Real Estate Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
Abatement Notice
A notice served on the owner(s) or occupier(s) of a property from which a private nuisance arises, warning them of the intention to enter on the land in order to abate the nuisance.
Absolute Title
A clear title that is free of any liens or judgments. A clear title is normally required before a mortgage is granted.
Abstract of Judgment Law
The summary of a court judgment that creates a lien against a property when filed with the county recorder.
Accelerated Cost Recovery System
A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.
Accelerated Depreciation
A bookkeeping method that depreciates property faster in the early years of ownership.
Acceleration Clause
A clause in your mortgage which allows the lender to demand payment of the outstanding loan balance for various reasons. The most common reasons for accelerating a loan are if the borrower defaults on the loan or transfers title to another individual without informing the lender.A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment.
Acceptance
Consent by the person receiving the offer to be bound by the terms and conditions of the person making the offer. Acceptance of an offer constitutes an agreement.
Access
Any means by which a person can enter property.
Accessibility
The degree to which a building or site allows access to people with disabilities.
Accessory
A second building on a lot and one that is not considered to be the primary building, e.g. a storage shed or a parking space. Usually described as ‘Accessory Building’ or ‘Accessory Unit’.
Accomodation Rating
Recording of instruments with the county recorder by a title company merely as a convenience to a customer and without assumption of responsibility for correctness or validity.
Accretion
The gradual addition to the shore or bank of a waterway by deposits of sand or silt.
Acknowledgment
A written declaration affirming that a person acted voluntarily.
Acquisition and Development Loan
A loan for the purchase and preparation of raw land for development. Usually a construction loan or land sale is the source of repayment.
Acre
A measurement of land equal to 43,560 square feet.
Acre foot
The volume of material needed to cover an acre of land one foot deep.
Act of God
Any act of nature such as rain, lightning, floods or earthquakes. Many insurance policies do not cover losses resulting from an ‘Act of God’.
Active Solar System
A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use.
Actual Age
The number of years a structure has been standing.
Addendum
An addition or change to a contract.
Additional Principal Payment
Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan.
Add-on interest
The interest a borrower pays on the principal for the duration of the loan.
Adjustable-Rate Mortgage (ARM)
A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes.
Adjusted Cost Basis
The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.
Adjustment Period
The amount of time between interest rate adjustments in an adjustable-rate mortgage.
Administrator
A person appointed by a probate court to administer the estate of a person who died intestate (without a will). ‘Administratrix’ is the feminine form.
Administrator’s Deed
A legal document that an administrator of an estate uses to transfer property.
Adverse Possession
The acquisition of title to property through possession without the owner’s consent for a certain period of time.
Adverse Use
The access and use of property without the owner’s consent.
Affiant
A person who makes a sworn statement.
Affirmation
A substitution for an oath granted to people based on religious reasons.
A-frame Design
An interior style that features a steeply peaked roofline and a ceiling that is open to the top rafters.
Agency
The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract.
Agency Closing
The process by which a lender uses a title company or other firm as an agent to complete a loan.
Agent
A person licensed by the state to conduct real estate transactions.
Agreed boundary
A compromise boundary to which property owners agree in order to resolve a dispute.
Agreement of Sale
A document the buyer initiates and the seller approves that details the price and terms of the transaction.
Alcove
A recessed section of a room, such as a breakfast nook.
Alienation Clause
A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred.
Alley
A lane behind a row of buildings or between two rows of buildings.
Allowances
Budgets offered by builders of new homes for the purchase of carpeting and fixtures.
Alternative Mortgage
Any home loan that does not conform to a standard fixed-rate mortgage.
Aluminum Siding
A metal covering that provides an alternative to paint for owners of wood homes.
Aluminum-Clad Windows
Wooden windows with aluminum covering the exterior.
Amenities
Parks, swimming pools, health-club facilities, party rooms, bike paths, community centers and other enticements offered by builders of planned developments.
Amenity
A feature of real property that enhances its attractiveness and increases the occupant’s or user’s satisfaction although the feature is not essential to the property’s use, e.g. scenic views, proximity to public transport or recreational facilities.
Amortise
To repay a mortgage with regular payments that cover both principal and interest.
Amortization Schedule
A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero.
Amperage
The strength of an electrical current.
Anchor Bolt
A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.
Anchor Tenant
A well-known commercial retail business such as a national chain store or regional department store (AAA Tenant) strategically placed in a shopping center so as to generate the most customers for all of the stores located in the shopping center.
Annual Percentage Rate (APR)
The cost of the loan expressed as a yearly rate on the balance of the loan.
Annuity
An amount paid yearly or at regular intervals, often on a guaranteed dollar basis.
Anticipatory Breach
A communication that informs a party that the obligations of the original contract will not be fulfilled.
Appraisal
A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.
Appraisal Report
A detailed written report on the value of a property based on recent sales of comparable sites in the area.
Appraiser
An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent.
Appreciation
An increase in the value of a property due to changes in market conditions or supply and demand, etc.
Arbitration
A method of resolving a dispute in which a third party renders a decision.
Arbor
An area shaded by trees, shrubs or vines on a latticework structure.
Architect
A licensed professional who designs homes, buildings and other structures.
Architrave
A decorative moulding around doors or windows.
Arpent
A French measurement of land equal to .84625 acres.
Asbestos
A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard.
As-Is Condition
The purchase or sale of a property in its existing condition.
