Real Estate Terms Everyone Should Know

1. RERA (Real Estate Regulation and Development Act)

The Real Estate Regulation and Development Act (RERA) is a significant legislation introduced to ensure transparency, accountability, and fairness in the real estate sector. Its primary objective is to safeguard the interests of home buyers and promote the healthy growth of the industry. RERA provides a robust framework for the regulation and development of real estate projects, offering protection to both buyers and developers. It establishes a fast-track grievance redressal mechanism, ensuring timely resolution of disputes.

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2. RERA Registration Number

When a real estate project is registered with the state RERA authority, it is assigned a unique identification number known as the RERA Registration Number. This number serves as proof that the project complies with the rules and regulations set forth by RERA. It also validates the authenticity of the documents submitted by the developer, assuring home buyers that the project is legitimate and trustworthy.

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3. Carpet Area

Carpet Area refers to the net usable area of an apartment or a property. It is the actual area within the walls and is defined by RERA. The Carpet Area excludes the space occupied by external walls, service shafts, balconies, or verandas. However, it includes the area covered by internal partition walls, providing an accurate measurement of the usable space available to the occupant.

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4. Built-Up Area

Built-Up Area encompasses the Carpet Area along with additional components. It includes the outer wall thickness and the area covered by balconies. The Built-Up Area provides a more comprehensive measurement of the space, considering the entirety of the constructed property.

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5. Super Built-Up Area

The Super Built-Up Area combines the Built-Up Area with a proportionate share of common areas within a residential or commercial project. Common areas may include the lobby, lift shafts, staircases, corridors, and other shared amenities. The Super Built-Up Area gives a holistic view of the total area that the buyer will have access to, including both the private and common spaces.

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6. Floor Space Index (FSI)

Floor Space Index (FSI), also known as Floor Area Ratio (FAR) or Floor Space Ratio, is a crucial parameter in real estate development. It represents the ratio of the gross floor area (excluding exempted areas) to the total plot area. The FSI varies based on the locality and the existing infrastructure. It plays a significant role in determining the permissible built-up area for a particular property or land parcel.

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7. Loading Factor

Loading Factor is a multiplier applied to the Carpet Area to account for the proportionate share of common areas in a property. It represents the additional space allocated to cover the amenities and facilities provided to the residents. By combining the Loading Factor with the Carpet Area, the Super Built-Up Area can be calculated, giving potential buyers a comprehensive understanding of the overall space, they would be acquiring.

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8. Clearance Certificate

A Clearance Certificate is an official document that certifies the absence of any outstanding dues or liabilities towards any entity. It serves as proof that all financial obligations related to the property in question have been duly settled. A Clearance Certificate is often required during property transactions to ensure that the buyer is acquiring a clean title without any encumbrances.

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9. Commencement Certificate

A Commencement Certificate is issued by the local municipal authorities to grant permission for the commencement of construction activities. Before obtaining this certificate, the developer must ensure that all necessary clearances, permits, and sanctions are in place. The Commencement Certificate acts as a validation that the construction work adheres to the approved plans and follows the prescribed regulations.

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10. Completion Certificate

A Completion Certificate is a crucial document issued by the municipal authorities or authorized architects/engineers upon the successful completion of a building. It certifies that the construction has been carried out in compliance with the approved plans, relevant codes, and safety norms. The Completion Certificate establishes that the property is fit for habitation or occupancy.

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11. Conveyance Deed

A Conveyance Deed is a legal document used to transfer the ownership of a property from one person or entity to another. It encompasses various circumstances beyond simple property sales, such as inheritance, gifting, or exchange of properties. The Conveyance Deed outlines the terms and conditions of the transfer, ensuring a smooth and legally binding transaction.

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12. Encumbrance Certificate

An Encumbrance Certificate is a document that certifies the absence of registered transactions, mortgages, or liabilities on a property during a specified period. It provides crucial information about the property's ownership history and serves as proof of a clear title. When purchasing a property, obtaining an Encumbrance Certificate is vital to ensure that the property is free from any legal or financial encumbrances.

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13. No Objection Certificate (NOC)

A No Objection Certificate (NOC) is issued by an agency, organisation, or institute to indicate that they have no objections to the agreements mentioned in a particular document. In the context of real estate, an NOC may be required for various purposes, such as the transfer of property, obtaining a loan, or making alterations to the property. The NOC ensures that all concerned parties are in agreement and that the necessary permissions have been obtained.

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14. Occupation Certificate (OC)

An Occupation Certificate (OC) is issued by the local government authorities upon the completion of a building or a specific unit within a building. The OC signifies that the property has met all the required construction standards, safety norms, and statutory regulations. It declares that the building is suitable for habitation and that all necessary amenities and facilities are in place.

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15. Property Card

A Property Card is a legal document that serves as proof of ownership of land in an urban area. It contains detailed information about the ownership history of a land parcel, including the names of previous owners, transfers, and encumbrances, if any. The Property Card plays a crucial role in establishing ownership rights and conducting due diligence during property transactions.

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16. Sale Deed/Final Deed

A Sale Deed, also known as a Final Deed, is a legally binding document that records the transfer of ownership from the seller to the buyer. It outlines the terms and conditions of the sale, including the purchase price, payment details, and any other relevant clauses. The Sale Deed acts as conclusive evidence of the transaction and is essential for establishing the buyer's legal ownership of the property.

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17. Stamp Duty

The government levies a tax known as stamp duty on real estate purchases. The amount of stamp duty is calculated based on the cost of the plot or construction as mentioned in the Sale Deed or other relevant documents. It is a mandatory payment that ensures the legal validity of the property transaction. The stamp duty rates may vary depending on the location and the value of the property.

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18. IGBC Certification

The Indian Green Building Council (IGBC) Certification is a prestigious recognition for sustainable residential buildings in India. It evaluates and rates homes based on various parameters, including resource usage, water conservation, energy efficiency, waste management, and design for healthy living. The IGBC Certification levels include Silver, Gold, and Platinum, signifying the degree of sustainable practices adopted in the construction and operation of the building.

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Overall Review

Navigating the real estate industry can be complex, but having a thorough understanding of the terminology used within the sector can greatly enhance your decision-making process. In this article, we have explored key real estate terms that encompass legal, regulatory, and technical aspects of property transactions. By familiarising yourself with these terms, you can confidently engage in real estate dealings, safeguard your interests, and make well-informed choices.

Remember, when venturing into the real estate market, it is essential to seek professional guidance from qualified real estate agents, lawyers, and consultants who can provide tailored advice based on your specific requirements and circumstances. Armed with the knowledge of these real estate terms, you are now better equipped to embark on your real estate journey with confidence and clarity.

So, whether you are a first-time homebuyer, a property investor, or a real estate professional, understanding the nuances of real estate terminology will undoubtedly give you a competitive edge in the industry.