Real Estate Terms and Glossary

A

Abatement Notice
It is a legal notice served on the owner or occupier/tenant of a property to inform them of the violation of local laws pertaining to maintenance of the property. 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
Unit of measurement of land. One acre is equal  to 4048.32 square meters and 43560 square feet.

Addendum
An addition or change in a legal contract.

Agent
A person authorized  by the state to conduct real estate transactions.

Alienation Clause
A provision that requires the borrower to pay the balance of the loan amount in a single large instalment after the property is sold or transferred.

Alley
A lane behind a row of buildings or between two rows of buildings.

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

Appraisal
Official valuation of a property carried out  by a certified Real Estate appraiser or valuer.

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

Assessed Valuation
The value that a taxing authority places on real property for the purpose of calculating  the amount of tax on that property.

B

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

Basic Sales Price (BSP)
Price of an apartment excluding the charges for amenities like car parking, clubhouse etc.

Bayana
It is a hindi term used to denote the token money given by a buyer for a particular property after negotiations are done. The payment indicates the buyer's interest in the property and is usually offered to seal the deal.

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

Built-Up Area
It includes the carpet area plus thickness of the outer walls and the area of balcony/balconies.

D

Deed
The legal document conveying title to a property.

Dejure Possession
Also known as Juridical Possession, it means possession in the eyes of the law.

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

Disbursement
A cash expenditure done for the purpose of settling a debt.

Down Payment
Payment term used in the context of the purchase of expensive items ,where a portion of the total amount due is usually given in cash upfront before finalizing a transaction.

Dual Occupancy
A block of land which is zoned in a way that there two separate residences are permitted to be constructed there.

Duplex
It refers to a house with two units while sharing a common wall

Deed
The legal document conveying title to a property.

Dejure Possession
Also known as Juridical Possession, it means possession in the eyes of the law.

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

Disbursement
A cash expenditure done for the purpose of settling a debt.

Down Payment
Payment term used in the context of the purchase of expensive items ,where a portion of the total amount due is usually given in cash upfront before finalizing a transaction.

Dual Occupancy
A block of land which is zoned in a way that there two separate residences are permitted to be constructed there.

Duplex
It refers to a house with two units while sharing a common wall

E

Earnest Money Deposit Or EMD
A nominal sum of money 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
Artist's impression of the final look of a project.

Encroachment
Part of a house or establishment illegally overhanging the street or a neighbour's property.

Encumbrance Certificate
A report issued by Registrar or Sub-Registrar's office after due verification of the relevant documents certifying that the property in question is free from mortgages, leases, easements or any other kinds of restrictions.

Equity
It is the actual amount of an asset actually owned by you.

Eviction
Expulsion of an occupant or tenant from a real property( lawful).

Executor
A person named in a will to take care of an estate.

F S I Or Floor Space Index / F A R Or Floor Area Ratio
The maximum amount of construction allowed on a given plot of land. It is calculated as the ratio of a building's total area to the piece of land upon which it is built.

F

Flex Space
A building providing 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.

Flexi Payment Plan
Flexi-plan gives buyer the flexibility to pay the price of a property over a time period but the payments are time linked rather than construction linked.

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

Foreign Exchange Regulation Act (FERA)
It is an act to regulate the payments for foreign corporation to hold or transfer any kind of immovable property in India.

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

G

Gated Community
It is a modern residential community or housing estate having strictly controlled entrances for pedestrians and automobiles, and often characterized by a closed perimeter of walls.

Greased Lease Back
The disposal of the interest on a property by a freehold or leasehold owner where the rent is geared to a fixed percentage of some variables.

Green Field Site
An underdeveloped area of land away from urban areas, which is now proposed for development.

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.

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
Residential properties that are suitable for occupancy. Local building codes ensure that structures are habitable through requirements for building permits and occupancy certificates.

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

Holding Deposit
An initial sum of money given to show interest in or confirm the sale of a real estate property before the full deposit is paid.

Home Improvement Loan
A loan made to a homeowner in which the home is used as collateral for the loan.

HVAC
Modern day technology systems installed in a building to regulate heating, air conditioning and ventilation.

I

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

Indenture
A deed including two or more parties, each party having their own copy.

Indian Stamp Act 1899
The act that regulates payment of stamp duty to the local government for real estate transactions.

Institutional Investors
These are organisations which pool money to invest in real estate properties and other investment assets

Inventory

J

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

K

Khata
It is a legal document that records property tax payment done by a resident to the municipality. Khatas are prominently used in Bangalore.

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.

L

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 a land or house or real estate, which is rented or leased to an individual or a business organisation.

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.

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.

M

Maintenance Charges
Charges payable by the owners or occupants of a development complex ( residential/commercial / plotted) towards 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 f; above ground level although in a Central Business District, this might extend to buildings up to twenty-five stories.

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.

Mortgage
A loan taken from a bank to finance a property.

Mutation
Transfer or change of name in the records of the Corporation for the concerned property.

N

Negotiation
Dialogue between two or more people/parties intended to reach a common agreement.

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

Net Worth
The value of a persons assets minus liabilities.

No Objection Certificate Or NOC
Certificate issued by the concerned local authority that the building plans submitted by the developer are in order and conform to the guidelines. Simply put, the authority has NO OBJECTION to the commencement of construction.

Nominee
A person who acts for or represents another person.

O

Occupancy Certificate(OC)
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. OC is issued after obtaining clearance from the water, electricity, sewerage, fire fighting 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 for 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.

P

Patwari
An individual appointed to maintain and update land ownership records as well as collection of land taxes

Possession Linked Plan
Payment under this plan is made in 2 – 4 phases. About 20 – 25 per cent of the payment is made at the time of booking, 30 – 35% is paid in the next installment after a fixed time 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 needs 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.

Preleased
Refers to space in a proposed building that has been leased before the start of construction or in advance of the issuance of 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 made available to low-income individuals or families at nominal rentals.

Pugree
A hindi term for the security deposit given to landlord before renting a property. It is refundable at the expiry of the lease term to the outgoing tenant.

Q

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

R

Realtor
Another name for Real Estate Agent

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

REIT (Real Estate Investment Trusts)
It is 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.

S

Sale Deed
Sale deed is governed by the Registration Act and is the most important 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 which also contains all the information required by the zoning ordinance.

Soft Launch
Another name for Prelaunch

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

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

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.

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.

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

Town And Country Planning
A planning system utilized by the government to balance economic development and environmental quality.

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

U

Under-Valuation
A value of the property that is lesser than the fair market value. Registration fee for a property is based on the value of the property in case of capital transaction or rent in case of rental transaction.

Underconstruction Property
A property whose basic structure is being built.

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.

Urban Land Ceiling And Regulation Act (ULCRA)
Popularly referred to as ULC Act. This is basically a legislation that was enforced to prevent profiteering and hoarding in the urban land market as well as prevent urban congestion

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

V

Vaastu Shastra
A traditional architecture system that specifies the methodology of building a structure or buying land, etc

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

Villa
A large single storey attached residence.

Vitrified Tiles
Tiles having the lowest porosity.

W

Warehouse
A building for storage of goods and raw materials

Working Drawings
The set of plans for a building that indicate the manner in which a project is to be built. It also includes a set of specifications for the building or project.

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

X

X
A notation made by an individual doesn't know how 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.

Xystus
A garden walk embarked by trees.

Y

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

Z

Zoning Ordinance
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.