Risk factors: All about property measurements

Mar 08 2014, 11:11 IST
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Every city has different norms for floor space index or FSI. Every city has different norms for floor space index or FSI.
SummaryProperty measurement has wide variations within and across countries.

Property measurement has wide variations within and across countries. There is a coalition currently working towards evolving a universal standard, but the challenge is to get governments to adopt them

India follows the international system for weights and measures where distance is expressed in kilometres, weight in kilograms and volume in litres. Even as this has been accepted widely across the country, this, however, does not extend to the measurement of area and especially so for property.

The problem is not about acres and hectares, or square yards and square metres. Across states, there are wide variations in the very nature of land measurement, and in the case of a built space, the area to be measured for calculation of stamp duty and market value.

“In India stamp duty and registration is calculated based on the carpet area. However, its market value or rent is calculated on the super built up area or gross leasable area,” says Subhankar Mitra, Head – Strategic Consulting (West), JLL India.

Even if the definition of carpet area remains more or less the same across cities and states, there is a difference while calculating super built up area or gross leasable area. Every city has different norms for floor space index or FSI.

“The area exempted from the calculation of FSI is also different. For example, in Mumbai, lobby, flower bed, balcony etc. are not considered in FSI but calculated separately under fungible FSI for which a premium is charged from the builder. But in Hyderabad, everything is included in FSI calculation,” says Mitra, adding that Tier II cities are better on this score than Tier I cities.

This problem, however, is not restricted to India, but is prevalent across some developed markets as well.

“An example is the way floor space is calculated. In India, the concept of super areas have been used to include outdoor swimming pools, stairs, and common areas such as pavements. In parts of the Middle East, floor areas can include the hypothetical maximum number of floors that could be built on the existing foundations. In Australia, measurements have included outdoor parking spaces, even when they are not physically adjoined to the property itself,” says Sachin Sandhir, MD, RICS South Asia, a body engaged in setting standards and certification for the real estate industry.

RICS, in a study on measuring floor spaces for commercial properties, has come across a variety of practices and the study showed that

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