Real estate - common terms

APPROVED PLANS: Plans of the building which are approved by the City corporation or municipal corporation .This is a drawing of the layout of the project and the layout of the flats duly approved for construction

SUPER BUILT UP AREA (SBUA): SBUA is the area over and above the Built Up Area and would include the space provided for common amenities within the flat complex like lobby, pathways, stair case, lift area etc. The SBUA thus would generally be around 20 - 25 percent more than the carpet area of the flat which is the actual usable area.

BUILT UP AREA (BUA): BUA is over and above the carpet area and would include the space covered by the thickness of the inner and outer walls of the flat. The BUA thus would generally be around 15 percent more than the carpet area of the flat which is the actual usable area.
CARPET AREA: The area of the flat where a carpet can be laid and thus is the net useable area. Until two decades back flats were sold on this basis. Carpet area is the area from the inner sides of wall to wall. This concept is rarely used today and as a result, flats today are generally sold on the basis of built up area and super built up area.

MONTHLY REDUCING BALANCE OF THE PRINCIPAL: It is same as annual reducing balance except that the balance is calculated on a monthly basis and the EMI is broken up every month to arrive at the opening balance of principal for the next month.

MORTGAGE: It is an agreement by which the borrower gives the lending institution the right to take possession of the property given as security if the loan is not repaid

POSSESSION LETTER: This is a letter handed over by the developer to the customer stating that the property is complete and ready for occupation. This letter also indicates the final dues payable by the customer before the key is handed over to the customer.

PREPAYMENT: Prepayment means repaying the loan before the tenure is over. Most HFCs charge a prepayment fee that is normally in the range of 1-2 percent of the prepaid amount.