Are You Aware of these terminology in Real Estate?

Having a basic understanding of important real estate concepts before you start the home buying process will give you peace of mind now and could save you a fortune in the future. Here are some real estate terms you should know before you start looking for a home/office.

Atrium Skylighted naturally / artificially ventilated area in buildings, with no intermediate floors, often used as circulation space or an entrance foyer or a sit out place.

Built-up-Area means any area covered by a building on all floors including cantilevered portion, mezzanine floor.

Built-up area is the area that comes after adding carpet area and wall area. Now, the wall area does not mean the surface area, but the thickness of the inner walls of a unit. The area constituting the walls is around 20% of the built-up area and totally changes the perspective. The built-up area also consists of other areas mandated by the authorities, such as a dry balcony, flower beds, etc., that add up to 10% of the built-up area. So when you think about it, the usable area is only 70% of the built-up area. So, if the built-up area says 1200 square feet, it means around 30% (360 square feet) is not really usable, and the actual area you will get to use is only the remaining 840 square feet.

“Carpet area” means the net usable floor area within a building excluding that covered by the walls, common areas (such as common staircases/ common passages and corridors) but including doorjambs.Carpet area is the area that can actually be covered by a carpet or the area of the apartment excluding the thickness of inner walls. Carpet area does not include the space covered by common areas such as the lobby, lift, stairs, play area, etc. Carpet area is the actual area you get for use in a housing unit. So when you are in search of a house, look at the carpet area and then make your decision, because that is the number that will give you an idea of the actual space at your disposal. Focusing on the carpet area will help you understand the usable area in the kitchen, bedroom, living room, etc. Nowadays, many builders don’t even mention carpet area at first, and usually, charge on the basis of built-up area or super built-up area. Carpet area is usually around 70% of the built-up area.

Carpet area is the area that can actually be covered by a carpet or the area of the apartment excluding the thickness of inner walls. Carpet area does not include the space covered by common areas such as the lobby, lift, stairs, play area, etc. Carpet area is the actual area you get for use in a housing unit. So when you are in search of a house, look at the carpet area and then make your decision, because that is the number that will give you an idea of the actual space at your disposal. Focusing on the carpet area will help you understand the usable area in the kitchen, bedroom, living room, etc. Nowadays, many builders don’t even mention carpet area at first, and usually, charge on the basis of built-up area or super built-up area. Carpet area is usually around 70% of the built-up area.

“Development Plan” means a plan for the development of the area within the jurisdiction of a Special Planning Authority and includes an Interim Development plan, revision of a development plan and proposals of a Special Planning Authority for the development of land within its jurisdictions.

“Floor space index (FSI) / FAR” means the quotient or ratio of the combined gross floor area of all floors, excluding areas specifically exempted from built up area calculation

FAR is calculated by a simple formula – totally built up area of all floors divided by the plot area. Suppose the builder has got a plot of 1,000 sq m and the permissible FAR, according to development plans, is 1.5. He is allowed to construct a building on 1,500 sq mt of this plot. It is the ratio of the total floor area in the building compared with the total plot area. The constructed area would include the basic structure, walls, staircase or lobby space, if anyFor example, if for a particular plot area of 10,000 square meters, an FSI of 1 is allotted, then the construction of 10,000 square meters would be allowed for the project.

“Marginal Open Space / Setback” means minimum distance required to be left open to sky between the boundary of the building plot or access road/existing road/ layout road / internal road/ proposed IDP road and the building excluding courtyard/Chowk, which is an integral part of the plot.

“Mezzanine Floor” means an intermediate floor between two floors of any story, forming an integral part of floor below, overhanging or overlooking a floor beneath, not being a loft between the floor and the ceiling of any storey.

“Net Plot area” means the area of the plot arrived after deducting from the gross area of the plot the area covered by IDP reservations, existing roads and amenity spaces.

“Plinth” means the portion of a structure between the surface of the surrounding ground and surface of the floor immediately above the ground.

“Podium” means raised platform like structure wider than the main building

“Stilts or Stilt Floor” means the portion of a building above ground level consisting of a structural column supporting the superstructure with at least two sides open for the purpose of parking vehicles, scooters, cycles, etc.

“Super Built-up Area” It is the area calculated by adding the built-up area and common area that includes the corridor, lift lobby, lift, etc. In some cases, builders even include amenities such as a pool, garden, and clubhouse in the common area. A Developer/Builder charges you on the basis of the super built-up area which is why it is also known as ‘saleable’ area.

Loading Factor” It can be defined as the area which includes the proportionate share of the common area for a flat which is determined by applying a multiplier to the carpet area. In general, builders include space around staircases and elevators as common areas while calculating the loading factor. Thus, loading factor, when combined with the carpet area, gives the super built-up area of a flat.For example, if a builder puts 1.25 as the loading factor, then it means 25% of space has been added to the carpet area of the flat. If the carpet area of a flat is 500 square feet then the super built-up area of the flat can be calculated as 500 square feet + 500 x 25% = 625 square feet.

