Frequently asked questions (FAQ)

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Re-Future FAQ

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.


Unit of measurement of land, 1 acre is equivalent to 4048.32 square meters and 43560 square feet.

Acceleration clause

A clause in your mortgage which allows the lender to demand payment of the outstanding loan balance for various reasons. The most common reasons for accelerating a loan are if the borrower defaults on the loan or transfers title to another individual without informing the lender.


Consent by the person receiving the offer to be bound by the terms and conditions of the person making the offer. Acceptance of an offer constitutes an agreement according to the terms of the loan contract.

Act of God

Any act of nature such as rain, lightning, floods or earthquakes. Many insurance policies do not cover losses resulting from an ‘Act of God’.

Additional principal payment

A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan.

Adjustable-rate mortgage (ARM)

A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes.

Adjustment Date

The date the interest rate changes on an adjustable-rate mortgage.


A person appointed by a probate court to administer the estate of a person who died intestate (without a will).


The written contract for the sale and purchase of property between the seller (vendor) and the buyer (purchaser).

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.


The person who is allotted a property, either by government body/authority or by a developer.


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


A feature of real property that enhances its attractiveness and increases the occupant’s or user’s satisfaction although the feature is not essential to the property’s use, eg : scenic views, proximity to public transport or recreational facilities.


To repay a mortgage with regular payments that cover both Principal and Interest.

Amortization schedule

A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero.


The loan payment consists of a portion which will be applied to pay the accruing interest on a loan, with the remainder being applied to the principal. Over time, the interest portion decreases as the loan balance decreases, and the amount applied to principal increases so that the loan is paid off (amortized) in the specified time.

Anchor tenant

One or more department or variety chain stores, or supermarkets, introduced into a shopping centre in key positions to attract the shopping public into the centre for the purpose of encouraging other retailers to lease shops en route. The larger the developments the more anchors required.

Annual percentage rate (APR):

This is not the note rate on your loan. It is a value created according to a government formula intended to reflect the true annual cost of borrowing, expressed as a percentage. It works sort of like this, but not exactly, so only use this as a guideline: deduct the closing costs from your loan amount, then using your actual loan payment, calculate what the interest rate would be on this amount instead of your actual loan amount. You will come up with a number close to the APR. Because you are using the same payment on a smaller amount, the APR is always higher than the actual note rate on your loan.


1. An amount paid yearly or at regular intervals, often on a guaranteed dollar basis.

2. 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 of 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.


The transfer of a property interest, especially a lease, from one party to another.


An entrance hall of a building, often rising through a number of stores and containing lifts, reception areas and plants. Originally the hall or chief apartment of a Roman house.

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.


Means a part of any property, intended for any type of independent use, including one or more rooms or enclosed spaces located on one or more floors or any; part or parts thereof, in a multi-storied building to be used for residence or office or for the practice of any profession or for the carrying on of any occupation, trade or for business or such other type of independent use as may be prescribed, and with a direct exit to a public street, 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 building in 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 any domestic aide employed in such an apartment.


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


The form used to apply for a mortgage loan, containing information about a borrower's income, savings, assets, debts, and more.


A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.

Appraised value

An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price.


An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent.


An increase in the value of a property due to changes in market conditions or supply and demand, etc.


A decorative molding around doors or windows.

Asking Price

The listed price of the property buy may not always be the selling price. The owner may be willing to negotiate.

Assessed value

The valuation placed on property by a public tax assessor for purposes of taxation.


The placing of a value on property for the purpose of taxation.


A public official who establishes the value of a property for taxation purposes.


Items of value owned by an individual. Assets that can be quickly converted into cash are considered "liquid assets." These include bank accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others.


The transfer of a mortgage or lease from one person to another.

Assumable mortgage

A mortgage that can be assumed by the buyer when a home is sold. Usually, the borrower must "qualify" in order to assume the loan.


The term applied when a buyer assumes the seller's mortgage.