Asking Price
The listed price of the property but may not always be the selling price. The owner may be willing to negotiate.
Assessed Value
The valuation placed on a property for the purposes of taxation by an authority.
Assessment Rolls
A list of taxable property compiled by the assessor.
Asset
Anything of monetary value that is owned by a person, e.g. personal property, real property, bank accounts.
Assignment
The transfer of a mortgage from one person to another.
Assignor
A person who transfers rights and interests of a property.
Assumable Mortgage
A mortgage that can be transferred to another borrower.
Assumption Clause
A provision that allows a buyer to take responsibility for the mortgage from a seller.
Auction
A public sale of a property or real estate that is sold to the highest bidder.
Avigation Easement
An easement over private property near an airport that limits the height of structures and trees.
Awning Windows
Single-sash windows that tilt outward and up.
B
BAD
Bank Accounts Debit Tax. State or Territory government tax (except ACT) on withdrawals from accounts on which a cheque can be drawn
Balloon Mortgage
A mortgage loan that requires the remaining principal balance be paid at a specific point in time. For example, a loan may be amortized as if it would be paid over a thirty year period, but requires that at the end of the tenth year the entire remaining balance must be paid.
Balloon Payment
A large loan payment to clear a debt.
Bankruptcy
A federal law Whereby a person’s assets are turned over to a trustee and used to pay off outstanding debts; this usually occurs when someone owes more than they have the ability to repay.
Base Rent
A set amount used as a minimum rent in a lease with provisions for increasing the rent over the term of the lease.
Beneficiary
An administrative body made up of all the owners within a group of units or apartments of a strata building. The owners elect a committee which handles administration and upkeep of the site.
Blanket Mortgage
A mortgage loan that requires the remaining principal balance be paid at a specific point in time. For example, a loan may be amortized as if it would be paid over a thirty year period, but requires that at the end of the tenth year the entire remaining balance must be paid.
Blockbusting
The attempt to induce someone to sell their home because someone from a protected class is rumored to be moving into the neighborhood. The classic example of this would be a real estate agent passing out her card to neighbors while telling them that a minority family is moving in down the block and they should sell now before the neighborhood gets any worse. This is illegal.
Body Corporate
A sum of money paid by a tenant and held by the Rental Bond Boaard to ensure against defaulting on payment and damage to the property.
Bond
A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.
Bond Market
Usually refers to the daily buying and selling of thirty year treasury bonds.
Boot
Money or property given to make up any difference in value or equity between two properties in an exchange.
Boundary
A line separating adjoining properties.
Brick Veneer
A system of building in which a structural timber frame is tied to a single brick external wall.
Bridging Loan
A short term loan (usually at a higher rate) taken out to cover the financial gap between buying a new property and selling an existing property.
Broker
A broker is anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee for doing so.
Build Out
The space improvements put in place per the tenant’s specifications. Takes into consideration the amount of Tenant Finish Allowance provided for in the lease agreement.
Building Code
Based on agreed upon safety standards within a specific area, a building code is a regulation that determines the design, construction, and materials used in building.
Built-Up Area
Built-up area denotes to the entire area of the floor including carpet area, walls, lobbies and corridors, atrium areas and basement. Always, check with your builder/agent on what concept they are using. In Mumbai, the basement, staircase, lift, and utility rooms like generator and electricity rooms are also taken as built-up area. In Delhi, the lift areas and staircase areas are included in the built-up area. In Chennai, the basement and atrium areas are excluded whereas in Bangalore, only basement is not included in the built up area.
Bullet Loan
Any short-term, generally five to seven years, financing option that requires a balloon payment at the end of the term and anticipates that the loan will be refinanced in order to meet the balloon payment obligation.
Business Day
A standard day for conducting business. Excludes weekends and public holidays.
Buyer’s Market
When the demand for property is less than supply so the advantages shift to the buyer. Contrast with Seller’s Market.
C
Cap Rate
Cap rate denotes to the capitalization rate. Capitalization rate is the restitution on investment on the property. The Capitalization rate is measured by the formula: Purchase Price / Net Operating Income from the Property.
Carpet Area
The actual usable area within the walls of the floor is Carpet area.
Cash On Cash
The yearly percentage return of your down payment not including appreciation. It is the first year’s cash flow divided by your initial down payment.
Certificate of Occupancy
Certificate of Occupancy.
Certificate of Title
A description of a property with the name of the registered owner, encumbrances, i.e. mortgages or easements on the property. It must be produced by the vendor before the sale of the property.
Chattels
Movable items of personal property such as furniture that may be included in a sale.
Clear Title
A title that is free of lien or legal questions as to ownership of the property.
Collateral
An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.
Commercial Bank
A financial institution authorized to provide a variety of financial services, including consumer and business loans (generally short-term with full recourse to the Borrower). Commercial banks may be members of the Federal Reserve System.
Commission
A proportion (usually a percentage) of the sale price of a property paid to a real estate agent for negotiating a real estate transaction.
Common Area Maintenance (CAM)
Common areas include hallways, pathways and utilities. CAM fees are accumulation by the landlords from the tenants to cover maintenance, property taxes and insurance in the case of Triple Net Lease.
Common Law
An unwritten body of law based on general custom in England and used to an extent in Australia.
Common Law Title
See Old System Title.
Common Price Index
Measures inflation in relation to the change in the price of a fixed market basket of goods and services purchased by a specified population during a “base” period of time.
