glossary of terms - indian real estate

8/2/2019 Glossary of Terms - Indian Real Estate

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Glossary of terms (Indian real estate)AAcreUnit of measurement of land, 1 acre is equivalent to 4048.32 square meters and 43560square feet.

AlloteeThe person who is allotted a property, either by government body/authority or by adeveloper.

AgentAlso known as Real Estate Agent, Realtor or Broker. An agent plays the role of afacilitator for property transactions for a consideration.

ApartmentMeans a part of any property, intended for any type of independent use, including oneor more rooms or enclosed spaces located on one or more floors or any; part or partsthereof, in a multi-storied building to be used for residence or office or for the practiceof any profession or for the carrying on of any occupation, trade or for business or suchother type of independent use as may be prescribed, and with a direct exit to a publicstreet, road or highway or to a common area leading to such street, road or highway,and includes any garage or room (whether or not adjacent to the multi-storied buildingin which such apartment is located) provided by the promoter for use by the owner of such an apartment for parking any vehicle or as the case may be for the residence of anydomestic aide employed in such an apartment.

AppraisalA written report of the estimated value of a property prepared by a certified Real Estateappraiser or a valuer.

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

Assessed ValuationThe value that a taxing authority places on real property for the purpose of determiningthe amount of taxation for that property.

B

Benami OwnershipIn Benami Ownership, the title of the property is in one party's name and the real


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ownership is in another party's name.

BeneficiaryThe person/persons/institution designated to receive the income from a trust, estateor a deed of trust. A contingent beneficiary has conditions attached tohis/her/their/its rights.

BhumidarA Bhumidar is of the class of a tenure-holder under the Delhi Land Reforms Act,1954. He has the right to use land for any purpose connected with agriculture,farming, pisciculture or poultry. He has no right to use the land for industrial

purposes other than those connected directly with the aforesaid activities, unless theland lies within the declared industrial belt.

Built-up Area

Includes the carpet area, the wall thickness

CCapital TransactionSale/Purchase of a property.

Carpet AreaThe actual usable area of an apartment/office unit/showroom etc. minus Wallthickness. Simply put, it is that area within the walls where you can actually lay acarpet.

CBD or Central Business DistrictCommercial area and its immediate radius of 2 - 3 kms, typically located towardsthe city centre, which forms the hub of all major commercial activity in a city. Mostof the larger corporate entities, large retail outlets and financial institutions would

be located in this area. The Real Estate prices here would be the highest comparedto all the other locations in the city.

Clear TitleA title that is free from claims or legal questions and all other encumbrances aboutthe ownership of the property.

CollateralAn asset (such as a car/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 theloan contract. In a housing loan scenario, collateral would mean additional securityover and above the security of the property being financed.

Commencement Certificate


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A certificate issued by the appropriate local authority certifying the constructionmay commence. Typically, this is done after the concerned party has obtainedsanction of plans for the construction of a multi-storied building and has put thecolumns in place indicating the building boundaries.

Commercial PropertyA building / property which is used for the purposes of carrying out commercialactivity or trading.

Common AreasThose portions of a building, land and amenities owned (or managed) by a plannedunit development (PUD) or condominium project's homeowners' association (or acooperative project's cooperative corporation) that are used by all of the unitowners, who share in the common expenses of their operation and maintenance.

Common areas include swimming pools, tennis courts, and other recreationalfacilities, as well as common corridors of buildings and parking areas.

Comprehensive Development Plan (CDP)The Master Plan approved by an authority.

CondominiumA Real Estate project in which each unit owner has title to a unit in a building, anundivided interest in the common areas of the project, and sometimes the exclusiveuse of certain limited common areas. Each individual owner may sell or encumber his/her own unit.

Co-ownershipWhen there are more than one owner for an immovable property, the status of the

property is known to be of the Co-ownership type. A Co-owner can do whatever hewishes with his part of the property as long as he does not affect the share of theother Co-owners.

