Among the many provisions the real estate regulator brought in through the Real Estate (Regulation and Development) Act (RERA), 2016, favoring the buyers, one of the provisions was that the sellers or real estate developers can only sell units on the basis of carpet area, and not built-up or super built-up area.
Carpet area is the area that is used by the owner of the house whereas the built up area includes the areas covered by walls or exclusive balconies and super built-up area casts the net wider to include common areas as well. Selling on the basis of super built-up area not only gives an inflated albeit wrong sense of the area of the house, but also reduces the per square feet cost of the house: imagine a 2 bhk with a carpet area of 900 sq.ft is priced at Rs50 lakh. This means a per sq.ft rate of about Rs5,556, but bring in the super built up area and suddenly you are buying a 2bhk of 1300 sq.ft with a per sq.ft rate of Rs3846. In both the cases, your livable area doesn’t expand, but the second proposition based on the built-up area looks more attractive.
Earlier, before RERA came in to existence, most developers used to sell apartments on the basis of super built-up area which consist of the apartment area and proportionate area of common areas such as elevator, stairs, lobby, clubhouse, play area and other amenities available in the project.
But in order to usher in transparency the Act states that developers have to now sell only on the basis of carpet area so that a buyer will get to know how much she is paying for the each sq. foot that she will get for her use. The Act also brought clear definition of the carpet area: “…the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment”.
Selling on basis of carpet area however, may not impact the total price of the property as developers are likely to club all other costs of development and raise the per sq. ft rate. It will, however, help home buyers get a clearer picture of the space and price.
“Buyers now exactly know how much space they would get inside their apartments. Previously when homes were sold on the basis of super built up area, there was no consistency as to what was included in the definition of super built up area and hence it was very opaque to the consumer as to what they would actually get in terms of carpet area,” said Dhruv Agarwala, Group CEO, PropTiger.com, Housing.com and Makaan.com, real estate portals.
Typically carpet area is 25-35% or more lower than super built up area . For instance, if an apartment is said to be the size of 1,400 sq. ft, the actual usable area, or the carpet area, will be 910-1,050 sq. ft.
Although some builders have started quoting the final price of the units instead of quoting the per sq.ft rate, the new rules put in place help buyers with clarity.