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MOFA V/S RERA: What’s the difference?

  • By admin
  • October 4, 2024
  • Blog

Owning a house is a matter of great pride, and when you have people over to your new home, one of the first questions asked is “What is the carpet area?” In Real Estate terms, The carpet area is the actual usable area within the walls of a residential or commercial unit, where one can lay a carpet. It is a critical concept in Indian Real Estate, as it directly affects the price, space utilisation and perception of the property. Understanding the carpet area is important, as it helps avoid confusion during transactions and ensures that buyers get the right value for the money they invest in a property.

Carpet Area in India is governed by two major regulatory frameworks: MOFA and RERA. Both of them have different implications for how space is calculated and represented in property transactions.

What is MOFA Carpet Area?

MOFA or the Maharashtra Ownership Flats Act defines carpet area as the net usable area inside an apartment. It typically excludes the area covered by external walls but may include the internal partition walls, balconies and in some cases the terraces. This interpretation of the carpet area under MOFA often led to discrepancies, and thus varied calculations.

RERA (Real Estate Regulation and Development Act) introduced a more standard definition for this term, which made it more transparent and uniform across the country. The RERA carpet area meaning is ‘the net usable floor area of an apartment, excluding the area covered by external walls, areas under the service shafts, exclusive balconies or verandahs, but includes the area covered by internal partition walls.

Historical Overview: Why Carpet Area is Important in Indian Real Estate?

The carpet area has always been a key determinant of a property’s value in Indian Real Estate. Developers have often marketed their properties using terms such as ‘super built-up area’ which also included shared lobbies, staircases and amenities with the carpet area. This led to confusion among buyers since they were paying for spaces that they couldn’t use exclusively.

With the introduction of RERA, these dealings became more transparent; developers now had to disclose the carpet area based on a clear and standardised formula, rather than through terms that could confuse the buyers about the actual usable space, something MOFA lacked.

Understanding MOFA Carpet Area:

MOFA full form and legal background:

The Maharashtra Ownership Flats Act of 1963, was introduced to regulate the promotion, construction, sale management and transfer of flats by developers. While MOFA was introduced to ensure that property transactions were conducted fairly, its provisions about MOFA Carpet Area were often loosely defined.

MOFA Carpet Area calculation: Under MOFA, carpet area was calculated by including areas such as the internal partitions and balconies, which gave the developers more freedom to increase the quoted carpet area. However, since external walls were excluded, the usable area in many cases did not match the buyer’s expectations.

Misconceptions about the MOFA Carpet Area: Many buyers often believed that the carpet area included all spaces within the apartment, but under MOFA, this wasn’t the case. A lack of clear definition often led to misunderstandings and sometimes, legal disputes between buyers and developers.

RERA Carpet Area vs. MOFA Carpet Area

Key differences include the balcony, terrace and wall areas. The biggest distinction between MOFA and RERA Carpet area meanings lies in the treatment of balconies, terraces and walls.

  • Under MOFA, balconies and terraces are sometimes included in the carpet area, leading to inflated figures.

  • The carpet area as per RERA excludes these areas, focusing on the internal usable space, such as internal walls.

Why were RERA regulations introduced?

The lack of clarity under MOFA and other state-specific regulations led to widespread confusion, and sometimes exploitation by developers. RERA was introduced to bring uniformity across states and ensure that there is transparency in property transactions.

RERA provided a clear and legally binding definition of carpet area, ensuring that buyers knew exactly how much usable space they were getting.

Importance of accurate carpet area calculation:

  • MOFA Carpet Area: Take, for example, a 2BHK apartment at Raymond Realty’s The Address at Bandra. It is advertised with a carpet area of 800 sq. ft.; under MOFA, this figure might include the internal walls and even a balcony of 100 sq. ft., meaning that the actual usable floor space inside the apartment could be less.

  • RERA Carpet Area: Take the same apartment under RERA: in this case, the carpet area would be strictly usable space within the apartment’s internal walls, excluding the balcony and the terrace. Thus, if the carpet area of this apartment is advertised as 700 sq. ft., buyers can be assured that this is the actual space that they will be able to use.

Importance of accurate carpet area calculation:

Impact on property prices: How developers market MOFA v/s RERA:

Since property prices are calculated on a per-square-foot basis, the smallest differences in carpet area can lead to significant cost variations. Developers under MOFA marketed larger carpet areas, which included non-usable spaces, thus leading to inflated prices.

With the RERA carpet area, the stricter guidelines protect buyers by ensuring that they only pay for actual usable space.

Legal and Financial Implications for buyers and sellers:

RERA mandates that all developers such as Raymond Realty, must provide the exact carpet area, and cannot advertise or charge more based on the super built-up area. This transparency reduces the risk of litigation and ensures that buyers are aware of what they are paying for. Accurate carpet area calculations also influence financing, as home loans are often approved based on the carpet area.

Carpet Area in builder agreements and buyer contracts:

Ever since the introduction of RERA, the carpet area must be mentioned in the sale agreement between the buyer and developer. This has made property contracts more transparent and legally enforceable, giving buyers a strong basis to contest if the delivered space does not match what was promised.

Carpet Area Calculators:

Carpet Area calculators are online tools that help buyers estimate the usable area of a property based on the parameters provided by the developer. There are carpet area calculators for both RERA and MOFA, but their accuracy depends on how the calculations are structured according to the legal framework governing the property.

RERA Carpet Area Calculators allow users to input the internal dimensions of the apartment, including spaces covered by internal walls. This helps calculate the accurate usable area as per the RERA carpet area meaning.

