parties before registration. The payment of proper stamp duty on the sale deed makes it legal and can be admitted as evidence in a court of law. Usually, the stamp duty is paid by the transferee/purchaser or if agreed to, by both the seller and buyer equally. Stamp duty varies from state to state and is usually five to six percent the value of the property.
Registration Charges This is the fees paid for getting the legal title registered in the buyer's name. Registration is done at the sub-registrar's office and registration charges also differ from state to state.
Common Area Maintenance Charges (CAM) This is a recurring charge paid after the possession of the property. Properties in India are mostly group housing projects or society apartments with shared common areas like driveways, parking lots, etc. CAM specifies the share of certain defined costs pertaining to maintenance, improvement, repair, replacement, operation, and insurance of such common areas shared by all the residents of a building, along with the cost of administration and other expenses. CAM can be calculated as: All common expenses multiplied by the built-up area of individual dwelling unit divided by the gross leasable area. CAM charges differ from one society to another.
For more useful tips and expert real estate advice, visit PropTiger.com