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Space - the Final Frontier (upon settlement)

1/4/2013

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Recently, I received a concerned email from a recent client about her new property which she bought off-the-plan.  Apparently, her property size had shrunk from what she originally paid for by five square metres (5m2), and was wondering why she was neither made aware of it during construction nor unsure if the property developer was pulling a fast one.  She had contacted the developer, who stated that the discrepancy of the size was due to how the area was measured at sale and at settlement.  

Depending on the contract signed, the floor space might reference difference floor areas such as Gross Floor Area (GFA), Nett Lettable Area (NLA), Fully Enclosed Covered Areas (FECA) and Unenclosed Covered Areas (UCA); it might reference one or a number of them, or might even mention that the areas are “indicative”. 

To further define it, the way that the area is measured for the areas are:

  • GFA – area measured from the external face of the external wall.  In your case, the areas including the width of the facade wall, the block work from the common area (depending on how they measure the common area) and middle of the tenancy walls.  GFA = UCA + FECA
  • FECA – area measured within the fully enclosed (i.e. walls or windows or doors to each side of the area) space whereby the internal face of the external wall is measured.  That is, if it was a double brick construction, they would measure from the internal face of the outer most external brick wall
  • UCA – area measured within a space where it’s not fully covered (e.g. a balcony) but measured the same as FECA.
  • NLA – area measured contained within a tenancy at each floor level measured from the internal finished surfaces (i.e. plasterboard walls, not the brick wall) of permanent external walls and permanent internal walls but excluding features such as balconies and verandahs, common use areas, areas less than 1.5 m in height, service areas, and public spaces and thoroughfares.

Whether the Developer should have told her or not would be from the contract documents, but typically the person selling the property would have to disclose whether she was in fact getting the quantified area of usable space as it may be part of the law in your state/country.  However, I recommend checking with your legal team or consultant. 

So, be careful out there when you're purchasing property off-the-plan.  Ask for confirmation, and if you can, a copy of the floor plan with dimensions on them as you can see where they've measured from.

Do you have any other tips for buying off-the-plan?  Add your tips below. 
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    Ivan Chew

    With over 16 years in the property and construction industry and over 8 years in project management, Ivan established IMPROJEX in March 2010.  He also holds a Bachelor of Building (Construction Economics), Masters in Project Management and a Postgraduate Certificate in Energy Studies (with a concentration in the Built Environment and Innovation Management). 

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