Category Archives: Real Estate Terminology

Real Estate Terminology 5

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We have been talking about Property Terms, giving you insight on the terminology that sometimes get difficult to comprehend. Read on further to know more such terms.

Facilities management

The co-ordination of many specialist disciplines to create the optimum working environment for staff.

Fail rent

The rent determined by a rent officer (or, on appeal, by a rent assessment committee) under a regulated tenancy and registered.

FERA

An act to regulate certain payments dealing in foreign exchange, securities, the import & export of currency and acquisition of immovable property by foreigners. Under Section 31 (1) of the Foreign Exchange Regulation Act (FERA) of 1973, it is mandatory for foreign corporations, which are not incorporated in India to obtain permission from the Reserve Bank Of India (RBI) to acquire, hold, transfer or dispose off in any manner (expect by way of lease for a period not exceeding five years) any immovable property in India.

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.

Fitouts

Relate to the interior permanent furnishings required in a property including HVAC ducting, fire protection system implementation, establishment of workstations and telephone/computer cabling among others, in order to make the property fit for usage.

Flatted factory

An industrial building of more than one storey, usually with two or more goods lifts, and constructed or converted for multiple occupation. The building is subdivided into small, separately occupied units which are used for manufacturing, assembly and associated storage.

Freehold

Freehold property can be defined as any estate which is “free from hold” of any entity besides the owner.

Frontage(line)

The full length of a plot of land or a building measured alongside the road on to which the plot or building fronts. In the case of contiguous buildings, individual frontages are usually measured to the middle of any parting wall.

Come back to continue reading about more Real Estate terms

Real Estate Terminology: Part 3

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Continuing with the series, take a look at more such terms.

Capitalisation

At a given date the conversion into the equivalent capital worth of a series of net receipts, actual or estimated, over a period. 

Catchment area

The area of land which finds its way into a particular watercourse, lake or reservoir.

Central business district

Generally the area of highest land value within a city. The functional centre in the city with shopping facilities, office accommodation, leisure facilities, buildings for recreational use, public museums, art galleries and governmental functions are found.

Clearance area

An area which is to be cleared of all buildings. Generally promulgated by way of a government declaration, which is normally followed by the acquisition of the land and the clearance of the area.

Completion certificate/statement

A statement prepared by solicitors, usually those acting for a purchaser and a vendor respectively, following the conveyance of an interest in property, giving a schedule of sums received leading to a balance being the final amount due to the vendor. In some case the statement is prepared at a later date and may show a figure recoverable by the purchaser from the vendor.

Conveyance

A document transferring title to land from one person to another.

Current yield

The remunerative rate of interest which is, or would be, appropriate at the date of valuation, assuming the property to be let at its full rental value. It will be the same as the reversion yield where the reversion is to full rental value, and the same as the term yield where the rent receivable under the lease is full rental value.

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Know the terms about your property-Part 2

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In continuation with the previous blog on real estate terminology, this blog briefs you on the terms that will help you understand things better.

Encumbrance Certificate: A report issued by Registrar of Assurances or Sub-Registrar’s office after due verification of the relevant documents certifying that the property in question is free from all encumbrances such as mortgages, leases, easements or restrictions.

Efficiency ratio: Efficiency ratio is expressed as a share of carpet to super areas of the property.

Floor Space Index (FSI): Floor Space Index is the quotient of the ratio of the combined gross floor area of all floors excepting areas specifically exempted under these regulations to the total area of the plot.

Maintenance charges: These are charges taken by the maintenance society towards the maintenance of the property which includes costs of generator sets, security, landscaping, and common areas.

Market value: Valuation process evaluates the market value of the property. Demand and supply forces in the market and factors like type of property, quality and construction, its location, infrastructure and available maintenance are taken into consideration. Market value of the property is the price that the property commands in the open market.

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 authorities etc.

Registration charges: The fees associated with getting the legal title registered in your name. This legal process takes place in the sub-registrar’s office in your local court.

Super area: This is as a rule regards to the entire area of the building which includes carpet area, lobbies and corridors, walls, lifts, staircases, basements, and other atrium and utility areas.

Stamp duty: Real Estate Stamp duty is a type of tax accumulation by the Government of India. Stamp duty is established on the agreement value or on the market value whichever is greater.

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. Subsequently, it is executed to the execution of the sale agreement and after compliance of various terms and conditions detailed in the agreement.

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

Know the terms about your property!

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It is really important to understand the real estate terminology as it helps an individual to know more about the properties. If you want to understand real estate development, you need to know the key terms used to describe properties whether you’re developing the properties from the ground up or acquiring and renovating them.

  1. Real Estate Broker –A real estate broker or real estate agent is a person who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy.
  1. Common Area Maintenance (CAM) – This is the amount of additional rent charged to the tenant to maintain the common areas of the property shared by tenants. Typical examples include such work as landscaping, snow removal, exterior lighting, as well as insurance and property tax.
  2. Usable Square Footage –USF is how much actual space you will be able to use. Rentable square feet is how much space you’re paying for, including shared common areas. The measurement called a load factor is the difference between RSF and USF, expressed as a percentage of USF
  3. Escalation Clause – A clause in a lease which allows the landlord to increase the rent in the future to reflect changes in expenses paid by the landlord, such as real estate taxes, operating costs, etc. This can take three forms: 1) fixed periodic increases, 2) adjustments based on the Consumer Price Index (cost-of-living increases), and/or 3) an increase tied to the increased costs of operating the property.
  4. Tenant Improvements –The real estate definition of Leasehold improvements, also known as tenant improvements (TI), are the customized alterations a building owner makes to rental space as part of a lease agreement, in order to configure the space for the needs of that particular tenant.
  5. Full Service Rent – This refers to an “all-inclusive” rent that includes operating expenses and real estate taxes for the first year. The tenant is generally still responsible for any increase in operating expenses over the base year amount.

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