Investment in real estate is not only made for staying in a place called your own home but also from the point of appreciation in value. However, we have always read that the value of a building depreciates. Then how is that the value of an apartment complex appreciates over a period of time?
Do we have you wondering over this point?
We tell you why. It is because you possess something called as a Undivided Share of Land or UDS as it is commonly known as.
What is Undivided Share of Land?
When you buy a house in an apartment complex or a villa in a gated community, you have possession over your apartment or a independent home which is valued at a particular amount. Have you wondered to whom does the land over which the entire complex is constructed belong to? It is definitely bought by the developer of the property who in turn develops the complex. But when the apartments or the houses are transferred to your name, what is the status of the land? Does it still belong to the builder or to the resident’s association or to individual apartment /house owners?
It does belong to the buyers. Undivided Share of Land is the individual share of land of each of the buyer of flat /houses in the total land area on which the entire complex is housed.
Why is Undivided Share of Land Important to a Buyer?
It may be thought that it is the apartment/house where you are going to be living, why does the share of land then assume importance?
UDS is important because your undivided share is what determines your right over the property in cases like the ones mentioned below
- When compensation has to be claimed in the event of a natural calamity like an earthquake or floods when the entire building is damaged
- In case there is redevelopment planned over the property
- When Government takes over the area for development of infrastructure
Also as mentioned above, the building depreciates over time, your value of the apartment or a house appreciates just because of the increasing land value over which it stands.
Without an UDS, your investment in any luxury or a premium property will carry no value.
How Do You Calculate Your Undivided Share Of Land?
An UDS is proportional to the area of the land on which the apartment /house is constructed.
For Example, an apartment complex is constructed over an area of 70,000 sq ft and has two sizes of apartments constructed, 100 apartments of 700sqft (1bhk) and 50 apartments of 1400sqft(2bhk).
The formula used for calculating UDS is
Apartment Size*Total Area of Land / Combined sum of the areas of all apartments
For our example these are the figures
Combines sum of areas of all apartments = (100*700) + (50*1400) =70000+70000 = 140000
Calculating the UDS of 1bhk buyers /owners (individually)= 700*70000/140000 =350 sqft or .025% of the total land value
Calculating the UDS of 2bhk buyers /owners (individually)= 1400*70000/140000 =700 sqft or .05% of the total land value
It is evident from the calculation above that the higher the number of units in the complex, the lower is your UDS.
As important it is to know about the value of your UDS, it is equally important that you also know that the value of UDS in percentage terms or the absolute value needs to be mentioned in the Registration Document. You should check for the same before registering the property.
Certain cities also call for separate registration of UDS. It is good to check the local regulations beforehand.
I would like to understand implications of using apartment land to build a temple. What would it mean in terms of rights to individual apartment owners who object to the constitution?
I would like to understand I have purchased a villa in uds in construction agreement they have promised me built up area of 1600 but actual buildup area is 1420 they are saying septic tank and sump coming to 180 sqft is that correct
I would like to understand the implications of using apartment land to build a masjid. What would it mean in terms of rights to individual apartment owners who object to the constitution?
I am buying a row house built large piece of land. Also the township has buildings with flats. So my question is that will I be owner of the piece of land which is mentioned in my agreement? Can I register my name to records of the land? And how my UDS is calculated?