OSR (Open Space Ratio): It is a terminology commonly used in the development of residential spaces. OSR is calculated by dividing the total amount of open space (which is commonly owned on the residential land parcel which is proposed for development) by the total area of the entire land parcel (which is proposed for development). Although, areas like parking lots and recreation areas are included in open spaces.

For example, if there are 4 acres of common open space and 8 acres of the land parcel proposed for development, then the open space ratio is 50%.

Construction Stages:

1) Mobilisation

Mobilisation is the process of making the plot ready for construction. The process generally involves building a fence around the plot, making necessary services available, transport of construction tools and equipment to the plot and building a shed for the laborers.

2) Ground Work

The process of leveling the ground of the plot, benchmarking and cleaning the plot comes under the phase of ground work.

3) Sub-Structure Work

Substructure work involves the construction of structures like the foundation, neck columns, grade beams, the ground floor, etc.

4) Super Structure Work

Superstructure work involves the construction of the structures that are situated above the ground like columns, slabs, beams, staircases, etc.

5) Masonry Work

Masonry work is a phase in which everything comes into shape and gets a face. It involves plaster work and leveling of the walls and ceilings. This stage is what prepares the project for the services work.

6) Services Work

Services work includes electrical work, sanitary work, plumbing work, etc. It involves fixing lights and fans, bathroom fittings, toilet equipment and anything else that would be provided by the builder.

7) Finishing Work

At this stage, it is time to give the final touch to the property. It involves painting and any kind of carpentry work like doors, door frames and, in some cases, false wooden ceilings.

8) Completion

Completion stage of the building construction process involves cleaning of the built property, final inspection, and handover of the property to the buyer.

Types of Approvals

  1. Commencement Certificate

A commencement certificate is a document you need to look for if you are planning on investing in an under-construction project. A commencement certificate is like a permission letter provided by the concerned authority allowing the builder to begin construction. Generally, commencement certificates are issued by local authorities like the municipality after they have inspected and taken into consideration the plans and engineering of the project. A builder is not supposed to start construction before receiving the commencement certificate.

  1. Completion Certificate

A completion certificate is a document given by the local authorities to the builder. A completion certificate is a proof that the construction of the building has been completed keeping in mind all the legal guidelines and safety norms such as enough space in the compound for an ambulance to turn around and a fire brigade to enter, earthquake resistant technology, etc. The absence of the completion certificate may lead to not only safety hazards but also legal matters.

  1. Occupancy Certificate

OC, which is the acronym for a certificate of occupancy, is another similar document issued by the local authority, indicating that the construction of the project is completed keeping terms with the legal laws and safety norms and that is now suitable for occupancy. The main purpose of the occupancy certificate is to say that the building is now in a legally habitable condition according to the law. Once the builder obtains the occupancy certificate you are good to go. In the case of the Campa Cola mess, the builder did not get the occupancy certificate and accommodated the residents without it. This led to several families losing their home and their life savings.

“Zoning” describes the control by authority of the use of land, and of the buildings thereon. Areas of land are divided by appropriate authorities into zones within which various uses are permitted. Thus, zoning is a technique of land-use planning as a tool of urban planning used by local governments

Urban zones fall into one of five major categories: residential, mixed, residential-commercial, commercial, industrial and spatial (e.g. power plants, sports complexes, airports, shopping malls etc.).

“Transfer of Development Rights (TDRs)” is a planning tool to preserve land where development is undesired, and promote density in specific targeted areas.

The concept is quite simple: Take parcels that are not using their total development rights, and allow them to sell and transfer those unused rights to another parcel that wants to exceed its permitted density restrictions

The TDR program allows the landowners to separate the right of ownership of the land from the right of its development. This way a farmer can continue to farm on his land while giving up his developmental rights to a property developer as TDR for a consideration.

“Freehold Property” The owner’s right over the property is full and unconditional. There are no restrictions on the right of the latter to further sell and transfer the ownership of that property. In the case of a standalone property, the owner owns the property as well as the land on which it stands. In the case of a multi-level property, land ownership is usually divided in proportion to the floor area of each owner. The ownership of a freehold property is transferred to another buyer through registration of sale deed

“Leasehold Property” The land owning agency gives the land on lease to a lessee for a stipulated period. The land ownership remains with the lessor. The lessee pays a lease premium. After the stipulated period gets over, allotters have to renew the lease by paying the lease rent once again that is usually after 90 years. Leased properties can also be converted to freehold provided permission has been obtained from the land-owning agency

Metric Units

  • 1 square meter = 10.76 square feet
  • 1 square yard = 9 square feet
  • 1 square hectare = 2 square acres
  • 1 Acre = 4048.32 sq.m and 43,560 sq.ft

“Benami Ownership” In Benami Ownership, the title of the property is in one party’s name and the real ownership is in another party’s name.

“Earnest Money Deposit or EMD” A nominal sum of money given as a token to the vendor, signifying the assent to a contract of sale or the like, that the parties are in the earnest or have made up their minds.

“Encumbrance Certificate” A report issued by Registrar of Assurances or Sub-Registrar’s office after due verification of the relevant documents certifying that the property in question is free from all encumbrances such as mortgages, leases, easements or restrictions.

Will keep updating the list to make sure all the important terms are complied at one place.

 

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