Buy 1800 sq ft, Get 1000, Housing Industry Chamber Says Developers Digging Own Graves

SALEABLE AREA From 40 per cent of carpet area, jacked up to 60-100 per cent; housing industry chamber says developers digging own graves

Aspiring home buyers, already grappling with spiralling prices, have a new problem: developers are jacking up the sale able area in most new projects by "unrealistic proportions".

Developers sell flats not on the basis of carpet area (the net usable wall-to-wall area) but on the basis of sale able area, also known as super built up area, which includes facilities like staircase, lobby and lift as also add-ones like sun decks.

Traditionally, these spaces have been limited to a maximum 40 per cent of the carpet area. Of late, developers have increased this notional "loading" to 60 to 100 per cent of the carpet area. As a result, a flat-buyer paying for a 1,800-sq-ft flat may end up with only 1,000 sq ft floor area to live in.

"We have tried explaining to developers that we are digging our own graves by resorting to such practices. The MCHI (Maharashtra Chamber of Housing Industry), time and again, appeals to developers to stick to selling flats on carpet area basis but we cannot impose any regulation on them," said real estate developer Pravin Doshi, president of MCHI.

Two years ago, the government had approved a Bill, whereby any developer who does not sell flats according to carpet area is liable to face imprisonment for a period of three years, a rule that has failed to take off with no one appointed to oversee implementation.

Developers, on the other hand, get to maximise their profits as the BMC rules allow them to build parking lots, elevators and other frills free of FSI. Also, developers are allowed to build four-foot pro jections in the form of sundecks or flower beds in addition to building a balcony free of FSI and enclosing it as part of the flat.

"We had to discontinue giving permission for such projections as they were mostly misused. But recently the BMC has started sanctioning these once again," said an official from the building proposals department.

This is the very reason why balconies, which had mysteriously disappeared from facades of flats in Mumbai, have made a comeback in new projects along with fancier versions like sun decks, viewing gallery, planter's box and individual terraces.

All these were earlier charged at one-third the rate (per sq ft) for the flat, but now everything is sold at a flat rate. Brochures of new launches by Orbit Corporation, Dheeraj Realty, Wadhwa Developers, RNA Corp, Lodha Group, Oberoi Constructions, Indiabulls, DB Realty and a string of many others show a huge discrepancy between the actual usable space and the saleable space the buyer is made to pay for.

Real estate experts said there is an upper cap of 2 on FSI in the suburbs, but by constructing the components free of FSI and selling them at market rates, developers effectively get an FSI up to 3 or 4.

"In the absence of a regulator, loading is sort of an eyewash by developers to salvage high land costs.

So while per-sq-ft rates in Ghatkopar is Rs 9,000, with loading the rates are as good as being a high Rs 13,500. While actual rates in Bandra-Khar are Rs 20,000 to 25,000 per sq ft, customers end up paying up to Rs 45,000 per sq ft of the usable area due to huge element of loading," said property consultant Sandeep Sadh.

Customer continues to be the king

Realty sector in Mumbai: High prices hit demand

Realty sales in Mumbai Metropolitan Region (MMR) have fallen. The total area (m sq ft) sold in MMR in December 2009 as compared to September 2009
quarter, has come down. Prices have risen or remained flat in some cases. This shows that homebuyers are holding on to their demand and exercising restrain. Demand for big-ticket houses has been the worst hit.

As per the data compiled by Liases Foras, a real estate research agency, flats costing Rs 1 crore to 2 crore have seen a sharp fall in demand which is contrary to what many developers in the region have been saying. Homes costing over Rs 2 crore are also witnessing the same trend. This is in contrast to cities like Bangalore, Hyderabad and NCR, where sales have risen, thus proving again that Mumbai property market defies rules applicable to other markets. The main reason for the same being that prices have fallen in the above-mentioned cities whereas Mumbai based developers have been increasing their prices.


They must realise that ‘Customer continues to be the king’, at least for the time being.

Redeveloped Bandra-Khar buildings lack open space

I have seen many such buildings in Mumbai where balconies jet out to the road. There is no setback and all architecture norms are flouted. Now it appears these guys flout civil aviation norms where the maximum number of floors in the Bandra Khar, SantaCruz, Vile-Parle, Andheri (east) zone is set to be 8-9 floors. Bribe and get away is the age old mantra. Buyers need to be extra vigilant else they may find that their floor is illegally constructed. The best thing is to go for floors below 8 just in case something comes up in the future. Given the prices I wonder who is buying in these areas.

Locals fear that these redeveloped buildings which have their entry points on roads and footpaths could cause serious safety hazards. According to the rules, compulsory space of 15 feet should be left open around the buildings for free movement of people during emergencies.

“From the roadside, at least 4.5m of space should be kept open. If this is not the case, then there is a cause for worry. We first have to verify if the building line is from the inside. This varies from case to case and on how the plans are passed. If buildings are constructed under section 33(7), then relaxation of open space is found. It also depends on whether relaxations were allowed by the municipal commissioner or the SRA commissioner,” said Uday Tatkare, chief fire officer.

According to Right to Information (RTI) replies,these redeveloped buildings without compulsory open spaces are on Linking Road opposite Khatwari Darbar, at the SV Road and Khar Station Road junction, at the Waterfield Road (near Popley Jewellers) junction of 13th and 8th Road in Khar (W) and on 33rd Road.

When VL Joshi, chief engineer (Development Plan) was contacted, he said, “We will call the building proposal officials from H (West) ward and clarify this. We approve certain plans, but if DC rules are not followed we don’t give the occupation certificate.According to DC Rules 1991, the plot potential has increased for builders in Bandra.”

A builder on condition of anonymity said: “If builders have a commencement certificate for six floors, they construct an additional six illegally. Many new commercial and residential buildings have even flouted civil aviation norms.”