Home Properties
Thinking of buying a flat but don’t quite
understand the jargon that
the developer or seller is using?
No problem. GODREJ PROPERTIES LTD. explains to readers some of the common
terminology
that they will come across while buying property.
A Guide for the
Homebuyer
Carpet Area: The net usable area. The carpet area is the area from the inner sides of wall to wall.
Built-up Area (BUA): Over and above the carpet area, this includes the space covered by the thickness of the inner and outer walls of the flat. (This is usually approximately 15 per cent more than the carpet area of the flat.)
Saleable Area (SBUA): Apart from the BUA, this will include the proportionate common areas on the floor such as the passage, staircase, etc. (Approximately 25 per cent to 40 per cent of the carpet area.)
Development Control Regulations: These are the rules and regulations provided by the municipal corporations for developing residential and commercial properties in and around its jurisdiction.
Floor Space Index (FSI): This is the ratio of floor to space, which is allowable by the municipal authority in the development control regulations, for the purpose of development. For example, if the FSI is 2.5, then over an area of 1 square metre, the developer can utilise a space of 2.5 square metres.
Commencement Certificate: This certificate is given by the Municipal Corporation permitting the developer to begin construction. This is done once the plans have been approved.
Occupancy Certificate: A document issued by the municipal corporation to a developer or owner permitting the structure to be occupied by members of the public. Issuance of the certificate generally indicates that the building is in compliance with the development control rules.
Completion Certificate: After the Municipal Corporation gives the Occupation Certificate the Completion Certificate is issued after complying with other formalities.
Search Report and Title Certificate: An advocate issues a Title Certificate after conducting a search on the title of the property to be purchased. The Title Certificate would state if the property is unencumbered and has a clear marketable title. It is mandatory for the developer to annex a copy of these reports in the “Agreement for Sale” with the intended purchaser of the flat. It would state whether or not there is any existing mortgage, litigation, condition or claim, which is likely to affect the title of the buyer adversely.
Agreement of Sale: A contract to enter into the sale of a flat or premises, which in order to be enforceable must be evidenced in writing and signed by the owner and the purchaser. The Maharashtra Ownership of Flats Act also specifies that copies of the Title Certificate issued, a copy of the approved plans and a specification list of fixtures and amenities, including provisions for lifts, should be attached to the Agreement.
Conveyance Deed or Sale Deed: This is a Deed document by which the title of property is conveyed by the seller to the purchaser. Conveyance is the act of transferring ownership of the property from a seller to the buyer.
Payments of Stamp Duty followed by the registration of the Agreement are two important procedures when one enters into an agreement with a developer/seller. Both the developer/seller and the purchaser need to be present at the Sub-Registrar’s office for registering the Agreement.
Stamp
Duty: Stamp Duty is a State subject and hence would vary from State
to State. The Stamp Duty in many States is paid as per the true market value
as assessed by the Stamp Office (market value means the price at which a
property could be bought in the open market on the date of execution of such
instrument). The Stamp Duty is payable on the agreement value of the
property or the market value, whichever is higher.
Registration of an Agreement: The Agreement should be registered
with the Sub-Registrar of assurances under the provisions of the Indian
Registration Act. Stamp Duty should be paid prior to the Registration.