Glossary

A

Acre

 It is a unit used to measure area of land and its value is equal to 43560 square feet.

Agreement for sale

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

Architect

An architect is a person who plans, designs, and reviews the construction of buildings.

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. 

Atrium

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

Amortisation

 Amortization is the schedule of your monthly mortgage loan payments.

Anchor Tenant

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

B

Bare Shell

 Bare shell refers to a property, whose construction is completed and has basic building services in place. However, such properties have unfurnished interiors and lack heating, ventilation and air-conditioning (HVAC) systems, lighting, plumbing, and elevators.

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. 

Benami property

 A ‘benami’ property is one, in which the property is purchased in the name of a person, who is not the real beneficiary. Such a person in whose name the property is purchased is referred to as a ‘benamidar’.

Brokerage

 A broker is a term referred to a firm or a financial institution that acts as an intermediary and facilitates buying and selling of real estate property/ financial securities/ stocks/ any other securities between a buyer and a seller. Brokerage is the payment received in lieu of this charge.

Built up Area

 Built up Area is the carpet area plus the thickness of outer walls and the balcony.

Business Park

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

C

Capital gain 

 Capital gain refers to the profit that one earns through the sale of a capital asset, such as real estate, or even stocks or bonds. It is basically the difference between the selling price of the property and its purchase price. Depending on the period for which the property was held, the capital gain can be either a long-term capital gain or a short-term capital gain.

Carpet Area

Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls. It is the actual used area of an apartment.

Certificate of Title

The certificate of title is the document that states the property belongs to the owner. This document can help buyers know what the assets of the property are and how much they are worth.

Commencement certificate – The certificate from the local municipal authority that permits the developer to begin construction of the project. The commencement certificate (or CC) is usually granted, only after the developer has met the legal requirements and obtained the relevant sanctions for the building’s plan.

Condominium

A form of real estate, usually a dwelling with individual ownership of separate portions of the building plus shared ownership of the common areas.

Construction Budget

The construction budget is the amount of money that the owner arranges for the building of his or her home. This budget must cover every aspect of construction—from the foundation to the roof.

Construction Linked Payment Schedule

The payment schedule that the customer has to follow based on the stage of the construction of the project.

Conveyance

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

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

A central business district (CBD) is the commercial and business centre of a city.

D

Deed

A deed is a document establishes that you are the legal owner of that property. When you sell your building, the deed to that building will then be transferred to the new owner.

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.

Down Payment

An initial payment made when something is bought on credit.

E

Easement

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

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.

Encumbrance certificate

  An ‘encumbrance’ refers to any liability that is created on a property. An encumbrance certificate for a specific requested period, is a note of all the registered transactions pertaining to the property for that period. This certificate can be obtained from the sub-registrar’s office, where the property is registered.

Escalation clause

A clause in a contract that allows for a rise in wages or prices under certain conditions.

Escrow Account

A third party account that holds money safely while a sale is in progress.

F

FAR

FAR or ‘Floor Area Ratio’ by definition is gross floor area of a given building divided by the total area of the plot on which building has been constructed.

Fixed rate home loan

 In a home loan with a fixed rate of interest, the equated monthly installments (EMIs) will remain constant over the tenure of the loan.

Floating rate home loan

In a home loan with a floating rate of interest, the equated monthly installments (EMIs) will fluctuate as per the market dynamics, as interest rates increase or decrease.

Floor area ratio

 The floor area ratio (FAR) number denotes the maximum floor space that you can construct on a given piece of land. In other words, it is a ratio between a building’s total constructed floor area and the land area. It is also known as Floor Space Index (FSI) in some markets.

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.

Fitouts            

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

Floor Escalation

The rise of property price due to increased altitude from ground level.

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 refers 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.

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

Gift deed 

 A gift deed is a legal document that describes the voluntary transfer of a property from the donor to the donee without any exchange of money. Section 122 of the Transfer of Property Act, 1882, governs the transfer immovable property through a gift deed. A gift deed has to be registered, to make it valid.

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.

H

High street 

 High street (also known as ‘main street’) refers to the primary business street of a town. This is the usually the focal region for retailers, banks, shops and other businesses.

HIRA

Housing Industry Regulation Act: Effective from 1st June 2018, the act is directed towards regulation and promotion of housing sector in West Bengal and to ensure that the transactions are made in an efficient and transparent manner and also to protect the interests of the stakeholders.

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.

