Buying your own house is unarguably one of the biggest life decisions and for most people its once-in-lifetime purchase. As you pour your life saving into buying your dream home, you will have to navigate several jargons that may tend to overwhelm you. We have listed a few key terms, the understanding of which is crucial and will help you make an informed decision.
Carpet area: The project area that can be completely carpeted- the space between the external walls to the internal walls is the carpet area. Also, staircase if inside the house can be accounted as part of this. While the width of the internal walls is part of the carpet area, it doesn’t include the balcony or terrace that is attached with the house. Remember that the carpet area is approximately 70 per cent of the built-up area. So, for a built-up area of 1,000 sq ft, the carpet area is 700 sq ft.
Built-up area: Also known as the plinth area, this includes the area from the external to internal walls and the balcony, private terrace or the help’s room that is a part of the house. Built-up area can be calculated as the sum of area that is covered by the walls and the carpet area. This is around 10-15 % of the carpet area plus the carpet area.
Super built-up area: The built up- area plus the common areas like lobby, podium, corridors, elevators, staircases, refugee area and club house that are part of the construction of the project all make up for the super built-up area. 1.25 is the multiplying factor used by developers to calculate the value of super built-up area. With this the saleable area increases by 25 per cent and this is also known as loading.
Sales deed: This is the most important document in one’s possession after buying a house, based on which registration of the property will be allowed. This document is made according to the value mentioned under a state’s stamp duty act. Once the document is signed by both the parties namely the seller and the buyer, the realty transaction is valid legally.
Land title: Land titles are basically an official record to affirm a person’s legal possessorship on a particular piece of land.
NOCs: The No Objection Certificate (NOC) is required before the developer proceeds with the construction of the project and before a buyer buys a property. This is a very important legal document, absence of which is a matter of concern for both developers and buyers. A developer might not be able to proceed with the construction unless the required NOCs are in place and a buyer cannot take possession of the property until the project in which he has invested in has been granted a NOC. A buyer can check with RERA if the project has received the NOC.
Freehold property: No other entity except the owner has any hold on the land that one is investing in. So, in a freehold property, keeping in mind the regulations of the place, a person can use the land in any way he wishes to - revamp it, transfer to others or sell it. As there is no government intervention needed for a freehold property, the document work related is comparatively lesser and hence are slightly expensive.
Occupation Certificate (OC): This document certifies that the project has been developed and constructed as per the regulation norms and plans approved by the authority and can be occupied by the residents. Without an OC in hand, the developer cannot apply for basic connections including electricity and water supply.
Commencement Certificate (CC): This is a certificate allotted by the local authorities to the developer to commence project construction. This is issued on the basis of an architectural draft that is in sync with regulatory and safety norms, A buyer should check if the developer has a CC certificate before investing in a project as absence of it means the project is illegal and one can lose their money if invested.
Floor Space Index (FSI): The ratio of the total built-up area and the total plot area is the FSI. Controlled by the municipal authority, the FSI determines the height and the size of the project and is vital to regulate construction activity.
Conveyance Deed: This is an instrument valid in a court of law that transfers all rights of ownership of a property from the seller to the buyer. With this legal document, the buyer can legitimately own the property and absence of this makes the purchase invalid.
Real Estate Regulation Authority (RERA) - RERA is an Act of Parliament of India passed on March 2016. RERA protects the interests of the home buyers by regulating the real estate industry, creating awareness and attending to the customer grievances. All projects have to be RERA approved/certified and the status of the under-construction projects have to be updated quarterly on the RERA website, thus keeping the buyers posted on the construction progress. Additionally, the property consultants also have to be RERA certified to work in the realty segment. This streamlining of the segment has resulted in weeding of the fly-by-night operators from the real estate sector and has encouraged investments in the segment.