What is justified loading in apartment?

Bottom Line: Since the homes are still being sold on Super Built-up Area despite RERA guidelines against it, it is imperative for the homebuyers to understand the anomalies with loading. 

Professional Stress, Real estate professionals, Client demand, brokers pressure, NRI investment, real estate salary, real estate depression, unprofessional real estate, Track2Media Research, Track2RealtyRamnik Sharma, an IT professional, wanted to buy an affordable apartment in one of the projects at Rajajinagar, Bangalore. Everything was up to his liking – the apartment, location, construction, delivery timelines and the pricing – till he enquired about the super built-up area and carpet area.

He was surprised to find that the loading percentage (the additional space to carpet area in the name of super built-up area) was as high as 42 per cent.

This is not just a Bangalore reality. The fact of the matter is that in the absence of any regulation that defines the standard measurement of super built-up area, built-up area and carpet area, every developer defines it as per his convenience. There is no scientific methodology that defines what is an ideal loading percentage.

“It was, after all, supposed to be an affordable house with a price of Rs. 5500 per sq feet but the loading percentage made it like Rs. 10,000 per sq feet. I can understand that in luxury housing projects the loading percentage is higher due to the kind of luxury amenities that the developer has to create. But for an affordable housing this is beyond permissible limit from the buyers’ standpoint,” says Sharma.

Considering the fact that most of the homebuyers in major cities of India are first time homebuyers in the affordable and mid-segment of housing, analysts point out that any loading that is beyond 25 per cent is unacceptable. The developers nonetheless have their own reasons to maintain that loading percentage is proportional to the kind of demand that is there in the market. 

J C Sharma, Vice Chairman & Managing Director, Sobha Limited defends it saying that to move in from an independent house to high rise apartments, homebuyers need to have a good common area, the lobby, club etc because here the outside infrastructure has gone and everything has to be provided within the complex. The thickness of wall itself is consuming seven to eight per cent; somebody has to pay for it. Again, if you are not keeping open areas close to 15 per cent you are not giving them value for money.

“I think the Indians need to come out of certain pre-determined notion if they aspire to live comfortably. For us, the bottom line is that while calculating the loading transparency should be there and we should not cheat. In one of our projects we wanted to give away the balconies because we felt it won’t be used and instead wanted to increase the carpet area inside. But the market did not accept that,” says Sharma.    

“Let it be, whether it is 25 per cent or 45 per cent. The issue here is who is driving that number. It is the customer. So, you are offering whatever the number based on demand. For a luxury project I won’t mind even loading 52 per cent because the buyer in that category is looking for better amenities, bigger club etc. So long the number is factual and you are offering it with transparency, because the buyer demands that kind of common areas etc, it is fair,” says Ashish Puravankara, Managing Director, Puravankara Projects.

According to Puravankara, the problem is when one has the loading of 20 per cent in calculation and out of thin air the developer is charging for 30 per cent. For each segment of housing, it is our understanding of what the buyer demands that is the basis of what amenities we do offer and it leads to the percentage of loading.

However, Ashwini Kumar, Executive Director & Chief Operating Officer, Nitesh Estates admits that if one is looking at it from buyers’ point of view to get an ideal loading share, no one would like to have loading of more than 20-25 per cent.

The developers nevertheless defend the loading that even for a project that is selling at INR 2,500 per sq feet in many of the cities where the demand is high, the buyer today demands card room, clubhouse, indoor pool, outdoor pool, badminton court, basketball, and everything which is adding to the loading. They maintain that there can be some bad number of loading because of the inefficiency or inexperience of the developer but as an industry practice the developers are loading on what they have built. 

One may have erred in making the design more efficient but if the developer is loading 30 per cent then he has actually made it like that. There is always a suspicion with regard to loading and the suspicion in cities like Mumbai or Delhi is that loading is extra due to the location of the project.

However, beyond the developers’ defence the fact lies that it is not just the miscalculation of the loading that is an issue among the homebuyers but there is no logic behind higher loading percentage with most of the affordable and mid segment housing. Any loading above 25 per cent raises the suspicion on the developers’ credibility, intent, calculation and/or efficiency.

By: Ravi Sinha

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