Common Property
Areas of a building, land or amenities within a strata title property that are shared by all owners, e.g. a driveway.
Company Title
See Stratum Title.
Condominium
A form of ownership in which individuals purchase and own a unit of housing in a multi-unit complex; the owner also shares financial responsibility for common areas.
Conduit
An entity which issues mortgage- backed securities backed by mortgages which were originated by other lenders.
Construction Loan
Also called Building Loan. A short-term, interim loan (only paid to registered builders) for financing the cost of construction. The lender makes payments to the builder at periodic intervals as work progresses.
Contiguous Space
(1) Multiple suites/spaces within the same building and on the same floor which can be combined and rented to a single tenant. (2) A block of space located on multiple adjoining floors in a building.
Contingency
A condition that must be met before a contract is legally binding.
Contract Note
(Victoria only) An agreement in writing setting out the terms and conditions relating to the sale or purchase of a property.
Contract of Sale
An agreement in writing setting out the terms and conditions relating to the sale or purchase of a property. It is the purchase document signed at auction.
Cooling-off Period
The legal entitlement of a property purchaser to withdraw from a contract by giving written notice within three clear business days after the Contract of Sale or Contract Note is signed. However, there are some circumstances where the cooling-off period.
Cooperative
A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.
Cost approach
A method of appraising real property whereby the replacement cost of a structure is calculated using current costs of construction.
Cost of Fund Index
One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home Loan Bank.
Covenant
Terms, conditions and restrictions noted on the title. A covenant may affect future plans or resale of the property.
Cover Note
A document issued by an insurance company giving temporary insurance until a formal policy is issued.
CPI
The Consumer Price Index is used to account the yearly rental increase so as to pay for inflation.
Credit History
A record of an individuals current and repaid debts which is usually used by a lender to assess the risk of a potential borrower.
Cul-de-Sac
Also called a ‘Court’ or ‘Dead End Street’. A street with only one entrance, the other end being closed. Often valued for the privacy provided to homes in the street.
D
Debenture
A long-term bond or note issued by governments and/or corporations and not secured by a mortgage or lien on any specific property. Since there is no specific property securing the debenture, the ability to repay the debt is based solely on the financial strength of the issuer.
Debt Service Coverage Ratio
The relationship between the annual net operating income (NOI) of a property and the annual debt service of the mortgage loan on the property.Both Lenders and Investors calculate this ratio to assist them in determining the likelihood of the property generating enough income to pay the mortgage payments. From the lender’s viewpoint, the higher the ratio, the better.Debt Service: The periodic payment (monthly, quarterly, or annually) necessary to pay the interest .
Dedicate
To appropriate private property to public ownership for a public use.
Deed
A legal document conveying title to a property.
Default
Failure to make mortgage payments regularly or to comply with other requirements of the mortgage.
Deposit
A percentage of the purchase price given to bind the sale of real estate.
Depreciation
A decline in the value of property due to changes in market conditions or other causes.
Disbursement
A cash expenditure for the purpose of settling a debt.
Discount Rate
The rate of interest charged to banks who buy money from the Federal Reserve System. An increase in the rate not only discourages the banks from borrowing, but it also serves as a signal that interest rates are probably going to increase. Also, a compound interest rate used to convert expected future income into a present value income.
Disposable Income
Money left over after all expenses have been met.
Distraint
The act of seizing (legally or illegally) personal property based on the right and interest which a landlord has in the property of a tenant in default.
Door Jambs
The vertical sides of a door frame.
Drawdown
The disbursement of loan funds provided by the Bank.
Dual Occupancy
A block of land which is zoned so that there two distinct dwellings are permitted to be constructed.
E
Easement
A right of use over the property of another created by grant, reservation, agreement, prescription or necessary implication.
Economic Rent
The market rental value of a property at a given point in time, even though the actual rent may be different.
Effective Gross Income
Term used for an income-producing property, derived from the potential gross income, less a vacancy factor and a collection loss amount.
Effective Rent
The actual rental rate to be achieved by the landlord after deducting the value of concessions from the base rental rate paid by a tenant, usually expressed as an average rate over the term of the lease.
Efficiency Ratio
Efficiency ratio is expressed as a share of carpet to super areas of the property.
Encroachment
Part of a house or establishment illegally overhanging the street or a neighbour’s property.
Encumbrance
An impediment to the use or transfer of the property in the form of an interest or right in the property, e.g. easement, mortgage or caveat.
Energy Efficient Mortgage
An FHA program that helps homebuyers save money on utility bills by enabling them to finance the cost of adding energy efficiency features to a new or existing home as part of the home purchase.
Equity
The amount of an asset actually owned. Equity is the difference between the market value of the property and the amount still owed on its mortgage.
Establishment Fee
A fee charged by a Lender to set up a loan.
Estate
The total of all the real estate and personal property owned by an individual at the time of death.
Eviction
The lawful expulsion of an occupant or tenant from real property.
Exclusive Authority
A written contract that gives one real estate agent the exclusive right to sell a property in a specified time period.
Executor
A person named in a will to administer an estate. Executrix is the feminine form.
Expense Ratio
Expense Ratio
F
Face Rental Rate
The asking rental rate published by the landlord.
Fair Housing Act
A law that prohibits discrimination in all facets of the homebuying process on the basis of race, color, national origin, religion, sex, familial status, or disability.
Fee Simple
An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited. Commonly, a synonym for ownership.