A public sale of a property or real estate that is sold to the highest bidder when the owner’s reserve is reached

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.


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.

Bill of sale

A written document that transfers title to personal property. For example, when selling an automobile to acquire funds which will be used as a source of down payment or for closing costs, the lender will usually require the bill of sale (in addition to other items) to help document this source of funds.

Bi-weekly payment mortgage

A mortgage that requires payments to reduce the debt every two weeks, (instead of the standard monthly payment schedule). The 26 (or possibly 27) bi-weekly payments are each equal to one-half of the monthly payment that would be required if the loan were a standard 30 year fixed-rate mortgage and they are usually drafted from the borrower’s bank account. The result for the borrower is a substantial savings in interest.

Bombay Stamp Act, 1958

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.

Body Corporate

An administrative body made up of all the owners within a group of units or apartments of a strata building. The owners elect a committee, which handles administration and upkeep of the site.

Bond market

Usually refers to the daily buying and selling of thirty year treasury bonds. Lenders follow this market intensely because as the yields of bonds go up and down, fixed rate mortgages do approximately the same thing. The same factors that affect the Treasury Bond market also affect mortgage rates at the same time. That is why rates change daily, and in a volatile market can and do change during the day as well.


A sum of money paid by a tenant and held by the Tenancy Services to ensure against defaulting on payment and damage to the property.


The lines that define the perimeter of a property.

Brick Veneer

A type of construction in which a structural timber frame is tied to a non-load bearing, single-brick external wall..

Bridging Loan

A short term loan (usually at a higher rate) taken out to cover the financial gap between buying a new property and selling an existing property.

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.


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.


1. Commission paid to a broker.

2. The activity of a broker in bringing together two parties in a transaction.

Built-up Area

Includes the carpet area, the wall thickness

Building Code

Local Council regulations that control design, construction and materials used in construction.

Buy down

Usually refers to a fixed rate mortgage where the interest rate is "bought down" for a temporary period, usually one to three years. After that time and for the remainder of the term, the borrower's payment is calculated at the note rate. In order to buy down the initial rate for the temporary payment, a lump sum is paid and held in an account used to supplement the borrower's monthly payment. These funds usually come from the seller (or some other source) as a financial incentive to induce someone to buy their property. A "lender funded buy down" is when the lender pays the initial lump sum. They can accomplish this because the note rate on the loan (after the buy down adjustments) will be higher than the current market rate. One reason for doing this is because the borrower may get to "qualify" at the start rate and can qualify for a higher loan amount. Another reason is that a borrower may expect his earnings to go up substantially in the near future, but wants a lower payment right now.

Buyers Market

When the demand for property is less than supply so the advantages shift to the buyer

Call option

Similar to the acceleration clause.


Adjustable Rate Mortgages have fluctuating interest rates, but those fluctuations are usually limited to a certain amount. Those limitations may apply to how much the loan may adjust over a six month period, an annual period, and over the life of the loan, and are referred to as "caps." Some ARMs, although they may have a life cap, allow the interest rate to fluctuate freely, but require a certain minimum payment which can change once a year. There is a limit on how much that payment can change each year, and that limit is also referred to as a cap.

Capital Expenditure

The cost of an improvement made to extend the useful life of a property or added to its value.

Capital Gain

The gain on the sale of a capital asset.

Capital Improvement

Any structure or addition to a property erected as a permanent improvement that adds to its value and useful life.


Money used to create income, either as an investment in a business or an income property. The money or property comprising the wealth owned or used by a person or business. The accumulated wealth of a person or business.

Cash Flow

A measure of cash inflow and outflow from the business. Positive cash

Cash-out refinance

A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points and the amount required to satisfy any outstanding subordinate mortgage liens,. In other words a refinance transaction in which the borrower receives additional cash that can be used for any purpose.

Cash-out refinance

When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use, it is referred to as a "cash out refinance.

