Who
invented super built up ?
By
Sanjay Chaturvedi
All over India, super built-up
concept has taken its place in real estate transactions. It is
applicable to residential units, commercial premises and now to the
open vacant land.
Although, there is no place of
such concept in any law for the time being inforce, the transactions
cannot take place without it.
Question is, who invented and
why ? When builders started selling concepts instead of flats in early
80s, they were asked to sell it on carpet and no due charges were
given for the extra amenities they had provided.
The balcony was charged extra
premium by the BMC and builder mounted balcony area on carpet area of
the flat. And slowly he started adding areas of passage, common
staircase, lift wells, compounds, terrace, gardens etc on the carpet
area to maximise his profits.
The permissible built up ratio
was 18% that time and is still applicable. But the trend changed over
the years. Builders started mounting 23% in early 90s then 30% in late
90s and nowadays majority of the builder sells nothing less then 33%
to 45% on residential units, 50% to 200% on commercial premises.
Government agencies like MHADA, SPPL, DDA and CIDCO are also following
the trend.
Landlords are also now very
well informed on such practice and hence sell the open land to
developers by adding 33% of saleable area.
This is not the practice in
Mumbai alone. Ahmedabad, Delhi, Rajkot, Bangalore, Pune, Nashik,
Kolkatta, Chennai and elsewhere in India are following the trend.
When Mr. Deepak Parikh,
chairman, HDFC, boldly said
in CREDAI meeting at Bangalore that the sale must be on carpet area,
no developer came forward to announce his intention to sell at carpet
area except Mantri Group. CREDAI has itself imposed code of conduct
which clearly says that the carpet area must be mentioned in sale
agreement. The Confederation of Real Estate Developers Association of
India failed to impose such code.
In Model Agreement under
Maharashtra Apartment Ownership Act, it is mandatory to mention carpet
area in sq.mtrs. And the model agreement is mandatory to be followed
for entering into an agreement. But sellers never follows the model
Agreement, instead drafts one sided agreement to protect them and
attack the purchaser without any fault.
A thought was coined by MCHI
office bearer, in a talk show on some channel recently, that we give
extra amenities, extra open space, extra lifts and other amenities, we
are charging for that. And super built-up area is just a method for
calculating the rates. Either you pay Rs. 2600/- as super built up or
Rs. 3800/- on carpet, my flat will cost Rs. 18,00,000/- for 2 BHK.
Open spaces are mandatory to
be left alone in the Development Rules of BMC. The builder has to keep
such open space. By just decorating and using it as USP for the
project, it doesn't give him any reason to mount on the carpet.
It is already written in DC
Rules and proven that lift wells and staircase do not count in the
total constructed FSI, hence charging such area on carpet is not
justified.
Compounds also cannot be
charged on carpet, because anything open to sky is not saleable. Non
saleable areas cannot be sold by proxy. It cannot be counted in area
of occupation. Also, open car parkings are been sold, hence builder
should not charge the open compounds twice, once sold as car parking
and secondly mounting such areas on carpet. Even open car parking
cannot be sold.
Lastly, the customer who
register their documents on super built-up area pays higher property
tax, society charges for life time. He pays the taxes for lifetime on
the area which he is not occupying and only mentioned on paper. Higher
stamp duty and Registration charges on super built-up area is also not
justified.
It was indeed a great concept
two decades ago, but now when transparencies are discussed, the seller
must be Caveat Emptor. Let the buyer be beware of everything which he
is paying for. Founder Convenor Mr. K.V. Satyamurthy, FAAI rightly
raised the voice as "Maap Mein Paap Nahin". An upcoming
rating agency sent a SMS to this author, said "Earth will swell
45%, if developed by a Mumbai developer"
[Counter arguments are
invited. Just mail on sanjay@accommodationtimes.com]
Updated
on 6th September 2005
