Evolution of Super Built up area

The one who is reading the article surely knows what is carpet, Built up and Super Built up area. This article is not to explain the definition but to understand how concept of Super built up area started and how it is misused by developers till date.

All over India, the super built-up concept has taken its place in real estate transactions. It is applicable to residential units, commercial premises. Although there is no place of such a concept in any law for the time being in force, the transactions cannot take place without it.

Question is, who invented and why? When builders started selling concepts instead of flats in the early 80s, they were asked to sell it on the carpet and no due charges were given for the extra amenities they had provided.

The balcony was charged an extra premium by the Corporations and builder mounted balcony area on carpet area of the flat. And slowly they started adding areas of passage, common staircase, lift wells, compounds, terrace, gardens etc on the carpet area to maximise the profits.

Basically, Additional area like passage, staircase, Lift etc was to be divided proportionately among all the flat owners. Average % accounting for additional area is approx 20 %.

The permissible Super built-up ratio was 20 % that time and is still applicable. But the trend changed over the years. Builders started miss using it by  mounting 23% in the early 90s then 30% in late 90's and nowadays the majority of the builder sells nothing less than 33% to 45% on residential units, 50% to 200% on commercial premises without any logic and justification to the percentage. 

Different ways used by different builders to calculate the super area.

A)Super area= ( Carpet Area ) X loading + 100 percent terrace.

B) Super area = ( Carpet area + 50 % terrace Area ) X loading.

C)Super area = ( Carpet area + 100 % terrace ) X loading.

D) Super area = (carpet area ) X loading + 33 % garden or parking. 

Now, you may think which is correct and which is wrong. 

As there is no legal definition, all are valid and can be correct. Builder sell the way he wants. But the entire practice is wrong as % is not justified anywhere.

Moreover, this is not just the practice in tier I or metro cities like Mumbai , Ahmadabad, Delhi, Bangalore, Pune, Nashik alone but also tier II and tier III cities like Aurangabad, Nagpur, Bhopal are following the trend.

The practice earlier was only for the projects that provided lifts , Amenities, Terraces , Passages. But now the loading concept is applied to even a LIG MIG affordable projects where in they Don't even provide any of the additional Amenities. 

Imagine a affordable Unapproved project having a 1 RK row house structure of carpet area of 300 sqft applying the loading of 35 % to it without any logic. They are applying just because everyone else is applying. 

This led to the sudden rise in property prices from incorporation till date. Now after so many years, when RERA came into existence, which mandated to sell the property purely on carpet area, Builders have adjusted the per sqft rate to keep the flat price same. Now, Either you pay Rs. 2600/- as on super built up or Rs. 3800/- on the carpet, your flat will still cost Rs. 18,00,000/- for 2 BHK. 

So indeed the property prices remained unchanged.

Being the part of the same system, we valuers willingly or unwillingly are following the same practice. Either we apply loading on per sqft rate or loading on carpet, Fair market value remains the same. So If you ask me what is correct? Then I will say both are wrong and it's just that we have to choose one from two wrong concepts. However a Valuer should ideally give the valuation on carpet area. Rate can be justified, area cannot.

How can we make this loading concept more transparent and genuine ? I believe if Architects start mentioning or Government mandates to mention the carpet area of each flat and proportionate common area for flats in the sanctioned plan itself then we can arrive at the justified sale-able area.Now Buyer should know what he is paying for. 

At the end , someone rightly said “Earth will swell 70 % if developed by a Mumbai developer” ??

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-Red Hawk Valuers & Advisors Pvt. Ltd.