Definition of Carpet Area under RERA 2016

Dear Friends,

Real Estate Sector before introduction of RERA,2016 was one of the most unregulated sector in the country. We know that the Real Estate Sector is contributing around 6.5 to 7% of the GDP of India. In this unregulated sector , the consumers are the real victim and their hard earned money is duped by the " Fly buy night ", promoters or real estate developers. Since there is no judicial remedy except Consumers Courts under the Consumer Protection Act, 1956. There existed an asymmetry of information between the promoters and buyers of real estate. Buyers lacked adequate information about the title to the land, the nature of development and the creditability of the developer , pricing of projects etc., the promoters earlier charged inappropriate rate for flats/shops on the basis of unregulated lodging on the flats. There was a lack of standardization and uniformity was key factors restraining better development of the real estate sector and due to this, the confidence of innocent customers were on jeopardised. This practice is still going on due to collision of authorize and the developers.

INTRODUCTION

RERA BILL,2013

The Standing Committee on Urban Development (2012-2013) of the 15^th Lok Sabha submitted its report on Real Estate ( Regulation and Development ) Bill, 2013. The committee emphasised for establishment of a regulator to control and development of Real Estate Sector in the country.

Inviting Suggestions by the Standing Committee- upon being introduced in the Upper House the RERA Bill has been transferred to Standing Committee and committee then asked for representations and suggestions on the draft bill. The committee held 17 sittings and after hearing grievances and suggestions of various players of the industry, the Standing Committee observed that in bringing about a balance between the need to protect consumers with the necessity of encouraging investment in the real estate.

The Committee observed and hear the grievances of the consumers, who were duped by the " fly by night operators", it was cognisant of the position that thee real estate sector was largely being developed through private promoters , all of whom could not be tarred with the same brush. The Committee further observed that there was a need to ensure that a renewed impetus is provided for the growth of the real estate sector to fulfil the government’s objective of ensuring housing for all, while at the same time protecting the interest of consumers.

RERA BILL, 2016

On the basis of the report of the selection Committee, the RERA Bill, 2016 was introduced and passed by the Parliament on 25^th March, 2016. The RERA, 2016 came into force from 1^st May, 2016 and initially with notification of 59 Sections out of a total 92. Remaining sections became effective from 1^st May, 2017.

The RERA, 2016 sought to remedy the drawbacks of the existing regulatory framework in the country by establishing a real estate regulator to ensure that transactions between the promoters and the buyers and governments by the twin norms of efficiency and uniformity.

The RERA,2016 sought to bring amount accountability towards consumers and to significantly reduce frauds, delay and high construction costs.

The main objective of RERA, 2016 are as follows

1. Symmetry of information between promoters and purchasers;
2. Transparency of contractual conditions;
3. Threshold standards of standardization of accountability ; and
4. A fast-track dispute resolution mechanism.
5. To establish the Real Estate regulatory Authority for regulation and promotion of the real estate sector; and
6. To ensure sale of plot, apartment or building ,as the case may be, or sale of real estate project , in an efficient and transparent manner; and
7. To protect the interest of consumers in the real estate sector; and
8. To establish an adjudicating mechanism for speedy dispute redressal ; and also
9. To establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of –

• The Real Estate Regulatory Authority; and
• The Adjudicating Officer; and

For matter connected with or incidental thereto.

Please Note That: The RERA ,2016 is retroactive in character and provisions of RERA,2016 will not be applicable to those projects , which have been completed on the date of enactment , but applicable on projects ,which are going on or in respect of which Completion Certificate has not been received by the promoter developer.

FIRST TIME, in the real estate history a legislation has defined " CARPET AREA"-

SECTION 2(k) of RERA, 2016 defines – "Carpet Area", means the net usable floor area of an apartment, excluding the area covered by external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area by the internal partition walls of the apartment.

Explanation- for the purpose of this clause, the expression " exclusive balcony or verandah area" means the area of the balcony or verandah, as the case may be , which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the allotted;

and " Exclusive Terrace Area" means the area of open terrace which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the allotted.

IT MEANS THAT "CARPET AREA", IS THE NET USABLE FLOOR AREA OF THE APARTMENT.

EXCLUSIONS FROM CARPET AREA

1. Area covered by external walls;
2. Areas covered under services shafts;
3. Exclusive balcony or verandah area ( i.e. area of the balcony or verandah, which is appurtenant to the net usable floor area of an apartment, meant for he exclusive of the allotted);
4. Exclusive open terrace area( i.e. area of open terrace which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the allotted).

INCLUSION IN CARPET AREA- such area includes the area covered by the internal partition walls of the apartment.

DIFFERENCE BETWEEN "CARPET, BUILT-UP AND SUPER BUILT-UP AREA"

• Carpet Area
• Built -Up-Area
• Super-Built Up -Area

It simply means an area that can be that can be covered by carpet or say the inner distance between the walls. Common area such as lift, lobby etc. are not included in the Carpet Area.

It includes the carpet area plus the wall thickness along with other unusable areas of a building complex.

 It is the total saleable area of a premise ,which includes the Carpet Area along with the terrace, balcony, verandah, areas occupied by walls and area occupied for common uses like lifts, stairs etc.

1. Carpet Area= Net Usable Floor Area+ Internal walls
2. Built-up-Area= Carpet Area+ Area of Walls
3. Super Built up-Area= Built Up Area+ Common Areas.

SECTION (n) "common areas" mean

(i) the entire land for the real estate project or where the project is developed in phases and

registration under this Act is sought for a phase, the entire land for that phase;

(ii) the staircases, lifts, staircase and lift lobbies, fire escapes, and common entrances and exits of buildings;

(iii) the common basements, terraces, parks, play areas, open parking areas and common storage spaces;

(iv) the premises for the lodging of persons employed for the management of the property including accommodation for watch and ward staffs or for the lodging of community service personnel;

(v) installations of central services such as electricity, gas, water and sanitation, air-conditioning and incinerating, the system for water conservation and renewable energy;

(vi) the water tanks, pumps, motors, fans, compressors, ducts, and all apparatus connected with installations for common use;

(vii) all community and commercial facilities as provided in the real estate project;

(viii) all other portion of the project necessary or convenient for its maintenance, safety, etc., and in common use.

Let’s consider an example:  suppose in a society Mr. X has purchased a Flat having Super -Built Up Area of 1200 sq.ft( Carpet area 900 Sq.ft.) of Rs. 60.00 Lakhs. The developers are generally charged post prior t enactment of RERA, 2016 on 1200 sq.ft and the rate was Rs. 5,000/-sq.ft. Now post RERA ,2016 the rate will be Rs. 60.00 Lakhs/900 Sq.ft i.e. Rs. 6667/- sq.ft.

Super Built-up Area = Carpet Area + Area of walls + Common Area + Share Areas.

DISCLAIMER: The article produced here is only for information and knowledge of readers. It is advisable to consult with professional for more understanding and clarification.