HRERA – Property to be sold on carpet area basis only

Himanshu Goswami, Partner and Arushi Jain, Associate

Haryana Real Estate Regulatory Authority (HRERA), Gurugram has made sale of property on the basis of “super area or any other basis”, illegal. HRERA has issued regulations that allow the conveyance deeds in the district to be executed only on carpet area basis. These regulations have been made by the Authority to ensure sale of plot, apartment, or building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector.  

The definition of carpet area as provided under Section 2(k) of the Real Estate (Regulation and Development) Act, 2016 (“RERA Act”) means the net usable floor area of an apartment. This includes area covered by the internal partition walls, which means all walls or independent columns constructed or provided within an apartment. 

Following has been excluded from the definition:-

  • external walls or all walls which are constructed or provided on the external face of an apartment;
  • areas under services shafts;
  • balcony or verandah area (the area of the balcony or verandah, as the case may be, which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the allottee);
  • open terrace area (the area of open terrace which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the allottee)

Carpet area, or the net usable area, is the space where one can spread a carpet. Built-up area includes the carpet area, plus the extra areas certified by the authorities, such as the area of the outer and inner walls, dry balcony area, etc.

Super built-up area, on the other hand, includes the carpet area, the built-up area, as well as a share of the balance area, such as the stairs, lobbies and galleries, which can be used by all the residents. Prior to enactment of the RERA Act, builders used to quote the super-built up area in various builder-buyer agreements, without specifically giving details and breakup of the components included in such area. 

Owing to the lack of legislation, super built up area was calculated differently by different developers which were against the interest of consumers/allottees. With issuance of new regulations by HRERA, Gurugram in addition to the existing RERA Act, there is now a uniform method of measuring and reporting carpet area and the customer will know precisely what s/he is purchasing. 

For ongoing projects where the promoter has allotted real estate units on super area basis prior to enactment of the RERA Act, he shall disclose what all components constituted the super area and its details/constituents and whether such super area as promised in the builder buyer agreement entered into between the allottee and the promoter has actually been assigned. In case the conveyance deed of the units has not been executed the promoter shall also indicate carpet area in addition to the super area and its details/constituents.

In case where conveyance deed has not been registered, the promoter shall at the time of registration make disclosure of all the components constituting the super area but the deed shall be registered only on carpet area basis. Total price/cost will remain unaltered even if the unit is to be registered on carpet area basis. It will not alter the sale consideration. 

The real estate agents shall facilitate sale or purchase of an apartment or building in any real estate projects on carpet area basis and not on super area basis or on any other basis. If any real estate agent is found indulging in sale/purchase on super area, he shall be presumed to be engaged in unfair trade practice and his/her registration to act as a real estate agent may be revoked or/and penal proceedings may be initiated against him as per provisions of the Act.

Further, the revenue authorities are expected to notify collector rate only on carpet area basis as now the sale on any other basis is illegal. It has been made clear that the regulations shall be applicable to all real estate projects, irrespective of the fact that they are registered / registerable or exempted from registration. 

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