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EDC ( External Development Charges ) in real estate :-

Besides the basics per sq. Foot Apartment rates, there are different other costs related to the purchasing of an apartment. You may have found different types of expenses such as external and Infrastructure development charges while searching for a property to invest. Prospective buyers willing to purchase an apartment for a housing project would be paid according to their apartment size. The Real Estate (Regulation and Development) Act, 2016 acknowledges these charges. 

To ensure that a housing project is appropriate for consumers, a developer must ensure that a variety of public facilities are present. These include essential facilities such as electricity and water supply, waste management systems and road networks, landscaping, and others. The builder shall pay a fee known as the External Development Charges or EDC to the municipal authorities in that area. It earns the rights to carry out the construction works mentioned above is paid by the developer to the municipal authorities and then forwarded to homeowners. Due to the fact that these charges vary from project to project, buyers have to pay different costs in addition to the per ft of the property rate. However, the apartment’s size is an important determinant of the EDC.

Unlike EDC, the State Government shall levy IDC and hence varies from State to State. In addition, the location and form of project in the city differ accordingly. 

For the local authorities, EDC is indeed a primary source of income. Developers, however, often struggle to make timely EDC payments. The default in the payment of EDC results in a heavy penalty that the developers are expected to pay. In any event, it is not possible to pass the value of the penalty on to the project buyers.