External Development Charges are paid by the developer to the municipal authorities to maintain civic amenities that are located within the project’s boundary.
In accordance with RERA, development work of this sort includes constructing roads, supplying water and electricity, landscaping, maintaining drainage and sewage systems, managing waste, and any other work that will benefit the project in its entirety.
Despite the fact that the city’s civic authorities decide the charges, the brunt of them ultimately falls on the buyer. So, EDC tends to raise the cost of the project for homebuyers by almost 15-20 percent.
Per square foot EDC would be equal to the applicable EDC rate divided by the total permissible area. The Department of Town and Country Planning (DTCP) has fixed a formula to permit uniformity in the calculation of EDCs, but as a buyer, you should keep on top of current FARs and EDCs in your area. You should also consider using RTI where appropriate.
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