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A

Agreement for sale

Agreement for sale or which is also known as Real Estate Sale Contract is a legally binding agreement that relates the two parties (buyer-seller) at the time of property purchase or transfer

Annuity

Annuity refers to a sum of money that a person is entitled to receive throughout his/her life on a yearly basis, either as legal obligation or under contract terms.

Assignment

Assignment is the transferring of a property, a lease in particular, from one person to another. 

Asset Valuation

Asset valuation is the process of calculating the fair market value of a property or an asset, be it a building, land, machinery or plant at regular intervals. 

Atrium

Atrium refers to the main entrance of any hall or building.

 

Amortisation

The concept of writing off the capital cost of a wasting physical asset by means of a sinking fund.

 

Anchor Tenant

Anchor tenant refers to one or more department or variety chainstores, or supermarkets, introduced into a shopping centre in key positions to attract the shopping public into the centre for the purpose of encouraging other retailers to lease shops en route. 

 

B

Brokerage

Brokerage is a term referred to a firm or a financial institution that acts as a broker and facilitates buying and selling of real estate property/ financial securities/ stocks/ any other securities between a buyer and a seller

Basic Rent

Basic rent is the net monthly rent that comprises of maintenance charges and interest costs that the landlord quotes in the agreement while renting out a property. 

Business Park

A high tech landscaped area where all amenities for business purposes are available in one place. 

Building Contract

Building contract is an agreement or contract between two parties which specifies the various terms pertaining to construction of a building, the scale of remuneration, time period, etc. 

Balloon Payment

A repayment of a loan bond, usually but not necessarily the final repayment. 

 

Buy-out rate

In a funding agreement between a developer and a prospective purchaser, the pre-determined investment yield which will be used to capitalize the annual income receivable at the time of sale to determine the buy out price. 

 

Bare shell

Depicts the condition of any property after completion of construction activity and installations of basic building services. 

C

Clearance area

Clearance area refers to an area that must not have any buildings at all. It generally comes as a declaration by the government following the land acquisition and subsequently clearance of area

Capitalization Rate

Capitalization rate refers to the rate of return on any property investment depending upon the future income that a property can generate, as expected. 

Catchment Area

As per analogy, the catchment area refers to an area that houses people who are subjected to procure goods or services from the property.

Condominium

It refers to a building with 2 or more units/levels.

 

Conveyance

Conveyance is a document that transfers the existing title of land from one individual to another.

Current yield

It takes into account the financially rewarding rate of interest which which is, or would be, a appropriate at the date of valuation, assuming the property to be let at its full rental value.

Completion certificate

A completion certificate refers to the legal document that approves about the building construction norms and their adherence with Buildings Act. 

Central Business District

Central Business District is generally the area of highest land values within a city. 

 

D

Developer

Developer in real estate refers to the entrepreneur or company that has interest to plan, initiate and develop property which can find uses such as residential, commercial and retail

Development Yield

Development yield is the sum total of investment yield, annual sinking fund factor and annual allowance for developer’s profit and risk in some specific cases

 

Discounted Cash Flow Analysis

Discounted Cash Flow Analysis refers to techniques put to use in development appraisal and investment.

Development control

It refers to the authority resting with local planning authority which actually empowers it to take control of any development or usage of land

E

Effective rent

Effective rent is the actual amount of gross rent that a tenant is obliged to pay to the land lord every month. It does not include the concessions on the base rent.

Equity linked mortgage

A form of mortgage where the interest on principal in part of whole is calculated, usually on yearly basis giving reference to security. 

Escalation clause

This refers to a clause which is sometimes specified in lease agreements. 

 

Easement

Easement refers to the lawful right to use a person’s land for any given purpose. 

F

FAR

FAR which is expanded as ‘Floor Area Ratio’ by definition is total square feet of a given building divided by the total square feet of the plot on which building has been constructed.

Force Majeure

Force majeure refers to a force that is beyond anybody’s control. This may be a natural disaster like earthquakes and floods or manmade disasters like terrorist attacks, riots, strikes, etc. 

Foreign Exchange Regulation Act of 1973

FERA is an act meant to regulate and control specific payment dealings in foreign exchange.

 

Fitouts

This term relates to the permanent furnishings and fabrications done to interiors as per requirements of a property.

 

Freehold

Freehold property refers to an estate that is free-from-hold or any entity besides the owner.

Frontage/Line

Frontage is a simple real estate term which is used to define full length of any property- a plot/land or building. 

Foreclosure

It is referred to the legal process as per which the lender tries to recover the remaining loan balance (in case of non-payment) from the borrower by forcing the sale of property or asset that suffices as the collateral for the loan. 

Facilities management

It refers to the co-ordination of many different disciplines in order to create an ideal working environment. 

 

Fail Rent

The Fail Rent is the term associated with rent determined by rent officer.

 

 

 

Fire Certificate

A certificate covering matters of safety required under the legislation for hotels, boarding houses, factories, offices shops and railway premises, excluding those buildings containing less than a minimum number of employees. 

