The world of real estate has over the years developed its own language through which it communicates with the world. Weather its procurement, development, sales, property management, lending, brokerage services or other professional services related to this industry.

It will help a prospective home buyer if they know & understand the different types of real estate, terminology, definitions etc.

Now let us understand the different types of real estate available & offered to buy or sell

1. Raw Land/Plots:

This type of property refers to a piece of open or vacant land. It can be a farm land or a non-farming land meant to be used for residential or commercial purpose. Each purpose needs an approval from statutory & local development authorities, who will assess & sanction the use.

2. Residential real estate:

Residential real estate refers to a piece of property exclusively meant for residential living. We will learn more about types of residential properties in the next chapter titled ‘Understanding group housing’

3. Commercial real estate:

This type of property can be defined as any property used exclusively for business purposes like shopping centers, offices, hospitals, theatres, restaurants, family entertainment centers (FECs) etc. They can be either constructed structures on open land too like sports academies etc.

4. Industrial real estate:

We can define a industrial real estate as a property meant to be used for manufacturing, production, storage, research & development, power distribution plants etc. SEZs (Special Economic Zones dedicated for industrial production is a classic example.

5. Special purpose real estate:

Properties developed and maintained for public utility like government buildings, libraries, places of worship, public parks, government schools, defense purpose etc. can be termed as special purpose real estate. In this type, the government typically acquires land or constructed properties from private owners & offer required public services. The government may also acquire an open land, develop the required structures & offer those public services.

Definitions:

Now let us know the simplest possible meaning of different terminology/terms used to define the real estate

1. Areas:

a. Square feet: it is the measure of 1 feet x 1 feet

b. Square meter: It is the measure of 1 meter x 1 meter

c. Square Yard: It is the measure of 3 feet x 3 feet

2. Constructed areas:

a. Carpet Area: Simply put, this is the net area you can use or lay your carpet in your house. This excludes areas occupied by internal walls & dry balconies.

In case of a residential unit in a multi-storey group housing complex, the carpet area is typically 70% of the super built-up area, which is illustrated in the diagram below.

RERA (Real Estate Regulatory Authority), a subject we will discuss in further topics, has now mandated that all real estate developers disclose the Carpet Area when selling an apartment/residential unit in a group housing project.

b. Built-Up Area (BA)

RERA defines Built-Up Area as the sum of Carpet Area (CA) plus (+) area of the internal walls and external walls plus (+) open terrace area, balconies, verandah etc.

c. Super Built-Up Area (SBA):

RERA defines Super Built-Up Area as the sum of Built-Up Area + proportionate of area occupied in shared/common construction like lifts, staircases, clubhouses & other common areas in the community. Builders usually load a certain percentage on the Carpet area to arrive at the Super Built-Up Area or simply known as Saleable area in most cases.

d. Floor plans:

These are nothing but the depiction of each & every residential unit that is being constructed. This is a drawing that shows the 2D image of the rooms, walls, balconies, bath & toilets, dimensions of each room, the entrance etc.

Floor plans are normally designed complete floor-wise that shows all units details. Below is the example:

e. The UDS (Undivided Share):

Typically in a group housing projects or multi-storey residential complex, It is a part of the land ownership given to the owner of the residential unit/apartment in a residential complex on which the entire structure is built. The builder allots the land on a certain percentage of the Saleable Area/Super Built-Up Area charged to the buyer.

For a simple understanding on how a builder arrives at the UDS, we will study the below example of 1000 sq. ft. SBA apartment purchased in a residential project/complex.

If the builder has got the permission to develop 300000 sq. ft. of saleable area on a 100000 sq. ft. land & he in fact constructs 300 apartments of 1000 sq. ft. Saleable Area or the Super Built-up Area each, he will divide total saleable area of the project by the land area held, which will come to 300 sq. ft. of land for every 1000 sq. ft. of apartment sold.

UDS = Total SBA of the project / total land area * 100.

In this case UDS = 300000 / 100000 * 100 = 300 sq. ft.

f. Schedule of Property:

This is the description of the property that will be mentioned when the seller executes the Sale Agreement/construction Agreement/Sale deed etc.

In a typical group housing/apartment complex, the schedule of property owned by the buyer will be sub divided into clauses.

For example, Schedule A of the property will describe the land details viz. the survey no./plot no., the property address, extent of the land area & its boundaries. It will also describe the UDS that is sold to the purchaser out of this total area.

Schedule B of the property will describe the extent of the developed/constructed/saleable area sold to you along with any statutory amenities like the car park etc. Below is an example

In addition to the above there can be multiple schedules dedicated to each aspect of the purchase like Payment Schedule, Specifications, facilities, common area rights etc.

f. Specifications: This is the detailed list of features, fittings, fixtures, amenities, facilities etc. to be provided by the seller as part of the residential unit to be handed over.

RERA now mandates that every developer/builder specifically mentions the list of specifications in all their promotional materials, mainly brochure, all public advertisements, sale & construction agreements, sale deeds etc

Approvals:

A. Commencement/Permission letter:

This letter is issued by the local development authority or municipal authority to the builder allowing him or her to commence the construction of the group housing project. This letter is also applicable for individual plot owners who wish to construct independent homes on them.

B. Completion/Occupancy Certificate:

This letter is also issued by the local development authority or the municipal authority after they inspect & are satisfied about the compliance of development according to the commencement letter/permission letter issued to the builder. The concerned authority checks for any deviations from approval plan & verify the presence of all amenities & facilities as promised in the specifications chart submitted by the builder.

C. Project sanction plan:

This is the construction plan submitted by the builder or developer depicting the various building designs & areas constructed. It will also contain a detailed floor plan of each residential unit the builder is constructing & its exact location in the complex. It also details out the statutory facilities or amenities provided in the project.

This plan has a validity date from the issue date. For individual homes, it is typically 2 yrs and for group housing project, it can go up to 5 yrs from the issue of commencement/permission letter.