1/12/2012

How is saleable area calculated? What

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How is saleable area calculated? What is super builtup area?

You have come to a very important page of www .nripro.com. There are two main reasons why it is absolutely important for buyers to understand areas and methods used to calculate saleable areas: (a) Different interpretations of areas and different methods used for calculation of saleable area can have more than 20% variation in total price tag and (b) Actual area that you get directly depends on how saleable area is calculated. After you are done reading this page, we strongly recommend you read another related page at this link on our website that shows actual examples of typical construction cost in Pune, and how much money builders make. Carpet Area: Area between the walls. Carpet area must have permanent roof (slab) over it, at normal height. Owner must get exclusive rights to use and resell the carpet area. Carpet area is calculated by multiplying dimension of room, i.e. length x w idth. Total carpet area is calculated by adding carpet areas of all rooms. Generally, in addition to all the rooms, varandas, passages, area inside the main door (if not included in living room dimension), balconies are included in carpet area. FSI is applicable to carpet area. Depending upon builder practice, carpet area may be 50% to 70% of of saleable area. It is always good to find ratio of carpet area to the saleable area, higher the ratio, better it is. This is just to give you idea of what you actually can use, in practice it is in interest of the buyers to find out what is carpet area and then apply loading factor on it (and not do the other way, i.e. should not arrive at carpet by applying loading factor to saleable area. The example below will illustrate trick used by builders/developers, when they say you can find carpet area by applying loading factor on the saleable area. Saleable Area: 1200 sq ft Loading Factor: 25% (or 1.25) Wrong Method (favours seller): Carpet Area: 1200 x (100-25)% = 1200 x 75% = 900 sq ft If you apply 1.25 or 25% loading, saleable area should be 900 sq ft + 900 x 25% = 1125 sq ft As you can see under this method builder is charging you for 1200 - 1125 = 75 sq ft more Right Method (favours buyer): Find carpet area first by measuring actual dimensions, and then apply loading factor Saleable area = 900 sq ft + 900 x 25% = 1125 sq ft Terrace: Open area without roof, attached to the main unit that buyer gets exclusive rights to use and resell (with the main unit). Open areas with slab at least double the height of the floor are also considered terrace area. FSI is not applicable to terrace areas. Balcony: Open area with roof (slab at floor height), attached to the main unit that buyer has exclusive rights to use and resell (with the main unit). Generally balcony area is added to total carpet area. FSI is applicable to balconies. Dry terrace or dry balcony: Area meant to dry clothes that buyer has exclusive rights to use and resell (with main unit). If it has roof (slab) at normal height, it should be treated as balcony. If it does not have roof (slab) at normal height, it should be treated as terrace. Builtup Area: Carpet Area + area occupied by walls, doors of the unit. Generally builtup area is not calculated separately, it is included into the loading factor. Loading factor or loading or load: Loading factor is a number used for purpose of arriving at saleable area. It is used to add constructed space not exclusively allocated to the buyer. Such area generally includes shared areas such as lift/elevator area, staircases, clubhouse, gymnasium, amenities area, etc. Loading factor 1.25 indicates that developer/builder is applying 25% on the carpet area. Some builders, in addition to carpet area, include terrace and balcony areas w hile applying the loading factor. If the project does not have lot of amenities, the loading factor should be small. In most cases loading factor of 1.3 is more than sufficient. Loading factor also includes parking space (irrespective of it is covered, open, stilt, sold separately or not). Superbuiltup Area: Carpet area + terrace + balconies + areas occupied by walls + area occupied by common/shared construction (e.g. lift, stairs, club house, etc). Generally builders use loading factor on carpet area to arrive at superbuiltup area. For example, if carpet area is 500, and loading factor is 1.3, then superbuiltup area is 500 x 1.5 = 750. Usable Area: This is relatively new term. Technically there is no difference between Usable Area and Superbuiltup Area. Some builders use this term to justify higher loading factor, typically in Mumbai where land cost is extremely high. Saleable Area: Generally superbuiltup area is saleable area. FSI: Floor Space Index. This is ratio of land to carpet area. Generally it is 1 for residential plots (much less for agricultural land) For example, if FSI is 1, and land area is 3000 sq ft, then total carpet area on that land cannot exceed 3000 x 1 = 3000 sq ft. It should be noted that FSI is not applicable

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1/12/2012

How is saleable area calculated? What

to terraces, balconies. Also, this definition is provided for your information, enforcement of FSI is taken care of by local authorities, and buyer should not w orry about it (unless there are allegations against the builder of misusing FSI). Methods used to calculate saleable area Builders apply different models to arrive at saleable area. The methods used by builder can result into as high as 20% to 25% increase in the effective rate. We will try to explain different methods (not all of them) used by developers/builders and their relative impact on saleable area, total price, and ratio of carpet to saleable area. In the example below, it is assumed that the rate is Rs. 4000 per sq. ft, loading factor is 1.3, and it is a 1BHK unit with the following dimensions: Room or area Kitchen Living room Bathroom Bedroom Total Carpet Area (C) Dry terrace Terrace Total terrace area (T) 4x8 10 x 13 Dimensions (ft) 8 x 10 10 x 15 4x7 12 x 10 Area (sq ft) 80 150 28 120 402 32 130 162

The table below lists different methods/ variations (certainly not all the variations) of arriving at the saleable area. Please note effect of each variation on saleable area, total price, carpet to saleable area ratio, and effective carpet rate. Please also note that calculations done manually don't match 100% with calculations done by builders/architects because they use CAD softw are. How ever the difference in two method should not be more than +/- 3%. Because of different methods and variations, it is difficult to "reverse engineer" and find out what method builder has used. It will be good to find out from the builder if terraces/balconies are charged at 50% of 100%, and is loading factor applied on those, and what is the loading factor. Most builders don't answer these questions in written material, and may not even bother to answer even if you ask. In that case only option for you is try different variations as given below and "figure out". Carpet charged at 100% Load applied to carpet? Yes Terrace charged at 33% Load applied to terrace? No Saleable area (sq ft) 576.06 Total price, Rs., (rate x saleable area) 23,04,240 Carpet to saleable area ratio 69.78%

Method #

Calculating saleable area (C x 1.3) + (T x 33%) (C x 1.3) + (T x 50%) (C x 1.3) + (T x 50% x 1.3) (C x 1.3) + T (C + T) 1.3

Effective carpet rate, Rs., (Total price/C)

5,732

100%

Yes

50%

No

603.6

24,14,400

66.60%

6,006

3 4 5

100% 100% 100%

Yes Yes Yes

50% 100% 100%

Yes No Yes

627.9 684.6 733.2

25,11,600 27,38,400 29,32,800

64.02% 58.72% 54.83%

6,248 6,812 7,296

Method #1 in above table is legal method (because it charges terrace at 33% of the area, that is maximum allow ed for terrace). Method #2 is widely used method. Summary a) Bigger saleable area does not mean bigger carpet area b) Lower rate does not mean good deal because it can result into higher effective rate because of loading factor, and the way terraces are charged (at 50% or 100% or at some other %), and if loading factor is applied on top of terraces c) Method used by builder can cause a big swing in the total price as demonstrated in the example above d) Lower loading % does not necessarily mean it is better deal, one needs to look into how it is applied on terraces, gardens and other areas that are not included in FSI e) Per square foot rate is meaningless and misleading if not looked in light of the other factors that influence saleable area Please visit our promotions to see our FREE offers, and promotional discounts

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