by Sukunj Realty 
Understanding Property Pricing: Carpet Area vs. Super Built-up Area Under RERA
Introduction RERA
When purchasing a property, one of the most crucial factors is understanding how the price is determined. Traditionally, builders in India have used the concept of super built-up area, but with the implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA), there is a legal push towards transparency in property transactions by mandating the use of carpet area for pricing. This blog will explore what these terms mean, why RERA emphasizes carpet area, and the implications for both buyers and builders.
Key Terms Defined
Carpet Area: According to RERA, carpet area refers to the net usable floor area of an apartment, excluding external walls, areas under services shafts, exclusive balcony or verandah area, and exclusive open terrace area. Essentially, it includes the area where a carpet can be laid, thus providing a clear picture of the usable space inside the property.
Built-up Area: This is the carpet area plus the thickness of external walls, areas such as balconies, and other spaces that are part of the unit but not necessarily usable living space.
Super Built-up Area: This includes the built-up area plus a proportionate share of common areas such as lobbies, staircases, lift shafts, and amenities like the clubhouse. This measure inflates the overall size of the property, thus impacting the price per square foot.
The Legal Framework: RERA’s Stance
RERA mandates that property sales should be based on the carpet area. This regulation aims to eliminate confusion and prevent the inflation of property prices through the inclusion of non-usable spaces in the super built-up area. By standardizing the definition and usage of carpet area, RERA seeks to ensure that buyers know exactly what they are paying for and to foster transparency in the real estate market.
Why Builders Prefer Super Built-up Area
Despite RERA’s clear guidelines, many builders continue to quote prices based on the super built-up area. Here are some reasons why:
1. Traditional Practice: The real estate market in India has long used super built-up area for pricing. Both builders and buyers are accustomed to this method, which includes shared spaces that enhance the living experience.
2. Perceived Value: Builders argue that the super built-up area gives a more comprehensive understanding of the total space a buyer gets, including access to amenities and common facilities that add value to the living experience.
3. Financial Viability: Charging based on the super built-up area helps builders cover the costs of constructing and maintaining common areas. This ensures the financial sustainability of projects, particularly those offering extensive shared facilities.
4. Market Competition: In competitive markets, quoting prices based on the super built-up area can make properties appear more affordable on a per-square-foot basis compared to those priced strictly on carpet area, thereby attracting more buyers initially.
The Buyer’s Perspective
From a buyer’s perspective, the shift to carpet area pricing is a significant advantage:
1. Transparency: Buyers gain a clear understanding of the actual usable space in their property, making it easier to compare different properties and make informed decisions.
2. Fair Pricing: By focusing on the carpet area, buyers can avoid inflated prices that result from the inclusion of common areas. This leads to a more accurate assessment of the property’s value.
3. Regulatory Protection: RERA provides a legal framework to address grievances, ensuring that builders adhere to the defined standards and that buyers are protected against misleading practices.
The implementation of RERA marks a pivotal shift towards greater transparency and fairness in the Indian real estate market. While the tradition of using super built-up area for pricing persists among many builders, the legal requirement to use carpet area provides significant benefits to buyers. As the market continues to adapt to these regulations, it is crucial for buyers to be informed and insist on transactions based on carpet area to ensure they get value for their money.
When purchasing a property, always check the agreement for compliance with RERA standards and consult with legal experts if necessary to protect your investment. This shift towards transparency and fair pricing is designed to build trust and integrity in the real estate sector, benefiting all stakeholders in the long run.
