Abatement notice:
A notice served on the owner(s) or occupier(s) of a property
from which a private nuisance arises, warning them of
the intention to enter on the land in order to abate the
nuisance.
Absolute title:
1. The right of ownership of a mortgage deed, which gives
the right, in certain specified circumstances, to demand
repayment in full, of the outstanding debt than the due
date.
2. A clause in a deed or contract, which provides for
the early termination of an exciting interest in land,
in certain specified circumstances, thereby advancing
the future interest.
Agreement for lease/sale:
A contract to enter into a lease (or sale), which in order
to be enforceable either must be evidenced in writing
and signed by the person against whom action is taken
for the breach of the alleged contract and there must
be a sufficient act of part performance.
Alternative user value:
The value of land and buildings,
which reflects a prospective use, which is different from
that of the current use.
Amortisation:
1. (UK) The concept of writing off the capital cost of
a wasting physical asset by means of a sinking fund.
2. (USA) Payment of a debt in equal installments of principal
interest, as opposed to interest -only payments. Anchor
tenant: One or more department or variety chainstores,
or supermarkets, introduced into a shopping center in
key positions to attract the shopping public into the
center for the purpose of encouraging other retailers
to lease shops n route. The larger the developments the
more anchors required.
Annuity:
A sum of money paid each year during the life of the recipient.
An annuity is usually paid as a legal obligation under
a contract or undertaking, as through a pension scheme,
and may be paid in installments more frequently than once
every twelve months.
Asset valuation in the property market:
This expression is applied to the valuation if land and
buildings or plant and machinery. The term is often used
to describe an expert opinion of the worth of a property,
which may be incorporated into company accounts, where
the ownership of the asset is not necessarily to be transferred
but the valuation is required for the company takeovers,
share flotation or mortgages.
Assignment:
The transfer of a property interest, especially a lease,
from one party to another.
Atrium:
An entrance hall of a building, often rising through a
number of storeys and containing lifts, reception areas
and plants. Originally the hall or chief apartment of
a Roman house.
Balloon payment:
A repayment of a loan bond, usually but not necessarily
the final repayment, which is larger in amount than other
installments.
Bare shell :
This Depicts the condition of any property after completion
of construction activity and installations of basic building
services. A bare shell includes basic flooring - tiled,
mosaic, cement or granite and plastered walls. Apart from
this, pantry and toilet facilities may also be operational
in such condition.
Basic rent:
A monthly rental net of maintenance and interest costs charged
or quoted by landlords for any property. The base rent comprises
of only the payment made for Usage of the subject property
under a lease agreement. Imputed costs such as holding costs
fit out costs and building service charges are not usually
included in the base rent.
Bayana:
An Indian term used to denote the token money given to the
landlord to informally freeze negotiations on a particular
property, after the initial terms and conditions have been
formalised.
Breach of contract:
An act, or omission, contrary to enforce specific performance
to rescind the contract and / or to claim damages, the remedy
available depending upon the nature of the breach.
Broker/dealer:
A person or company who acts as a medium of bringing owners
and proposed buyers together with a view to complete a real
estate transaction.
Brokerage:
1. Commission paid to a broker.
2. The activity of a broker in bringing together two parties
in a transaction.
Building byelaws:
Local authority control of building standards promulgated
to regulate and control the usage of land, property and
areas in cities and towns.
Building contract:
A contract between an owner or occupier of land and a building
contractor, setting forth the terms under which construction
is to be carried out, basis of remuneration, time scale,
and penalties, if any, for failure to comply with terms
of the contract.
Business center:
Commercial premises usable by the occupiers for a short
period on a membership basis of the center. Usually, a business
center charges for the full service accommodation, which
is generally substantially higher than the rental of a standard
office space, and higher than the rental of a standard office
space, and usually includes cost of HVAC, housekeeping,
electricity, and security systems.
Business park:
A landscaped area containing high tech, other amenities
for business purposes, as a distinct from high-tech park
or a science park. Building density is lower than would
be usual in a traditional industrial estate. Business parks
are preferentially located where motorway, rail and airport
communications are within a short distance.
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.
Capitalisation:
1. At a given date the conversion into the equivalent capital
worth of a series of net receipts, actual or estimated,
over a period.
2. A method of calculating a final purchase price for a
development using an agreed formula to convert actual, or
assumed, income from initial lettings into a capitalism.
