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When it comes to buying your dream home, do you have a preference for a particular floor or view?If yes, you must have frequently come upon real estate terms like PLC and FRC. So, what do they mean, and how do they impact your home-buying process? Let’s take a look:

Preferential Location Charges (PLC)

  • What is PLC?

    • Preferential Location Charges (PLC) are additional premium charges the buyers pay for specific advantageous locations within a building/township. Some common types of PLC include corner units, homes with Vaastu compliance, views of external landscapes such as water bodies, natural greenery, cityscape, or amenities like swimming pools, boulevards, etc.

  • What are the factors that affect PLC?

    • Many factors influence PLC. For example, corner apartments are highly preferred in a township because of better ventilation and more square footage.
    Homes with the best views – the sea, mountains, or the park – will also cost you PLC. Homes facing roads also cost more because they provide easier access to the street.
    Floor is another factor influencing PLC, but it varies from region to region. For example, if you are in a city susceptible to floods, most people will prefer homes on higher floors, resulting in a PLC being charged for them. On the other hand, if you are in an earthquake-prone area, homebuyers will pay a premium for apartments near the ground, allowing them to escape faster.

  • How is PLC calculated?

    • Usually, PLC is calculated as below:
    PLC = Super Built-Up area of the property X the PLC (per square foot) being charged by the developer.
    Since there are no guidelines on PLC, it can vary based on the developer, the scope of the project, the city, the locality and the square footage of the property concerned.

  • Is PLC negotiable?

    • In the absence of fixed rates and legal guidelines, PLCs are quite flexible. It means that you can negotiate the rates with the developer.

Floor Rise Charges (FRC)

  • What is FRC?

    • Floor Rise Charges (FRC) are additional costs the buyers pay for a flat/unit on a higher floor in a multi-storey building. Most developers raise the per-square-foot cost for units on floors beyond the fourth floor, as home buyers prefer them over lower floors for plenty of sunlight, ventilation, privacy, less noise, and easier access to the terrace.

  • How is FRC calculated?

    • There are no fixed FRC rates, which vary from project to project, depending on the developer, the amenities, the area, etc. But the most common way of calculating it is this: Floor Rise Charge X Carpet area + rate per square foot.
    Let us understand this with an example. Suppose the rate per square foot in the 1,000 sq. ft. apartment you are buying is Rs 3,000. Now, the base price is Rs. 30 Lakh. If the FRC is Rs 100 per floor and your apartment is on the 10th floor, the amount is 100×10 = Rs 1,000 per sq. ft. This means that your per-square-foot rate will rise from Rs.3,000 to Rs. 4,000. So, your base price will increase from Rs. 30 Lakh to Rs 40 Lakh.

Points To Remember While Paying PLC & FRC

  • Make sure you are being delivered what you paid for.
  • Evaluate the property’s potential for appreciation. Remember that you are paying a huge additional amount, be it PLC or FRC. If the property appreciation rate is low in the area, it might turn out to be a bad investment in the long run. Just in case, what if you want to sell it one day?
  • Assess the overall condition of the property. Make sure the quality of construction, lifestyle amenities, and the general ambience of the property are worth every additional penny you are paying. Even sustainability is a key factor these days, and it will become even more important in the future.
  • Check if the USP will always remain. Suppose you are paying extra for an apartment facing the park. Are you sure no other building will come up in front of yours, thus obstructing the view?

Make An Informed Choice

While no cost will seem too big to obtain your dream home, pay PLC and FRC after much consideration. The credibility and reputation of your builder are important factors when agreeing to pay extra. Consult a lawyer, realtor or others who have bought property from the same developer by paying PLC/FRC. Most importantly, try to gain an in-depth understanding of the terminology for real estate here https://www.providenthousing.com/glossary-home-buying/ to make an informed decision.

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