Caveat Emptor

A Latin phrase for “Let the buyer beware”, i.e.: the onus is on the buyer to be satisfied with any item before purchasing.


A warning on a title to a purchaser that a third party might have some interest or right in the property.

Certificate of deposit index

One of the indexes used for determining interest rate changes on some adjustable rate mortgages. It is an average of what banks are paying on certificates of deposit.

Certificate of deposit

A time deposit held in a bank which pays a certain amount of interest to the depositor.

Certificate of Eligibility

A document issued by the Veterans Administration that certifies a veteran's eligibility for a VA loan.

Certificate of Occupancy

A document issued by a local government to a developer permitting the structure to be occupied. This generally indicates that the building is in compliance with public health and building codes.

Certificate of Reasonable Value (CRV)

Once the appraisal has been performed on a property being bought with a VA loan, the Veterans Administration issues a CRV.

Certificate of Title

A description of a property with the name of the registered owner, encumbrances, i.e.: mortgages or easements on the property. It must be produced by the vendor before the sale of the property.

Certificated Salesperson

All Salespeople in real estate who have not qualified by exam to be an Associate (AREINZ), who are employed by a licensed Real Estate Agent.

Chain of title

An analysis of the transfers of title to a piece of property over the years.


Moveable and removable items of personal property. In real estate transactions, chattels included in the sale usually include the stove, television aerial, carpets, blinds, curtains, drapes and Light fittings. However, unless chattels are specified in the agreement, they are not sold as part of the property.

Clear Title:

A title that is free of or legal questions as to ownership of the property.

Closing costs

Closing costs are separated into what are called "non-recurring closing costs" and "pre-paid items." Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. "Pre-paid" are items which recur over time, such as property taxes and homeowners insurance. A lender makes an attempt to estimate the amount of non-recurring closing costs and prepaid items on the Good Faith Estimate which they must issue to the borrower within three days of receiving a home loan application.

Closing statement

See Settlement Statement.


This has different meanings in different states. In some states a real estate transaction is not consider "closed" until the documents record at the local recorder’s office. In others, the "closing" is a meeting where all of the documents are signed and money changes hands.

Cloud on title

Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by deed, release, or court action.


An additional individual who is both obligated on the loan and is on title to the property.


When a borrower falls behind, the lender contacts them in an effort to bring the loan current. The loan goes to "collection." As part of the collection effort, the lender must mail and record certain documents in case they are eventually required to foreclose on the property.


Most salespeople earn commissions for the work that they do and there are many sales professionals involved in each transaction, including Realtors, loan officers, title representatives, attorneys, escrow representative, and representatives for pest companies, home warranty companies, home inspection companies, insurance agents, and more. The commissions are paid out of the charges paid by the seller or buyer in the purchase transaction. Realtors generally earn the largest commissions, followed by lenders, then the others.

Common area assessments

In some areas they are called Homeowners Association Fees. They are charges paid to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD) and are generally used to maintain the property and common areas.

Common areas

Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.

Common law

An unwritten body of law based on general custom in England and used to an extent in some states.

Common Property

Area of building, land or amenities within a strata title property that are shared by all owners, eg: a driveway.

Community property

In some states, especially the southwest, property acquired by a married couple during their marriage is considered to be owned jointly, except under special circumstances. This is an outgrowth of the Spanish and Mexican heritage of the area.

Company Title

A company owner has a certificate of title and the owner automatically comparable sales: Recent sales of similar properties in nearby areas and used to help determine the market value of a property. Also referred to as "comps."

Conditional Agreement

This is a legally binding contract, but it is subject to conditions being satisfied, usually by the purchaser. The conditions will be detailed in the agreement and may, for example, require that you are able to sell your existing home by a set date or to arrange finance by a certain date. Conditions can also be included by the purchaser that require the seller to do something by a specified date - for example, that settlement will take place only on the conditions that the house is painted, the windows repaired or that rubbish around the section is removed. Note: Purchasers' conditions usually do not prevent the sale-taking place, but may allow the purchaser to delay settlement without penalty or claim damages if the conditions are not met in time.