Fibro Cement
Building material made of compressed fibres cemented into rigid sheets.
FID
Financial Institutions Duty. State duty on the receipts of financial institutions.
Fiduciary
A person who essentially holds the character of a trustee. Real estate agents and salespersons are considered by law to be fiduciaries, thus they have a duty to act primarily for the benefit of the principal (the person who employed them).
Finance
The commercial activity of providing funds and capital.
First Mortgage
The senior mortgage which, by reason of its position, has priority over all junior encumbrances. The holder of the first or senior mortgage has a priority right to payment in the event of default.
First Refusal Right or Right Of First Refusal
A lease clause giving a tenant the first opportunity to buy a property at the same price and on the same terms and conditions as those contained in a third party offer that the owner has expressed a willingness to accept.
Fittings
Objects that can be removed from a property without causing damage to it.
Fixed Expenses
Expenditures such as property taxes, license fees, and property insurance that are not directly affected, by the occupancy of the property.
Fixed Rate Mortgage
A mortgage in which the interest rate does not change during the term of the loan.
Fixtures
Personal property that becomes real property when attached in a permanent manner to real estate.
Flex Space
A building providing its occupants the flexibility of utilizing the space. Usually provides a configuration allowing a flexible amount of office or showroom space in combination with manufacturing, laboratory, warehouse distribution, etc.
Floor Space Index (FSI)
Floor Space Index is the quotient of the ratio of the combined gross floor area of all floors excepting areas specifically exempted under these regulations to the total area of the plot.
Footing
The footing supports the building on its foundation.
Foreclosure
A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.
Foreign Direct Investment
Investment made by a foreign individual or company in productive capacity of another country. For example, the purchase or construction of a factory.
Freddie Mac
Federal Home Loan Mortgage Corporation (FHLM); a federally-chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders with funds for new homebuyers.
Freehold
An estate in real property which continues for an indefinite period of time. Freehold estates may be inheritable or non-inheritable. Inheritable estates include the fee simple absolute, the qualified fee, and the fee tail.
Full Service Lease
A Lease where the tenant pays rent to cover everything including utilities.
Future Proposed Space
Space in a proposed commercial development which is not yet under construction or where no construction start date has been set.
G
Gable
The triangular part of a building’s end wall which extends up to meet the two slopes of a roof.
Garnishee
To legally divert part or whole of someones money or property to someone else, e.g. for Child Support Payments.
Gazumping
Where a seller agrees to sell to one buyer but then either sells to another buyer or raises the price when two or more buyers show interest.
Gearing
The ratio of your own money and borrowed funds for investment. See Negative Gearing.
Graduated Lease
A lease, generally long term in nature, which provides that the rent will vary depending upon future contingencies, such as a periodic appraisal, the tenant’s gross income or simply the passage of time.
Gross Building Area
The total floor area of the building measuring from the outer surface of exterior walls and windows and including all vertical penetrations (e.g. elevator shafts, etc.) and basement space.
Gross Income
Income before taxes are deducted.
Gross Lease
A Lease where the tenant only pays the rent and the landlord pays the taxes, insurance and maintenance.
Gross Leasable Area (GLA)
The Gross Leasable Area or the total rentable area is the area which can be rented out for rental income. Itn’t include space for elevators, utilities room etc. does
Guarantor
A person who agrees to indemnify the holder of a loan all or a portion of the unpaid principal balance in case of default by the borrower.
H
Habitable
Suitable for occupancy. Local building codes ensure that structures are habitable through requirements for building permits and certificates of occupancy.
Hard Cost
The cost of actually constructing the improvements (i.e. construction costs).
High Rise
In the Central Business District, this could mean a building higher than 25 stories above ground level but in suburban sub-markets, it generally refers to buildings higher than 7 or 8 stories.
Hold Over Tenant
A tenant retaining possession of the leased premises after the expiration of a lease.
Holding Deposit
An initial (goodwill) sum of money given to register interest in or bind the sale of real estate before the full deposit is paid.
Home Equity Line of Credit
A mortgage loan which allows the borrower to obtain multiple advances of the loan proceeds up to a specified percentage of the borrowers equity in a property.
Home Improvement Loan
A loan made to a homeowner in which the home is used as collateral for the loan.
Home Inspection
An examination of the structure and mechanical systems to determine a home’s safety; makes the potential homebuyer aware of any repairs that may be needed.
Housing Expense Ratio
The percentage of gross income that goes toward paying housing expenses.
HVAC
The acronym for Heating, Ventilating and Air-Conditioning.
Habitable
Suitable for occupancy. Local building codes ensure that structures are habitable through requirements for building permits and certificates of occupancy.
Hard Cost
The cost of actually constructing the improvements (i.e. construction costs).
High Rise
In the Central Business District, this could mean a building higher than 25 stories above ground level but in suburban sub-markets, it generally refers to buildings higher than 7 or 8 stories.
Hold Over Tenant
A tenant retaining possession of the leased premises after the expiration of a lease.
Holding Deposit
An initial (goodwill) sum of money given to register interest in or bind the sale of real estate before the full deposit is paid.
Home Equity Line of Credit
A mortgage loan which allows the borrower to obtain multiple advances of the loan proceeds up to a specified percentage of the borrowers equity in a property.
Home Improvement Loan
A loan made to a homeowner in which the home is used as collateral for the loan.