 

Flatted Factory

An industrial building of more than one storey, usually with two or more goods lifts, and constructed or converted for multiple occupation. 

False Ceiling

False Ceiling is synonymous to Suspended Ceiling which refers to ceiling which is not actually part of the main structure but is built later to provide aesthetic appeal to the usual boring looking ceilings.

G

Green Field Site

A piece of undeveloped land in a city or rural areas on which agriculture is being carried out or is left to naturally evolve. These lands do not have any urban development on them whatsoever. 

Gold Clause

As per the gold clause in a lease the rent is reviewed with reference to the existing price of gold. 

 

Gross External Area (GEA)

The combined superficial area of any building which includes every floor into account. 

Greased lease back

The disposal by a freehold or leasehold owner of his interest on a property or leasehold interest where the rent payable is geared to a fixed percentage of some variables, often rack-rental value.

 

H

Hi-Tech Building

Hi-tech buildings are those infrastructures that are highly technology-based structures well-suited to meet the needs of modern technological commercial organisations. A hi-tech building brings together strands of high-tech industry and technology and incorporates it into the building design.

I

Investment yield

Investment yield is the annual interest or dividends received on a security or an investment. It is represented as a ratio of the actual/estimated annual net income and the capital value and is dependent upon several factors.It can be used to measure the prospects and risks involved in an investment. 

Institutional Investors

Institutional investors refer to those institutions or entities that pool in money so as to purchase property, securities and other assets. 

Indian Stamp Act, 1899

The Indian Stamp Act of 1899 is a legal statute that requires the payment of a stamp duty to the local government in all real estate transactions. 

Improvements

Improvements refer to physical changes that are done so as to increase the capital value of any land or building.

 

Internal rate of return (IRR)

It refers to the highest rate of interest at which funded cash flow generated is to be sufficient to repay original outlay at the completion of project life.

Indenture

A deed between two or more parties, each party having his own copy. 

 

J

Joint agent

The term ‘joint agent’ refers to real estate agents (one, two or more) who come together to help a buyer close a deal. 

K

Kiosk

 A kiosk is a temporary enclosed retail booth that is set up in commercial and business sites with heavy foot-traffic. It is used for attracting more customers and marketing purposes and is generally operated by one or two people.

L

Lease agreement

A lease agreement is a signed contract between a lessor and a lessee which that puts down the terms of agreement on which the lessee is given the property and the control rights the lessor has over the tenant. It also allows the lessee to change or modify the property according to his/her needs. 

Load Bearing

A technique used in the construction of buildings in order to support an extra weight in addition to its own. A load bearing wall, either vertical or horizontal, works to support the structure along with its own weight. 

Land assembly

Land assembly usually refers to a process wherein a single site is formed by joining together several different sites either for development purposes or redevelopment.

License

License refers to the lawful grant or right to do something which without proper licensing would otherwise be illegal or wrongful.

M

Maintenance

In the context of real estate, maintenance refers to the upkeep of an infrastructure, be it a building or any other physical structure protecting it from weather conditions, erosion, etc. to keep it in a good condition. The cost involved in maintenance can be deducted from income tax.

Mortgage

A legally binding agreement under which a mortgagee (lender) lends money to the mortgagor (borrower) in exchange for the title of the debtor’s property, whether land, jewelry, etc. as security against the money.

Mattha

It is Indian word used to define the frontage of a building with the main road.

N

Net Present Value Method (NPV)

The total sum of present values of cash flows over a period of time.

 

Non-Conforming Use

Non-Conforming use refers to the use of a property which is not in conformity with the allocation of an area allotted for planning purposes. 

Negotiation

A verbal and written discussion between two or more than two parties which aim to reach to a common agreement about any property. 

O

Outgoings

Outgoings refer to the cost that is borne by an owner of interest in property.

 

Open Market Value

OMV or Open Market Value is the best reasonably expected price for an interest in property at the time and date of valuation. 

 

P

Property regulation bill

A bill introduced by government that regulates transactions happening between buyers and promoters of residential realty projects.

Pugree

A term used in India referring to the security deposit on which no interest is charged. It is paid to the landlord and is refundable at the end of the lease term.

Premium rent

The rent above the level which a property could reasonably be expected to command in the open market on normal terms.

 

Private Treaty

Private treaty is a common procedure to dispose of real property wherein the negotiations are held between the vendor and the prospective buyers or their agents.

Property Investment Trust

Property Investment Trust is defined as a public company that is subjected to certain tax advantages and adheres to the rules applicable to its operations and various investment activities.

 

Property Management

As per definition, property management takes into account factors like building caretaking, collection of rents, outgoings and payments.

 

Penal Rent

It refers to the legal and financial punishment/penalty for a tenant who has failed to pay rent in time. 

Permitted one

The development that is sanctioned/approved or permitted to carry forward by the related development authority which analysis the project as per existing controlling norms. 

 

Pre-stressed Concrete

The pre-stressed concrete overcomes the natural weaknesses of concrete.