Condominium conversion

Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.

Condominium hotel

A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned. These are often found in resort areas like Hawaii.


A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.

Construction Loan

Also called Building Loan. A short-term, interim loan (only paid to registered builders) for financing the cost of construction. The lender makes payments to the builder at periodic intervals as work progresses.


Contingency. See Special Condition.

Contract Note

An agreement in writing setting out the terms and conditions relating to the sale or purchase of a property.

Contract of Sale

An agreement in wiring setting out the terms and conditions relating


An oral or written agreement to do or not to do a certain thing.

Conventional mortgage

Refers to home loans other than government loans (VA and FHA).

Convertible ARM

An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time.

Co-operative (co-op)

A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.

Cost of funds index (COFI)

One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home Loan Bank.


Terms, conditions and restrictions noted on the title. A covenant may affect future plans or resale of the property.

Cover Note

A document issued by an insurance company giving temporary insurance until a formal policy is issued.

Credit Report

A report of an individual’s credit history prepared by a credit bureau and used by a lender in determining a loan applicant’s creditworthiness.

Credit repository

An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.


An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date.


A person to whom money is owed.

Cross Lease

This type of ownership is common where there is more than one home on a block of land. You are all owners of the land and you each lease your home. The lease will usually provide for an exclusive use area for each cross-lessee. It's like owning a freehold property but there are some restrictions. Another form of ownership for more than one home on a block of land is a unit title.


Also called a ‘Court’ or ‘Dead End Street’. A street with only one entrance, the other end being closed. Often valued for the privacy provide to homes in the street.

Debutter property

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


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.


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


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

Due diligence

Verification of the authenticity of the title of the property


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 recapitalized 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 rates 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.


An amount owed to another.

Deed of trust

Some states, like California, do not record mortgages. Instead, they record a deed of trust which is essentially the same thing.


The legal document conveying title to a property.


Short for "deed in lieu of foreclosure," this conveys title to the lender when the borrower is in default and wants to avoid foreclosure. The lender may or may not cease foreclosure activities if a borrower asks to provide a deed-in-lieu. Regardless of whether the lender accepts the deed-in-lieu, the avoidance and non-repayment of debt will most likely show on a credit history. What a deed-in-lieu may prevent is having the documents preparatory to a foreclosure being recorded and become a matter of public record.


Failure to make the mortgage payment within a specified period of time. For first mortgages or first trust deeds, if a payment has still not been made within 30 days of the due date, the loan is considered to be in default.


Failure to make mortgage payments when mortgage payments are due. For most mortgages, payments are due on the first day of the month. Even though they may not charge a "late fee" for a number of days, the payment is still considered to be late and the loan delinquent. When a loan payment is more than 30 days late, most lenders report the late payment to one or more credit bureaus.


A sum of money given in advance of a larger amount being expected in the future. Often called in real estate as an "earnest money deposit."


A decline in the value of property due to changes in market conditions or other clauses.


A cash expenditure for the purpose of settling a debt.

Discount points

In the mortgage industry, this term is usually used in only in reference to government loans, meaning FHA and VA loans. Discount points refer to any "points" paid in addition to the one percent loan origination fee. A "point" is one percent of the loan amount.

Disposable Income

Money left over after all expenses have been met.

Door Jambs

The vertical sides of a door frame.

Down payment

The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.


The disbursement of mortgage funds provided by the Bank.

Dual Occupancy

A block of land which is zoned so that there two distinct dwellings are permitted by the Local Territorial Authority, to be constructed

Due-on-sale provision

A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.


Semi-detached flat

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.


A right of way giving persons other than the owner access to or over a property.

Effective age

An appraiser's estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.

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.

Eminent domain

The right of a government to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation proceedings.