Home Inspection
An examination of the structure and mechanical systems to determine a home’s safety; makes the potential homebuyer aware of any repairs that may be needed.
Housing Expense Ratio
The percentage of gross income that goes toward paying housing expenses.
I
Interest
The fee charged for borrowing money.
Interest Only Loan
A loan where only the interest is repaid throughout the course of the loan. The original amount or principal is repaid at the end of the term of the loan.
Interest Rate
The rate of interest in effect for the monthly payment due.
Introductory Loan
A loan offered at a reduced rate for an introductory period to new borrowers.
Inventory
The total amount of rentable square feet of existing and any forthcoming space (whether it be a tenant vacating space or new buildings coming on the market), in a given category, for example, all warehouse space in a specified submarket.
Investment
Investment is a term with several closely-related meanings in finance and economics. It refers to the accumulation of some kind of asset in hopes of getting a future return from it.
Investment Property
A property that is not occupied by the owner but leased to produce income.
J
Joint Agent
One or two or more agents jointly instructed by a principal to act on his behalf. In the case of estate agents this is normally on the basis that if any one of the agents effect the sale, letting or other joint agent(s) will share the remuneration in agreed proportions.
Joint Sole Agent
One of two or more agents jointly instructed as the only agents entitled to represent the principal. It is customary for the joint agents to share any commission earned on an agreed basis, irrespective of which agent effects the sale or letting.
Joint Tenancy
A form of co-ownership that gives each tenant equal shares and rights in the property including the right of survivorship, e.g. ownership of a property passes to the surviving owners.
Judgment
The official and authentic decision of a court of justice concerning the respective rights and claims of the parties to an action or suit.
K
Key Tenant
A major or primary tenant in an office building or shopping centre. Generally such a tenant leases a significant amount of the available space.
Keystone
An angular block centered over a door or window in a header or mantle.
Kickback
Payment made to someone for referral of a customer or business. Generally speaking, kickbacks are illegal because, unlike a commission, a kickback is made without the customer’s knowledge.
Kick-Out Clause
A clause in a sales contract allowing a seller to accept one buyer’s contingent offer then back out without penalty if a second buyer makes a better offer.
Knee Wall
A wall-like structure that supports roof rafters.
L
Laminated Timber
Layers of timber glued and pressed together to increase rigidity or to use as bench tops or cupboard doors.
Land Tax
A State tax based on the value of a property (not the principal place of residence) that is paid by the owner.
Landlord
A person who rents property to another; a lessor. A property owner who surrenders the right to use property for a specific time in exchange for the receipt of rent.
Lease
A written agreement between a landlord and a tenant granting a period of tenancy of a property under specific terms and conditions.
Leasehold
The right to use and have exclusive possession (but not ownership) of real estate for a specified period and subject to the fulfilment of certain conditions as recorded in a lease agreement.
Letter of Intent (LOI)
The Letter Of Intent is a non-binding offer letter to buy a commercial place.
Lessee
A person leasing a property.
Lessor
The owner of a property that is leased to another person.
Letter Of Attornment
A letter from the grantor to a tenant, stating that a property has been sold, and directing rent to be paid to the grantee (buyer).
Liabilities
A list of debts owed.
Lien
A legal claim against a property that must be paid off when the property is sold.
Life Estate
Also called Tenancy for Life. A freehold interest (in real property) that expires upon the death of the owner or some other specified person.
Like-Kind Property
A term used in an exchange of property held for productive use in a trade or business or for investment. Unless cash is received, the tax consequences of the exchange are postponed pursuant to Section 1031 of the Internal Revenue Code.
Line of Credit
An agreement by a lender to extend credit up to a specified amount for a specified time for a specified purpose. See Home Equity Line of Credit.
Liquid Asset
An asset, cash or otherwise, that can be converted into cash.
Listing
1. A written contract between an owner and a real estate agent, authorising the agent to perform services for the principal involving the owners property. 2. The property so listed.
Listing Agreement
An agreement between the owner of a property and a real estate broker giving the broker the authorization to attempt to sell or lease the property at a certain price and terms in return for a commission, set fee or other form of compensation.
Loan
A sum of borrowed money (principal) that is generally repaid with interest.
Loan Application Fee
Also called Establishment Fee. A fee paid to a lender for processing a loan.
Loan to Valuation Ratio
The amount of the loan financed as a proportion of the property value, expressed as a percentage.
Long Term Lease
In most markets, this refers to a lease whose term is at least three years from initial signing until the date of expiration or renewal option.
Low Rise
A building with fewer than 4 stories above ground level.
Lump-Sum Contract
A type of construction contract requiring the general contractor to complete a building or project for a fixed cost normally established by competitive bidding. The contractor absorbs any loss or retains any profit.
M
Maintenance Charges
These are charges taken by the maintenance society towards the maintenance of the property which includes costs of generator sets, security, landscaping, and common areas.
Manhole
An opening which permits access to the space between the roof and the ceiling, or below the floor.
Market Study
A forecast of future demand for a certain type of real estate project that includes an estimate of the square footage that can be absorbed and the rents that can be charged. Also called Marketability Study.
Market Value
Valuation process evaluates the market value of the property. Demand and supply forces in the market and factors like type of property, quality and construction, its location, infrastructure and available maintenance are taken into consideration. Market value of the property is the price that the property commands in the open market.p>
Metes and Bounds
The boundary lines of land, with their terminal points and angles, described by listing the compass directions and distances of the boundaries. Originally, metes referred to distance and bounds referred to direction.