Such capitalised sums may be offset against a purchasing
fund's interim finance payments, any excess being paid to
the developer.
3. In relation to a company's reserves, the conversion into
capital of money, which is then distributed as a capitalisation
issue.
Catchment area:
1. The area of land from which finds its way into a particular
watercourse, lake or reservoir.
2. By analogy, the area which contains those people who
can be expected to obtain goods, services, employment or
other benefits from a particularly property. More especially
related to retail premises, where the success of forecasting
depends on the accuracy of estimating the number of purchasers
(catchment population) likely to be attracted from the different
parts of the area and the average expenditure, which might
be expected, from them.
Central business district:
The functional center around
which the rest of a city is comparison shopping, office
accommodation, leisure facilities, buildings for recreational
use, public museums, art galleries and governmental functions.
Generally the area of highest land values within a city.
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:
1. (UK) 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.
2. A certificate issued by the local development authority
certifying that all necessary works have been completed
and that the property is fit for occupation.
Condominium (USA):
A building or a structure of two or more units, the interior
space of the individually owned and the balance of the property
(both land and building) being owned in common by the owners
of the individual units.
Conveyance:
A document transferring title to land from one person to
another.
Current yield:
The remunerative rate of interest, which is, or would be,
an 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.
Developer:
An entrepreneur who has an interest in a property, initiates
its development and ensures, that this is carried out (for
occupation, investment or dealing) and from the outset accepts
the responsibility for providing or procures the requisite
funds needed to finance the whole project.
Development control:
The powers of a local planning authority to control the
development and use of land, which includes inter alia,
a) the refusal or grant (with or without conditions ) of
planning permission;
b) the issue of enforcement notices;
c) the making of revocation, modification or discontinuance
orders;
d) the grant or refusal of listed building consents;
e) the designations of conversion areas;
Development yield:
In a valuation to ascertain a ground
rent, the rate at which costs are decapitalised to find
the annual deduction from the occupation rents; it comprises:
a) an investment yield
b) an annual allowance for developers risk and profit and,
in some instances
c) an annual sinking fund element
Discounted cash flow analysis:
Techniques used in investment and development appraisal
whereby future inflows and outflows of cash associated with
a particular project are expressed in present -day terms
by discounting. The most widely used forms of DCF are the
internal rate of return (IRR) and net present value (NPV).
The techniques may be used for such purposes as the valuation
of land and investment, the ranking of projects or their
components.
Easement (UK):
A right appurtenant to a parcel of land entitling a dominant
owner to use the land of the servient owner in a particular
manner, or constraining the legal rights otherwise enjoyed
by the servient owner, e.g. A right of way, right to light,
right to support. Strictly speaking, easements cannot exist
"in gross", i.e. personal and unattached to the
ownership of land, but rights similar to easements can be
created by statute, usually for the benefit of public utility
undertakings, and these are commonly referred to as "statutory
easements".
Effective rent:
The gross rent payable per month by the occupiers which
includes the base rent, maintenance charges, imputed costs
of loss of interest on security deposit and rental advance.
The effective rent indicates the total cash outflow of an
occupier every month on account of leasing any property.
Equity linked mortgage:
A mortgage whereby the interest on the principal in part
or in whole is calculated, usually yearly, by reference
on the security, e.g. It may reflect annual increase or
possible decreases, in the annual return on, or the value
of, the property in which the mortgage is secured.
Escalation clause specified in lease agreements wherein
renewals of lease period are built in:
It involves an increment in the base rent at every renewal
of a lease agreement in the base rent at every renewal of
a lease agreement and is generally a percentage rate that
is either pre agreed or negotiated before the renewal of
the lease agreement.
Facilities management:
The coordination 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. In order
to obtain a fire certificate, one must apply to a fire certificate,
one must apply to a fire officer, who then inspects the
building and issues a list of requirements (e.g. Fire doors).
Once the fire officer is satisfied that those requirements
have been met he will issue the fire certificate. It enables
fire officers, in the event of an emergency, to have prior
knowledge inter alia of the permitted number of people on
each floor; it also informs officials if any authorised
inflammables /explosives materials on the premises.
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 other, 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.
Force majeure:
A force, which cannot be resisted, in other words, something
beyond the control of the parties involved. It includes
acts of God and acts of man, e.g. Riots, strikes, arson.
In many contracts and insurance policies, specific provision
is made for damage or injury arising from force majeure.
