Home >Money >Do you really prefer the location you are paying so much for?

An advertisement for a newly launched residential project in Delhi’s satellite town Noida claims to have no additional charges for car parking, power backup or maintenance. But applicable preferential location charges (PLC) need to be paid.

Graphic: Yogesh Kumar/Mint

Your broker or developer may not tell you that there are apartment units on which there is no PLC applicable and that may save you a lot of money in the overall deal.

No-PLC flats

Often, due to the design and building plans of a housing project, some apartments do not attract any kind of PLC. Referred to as non-PLC flats, these save a few thousands to a few lakhs depending on the price range and area of your apartment.

For instance, in the above example, PLC is applicable on the ground floor up to the fifth floor and from the 15th to 18th. But the floors in the middle—6th to 14th—come with zero PLC.

Says Rajesh Goyal, managing director, RG Group, a Delhi-based real estate firm developing a residential project in Noida: “Around 30% units in a housing project do not have any kind of PLC. Booking these units will save you some money."

Sometimes developers do not have any PLC for the topmost floor if the building is a high-rise comprising of at least 20 floors.

What is PLC?

As the name suggests, PLC is an additional cost that you pay for a better location within the same apartment. For showing your preference for that particular location, you have to pay a charge.

For instance, if you want a unit that faces the park or the road or is on the ground floor, you would need to pay a PLC.

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 of the apartment.

To calculate how much PLC you need to pay, 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.

No fixed range

The amount of PLC charged varies between different developers and projects. It depends on the size, the rate of PLC, location and the alignment and construction quality of the apartment.

Says Gaurav Gupta, director, SG Estates Ltd, a Ghaziabad-based developer: “There is no regulatory framework on PLCs. There are no standard rules that govern the laws relating to PLCs."

Usually, luxury projects situated in the heart of the city have a higher PLC on each unit. Pradeep Mishra, a Delhi-based independent real estate analyst, says, “In general, PLCs range from Rs25 per sq. ft to as high as Rs2,000 per sq. ft." For instance, apartments at real estate firm DLF Ltd’s premium project in New Delhi, Capital Greens, the PLC is Rs500-2,000 per sq. ft.

Penthouses built on top of a tower may command the highest PLC in a tower. An independent villa with personal parking space, park and swimming pool will also command high PLC.

Climate and the topography also play a vital role in deciding the PLC in a group housing. For instance, because of humid climate, high-rise apartments in Mumbai that are more airy are priced high and have higher PLCs. On the contrary, buyers in Delhi and in the north prefer low-rise apartments and villas. Therefore, the PLC is higher if your apartment is closer to the ground level.

“PLC is higher for apartments that are in demand in a particular project. You should look at the cluster plan of the group housing project before booking the flat," says Gupta.

Remember that even within the same apartment, there could be different PLCs. For instance, the PLC for a first floor apartment may be higher than that for the fourth floor.

Two or more PLCs

Another thing to keep in mind is that the apartment unit you choose may attract one or more PLCs. So if it is a ground floor apartment facing the park, it will attract two PLCs—for two preferences you opt for. It may even go up to three PLCs, if your apartment is a penthouse.

However, usually, developers charge only for two PLCs. Says Gupta, “Developers charge only two PLCs so as to ease the buyer. But he will probably add the two PLCs having higher value among the three."

Hiding PLCs

Since there is no regulation on fixing PLCs, remember that developers may give it some other name in their sales brochures. Rohtas Goel, chairman, Omaxe Ltd, says, “This is more of a regulatory issue. There has to be some clarity on this. A developer may not call it PLC, but may simply put different price tags depending on the location of towers or units." So it’s worth being cautious.

Some developers add it to the basic sale price. Says Priya Kapoor, senior manager, PricewaterhouseCoopers, market consultants: “PLC is often used to disguise the basic sale price."

Before you book your flat, check the size and the total cost of the apartment with and without the PLC.

What to do?

If you don’t want to pay the PLC and your broker hasn’t told you about no-PLC flats, there is a way to find out.

The developers give a cluster plan, which is a simple layout map detailing the view from each of the towers and apartments. It gives an idea of the apartments that are located between towers facing each other or those facing the parking, the road or the green spaces within the apartment.

Gulshan Kumar, director, Gulshan Homz, a Delhi-based developer, gives a cue: “They may be in one corner or interspersed between two towers or may be the top-most floors."

Ask the company’s personnel to point out no-PLC apartments on the cluster plan and then check their availability.

Often, timing plays a crucial role. You may get a no-PLC apartment if you book the flat at the time of launch as the demand for such apartments is higher and they move out faster.

Says Manu Garg, director, Landcraft Developers, a developer with projects in Ghaziabad: “At the time of launch, it is easier to get a no-PLC flat as they are in demand."

Kapoor adds, “Investors usually pick the first few no-PLC apartments at the time of launch."

As a buyer you would want to be near the park or the road. But often it is insignificant to book an apartment on one of the higher floors and pay for the park or the nearest road. In this case the park or the road that you pay for will still be at a distance and slightly out of sight. So make sure your really want what you are paying for.

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