Mid-Rise
A building with between four and eight stories above ground level although in a Central Business District, this might extend to buildings up to twenty-five stories.
Mixed-Use
It is commercial properties with retail on the first floor and apartments on upper floors. Mixed use is the use of commercial and residential simultaneously.
Mortgage
A written instrument creating an interest in real estate and that provides security for the performance of a duty or the payment of a debt. The borrower (i.e., mortgagor) retains possession and use of the property.
Mortgage Discharge
A fee charged by some lending institutions for finalising a loan.
Mortgage Insurance
A policy that insures the lender against the borrower defaulting on a loan. Most lenders generally require insurance when borrowing more than 80% of the property value.
Mortgage Offset
A non-interest earning account that is offset against a home loan to reduce the total interest payable.
Mortgagee
The lender in a mortgage agreement.
Mortgagor
The borrower in a mortgage agreement.
N
Negative Gearing
Where the return on an investment is not sufficient to cover the costs on the investment, e.g. property maintenance and interest on the loan.
Net Income
Income after taxes are deducted.
Net Operating Income (NOI)
Net Operating Income is the annual income after deduction of expenses like property tax, insurance, and maintenance but mortgage payments are exceptional.
Net Worth
The value of a persons assets minus liabilities.
Nominee
A person who, in a limited sense, acts for or represents another.
Notice of Default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.
Notice to Quit
A notice to a tenant to vacate the property.
Null and Void
That which cannot be legally enforced, as with a contract provision that is not in conformance with the law.
O
Off the Plan
To purchase a property before it is completed after having only seen the plans.
Offer
Conveyed intent by one party to form a contract, which may have conditions and stipulations, with another party.
Offset Account
An account linked to a mortgage account so that the interest earned is applied to reduce the interest on the mortgage.
Old System Title
Also called Common Law Title. A series of title documents called a ‘chain of title’. The overall title is sound only if the every document in the chain is sound. The legal investigations are complicated and expensive. An old system title may be converted .
Ongoing Fee
A loan maintenance fee charged regularly over the life of the loan.
Open Listing
A type of listing agreement in which more than one real estate agent may be employed to sell the property. The owner pays a commission only to the agent who finds the buyer. This listing is also known as a simple listing or a general listing and the owner.
Open Space
Land which has not had improvements such as buildings and other structures added to it. Such land is often left in a subdivision by a developer or stipulated by a local authority for recreational use or for personal use by the owner.
Operating Cost Escalation
Although there are many variations of escalation clauses, all are intended to adjust rents by reference to external standards such as published indexes, negotiated wage levels, or expenses related to the ownership and operation of buildings.
P
Pacific Security Capital
A leading commercial real estate investment bank. Pacific Security Capital is a direct lender and intermediary offering Acquisition, Development, Construction, Renovation, Bridge, Mezzanine and Permanent Financing of commercial real estate projects requiring more than $2MM in Financing.
Partial Taking
The taking of part (a portion) of an owner’s property under the laws of eminent domain.
Passed In
The highest bid fails to meet the reserve price of a property at an auction and consequently does not sell.
Percentage Lease
Percentage Lease is a lease where the tenant has to pay base rent plus a percentage of the tenant’s revenue.
Plat (Plat Map)
Map of a specific area, such as a subdivision, which shows the boundaries of individual parcels of land (e.g. lots) together with streets and easements.
Power-of-Attorney
The person who has authority to execute documents on behalf of the grantor of the power.
Preleased
Refers to space in a proposed building that has been leased before the start of construction or in advance of the issuance of a Certificate of Occupancy.
Pre-qualification
The process of determining how much money a prospective home buyer will be eligible to borrow before he or she applies for a loan.
Prime Rate
The interest rate that banks charge their preferred customers. Changes in this rate can influence other rates including mortgage interest rates.
Prime Space
This typically refers to first generation (new) space that is currently available for lease and which has never before been occupied by a tenant.
Principal
The amount borrowed or still to be repaid. The part of the monthly payment that reduces the balance of the mortgage.
Private Sale
The sale of a property by the owner without the services of a real estate agent.
Private Treaty Sale
The sale of property, through an estate agent, by negotiation.
Proxy
A person who represents another, particularly in some meeting. Also, the document giving to another the authority to represent.
Public Housing
Government-owned housing made available to low-income individuals and families at no cost or for nominal rental rates.
Q
Quadrangle
A rectangular area bordered on all sides by buildings. Often, a quadrangle is grassy with decorative landscaping. A quadrangle can be found in a central business district or on the site of an academic institution.
Quadriplex
A free-standing building having four dwelling units under one roof. Normally a quadriplex is a two-story complex with one dwelling unit located on top of and adjacent to another. Other configurations are possible including a one story structure with all four units simply being adjacent to each other.
Quadrominium
A four-unit building with four tenants in a condominium type of ownership and management.
R
Rafter
Part of the framework of the roof, the rafters slope down from the ridge to the eaves.
Raw Land
Unimproved land that remains in its natural state.
Real Estate
Also called “real property.” (1) Land and anything permanently affixed to the land, such as building, fences and those things attached to the buildings, such as light fixtures, plumbing and heating fixtures, or other such items that would be personal property if not attached. (2) May refer to rights in real property as well as the property itself.
