What is RERA Act
Property

What is RERA Act

Like all laws, RERA Act also has certain legalese in it. There are certain legal terms which are not easily understood by the common people. We try to simplify these legal terms for you and bring a ready explainer for the same.

Let us explore some of the real estate jargons in the RERA Act.

Carpet Area

RERA Act defines carpet area as the “net usable floor area of an apartment”. Carpet area excludes the area of external walls, lifts, balconies etc. Internal walls however fall under the definition of carpet area. Before RERA, the definition of carpet area was not legally given and hence, there was a lot of confusion regarding this. The builders often took advantage of this ambiguity. With a clear definition in place, homebuyers can now rest assured. 

Consulting a Lawyer is always useful for quick and authentic information about RERA Act.

Super Built-Up Area

Before we understand super built-up area, it is important to understand the meaning of built-up area. Built up area includes all areas of your flat (carpet area + balconies, walls etc.). Super built-up area includes built-up area plus your proportional share in the common areas of your building. For instance, if your building has common pathways, parks etc., these would also be included in the term super built-up area, in proportion to your share in them.

Typical common areas included in a super built-up area are: 

  • Staircases

  • Lobbies

  • Lifts

  • Club house

  • Security rooms

However, the super built-up area, does not include the following: 

  • Underground water facilities. 

  • Open swimming pools and skywalks

  • Open sports amenities. 

Occupancy Certificate

An occupancy certificate is the evidence that the building is inhabitable and that its construction is in compliance with all rules and regulations. It is issued by a local government, agency or planning authority. It is the developer of the building who needs to obtain the occupancy certificate. Occupancy certificate needs to be shown at the time of obtaining public utility connections. Typically, a developer applies for an occupancy certificate within 30 days of the completion of the project. The developer or the person applying for an occupation certificate should furnish the following documents: 

  • Project commencement certificate

  • Project completion certificate

  • NOCs for fire and pollution

  • Sanctioned plan of the building. 

People Also Read This: How to Register Projects under RERA?

RERA Registration Number

RERA mandates that all real estate developers register under it. RERA registration acts as a stamp of credibility. Once the registration process of RERA registration is complete, the real-estate developers obtain a RERA registration number. This RERA registration number acts as a proof of authenticity that the project is credible and that buyers can put their money in it. 

Floor Space Index

Floor space index, also known as Floor area ratio, is the ratio of the built up area to the total land of the project. Floor space index is important as it indicates the total area that can be built upon a plot of land. The development control regulation department and the building code of India regulate the floor space index. The type of building, which city it is located in and the amenities available in the building are factors taken into account while determining the floor space index. Floor space index helps in maintaining the ratio of open space to closed spaces and helps in sustainable development of cities. 

Leasehold Property

A property which has been taken on lease is a leasehold property. Builders and real-estate developers, build their projects either on leasehold properties or freehold properties. Leasehold properties are typically on lease from 30 to 99 years. Once, the leasehold period gets over, they convert to freehold properties. Buyers prefer freehold properties to leasehold properties, as certain restrictions operate on leased land. 

People Also Read This: Delay in Providing Possession of Flats and RERA's Role

Freehold Property

A freehold property absolutely belongs to the owner. The developer may purchase the same form the owner for the purposes of development of the project. Unlike leasehold properties, no statutory approval is required to transfer the ownership of a freehold property. It is easier to get loans for freehold properties and no restrictions are imposed on the same. 

Pre-Launch Properties

You would have heard about pre-launch properties or pre-launch offers. A pre-launch property is a property whose launch has been announced, even before the approval process is underway. Typically, builders solicit offers from customers, who could be old customers or through real-estate agents a discounted prices for pre-launch offers. Such offers and properties attract potential buyers’ attention as they are available at prices lower than the market value. 

These are a few terms or legal jargons which are widely used in the real-estate sector. RERA Act, also uses these terms in its provisions. It is hence, important that you as a customer should know what these jargons mean and make an informed decision, while buying any property. 

People who read this Article also Consulted a Lawyer about RERA Act.