CovenantA clause in a mortgage that obligates or restricts the borrower on the use of land or

promising certain acts and if violated, can result in legal action against a violator.

For example, homeowners' associations often enforce restrictive covenantsgoverning the architectural controls (such as how the house is built and what thehouse can look like) and maintenance responsibilities. However, land could besubject to restrictive covenants even if there is no homeowner's association.

DDebutter propertyA debutter is an endowment much less a trust although it can be created through the


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medium of trust in which the property vests in the trustees and the deity /God is the beneficiary. Not necessary that debutter be always a registered deed

DeedThe legal document conveying title to a property.

Defacto PossessionAlso called Constructive Possession; the actual physical possession is calledDefacto Possession. The actual possession should be held without force or fraud.

Dejure PossessionAlso called Juridical Possession, it means possession in the eyes of the law. Thismay not be accompanied by Defacto Possession. Even when the property is lyinglocked, the Dejure possessor is the Defacto possessor of the property.

Deposit

A sum of money given to bind the sale of Real Estate or a sum of money given toensure payment or an advance of funds in the processing of a loan. Deposit couldalso be the deposit paid to a landlord as part of a rental transaction.

DepreciationA decline in the value of property brought about by age, physical deterioration,functional or economic obsolescence, etc.

Due diligenceVerification of the authenticity of the title of the property

EEarnest Money Deposit or EMDA nominal sum of money given as a token to the vendor, signifying the assent to acontract of sale or the like, that the parties are in the earnest or have made up their minds.

Effective AgeA Real Estate appraiser's estimate of the physical condition of a building. Theactual age of a building may be shorter or longer than its effective age.

EncroachmentThe physical intrusion of a structure or improvement on the land of another. For example, a neighbor's fence or construction that crosses over your property line.

Encumbrance CertificateA report issued by Registrar of Assurances or Sub-Registrar's office after dueverification of the relevant documents certifying that the property in question is freefrom all encumbrances such as mortgages, leases, easements or restrictions.


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FFair Market ValueThe highest price that a buyer, willing but not compelled to buy, would pay, and the

lowest a seller, willing but not compelled to sell, would accept. In other words avalue decided by the market forces.

FarmhouseThe concept of a farmhouse is nothing but the building appurtenant to theagricultural land. A farmhouse may be used for dwelling purposes, or as astorehouse or an out-house.

Farm PropertyFarm Property is the general name given to the agricultural property.

Freehold PropertyA property where title paramount has conveyed the property in favour of the purchaser by conveyance/ sale deed with no restriction on the right of the holder of the property to further transfer the property. Record of ownership of the freehold

property can be ascertained from the office of the sub-registrar. It can be transferred by registration of sale deed.

F S I or Floor Space Index / F A R or Floor Area RatioThe maximum amount of construction allowed on a given plot of land. This is

purely dependent on the plot area and would vary from one locality to another based on factors such as the road width. For example, in Delhi in a 400 sq. yard plotthe area is 40% the distribution being 20% for the backspace and 20% for the front.In case of a 1000 sq. yard area the area set aside is 60% for the back and the frontspaces.

HHeirThe person who is the lawful obvious inheritor of an estate or a property.

HobliThe administrative jurisdiction of a revenue authority.

IImmovable PropertyIncludes land, buildings, hereditary allowances, rights to ways, lights, ferries,fisheries or any other benefit to arise out of land, and things attached to the earth or

permanently fastened to anything which is attached to the earth, but not standingtimber, growing crops not grass.


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Industrial PropertyAny property used for a manufacturing purpose. Areas where industrial activitymay be carried out are specified by the respective local authorities.

Investment PropertyReal Estate owned with the intent of supplementing one's income and is notintended for owner occupancy (i.e. rental houses, apartment buildings, etc.).

JJoint Ownership AgreementAn agreement between owners defining their rights, ownership, monetaryobligations and responsibilities.

LLandlord/OwnerAny person who has a valid and legal right, title and interest in the property.

