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Business News/ Opinion / Online-views/  Did you know | Some developers are charging uniform PLCs above a certain floor
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Did you know | Some developers are charging uniform PLCs above a certain floor

Did you know | Some developers are charging uniform PLCs above a certain floor


A new trend among real estate developers is that they are charging uniform preferential location charges (PLCs) above a certain floor. Earlier, it used to differ from floor to floor.

What is PLC?

The amount of PLC varies between different developers and projects. It depends on the size, the rate of PLC, location and alignment and construction quality. Typically, each floor has a different PLC and floors closer to ground have the highest PLCs.

How is it fixed?

PLC is charged per sq. ft of the super area of your apartment, unlike maintenance or car parking charges that are usually fixed at the time of booking the flat. To calculate the PLC amount, multiply the super area of the apartment with the rate specified in the developer’s rate card. So the bigger your apartment, the higher would be your PLC.

What’s led to the new PLC trend?

According to industry estimates, residential projects across Mumbai Metropolitan Region and National Capital Region have witnessed a drop of at least 50% in absorption (sales) during the January-March period compared with the same period a year ago. Developers across key residential markets have not registered healthy sales, leading to an increase in inventory, which in turn has put developers under pressure. As a result, there is a drop in new launches. The latest report from property consultants Cushman and Wakefield India corroborates the trend. Among other measures, developers are now devising new ways to tackle the problem. Keeping a uniform and affordable PLC above a certain floor can help the developer advertise the project as an affordable one, attracting more customers.

What it means for you

Uniform PLC rates can affect buyers in two ways—some may find a cheaper deal, while for others the deal may become expensive.

Let us understand this with an example of a mid-housing project with 24 floors. Usually, developers fix the ground-floor PLC at 200 per sq. ft for ground floor, 175 per sq. ft for the first floor, 150 per sq. ft for the second, third, fourth and fifth floors, 120 from the sixth to ninth floors, 100 for 10th to 15th floors, 50 for 16th to 18th floors and finally 25 for 19th to 24th floors. Now suppose the developer fixes a charge of 80 per sq. ft from the ninth floor onwards. Here, while those who book into any of the apartments between the 9th and 15th floors would stand to gain, while those in floors above will be at a disadvantage. Collectively, the developer still makes a profit.

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Published: 06 Aug 2012, 12:51 AM IST
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