POSTED BY Jig ON April 24, 2012 5:12 pm COMMENTS (4)

I have came across one very good video by NDTV PROFIT and they were discussing about how builder is not keeping their promises.
My concern is:
Calcuation of loading area in FLAT;

For example Flat with
Super Builtup Area:1000
Carpet Area: 800

then builder says its a 20% loading but actually it is calculated as below:
Loading is : (1000-800)/800 which is actually 25%. and this way they mis selling to consumers.

Now in some cities it is much much more upto 45 to 50%. As a consumer , Are we not eligible to get some transperant data so we can clarify/measure while doing our once in lifetime investment ( for our dream home)?
Should there be any body who regulate / provide guidelines for such things?

I know personally the projects who has SBA is 1300 and carpet area is 800. Now think Consumer is paying for what and what he will get?

This i just would like to bring in notice and for discussion by some law professionals if there is any on this forum.

4 replies on this article “REAL ESTATE TERMS”

  1. Dear Jig, there are some signals from GOI of India for appointing a regulator for real estate sector. When ‘ll it happen only God knows?

    Now from your own query & the problems you are facing, you can understand why most of us are not in favor of Real estate as an investment grade asset class.



  2. BanyanFA says:

    For Commercial Property, the only thing to keep in mind is LOCATION, LOCATION & LOCATION, else your property will be lying vacant.

    Indeed there are some laws, but no enforcement – ya courts can help, but good luck on that front.

    Hence, as a principle, I avoid advising on Real Estate bits considering if things go wrong, they go horribly wrong !


  3. Jig says:

    Thanks Dear BFA,
    Thats very true. Well but here appreciation part is not touched and defenately it will be there if you have good location for investment.
    But what i was wondering that , there is NO Regulation for such construction / real estate buisness who supposed to take care of consumers. What is the role of consumer protection then?



  4. BanyanFA says:

    Hi Jig,
    I have personally done a big research in this and the end result was that I didn’t invest in any builder property, specially commercial properties. The builders sell the entire floor area at premium prices and provide just over 50-60% as the actual useable area of the shop / flat.
    Considering the fact that the buyer ends up paying a for the super area, he should own a % of the overall property, however the reality is far from it. The Builder maintain their right over the common area which later on they end up extending to further their profits.
    In many cases I have even seen that the builder would put multiple parts of the common are on rent (via ATM, advertisement boards) and make a hugh killing on the money of the buyer.

    Hence, personally I don’t really like investing in such Commercial Properties due to an excessive cut taken by the builder.


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