GLOSSARY

Glossary of Real Estate Terms

A list of terms and definitions commonly used in real estate. Use it as a reference, or give it a quick browse to widen your real estate vocabulary and knowledge.

Abatement Notice
A legal notice that’s served on an owner or an occupant/tenant of a property to inform them of a violation of local laws that require maintenance of the property to be corrected. The notice also indicates actions that are needed to address the violation and notifies them of the consequences in case they fail to take corrective measures.

Acre
A unit of measurement of land. One acre is equal to 43,560 square feet.

Addendum
An addition or change in a legal contract.

Allottee
The person who is allotted a property, either by a government authority or by a builder.

Appraisal
An official valuation of a property carried out by a certified real estate appraiser.

Appreciation
An increase in the value of a property due to changes in market conditions or any other causes over an amount of time.

Assessed Value
The value that a taxing authority places on real property to calculate the amount of tax on that property.

Balloon Payment
A loan payment (EMI) that is at least double the number of previous payments (EMIs), is done to clear a debt. 

Beneficiary
A person/persons or an institution designated to receive an income from a trust, estate, or deed of trust.

Building Code
Based on the notified safety standards within a specific area, a building code is a regulation that defines the design, construction, and materials used in a building.

C, C, & R’s (CC&Rs of a HOA)
A legal document outlining the Covenants, Conditions & Restrictions (CC&Rs) for a specific community’s HOA (Home Owners Association).

Deed
The legal document conveying title to a property.

Depreciation
A decline in the value of a property due to changes in market conditions or any other issues.

Disbursement
A cash expenditure (usually to settle a debt).

Duplex
Refers to a multi-family property of two units, that share a common wall or floor/ceiling.

Earnest Money Deposit Or EMD
A nominal sum of money is given as a token to the vendor, signifying the assent to a contract of sale. It affirms that the parties have made up their minds to purchase the said property.

Elevation
A view of the final look of a project, used in blueprints.

Encroachment
Part of a house or establishment illegally overhanging the street or a neighbor’s property.

Equity
The value of an asset left owned by you, after considering its current value and subtracting any debt owed. Ex. Purchase price: $500,00 + $50,000 that the home appreciated = Current Value: $550,000 – $350,000 still owed on mortgage = $200,000 Equity

Executor
A person named in a will to be in charge of distributing an estate.

FHA Loan
Federal government-backed loan. FHA = Federal Housing Administration. Generally, favorable terms and interest rates.

FSI / Floor Space Index Or FAR / Floor Area Ratio
The maximum amount of construction allowed on a given parcel of land. It is calculated as the ratio of a building’s total area to the total area of the parcel of land upon which it is built.

Flex Space
A building provides its occupants the flexibility of utilizing the space. Usually, flex space provides a configuration allowing a flexible amount of office or showroom space in combination with manufacturing, laboratory, etc.

Floor Plan
A pictorial representation that shows how an apartment would look after completion. It includes the placement of rooms in the flat, their dimensions, and the super built-up area of the flat.

Freehold
A property that is free from the hold of any entity.

Gross Building Area
The total floor area of the building starting from the outer surface of exterior walls and windows including all vertical penetrations (e.g. elevator etc.) and basement area

Heir
The person who is the lawful inheritor of an estate or a property.

“Highest and Best”
The most a buyer is willing to write an offer for during negotiations on a specific property.

High Rise
In the Central Business District, it means a building higher than 25 stories above ground but in suburban areas, it generally refers to buildings 7 or 8 stories tall.

HVAC
Modern-day technological/mechanical systems that are installed in a building to regulate heating, air conditioning, and ventilation.

Immovable Property
Includes land, buildings, or other fixture attached to the earth or permanently fastened to anything which is attached to the earth.

Institutional Investors
Organizations that pool money to invest in real estate properties and other investment assets

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.

Joint Agent
Here one /two or more agents are jointly instructed by a principal to act on his behalf. In the case of real estate agents, this normally means if any of the agents affect the sale, the other joint agent(s) will share the commission in agreed proportions.

Joint Ownership Agreement
An agreement between owners holding the same property, defining their rights, ownership, monetary obligations, and responsibilities.

Kick-Out Clause
A clause in a sales contract that allows the seller to accept one buyer’s offer and then back out without penalty if a second buyer makes a better offer to him.

Knee Wall
A wall-like structure that supports roof rafters in timber roof constructions.

Land Tax
It is the state tax based on the value of a property (not the place of residence) paid by the owner.

Landlord
The person who owns land or house or real estate, which is rented or leased to an individual or a business organization.