For example, the financial liability of a building contractor
for failure to complete by a specific date may be relieved
to the extent it was caused be force majeure. This is a
common clause in most property contracts.
Foreclosure:
1. (UK) The mortgagees restricted power to extinguish the
mortgagor's right of redemption by transferring the mortgagor's
interest in the property to himself, if the mortgagors defaults
in paying his dues or in complying with any other terms
of the mortgage deeds.
2. (USA) The legal process by which a mortgagee can sell
the mortgagors interest in the property to satisfy debt:
also called "foreclosure sale". Also applied to
the extinguishment of a mortgagors right of redemption.
Freehold:
In general parlance this is used as shorthand for the tenure
of an estate in fee simple absolute in possession. Strictly
speaking, however, freehold includes fee simple, entailed
interests and tenancies for life. 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 party wall.
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.
Gold cause (UK):
A clause in a lease, which provides for the rent to be reviewed
by reference to the price of gold.
Green field site:
An area of land, usually in the edge of a town or city or
away from substantial urban areas, hitherto undeveloped
but for which development is now proposed.
Gross External Area (GEA):
The aggregate superficial area
of a building taking each floor into account. As described
in the RICS/ISVA Code of Measuring Practice (UK), this includes:
external walls and projections, internal walls and partitions;
columns; piers, chimney-breasts, stairwells, and lift wells;
tank and plant rooms, fuel stores whether or not above main
roof level and open-sided covered areas and enclosed car-parking
areas, terraces etc.
Hi-tech building (high technology building):
Primarily a modern industrial building which is particularly
suited to the flexible uses and space needs of business
organisations engaged in modern technologies. Such activities
usually require more office or laboratory space than a traditional
factory and also more sophisticated and adaptable installations
for services and communications.
High point loading:
A concentration of abnormally heavy floor loading at one
point or more particular places in a building or other structure
where extra support may be required.
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.
Indian Stamp Act, 1899:
A legal statute, which provides for the payment of stamp
duty in case of all real estate transactions to duty to
the local government. The value of the stamp duty depends
on the rental payable and the lease term or the sale value
as the case may be. This duty is paid by purchasing non-judicial
Indian Stamp Paper, on which the lease/sale agreements are
documented.
Improvements:
Generally, physical changes which enhance the capital value
of land or buildings. These may include additional buildings,
extensions to existing buildings, installation of new services,
e.g. Central heating and air conditioning and infrastructure
works. On the other hand, mere replacement by a modern equivalent
if something worn out would normally be regarded as a repair
rather than an improvement. The distinction has legal and
taxation consequences.
Indenture:
A deed between two or more parties, each party having his
own copy. Originally copies were all included in a single
document from which each was torn or cut along a wavy (intended)
line. Institutional investors: These are generally taken
to include banks, pension funds, insurance companies, unit
trusts and investment trusts, which are together commonly
referred to in the investment field as the "institutions".
Investment yield: The annual percentage return which is
considered to be for a specific valuation in an investment
being expressed as the ratio of annual net income (actual
or estimated) to the capital value. It is therefore a measure
of an investor's opinion about the prospects and risks attached
to that investment. The better the prospects and lower the
risks, the lower the expected yield and thus the greater
the capital value. The required yield from an investment
is estimated in the light of such factors as:
a) the security in real terms of the capital invested;
b) the security in real terms and regularity of income;
c) the ability to adjust the income to reflect market conditions;
d) the complexity and cost of management;
e) the ease and likely cost of realizing the capital;
f) the tax position
Internal rate of return (IRR):
1. The rate of interest (expressed as a percentage) at which
all-future cash flows (positive and negative) must be discounted
in order that the net present value of those cash flows
should be equal to zero. It is found by trial and error
by applying present values at different rates of interest
in turn to the net cash flow. It is something called the
discounted cash flow rate of return.
2. An alternative explanation might be: the highest rate
of interest (expressed as a percentage) at which funded
f cash flow generated is to be sufficient to repay the original
outlay at the end of the project life.
Joint agent:
One or two or more agents jointly instructed by a principal
to act on his behalf. In the case of estate agents this
is normally on the basis that if any one of the agents effect
the sale, letting or other joint agent(s) will share the
remuneration in agreed proportions. None of these agents
would be entitled to a commission if the transaction is
concluded as a result of someone else's introduction.
