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Haryana real estate regulatory authority has made it clear that any sale on the basis of super area shall be treated as ‘fraudulent/unfair’ trade practice by the promoter. Conveyance deed too shall have to be executed on carpet area basis only.
“No conveyance deed of a real estate unit shall be registered except on the basis of carpet area. In cases where the real estate unit was allotted to the allottee prior to the Act coming into force, the promoter shall at the time of registration of the conveyance deed has to make disclosure of all the components constituting the super area, however the conveyance deed shall be registered only on carpet area basis,” HARERA said on April 27.
The move comes after a large number of homebuyers complaining that property developers have been charging them for the super area and not the carpet area.
As per the H-Rera Act, which came into force in 2017, developers are allowed to sell property on the basis of actual carpet area and they are not allowed to sell the super area, but because of vague definitions, they often got away with it.
KK Khandelwal, chairperson of H-Rera (Gurugram), said that penal proceedings will be initiated against the promoter or the real estate agent violating the instructions.
“Sale of apartment or building only to be on carpet area basis. Sale of Super area or any other basis is illegal. Sale on super area basis shall be treated as fraudulent/unfair trade practice by the promoter. Conveyance deed shall be executed only on carpet area basis,” he said.
The practice of sale of real estate on super area basis is misleading, ambiguous, opaque, and gives rise to confusion and complexities and at times result into avoidable litigation. To ensure sale of plot, apartment, or building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector, these regulations have been made by the Authority, Khandelwal added.
Before Real Estate (Regulation and Development) Act, 2016 came into existence there was lack of a legal description for the term carpet area. It has provided specific/concrete definition of carpet area which now has addressed the vagueness and uncertainty in this regard.
In case of ongoing projects where the promoter has allotted real estate units on super area basis prior to coming into force of the Real Estate (Regulation and Development) Act, 2016, he shall disclose what all components exactly constituted super area and also whether the super area as promised in the builder buyer agreement entered into between the allottee and the promoter has actually assigned existed as per builder buyer agreement or not, HARERA said.
This is to prevent any fraud with the allottee when the unit is sold on super area basis.
In case where the conveyance deed of the units has not been executed, the promoter shall also indicate carpet area in addition to the super area and its details/constituents.
Sameer Kumar, member, HARERA, Gurugram, made it clear that any agreement for sale on any other basis except on carpet area shall amount to indulgence in unfair trade practice/fraudulent practice by the promoter and shall attract appropriate action as per the relevant provisions of the Act.
As per the norms, total price/cost will remain unaltered even if the unit is to be registered on carpet area basis. It will not alter the sale consideration. It is for the purpose of disclosure and exact description of apartment.
This move will bring about more transparency. Affordable housing projects have already been following the carpet area norms. “We are hopeful that sales would increase as a result of this move,” said Rajat Goel, JMD, MRG World.
Pradeep Aggarwal, founder and chairman of Signature Global, said that “We welcome the step taken by the HRERA. In the current scenario, when the market is becoming end-user driven, it is important to be transparent in dealings.”