Home Loan

Home Loans are loans made by banks to individual homeowners. They are secured by the equity of a home. It is a popular way for homeowners to borrow money because the percentage rates are typically much lower than a credit card or a line of credit.

HVAC 

HVAC refers to the heating, ventilation and air conditioning system installed in a building, to regulate temperature. This includes air conditioning plants, chillers and ducting systems, which ensure the uniform transfer of the cold or hot air, as the case may be throughout the building.

I

Indexation benefit 

 The Indexation benefit is available for long-term capital gains on a property. This benefit allows the cost of acquisition of the property to be adjusted, considering the cost of inflation. The indexed cost of acquisition is calculated with the help of the Cost Inflation Index, which is notified by the income tax department every year.

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.

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.

Intestate 

Intestate means that an individual has died without leaving behind a will. There are various laws that govern the succession of a property for a person who dies intestate, and for those who die after making a will.

Indenture

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

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.

Lease Buyout

A lease buyout is an agreement in which a tenant or landlord pays to break the lease for the remainder of its term.

Leave and licence agreement 

It is an instrument/ agreement, where the owner of the property (licensor) allows the licensee to occupy and use a portion of the property for residential purposes for a temporary, pre-decided period, based on certain terms and conditions. In a leave and licence agreement, there is no transfer of interest in the property.

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.

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

An 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.

Mutation

Mutation means transfer or change of title in the records of the local municipal body for the concerned property.

N

Negotiation

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

Nomination Agreement

In a nominee agreement, the owner conveys property to a nominee who the latter consents to hold and execute transactions on behalf of the owner.

No Objection Certificate

Popularly abbreviated as NOC, it is a type of legal certificate issued by any agency, organization, institute or, in certain cases, an individual. It does not object to the covenants of the certificate

O

Occupancy certificate 

This document, issued by the local authorities, certifies that a building is fit for occupation and has been constructed as per the approved plan and in compliance of local laws.

P

Penthouse

An apartment or a luxurious suite built at the top of a building. 

PLC

These are additional charges that are levied over and above the basic sale price (BSP) of a housing unit. Builders charge extra amount for units that are better located than others within the same building or society complex. A better location can mean preference of floor or the view from the front of the house.

Possession

Possession refers to the process of complete handover of the property to the rightful owner.

Probate 

Probate refers to the legal process through which a will is proved in a court of law and accepted as a valid document that is the last testament of the deceased.

Premium rent

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

Probate Sale

Individuals make wills for the purpose of deciding what happens to their property upon their death. Assets and personal effects are legally transferred to designated heirs or descendants.

Property Management

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

Property regulation bill

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

Property Portfolio Management

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

Project Management

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

R

Refinancing

Refinancing is the process of paying off an existing mortgage loan using a new loan. In most case, property owners will refinance current loans when interest rates drop and they are able to realize a significant reduction in either their payment amount or the loan term.

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.

Rent Control Act

This Act was passed so as to regulate the various norms of tenancy and land ownership.

Real Estate Investment Trust (REIT)

An organization which enables investors to own and transfer shares of an interest in a property. It is expected that REIT will become influential in the Indian real estate market in the near future.

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.

RERA

Real Estate Regulatory & Development Act: Effective from May 1st, 2016, the act seeks to protect the interest of the stakeholders in the Indian real estate industry, help boost investment and bring complete transparency in the Indian Real Estate sector.

Root of Title

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

S

Short-term capital gain - If a property is held by an assessee for less than three years, the gains from the sale of such property are known as short-term capital gains.

Sinking Fund

A fund formed by periodically setting aside money for the gradual repayment of a debt or replacement of a wasting asset.

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.

Super Built Up Area

It is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc.

Speculator

Speculator is a person or dealer who undertakes property transaction.

Specification

An act of identifying something precisely or of stating a precise requirement. In real estate, specification refers to the technical features of the inner

Stamp duty 

Stamp duty refers to the tax that is levied on documents – in this case, the transfer of property. The amount of stamp duty that is payable depends on the value of the transaction and varies from state to state.

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.

Triplex

Apartment with rooms on three floors. 

U

Undivided share (UDS)

A home buyer who purchases an apartment or flat is essentially buying two things – the constructed part of the building where s/he will reside and the proportionate share of land, where the building is constructed. This proportionate share of the land allotted to the flat buyer is known as the undivided share (UDS) of land.

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.

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.

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.

Y

Yield

Yield is the dividend, revenue or income from an investment, in real estate it is usually rental income

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.