Property Portfolio Management

The combined management of collection of properties which fall under single ownership.

Patwari

It is duty of any Patwari to keep the land records to the most updated forms. 

 

Project Management

Under the project management role the planning and budget of any given project is devised or deducted. 

Q

Qualified Covenant

Qualified Covenant

R

Rental Advance

Rental advance consists of a lump sum amount that a tenant pays to the landlord right at the beginning of a lease period. This amount is then adjusted as equal installments over the term of the lease.

Rateable Value

Rateable value is a particular figure on the basis of which property tax is charged in the country. 

Registration and Mutation

Registration and Mutation

Rent Act (s)

Rent Act is a legislation pertaining to the rental market which aim at restricting hoarding and profiteering. 

Real Estate Investment Trust

An organization which enables investors to own and transfer shares of an interest in a property.

Refurbishment

Smaller improvements or amendments in a building that relate to modernization of property.

Renewal

Not to be confused with repair, renewal refers to reconstruction of some or major parts of the property for a newer look.

Rent Free Period

A period of agreement which can extend to weeks and even months, during which the lessee is allowed for occupying the property without making any payment or rent.

Rentable area

The area of floor space for which rent is calculated even though other areas, within or outside the premise, are lawfully used by the tenant. 

Root of Title

In conveyancing of unregistered land, a document which forms a solid basis to establish the title to the land. 

S

Senior housing

Senior housing is a term related to development and offering of housing solutions or living facilities which are appropriately maintained for the use and benefit of people who have reached an age of retirement or the senior citizen

Smart city

Quite recently the term smart city has gained a good popularity among Indian citizens as government announced to establish 100 of them across India. What is a smart city?

Site Plans

A site plan is an illustration of an area of land on a horizontal surface representing the physical boundaries and extent of that land. 

Sub Leasing

Sub leasing is a situation where in the first lessee of a particular property gets the right to lease it further, either in parts or the whole of it.

Security Deposit

Security Deposit

Serviced Accommodation

Offices or rooms that are provided by the landlord with an extra range of various services that are provided in addition to the traditionalfacilities within the premises.

Science Park

A science park refers to a development that is industrial in nature and features high-end, cutting technology. 

 

Shopping Mall

Shopping mall is the term used to define a collection of retail outlets, showrooms, brand offices, all integrated to a single complex.

 

Strata Title

It is the form of ownership planned or formulated for multi-level blocks or apartments with horizontal subdivisions that include the demarcation of shared areas.

Speculator

Speculator is a person or dealer who undertakes property transaction.

Suspended Ceiling

A ceiling, not being part of the structural framework of a building. 

T

Tenancy

Tenancy refers to an arrangement between two parties, landlord and tenant, which establishes the rights of possession of a tenant over the property in consideration. 

Town and Country Planning (TCP)

Town and Country Planning is name of the authority that determines policies for development and use of land in urban and rural areas. 

 

Tenant Improvement

Tenant’s improvement refers to the various improvements that are incorporated in buildings or land to meet the needs ofthe tenant.

Tax clearance (37-1)

The Income Tax Act, 1961 specifies that any lease transaction for not less than 12 years or any sale transaction, above a prescribed transaction value limit tax, has to undergo a clearance process from the appellate body known as the Income Tax Appropriate Authority, constituted under the Income Tax Act.

 

Turnover Rent

The rent which is measured as a proportion of annual turnover of lessee's business.

U

Urban Centres

Some urban cities have been classified into certain categories designated by ‘A’, ‘B’, ‘C’ and so on. 

Urban Land Ceiling and Regulation Act (ULCRA)

Urban Land Ceiling and Regulation Act was passed as legislation in 1976 to check hoarding and profiteering of land in urban areas. 

Uplifted Rent

Uplifted rent is defined as the rent that represents lease terms that are more beneficial to the occupant/tenant when compared to prevailing commercial terms

 

V

Valuation

Valuation is a process wherein an estimation of the current worth, monetary worth, of a property or any other asset is made. Both subjective and objective methods can be used for valuation of an asset. 

Vaastu Shastra

An in-depth methodology of purchasing property, designing infrastructure, aligning furniture, etc. based on the principles and traditions of Indian architecture system.

Value

Value is generally an estimate of any piece of land, residential property or commercial property.

 

Vertical Slice Participation

It refers to the method of multi-participation in a single venture, a development.

 

W

Warehouse

A warehouse is a designated area or premise which is used for bulk storage. 

Willing Seller/Buyer

It refers to an assumption made sometimes for valuation purposes. 

 

X

Xystus

Xystus refers to the space that was used for exercise, as a fitness centre by Greek athletes.

Y

Yield up

Yield up refers to the giving up of possession of a property after a tenancy lease terminates.

Z

Zoning

Zoning is a process wherein the local planning authorities of a region divide that region into different zones for the purpose of different activities or utility.

Zone

A designated area of land/ or a part of any building which has been allocated to fulfill a particular purpose.