MOFA Carpet area: These calculators include the balconies, terraces, and at times, the internal partitions, leading to inflated carpet area numbers when compared to the RERA Carpet Area.

How to use the RERA Carpet Area calculator effectively:

  • Start by gathering accurate dimensions. Ensure that you have the exact internal dimensions of the apartment, including the lengths of the walls and the area of each room. Exclude the areas covered by balconies, terraces and external walls as per the RERA guidelines.

  • Input the correct dimensions into the calculator for each section of the apartment (the living room, bedroom, and kitchen). Most calculators will allow you to input these separately and then sum them up.

  • Always cross-check the output of the calculator with the carpet area mentioned by the developer their RERA registration or the sale agreement.

  • Make sure that you review the internal partitions; the calculator should include internal walls in the usable area, but exclude the external walls and service shafts, which do not come under the RERA carpet area meaning.

  • Compare with the super built-up area, as some calculators also let you compare the carpet area with the built-up or super built-up area, helping you understand the proportion of usable v/s non-usable spaces.

Limitations of Online MOFA Carpet Area Calculators:

MOFA Carpet Area calculators can be useful, but they also have the following limitations:

  • Inclusion of balconies and terraces: Under MOFA, balconies and terraces may be included in the carpet area, leading to a larger figure that doesn’t reflect the actual usable indoor space.

  • Inconsistent definitions: MOFA Carpet area calculators may vary from one developer to another, depending on how they interpret the act. This can lead to confusion for the buyers, especially when comparing properties.

  • Limited Coverage for External Walls: Since MOFA doesn’t strictly regulate how the internal and external walls should be accounted for in carpet areas, the calculators may either include or exclude walls, leading to inaccurate or misleading.

  • No National Standardisation: MOFA is a state law applicable only in Maharashtra, so calculators designed for MOFA may not be suitable for properties in states, where different rules are applicable.

  • Transparency Issues: MOFA Calculators may not fully reflect the usable area you will get, as the inclusion of semi-open spaces like balconies. This can lead to a skewed understanding of the property’s actual value.

Step-by-step guide for manual carpet area calculations:

Step 1: Measure the length and width of each room.

Start by measuring the interior dimensions of each room. Measure from the inside of the walls instead of the outside or the centre. For example, if the living room’s measurements are 15 feet x 10 feet, the area is 150 sq. ft.

Step 2: Sum up the room areas.

Add the areas of all the individual rooms, such as the living room, kitchen, bedrooms, bathrooms and any other spaces included in the apartment.

Step 3: Include internal partition walls.

In RERA carpet area calculations, you should include the areas taken up by internal partition walls. If you have access to the architectural layout, calculate the space they occupy and add it to the total.

Step 4: Exclude Balconies, Terraces and external walls.

Since carpet area as per RERA excludes balconies, terraces and external walls, make sure you also don’t count them in your final figure.

Step 5: Double-check the measurements.

Review all dimensions and ensure that no external spaces or shared areas have been included by mistake.

Innovative and Overlooked Aspects

Implications of balcony and terrace inclusion on usable space:

Balconies and terraces are often advertised as part of the overall apartment area but are excluded under RERA.

  • Usable Space Impact: Buyers may feel like they are getting more space under MOFA calculations when in reality balconies are not always as functional as interior living areas. This can be deceptive, as the quoted MOFA carpet area suggests more usable space than what is actually available.

  • Price consideration: Including balconies and terraces in the carpet area can lead to inflated prices, as developers may charge for these spaces at the same rate as the interior areas.

Hidden costs and benefits: Which is better for homebuyers?

  • MOFA: The inclusion of balconies and other unusable spaces under MOFA means that buyers are paying more for less. This can be a hidden cost, as buyers do not realise that some of the areas they are paying for are semi-open or unusable.

  • RERA: By excluding non-usable spaces, RERA allows for a more transparent and buyer-friendly approach. This, however, also means that properties with carpet areas as per RERA may seem smaller, even though the usable spaces are the same, or even better.

Legal Discrepancies in other states v/s Maharashtra:

  • Maharashtra (MOFA): Since the state is governed by MOFA, it lacks clear-cut standards for carpet area calculations, compared to RERA. Developers also have the liberty to include external spaces like balconies and terraces in their quoted carpet area.

  • Other states (RERA): Other states in India follow RERA guidelines, which have set a standardised definition of carpet area. This eliminates many inconsistencies under MOFA and makes the property buying process more transparent.

Common buyer concerns and FAQs

1.  How to verify MOFA carpet areas in builder contracts?

To verify the carpet area in builder contracts under MOFA, follow these steps:

  • Check the layout plan: Ask for the approved floor plan or layout from the developer, which should mark the carpet area as per MOFA regulations.

  • Request a breakdown: Ask the builder to give you a detailed breakdown of how they arrived at the quoted carpet area. Ensure you understand that the balconies, terraces and internal walls are also included.

  • Legal Review: Have a lawyer review the agreement; discrepancies between the promised and actual carpet area can lead to legal disputes. This builder agreement should mention whether the carpet area includes non-usable spaces such as the balcony and the terrace.

2. Can carpet area affect property taxes?

Yes, while the carpet areas can affect property taxes, this number often varies from region to region. In many municipal jurisdictions, the property tax is calculated based on the carpet area, rather than the built-up or super built-up area. Thus, the larger the carpet area, the higher the property tax.

  • RERA-based properties: Since RERA provides a clearer and more accurate calculation of carpet area, property taxes calculated based on these numbers are more equitable.

  • MOFA-based properties: In MOFA-based properties, where the carpet area includes non-usable spaces like balconies, property taxes seem inflated, as they are calculated based on larger but less functional areas.