Joint sole agent:
One of two or more agents jointly instructed as the only
agents entitled to represent the principal. It is customary
for the joint agents to share any commission earned on an
agreed basis, irrespective of which agent effects the sale
or letting.
Kiosk:
A small enclosed retailed outlet, normally without toilet
facilities and in the retail area, frequently located in
a public concourse or other place where it may remain open
place where it may remain open only during peak times and
be closed securely when there are no customers. Kiosks are
now sometimes included in managed shopping schemes.
Land assembly:
The process of forming a single site from a number of land,
usually for eventual development or redevelopment. This
will include acquisition of individual interest the eventual
development or redevelopment. This will include acquisition
of the individual interests, removal or discharge of any
restrictive covenants or other encumbrances and obtaining
physical possession, when required, from occupiers.
Landlord:
The owner of an interest in land who, in consideration of
a rent or other payment (e.g. A premium), grants the right
to exclusive possession of the whole or part of their land
to another person for a specific or determinable period
by way of a lease or tenancy.
Lease agreement:
An agreement, usually written, between the lessor and the
lessee, which allows for the conveyance of property to the
tenant under a contract, and confers usage and control rights
to the tenant for the duration of lease. Apart from financial
terms and conditions, several clauses describing the other
binding terms and conditions of the agreement are also documented.
License:
The lawful grant of a right to do something, which would
otherwise be illegal or wrongful. It may be gratuitous,
contractual or coupled with an interest in land. The grantor
of license is the licensor and the grantee is the licensee.
A gratuitous ("Mere" or "bare") license
can always be revoked (i.e.. Cancelled), but revocability
of a contractual license depends on the terms of the contract.
A license coupled with an interest in land may be irrevocable
and unlike the other two categories, may be binding on successors
in title of the licensor. One example of license is permission,
usually required in writing, given specifically by an owner
to a tenant, enabling something to be done which otherwise
would be in breach of a term of the lease. A license does
not itself transfer any interest in the land but may authorise
the licensee to enter the licensor's land for some specific
purposes of the license; the licensor may enter the land
and use it in any way not inconsistent with the rights of
the licensee. However, a landlord may authorise by license
some act or omission by a tenant, which would otherwise
be a breach of the terms of the lease.
Load bearing:
The capacity of an element in a building structure to support
a weight in addition to its own, whether vertically or laterally.
Thus a load-bearing wall is one, which supports part of
the structure in addition to its own weight.
Maintenance in property parlance:
The keeping of a building, structure or other physical feature
in a specified e.g. Wind and weather tight, condition. The
approved cost of maintenance may be deductible for income
taxation.
Mattha:
Frontage of a building with the main road.
Mortgage:
The conveyance of a legal or equitable interest in freehold
or leasehold property as security for a loan and with provision
for redemption on repayment of the loan. The lender (mortgagee)
has powers of recovery in the event of default by the borrower
(mortgagor). A mortgage is a form of land charge and can
be either legal or equitable.
Negotiation:
Discussion, written or otherwise, between two or more parties
no different sides, the aim being to reach a common agreement.
Non-confirming use:
The use of a property, which does not conform to the allocation
of the area for planning purposes. Such a property may have
been built in conformity with the planning requirement at
the time and a policy change ensued; more usually, the property
was constructed before planning control was introduced.
Net present value method (NPV):
A method used in discounted cash flow analysis to find the
sum of money representing the difference between the present
value of all inflows and outflows of cash associated with
the project by discounting each at a target yield.
Open market value:
1. The best price which might reasonably be expected to
be obtained at arms' length for an interest in a property
at the date of valuation, subject to any statutory assumptions
which may be required.
2. For the purpose of asset valuations this is defined by
the Royal Institute of Chartered Surveyors (UK) as the best
price which might reasonably be expected to be obtained
for an interest in a property at the date of valuation assuming:
-a willing seller
-a reasonable period in which to negotiate the sale
-that values will remain static during that period
-that the property will be freely exposed to the market;
and
-that no account will be taken of any higher price that
might be paid by a person with a special interest.
-Outgoings Costs incurred by the owner of an interest in
property, usually calculated on a yearly basis. e.g. management,
repairs, rates, insurance and rent payable to the holder
of a superior interest, as appropriate to his contractual
or other liabilities. It is prudent to make annual provision
for future items involving expenditure at intervals of more
than one year.
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