Real Estate Glossary- Top 30 Essential Real Estate Terms You Should Know (part-1)
Posted by: Ritu Misra
13th July, 2020
Your Handy Guide to Real Estate Jargon – Real Estate Glossary (Part-I)
Planning to buy a house and confused about the real estate terms used in advertisements? The real estate vocabulary is difficult to interpret and while planning to buy/sell a property, some basic information on the technical terms used frequently come as a big breather.
Here is a list of 30 vital real estate terminologies that are used by all the parties involved. This short real estate dictionary has terms arranged in alphabetical order.
Agreement to Sale– A written agreement to sell in future between seller and purchaser in which the purchaser agrees to buy certain real estate and the seller agrees to sell upon terms of the agreement.
Allotment Letter – This is a letter given by the property developer allotting a specific piece of land or apartment unit to the buyer, which could be under development or construction.
Benami Ownership – In Benami Ownership, the title of the property is in one party’s name and the real ownership is in another party’s name.
Beneficiary– The person /persons /institution designated to receive the income from a trust, estate or a deed of trust. A contingent beneficiary has conditions attached to his /her/their/ its rights.
Built -up Area – Includes the carpet area, the wall thickness.
Carpet Area -The actual usable area of an apartment / office unit/ showroom etc. minus Wall thickness. Simply put, it is that area within the walls where you can actually lay a carpet.
Circle Rate – This is the minimum rate decided by the government authorities for valuation of land in a particular area.
Credit Score – This is the measure of an individual’s credit worthiness that is statistically derived from his/her past records of dealings with financial bodies.
Comprehensive Development Plan (CDP) – The Master Plan approved by an authority.
Disclosure for Mortgage – This information includes the number of pre-approvals made, the number of mortgages granted, loan amounts, etc. for the piece of property.
Deed – The legal document conveying title to a property.
Defacto Possession – Also called Constructive Possession; the actual physical possession is called Defacto Possession. The actual possession should be held without force or fraud.
Dejure Possession – Also called juridical Possession; it means possession in the eyes of the law. This may not be accompanied by Defacto Possession. Even when the property is lying locked, the Dejure possessor is the Defacto possessor of the property.
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 or the like, that the parties are in the earnest or have made up their minds.
Encumbrance Certificate – This is a report issued by registrar of Assurances or Sub- Registrar’s office certifying that the property in question is free from all encumbrances such as mortgages, leases, easements or restrictions.
Freehold Property – It is defined as any estate which is “free from hold” of any entity besides the owner. So, the owner of such an estate enjoys free ownershipfor perpetuity and can use the land for any purposes however in accordance with the local regulations.
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’s the ratio of the total area of all the floors in a building to the total plot area. So if the FSI is 2, the total floor area of a multi – storied building cannot exceed twice the size of the plot.
Industrial Property– Any property used for a manufacturing purpose. Areas where industrial activity may be carried out are specified by the respective local authorities.
Joint Ownership Agreement – An agreement between owners defining their rights, ownership, monetary obligations and responsibilities.
LOI – The letter of Intent is a non-binding offer to buy a commercial place.
Lease Hold – Such a property is leased from the freeholder for a specific period of time on certain terms and conditions. The lease can be transferred to another person after taking permission from the lessor. Most lease agreement is for 99 years. At the end of this tenure, the property reverts to the freehold owner.
Mixed Land Use– The term could be used for residential properties that the provision commercial use on the ground floor and apartments on upper floors. Mixed use is the use of commercial and residential simultaneously.
Mutation – Mutation means transfer/ change of name in the records of the corporation for the concerned property. Mutation of a property is the entry of the transfer of title in the revenue records of the local municipal body.
No Objection Certificate or NOC– A certificate issued by the concerned local authority that the plans are in order and conform to the guidelines and rules in force. In other words, the authority concerned has NO OBJECTION to the commencement of construction.
Occupancy Certificate or OC – A 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 fit for occupation. The OC is issued after clearance from the water, electricity, sewerage, fire fighting.
PLC- Preferential Location Charges are charged by the developer for any preferred location of your chosen apartment.
Possession – Possession of the property without completion is not possible, Handover of property can only be after completion certificate is received.
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.
Super Built- Up Area or Super Area– The common area proportionately divided amongst all unit owners makes up the Super Built-up area. This includes corridors, balconies, swimming pool, garden, clubhouse, the lift wells etc. This is also known as the usable area.
Title Search – An investigation of public records into the history of ownership of a property to check for liens, unpaid claims, restrictions or problems, to prove that the seller can transfer free and clear.
With this real estate glossary buyers can ask much more detailed questions to builders and have a clearer view about the size of the house being purchased.