Real Estate Agent
A person licensed to negotiate and transact the sale or lease of real estate on behalf of the property owner.
Real Estate Owned
Real estate that has come to be owned by a lender, including real estate taken to satisfy a debt. Includes real estate acquired by lenders through foreclosure or, in settlement of some other obligation.
Real Property
Land, with or without improvements.
Realtors
A real estate agent or broker who is a member of the NATIONAL ASSOCIATION OF REALTORS, and its local and state associations.
Realty
Real property: property consisting of houses and land.
Redraw Facility
A loan where the borrower can make additional payments and then access those funds when required. There may be a minimum redraw amount.
Refinance
The process of paying off one loan with the proceeds from a new loan using the same property as security.
Registration Charges
The fees associated with getting the legal title registered in your name. This legal process takes place in the sub-registrar’s office in your local court.
Rehab
An extensive renovation of a building or project which is intended to cure obsolescence of such building or project.
Repayment
Refund: the act of returning money received previously.
Representation Agreement
An agreement between the owner of a property and a real estate broker giving the broker the authorization to attempt to sell or lease the property at a certain price and terms in return for a commission, set fee or other form of compensation.
Request for Proposal
The formalized Request for Proposal represents a compilation of the many considerations that a tenant might have and should be customized to reflect their specific needs. Just as the building’s standard form lease document represents the landlord’s wish list, the RFP serves in that same capacity for the tenant.
Requisitions on Title
A process where the buyer requests additional information about the title of the property from the vendor.
Reserve Price
The minimum price which a seller will accept at auction.
Retail Market
Market in which energy is sold directly to the end-user customer.
Right of First Refusal
A provision in an agreement that gives a party the first opportunity to purchase or lease the property before it is offered for sale or lease to others.
Right of Survivorship
In joint tenancy, the right of the survivors to acquire the interest of a deceased joint estate.
Right of Way
A right of one property or the general public for access to or across another property.
Rise and Fall Clause
This clause may be contained in a building contract. It provides for an upward or downward contract price which correlates to the movement of prices, wages or other factors specified in the clause.
Roof Pitch
The slope of the roof.
S
Sale Deed
Sale deed provides the buyer the absolute and undisputed ownership of the property. With this law, the seller transfers his right of property to the buyer. Subsequently, it is executed to the execution of the sale agreement and after compliance of various terms and conditions detailed in the agreement.
Sash
The frame in which a pane of glass is set to form a window.
Second Mortgage
A mortgage on property that ranks below a first mortgage in priority. Properties may have two, three, or more mortgages, deeds of trust, or land contracts as liens at the same time. Legal sequence priority, indicated by the date of recording, determines the designation first, second, third, etc.
Security
The property that is pledged as collateral.
Security Deposit
A deposit of money by a tenant to a landlord to secure performance of a lease. This deposit can also take the form of a Letter of Credit or other financial instrument.
Seller’s Market
When demand for property is greater than supply. The result is greater opportunities for owners who may find someone willing to offer the asking price or even a figure greater than the asking price. Contrast with Buyer’s Market.
Semi-Detached
Also called Duplex. A type of construction where two buildings are attached together by a common wall.
Service (the loan)
The periodic, normally monthly, collection of mortgage interest and principal repayment and other mortgage- related expenses, such as property taxes and property insurance.
Setback
The distance from a curb, property line or other reference point, within which building is prohibited.
Settlement
1. The sale of a property is finalised by the legal representatives of the vendor and the purchaser, mortgage documents come into effect, costs are paid and the new owner takes possession of the property.
2. Sinking of the soil or any part of the structure.
Shingles
Thin pieces of wood or other material set in overlapping rows to form a roof or wall cladding.
Sill
The horizontal section of material at the base of a window opening.
Site Plan
A detailed plan which depicts the location of improvements on a parcel of land which also contains all the information required by the zoning ordinance.
Skillion
A roof shape consisting of a single sloping surface without a ridge.
Slab
Costs incidental to property ownership, other than interest (i.e. taxes, insurance costs and maintenance expenses), that must be absorbed by the landlord during the initial lease-up of a building and thereafter during periods of vacancy.
Soft Cost
That portion of an equity investment other than the actual cost of the improvements themselves (i.e. architectural and engineering fees, commissions, etc.) and which may be tax-deductible in the first year.
Special Assessment
Any special charge levied against real property for public improvements (e.g., sidewalks, streets, water and sewer, etc.) that benefit the assessed property.
Special Condition
A condition that must be met before the contract is legally binding. For example, if buying a home the purchaser may specify that the contract is not legally binding until the purchaser has obtained a building inspection.
Square
A square is a measurement of home area. One square = 9.3m2 approximately.
Stamp Duty
Real Estate Stamp duty is a type of tax accumulation by the Government of India. Stamp duty is established the agreement value or on the market value whichever is greater.
Strata Title
A title to a unit or lot on a plan of subdivision associated with townhouses, units and blocks of flats and based on the horizontal and vertical subdivision of air space. Owners have a certificate of title, are absolute owners of a freehold flat .
Stratum Title
Also called Company Title. A stratum-title owner has a certificate of title and is the absolute owner of a freehold flat. An owner automatically becomes a member of a service company that administers, manages and maintains the property.
Strip Center
Any shopping area, generally with common parking, comprised of a row of stores but smaller than the neighborhood center anchored by a grocery store.
Studs
The uprights in the wall of a building.
Subdivision
A tract of land divided into individual lots for a housing development.