LeaseLease is where there are no two kinds of payments made to the landlord by thetenant unlike a rental transaction. A sum of money is paid to the landlord at the

beginning of the lease tenure, which is repaid without interest when the tenure ends. No monthly payments are made.

Lease Hold PropertyA property "bought" for a certain period of time. The "owner" of such a propertywill have "bought" the property from the original landlord and is entitled lawfullyto rent, lease or "sell" the property to a third party during the period of leasehold.After the leasehold period, the property goes back into the original landlord's

possession.

Loan-to-Value Ratio (LTV)The ratio of the amount of your loan to the appraised value of the home. The LTVwill affect loan programs available to the borrower and generally, the lower theLTV the more favorable the terms of the loan programs offered by lenders.

Long-term Capital AssetThis means a capital asset held by an assessee for nothing less than thirty sixmonths immediately preceding the date of transfer.

Lock-inRate Lock Option. A written agreement guaranteeing the homebuyer a specifiedinterest rate provided the loan is closed within a set period of time, usually within60 days. The lock-in also usually specifies the number of points to be paid atclosing.


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MMaintenance ChargesCharges payable by the owners / occupants of a development (apartment complex /

commercial complex / plotted development etc) towards upkeep & maintenance of all common areas and facilities. It is normally a monthly charge and the amount payable is dependent on the kind of amenities that are part of the project.

MortgageA legal document that pledges a property to the lender as security for payment of the loan.

MutationMutation means transfer/change of name in the records of the Corporation for theconcerned property.

NNo Objection Certificate or NOCA certificate issued by the concerned local authority that the plans are in order andconform to the guidelines and rules in force. In other words, the authorityconcerned has NO OBJECTION to the commencement of construction.

OOccupancy Certificate or OCA certificate issued by the local development authority certifying that all necessary

works have been completed as per the sanctioned plans and that the property is fitfor occupation. The OC is issued after clearance from the water, electricity,sewerage, fire fighting authorities etc.

OwnerAny person who has a valid and legal right, title and interest in the property.

Owner FinancingA property purchase transaction in which the property seller provides all or a part of the financing.

POccupancy Certificate or OCA certificate issued by the local development authority certifying that all necessaryworks have been completed as per the sanctioned plans and that the property is fitfor occupation. The OC is issued after clearance from the water, electricity,sewerage, fire fighting authorities etc.


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OwnerAny person who has a valid and legal right, title and interest in the property.

R Real AssetsReal Estate or real property owned by an individual or business.

Realtorsynonym of "Real Estate Agent".

RefinancingThe process of paying off one loan with the proceeds from a new loan using thesame property as security.

Registration

A legal documenting and subsequent recognition of a transaction under the State.This can either be a rental or capital transaction and there is a fee attached toregistering a transaction, which varies from state to state.

Residential PropertyAny property, which is used for residential purposes. These areas are specificallyearmarked as such by the concerned local authority.

SSecurityIn lending, security refers to the collateral given, deposited or pledged to secure the

payment of the loan.

Super Built-up AreaThe plinth area along with a share of all common areas proportionately dividedamongst all unit owners makes up the Super Built-up area. The common areasinclude corridors, balconies, swimming pool, garden, clubhouse, the lift wells etc.

TTahsildarRevenue authority or officer empowered to impose and collect revenue from a

particular jurisdiction.

TenantOne who is not an owner but enjoys possession of a property from the owner oncertain specified terms and conditions for a temporary period.

Title


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The document that provides legal evidence that the person has the right to the possession of the land.

Title SearchAn investigation of public records into the history of ownership of a property tocheck for liens, unpaid claims, restrictions or problems, to prove that the seller cantransfer free and clear ownership.

TransactionAny activity that leads to an exchange between two parties - buyer andseller/landlord and tenant etc.

UUnder-valuationA 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 rentin case of rental transaction.

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

ZZoneParts of a city or town are allocated and categorized into zones, which in turn willhave a bearing on factors like type of property that can be constructed, number of floors allowed for construction, etc.

glossary of terms - indian real estate

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