and plot coverage ratio of say 75 per cent, not more than 1,800 sq ft can be constructed on each floor for the same 3,600 sq ft built up area.
This leaves only two floors under the FAR concept, while under FSI there can be any number of floors subject to other restrictions.
Such inconsistencies have their impact on property valuation in the absence of a common standard. “Inconsistency in measurement leads to incorrect valuation of the properties. This results in faulty transactions. In a series of events, the government also then shares the burden in terms of reduced or incorrect stamp duty and registration charges,” says Sandhir.
Towards this end, RICS has on a global scale, begun consultations on an International Property Measurement Standards or IPMS. A coalition for IPMS was formed last May after a meeting at the World Bank in Washington. Currently 28 organisations globally are part of this initiative.
In the first phase, the coalition would focus on measurement standards for office space, and standards for residential real estate would be developed in the second phase.
“The biggest long term advantage to a buyer would be that he would be paying for the space that he would be using. It will remove the element of risk for both — buyer and seller, and will ensure the valuation accurately reflecting the usable space within a property,” says Sandhir.
The challenge, however, is to get governments to adopt these standards. Currently only one government, Dubai, has committed to adoption.
Even as the RICS is working on an ambitious scheme to get stakeholders and governments on board for a uniform standard, implementing it India would have challenges.
Sandhir, however, is hopeful that with greater cross-border investments into real estate, that would be a gradual move towards a common standard in the interest of transparency. “I am hopeful that other countries including India will follow in adapting and supporting these standards.”