Using deceptive terms to deceive home-buyers is a common practice in the real estate industry. The terms usually used by the developers in the Builder-Buyer Agreement can be tricky for those who don’t understand their actual meaning. Here are some of the important terms every investor/home-buyer in the real estate industry shall be aware of:
CARPET AREA
It is the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.
BUILT-UP AREA
Built-up area is the area that comes after adding carpet area and wall area. The wall area is the thickness of the inner walls of a unit. The built-up area also consists of other areas mandated by the authorities, such as a dry balcony, flower beds, etc.
SUPER BUILT-UP AREA
Super Built-up area is the area calculated by adding the built-up area and common area that includes the corridor, lift lobby, lift, etc. In some cases, builders even include amenities such as a pool, garden and clubhouse in the common area. A Developer/Builder charges you on the basis of the super built-up area which is why it is also known as ‘saleable’ area.
ESCROW ACCOUNT
The RERA Act, 2017 mandates the builders to keep 70% of the sales proceeds received from the allottees to be maintained in a scheduled bank to cover the cost of construction and the land cost.
COMPLETION CERTIFICATE
A completion certificate is a document issued by the competent authority that is awarded after the inspection of a real estate project, stating that it has been constructed according to the approved building plan and meets all the necessary standards set by the competent authority.
OCCUPANCY CERTIFICATE (OC)
The certificate issued by the local authority that certifies that a building is fit for occupation and has been constructed as per the approved plan and in compliance with local laws.
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