Subdivision Plat
A detailed drawing which depicts the manner in which a parcel of land has been divided into two or more lots. It contains engineering considerations and other information required by the local authority.
Super Area
This is as a rule regards to the entire area of the building which includes carpet area, lobbies and corridors, walls, lifts, staircases basements, and other atrium and utility areas. In Mumbai, the area under water tanks and other utility rooms are included in the super areas. In Delhi, the basement is excluded in super area unless it is being used for commercial purposes. In Chennai, the basement and atrium areas are included in the super areas and in Bangalore, the basement is not included in the super area.
Survey
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
T
Tax Base
The assessed valuation of all the real property that lies within the jurisdiction of a taxing authority, which is then multiplied by the tax rate or mill levy to determine the amount of tax due.
Tax Lien
A statutory lien, existing in favor of the state or municipality, for nonpayment of property taxes which attaches only to the property upon which the taxes are unpaid.
Tax Roll
A list or record containing the descriptions of all land parcels located within the county, the names of the owners or those receiving the tax bill, assessed values and tax amounts.
Tenancy
The right to occupy a property under agreed terms and conditions.
Tenancy For Life
See Life Estate.
Tenants in Common
A type of joint tenancy in a property where two or more purchasers own a property in unequal shares. If one dies, his or her shares pass to his or her beneficiaries under the terms of the will. Contrast with joint tenancy.
Title Search
A check of the title records to ensure that the seller is the legal owner of the property and that there are no other claims or liens outstanding.
Torrens Title
A system of recording property ownership where registration on the Certificate of Title guarantees ownership.
Total Inventory
The total amount of square footage of a type of property (i.e. office, industrial, retail, etc.) within a geographical area, whether vacant or occupied. This normally includes owner-occupied space.
Townhouse
A dwelling unit, generally having two or more floors and attached to other similar units via party walls.
Trade Fixtures
Personal property that is attached to a structure (i.e. the walls of the leased premises) that are used in the business. Since this property is part of the business and not deemed to be part of the real estate, it is typically removable upon lease termination.
Transfer
A document registered at the Land Titles Office and noted on the Certificate of Title which verifies the change of ownership of a property.
Triple Net Rent
A lease in which the tenant pays, in addition to rent, certain costs associated with a leased property, which may include property taxes, insurance premiums, repairs, utilities, and maintenances. There are also “Net Leases” and NN (double net) leases, depending upon the degree to which the tenant is responsible for operating costs.
Trustee
A fiduciary who holds or controls property for the benefit of another.
Turn Key Project
The construction of a project in which a third party, usually a developer or general contractor, is responsible for the total completion of a building (including construction and interior design) or, the construction of tenant improvements to the customized requirements and specifications of a future owner or tenant.
U
Under Licence
Early possession of the property before settlement with the permission of the vendor. This usually involves the payment of rent.
Underlayment
A layer of wood between the sub-floor and the floor.
Underpinning
Supports placed under an existing wall to provide added strength.
Undisclosed Heir
A person who claims the right to a piece of property after the death of an owner without a will.
Unilateral Contract
A one-sided contract. If one party makes a promise to do something, the second party is not legally required to perform. If the second party does comply, however, the first party is obligated to keep its promise.
Unsecured Loan
A loan that is not backed up by collateral.
Utilities
The private or public service facilities such as gas, electricity, telephone, water, and sewer that are provided as part of the development of the land.
V
Valuation
A written analysis of the estimated value of a property prepared by a qualified valuer.
Vendor
The seller
Vendor Statement
(Victoria only) Also called the Section 32 Certificate of the Sale of Land Act. Known as Contract of Sale in NSW. A statement by the vendor of the particulars of the property offered for sale. It must be signed by the purchaser before signing the Contract.
Villa
A single storey attached dwelling.
Void
Having no legal force or effect. Unenforceable. See Null and Void.
W
Wall Cavity
The space between the inner and outer sections of a wall.
Warranty of Possession
It provides a warranty by Landlord that it has the legal ability to convey the possession of the premises to Tenant; the Landlord does not warrant that he owns the land.
Water Course
A natural stream of running water being fed by a natural source such as a stream or river.
Weighted Average Rental Rates
The mean proportion or medial sum made out of the unequal rental rates in two or more buildings within a market area.
Wish List
Think of a wish list as the criteria for your perfect home. While it’s rare to find everything you’d like in the house you finally purchase, sitting down and making a wish list will help you find the house which most closely matches your dream.
Working Drawings
The set of plans for a building or project that comprise the contract documents that indicate the precise manner in which a project is to be built. This set of plans includes a set of specifications for the building or project.
X
X
A notation made by an individual who has not learned to write or physically unable to write, to show intent to sign an instrument such as a deed or will. In regard to the conveyance of real property, such a person would be required to make such a mark or at least a thumbprint as intent to sign and have it witnessed.
Y
Yield
The interest earned or return by an investor on an investment, stated as a percentage of the amount invested.
Z
Zoning
The division of a city or town into zones and the application of regulations having to do with the structural, architectural design and intended use of buildings within such designated zone (i.e. a tenant needing manufacturing space would look for a building located within an area zoned for manufacturing).
Zoning Ordinance
Refers to the set of laws and regulations, generally, at the city or county level, controlling the use of land and construction of improvements in a given area or zone.
Zoning Variance
A one-time modification of existing zoning laws.
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