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 fulfillment of certain conditions as recorded in a lease agreement.

Load Bearing
An element in a building structure( usually a wall) with the capacity to support the weight resting on it in addition to its own.

Maintenance Charges
Charges payable by the owners or occupants of a development complex (residential/commercial/plotted) towards the upkeep of all common areas and facilities. It is generally a monthly charge.

Market Value
The price at which a seller is happy to sell and a buyer is willing to buy.

Mid-Rise
A building with between four and eight floors above ground level although in a Central Business District, this might extend to buildings up to twenty-five stories.

Mile (1 mile)
5,280 feet.

Mixed-Use Development
A project providing for more than one purpose. In housing, it blends a combination of residential, commercial, cultural, institutional, and industrial usage.

“Multiples”
Multiple offers on the same property.

Net Present Value Method
The method used for the evaluation of investment proposals.

Nominee
A person who acts for or represents another person.

Certificate of Occupancy
Certificate issued by the local development authority certifying that all necessary works have been completed as per the sanctioned plans for the said property and it is fit for occupation. A certificate of occupancy is issued after obtaining clearance from the water, electricity, sewerage, firefighting authorities, etc.

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 personal use by the owner.

Operating Cost Escalation
Clause intended to adjust rents by reference to external standards such as published indexes, negotiated wages, or expenses related to buildings.

Possession Linked Plan
Payment under this plan is made in 2 – 4 phases. About 20 – 25 percent of the payment is made at the time of booking, 30 – 35% is paid in the next installment after a fixed period, another 30 – 35% after another fixed period, and the remaining amount is paid after possession of the property.

Pre-Emi
A type of home loan repayment plan where the borrower is required to pay only the interest on the loan amount disbursed by the bank as per construction progress. Actual EMI starts after possession of the said property.

Precast Technology
New age construction technology where parts of a building like slabs etc are manufactured at an industrial unit and then assembled on site

Preferred Location Charges
These are additional costs that need to be paid for the unit that has a certain location advantage over other units in the project.

Prelaunch
Property available for purchase before its official launch. It is generally cheaper and may or may not have the requisite approvals from government authorities.

Pre-leased
Refers to space in a proposed building that has been leased before the start of construction or in advance of the issuance of the occupancy certificate.

Private Sale
The sale of a property by the owner without the services of a real estate agent.

Public Housing
Government-owned housing projects are made available to low-income individuals or families at nominal rentals.

Qualified Covenant
A legal document that restricts the rights of a person on the interest in a land/property.

Realtor
A real estate agent or broker who conducts business with the sale and purchase of buildings and land, and in particular, is a member of the National Association of Realtors.

Registration
The legal documentation and subsequent recognition of a transaction under the State. This can either be a rental or a capital transaction.

REIT (Real Estate Investment Trusts)
A company that offers real estate shares to the public. Simply put, REIT stock is similar to any other business stock.

Rent Act(S)
Includes the terms and conditions of the rental market to check profiteering and hoarding.

Repo Rate
It is the rate (discounted) at which RBI lends money to commercial banks in the event of any shortfall of funds.

Requisitions On Title
A process where the buyer requests additional information about the title of the property from the vendor.

Sale Deed
The sale deed is governed by the Registration Act and is the most essential document for the purchase or sale of a property. No property buying or selling is complete without signing the sale deed by both the buyer and the seller in front of at least two witnesses.

Site Plan
A detailed plan which depicts the location of improvements on a parcel of land also contains all the information required by the zoning ordinance.

Soft Launch
Another name for Prelaunch

Stamp Duty
Tax is paid on legal documents during the transfer of any asset or property.

Stilt Parking
A housing complex where the ground floor is reserved for parking.

Tax Base
The total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates.

Tenancy
Possession of land/property by title done either under a lease or on payment of rent.

Title Deed
A legal document constituting evidence of property ownership

Trustee
A person who holds or controls property for the benefit of another.

Unilateral Contract
A one-sided contract. If one party promises 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.

Utilities
The private or public service facilities such as gas, electricity, telephone, water, and sewer are provided by government agencies as part of the development of the land.

Valuation
A written analysis of the estimated value of a property prepared by a qualified valuer.

Villa
A large single-story attached residence.

Working Drawings
The set of plans for a building indicates how a project is to be built. It also includes a set of specifications for the building or project.

“Write” or “Write On”
To submit an offer to purchase/purchase agreement.

Written Down Value
Making deductions for depreciation against capital cost or present value of an asset.

Yield
The interest earned or return by an investor on an investment is stated as a percentage of the amount invested.

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.