BuilderSpeak: Jargon demystified

FSI Floor Space Index: Mathematically speaking,Floor Space Index or Floor Area Ratio FAR is: Total covered area on all floors of all buildings on a certain plot divided by the area of the plot.

In plain English,it means the buildable area on the plot of land. An FSI of 1 means that the area of construction equals the area of the plot. For example,a plot of 10,000 square feet can have a built-up area of 10,000 square feet and no more.

FSI is subject to regulations by municipal and/or other authorities. A number of factors go into determining the permissible FSI such as location,population density etc. This is mainly to avoid problems like parking,traffic if tall buildings are constructed in areas with narrow lanes. For example,FSI in Mumbai suburbs is 1.33,in Chennai city it is 1.5 and in the suburbs it can go to 2.5.

If you own land where FSI is revised upwards,the value of your land is likely to go up. While purchasing a new flat,it is important to be aware of the maximum permissible FSI in the locality and check with your builders whether the rules are being adhered to.

Premium FSI refers to the permission to build extra floor space by paying a premium. For example,if the normal FSI in a locality is 1.5,the builder can pay premium FSI charges a certain percentage of the guideline value of land and build more than 1.5 times the plot area. This helps builders better utilise space where the price of land is prohibitively high,resulting in extra value for the buyer.

Carpet area: Carpet area is the usable area within the walls of the dwelling unit. Have you wondered why the sum total of the area of all your rooms is not the same as the area of the flat you paid for? This,you should clarify. Normally in huge societies with many common amenities,the carpet area could be as less as just 2/3rd of the built up area.

Built up area : This includes carpet area plus the area occupied by the walls,lobbies and corridors,basement,atrium,lift area,staircases,generator rooms etc. While buying the flat,you pay for the built up area whereas you get to occupy only the carpet area.

Guideline value vs. market value: This is a common term related to the valuation of the property. Guideline value is the value of the land as determined by the government based on the facilities and infrastructure growth in that locality. It forms the basis for registration charges and stamp duty.

Market value is determined by the demand and supply forces in the market and factors like type/age of property,quality of construction,location,infrastructure and amenities available,maintenance etc. This will invariably be the price,which you will pay for your property.

The Guideline Values are revised periodically to have them in sync with the Market Value,and both act as pointers to each other. The difference is generally 30 per cent.

Stamp duty: Stamp duty is a tax collected by the government. It is paid to obtain the stamp paper on which the sale deed is written and signed by both the parties prior to registration. The payment of proper stamp duty on the sale deed bestows legality on them. Such instruments can then be admitted as evidence in a court of law. The instruments which are not properly stamped are not admitted as evidence. Stamp duty is payable usually by the transferee/purchaser,or if agreed by both the seller and buyer equally.

Registration charges: These are the fees associated with getting the legal title registered in the buyers name. This is done at the sub-registrars office.

Common Area Maintenance CAM charges: This is a recurrent charge paid after possession of the property. It is the specified share of certain defined costs such as maintenance,repair,replacement,improvement,operation,and insurance of the common area shares by all the residents of the building together with costs of administration and overheads. It is calculated as: All common expenses multiplied by built-up area of individual dwelling unit divided by the gross leasable area.

As you can see,these terms are simple and now having been acquainted with them,do not feel intimidated when talking to a builder.

Author is CEO,BankBazaar.com