By Jaswant B. Mehta,
Till late forties, most of the housing constructed in the city of Mumbai was meant to be letted out. Since the introduction of Rent Control Act in the year 1947 which froze the Rents for subsequent years except for the permitted increases in municipal taxes etc., it slowly became a losing proposition to build and rent the premises. Due to the inflation, the returns started dwindling. This gave rise to the concept of ‘ownership schemes’ under which the landlords or builders preferred to sell the premises on outright basis rather than ‘rent out’ and ‘regret’ for the rest of their life. Since the rental flats were assessed on the basis of carpet area by the Municipal Corporation, the fixation of rent was on carpet area basis and the same trend continued for the ownership schemes while selling and the rates were quoted on the basis of carpet area. The normal definition of carpet area is the area of the rooms measured from wall to wall including door jams. Column projections inside the rooms are not deducted while arriving at the carpet area. The only difference between the method of calculating carpet area for assessment purposes by the Corporation and that adopted by the builders was as regards door jam area and the balcony area which was taken fully for computation purposes by the builders as compared to Municipal Corporation’s assessment method where balconies were taken at 50% of the area while the door jam area is very nominal (a few sq.ft. per flat), the addition of balcony area to be included fully in the carpet area calculations was accepted by the Purchasers as the balcony formed an integral and fully useable part of the flat and even the Municipal Bye-Laws were amended later on and permitted the balconies to be enclosed.
The author had his own experience of definition of carpet area when a Parsee tenant who was to be provided with alternate accommodation in a newly constructed building on ‘carpet area’ basis, refused to move in the new flat as according to him the carpet area in the new building was little less than promised to him inspite of the fact that the building was built as per the plans agreed upon. His definition of carpet area was the total area of carpet that can be laid on the floor. The skirting projection of a tile fixed on the wall as a routine practice to provide for cleanliness between corner of the walls and the floor, reduced the carpet area of rooms according to his definition. When we decided to remove the skirting from the walls and re-plaster the walls and make them flush, he relented and took possession.
Built-up Area – Phase
This trend of selling on carpet area continued till early seventies when some of the builders started including area of walls to the carpet area and started quoting the rates on built-up area basis. (The area of common wall between the two flats was divided equally). According to them, this was justified since the walls were included in the FSI calculations as per Municipal rules and therefore should be included to cover the rising cost of FSI while selling. The difference between carpet area and built-up area was normally around ten percent. Another advantage of selling on built-up area was that with escalation in prices, quoting the rates on built-up area made it more attractive to the customers as the rates on the square foot basis were lower than the carpet area.
From Built-up to Super Built-up
As the prices continued to rise, the trend of quoting the rates to appear ‘more attractive’ to the purchasers picked up and in the early eighties some of the builders initiated another ‘gimmic’ which was to include staircase, lift and lobby areas and add it on ‘prorata basis’ to individual flats and thus the practice of selling on ‘super built-up area basis’ started and slowly almost all the builders and developers fell in line of quoting on the super-built-up area method. The difference between carpet and super built-up area was generally in the range of 20 to 25 percent depending on the no. of lifts, the width of the staircase and planning of common passages and lobbies, etc.
From Super Built-up to Super …… Duper ?
The late eighties and early nineties witnessed an unprecedented rise in the prices of real estate in Mumbai and it was virtually a ‘seller’s market’. It was during this period that the practice of ‘super-duper’ system emerged. It was virtually a free for all, and every builder fixed his own norms to arrive at defining saleable area. While some builders included the common areas such as ‘entrance hall’ on ground floor or common toilet block etc. to be included on prorata basis, few went on to add even areas like meter room, flower beds, lift machine room, pump room etc. Many even preferred to straightaway load the carpet area with a fixed percentage. The difference between carpet area and the saleable area ranged from builder to builder and project to project it varied from 25 percent to 45 percent. For shopping or commercial premises it varied from 40 percent to as high as ever 90 percent. The variations were very high in commercial premises due to wide differences in areas of individual shops and the common corridors and lobbies loaded on prorata basis. It was almost like a contagious disease wherein if a builder felt that his loading was less, but his neighbour or competitor who was apparently quoting lesser rates but manipulated in ‘saleable’ area he would be tempted to match the ‘saleable’ area of the competitor and change his saleable area definition.
However, an important point sorely missed by the trade in this rat-race of matching practice was that, the industry as a whole started losing credibility with the purchasers ultimately also leading to the overall loss of image in the public. The abnormally high difference between the saleable area and the carpet area ‘pinched’ the buyers and the word ‘duper’ was ironically linked to indicate the duping of the purchasers by the builders.
Lot of discussions took place on this topic by the concerned Associations of Builders and Developers both at all India and local levels. MCHI which is a representative body of builders and developers in Mumbai and its neighbourhood after long deliberations has finalized the following guidelines for arriving at the definition of Saleable / Chargeable Area.
Saleable / Chargeable Area :
The Saleable / Chargeable Area shall be the Built-up Area of the flat plus the proportionate area of the staircase, including landings, lift, lift lobby and passages on each floor and common servant toilet on each floor, distributed among all the flats on the floor in proportion to the Built-up Area.
Besides the above, following will be added :-
- Additional area, on account of extra height of the room/rooms to the extent it is counted in the FSI calculation.
- Upto 50% area of the Otla attached to the ground floor flat.
- Entrance hall, staircase including landings, lift and lift lobby on the ground floor shall be distributed to the entire building in proportion to the Built-up Area of each flat.
- Any other area considered in FSI.
The Saleable / Chargeable Area shall not include any area comprising in the following :
1. Society office 16. Flower beds
2. Common toilet block on ground floor 17. Common terrace
3. Mail room 18. Refuge area
4. Electric meter room 20. Indoor/sports room
5. Pump room 21. Open sports facilities
6. Sub-station 22. Swimming pool
7. Generator room 23. The drying area provided
for clothes drying
8. Watchman/Security cabin 24. Niches below and above
9. Staircase well 25. Ramp
10. Staircase including landings 26. Chhajas / weather sheds
leading to terrace level
11. Any ducts and voids including 27. Walkways
ducts for various services such as
electric, plumbing etc.
12. Lift machine room 28. Septic tank/
Sewage Treatment Plant (STP)
13. Elevation boxes 29. Atrium open to sky
14. Overhead and underground tanks 30. Compound wall
It should be noted that the Maharashtra Ownership Flat Act requires to mention carpet area in the ownership flat agreement to be executed between the builders and the purchasers and also mention the pro-rata common service areas like staircase, passages, etc. for every flat. However, the agreement is entered only after the transaction is finalized between the builder and the purchaser. It is, therefore, desirable that at the time of selling or quoting the rates only the proper data is disclosed.
It is unfortunate that an industry which is providing one of the most basic amenities to the community and generates so much of employment and adds so much to the wealth of the nation has to lose much of its image because of the arbitrary methods adopted by the builders in arriving at saleable area. It will restore atleast some credibility if atleast the norms prescribed by the MCHI are followed by the Members of the Association.
The Author is an Architect and Civil Engineer and recipient of Gold Medal from Institution of Valuers. He is the Member of Managing Committee of MCHI and Past Executive Committee Member of PEATA (1983-92). (Resume enclosed). The views expressed in the article are in his individual capacity and not necessarily those of any Association.