An improvement that intrudes illegally on another's property.

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.


Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.

Equal Credit Opportunity Act (ECOA)

A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.


The amount of an asset actually owned, Equity is the difference between the market value of the property and the amount still owed on its mortgage.

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.

Escrow account

Once you close your purchase transaction, you may have an escrow account or impound account with your lender. This means the amount you pay each month includes an amount above what would be required if you were only paying your principal and interest. The extra money is held in your impound account (escrow account) for the payment of items like property taxes and homeowner's insurance when they come due. The lender pays them with your money instead of you paying them yourself.

Escrow analysis

Once each year your lender will perform an "escrow analysis" to make sure they are collecting the correct amount of money for the anticipated expenditures.

Escrow disbursements

The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.


An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.

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 and is generally a percentage rate that is either pre agreed or negotiated before the renewal of the lease agreement.

Establishment Fee

See Loan Application Fee


The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.


The total of all the real estate and personal property owned by an individual at the time of death.


The lawful expulsion of an occupant or tenant from real property.

Examination of title

The report on the title of a property from the public records or an abstract of the title.

Exclusive Listing/Sole Listing

A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time.

Exclusive listing

A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time.


A person named in a will to administer an estate. The court will appoint an administrator if no executor is named. "Executrix" is the feminine form.

Facilities Management

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

Fair Credit Reporting Act

A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

Fair Market Value

The 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 a value decided by the market forces.


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

Farm Property

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

Fee simple estate

An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.

Fee Simple

The greatest possible interest a person can have in real estate.

Fibro Cement

Building material made of compressed fibers cemented into rigid sheets.


Financial Institutions Duty. State duty on the receipts of financial institutions.


A person who essentially holds the character of a trustee. Real Estate agents and salespersons are considered by law to be fiduciaries, thus they have a duty to act primarily for the benefit of the principal (the person who employed them) and not their own. A fiduciary must act with the highest degree of care and good faith in relations with the principal and on the principal’s business. Penalties for failing in fiduciary duties may be quite severe.

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 officer, who then inspects the building and issues a list of requirements (e.g. Fire escape doors/stairways). 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 authorized inflammables /explosives materials are found on the premises. Fit outs 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.

Firm commitment

A lender's agreement to make a loan to a specific borrower on a specific property.

First mortgage

The mortgage that is in first place among any loans recorded against a property. Usually refers to the date in which loans are recorded, but there are exceptions.


Objects that can be removed from a property without causing damage to it.

Fixed Installment

The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest.

Fixed Rate Mortgage

A mortgage in which the interest rate does not change during the term of the loan.


Personal property that becomes real property when attached in a permanent manner to real estate.

Flood insurance

Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.


The footing supports the building on its foundation.

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 by force majeure. This is a common clause in most property contracts.


The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually results in the selling the property by auction and the proceeds being used to service the mortgage debt.

Freehold Property

A property where title paramount has conveyed the property in favor 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 Ratio

The 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 plot the 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 front spaces.


An estate in real property which continues for an indefinite period of time. Freehold estates may be inheritable or non-inheritable. Inheritable estates include the fee simple absolute, the qualified fee, and the fee tail. Non-inheritable estates include various life estates which are created by acts of parties, such as an ordinary life estate, or by operation of law.

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.

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.


The person to whom an interest in real property is conveyed.


The person conveying an interest in real property. have a sewerage easement across part of your

Hazard insurance

Insurance coverage that in the event of physical damage to a property from fire, wind, vandalism, or other hazards


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

Hi-tech building (high technology building)

Primarily a modern industrial building which is particularly suited to the flexible uses and space needs of business organizations 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.

Home Equity line of credit

A mortgage loan, usually in second position, that allows the borrower to obtain cash drawn against the equity of his home, up to a predetermined amount.

Home inspection

Thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser.

Homeowners' association

A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common elements. In a PUD project, it holds title to the common elements.

Homeowner's insurance

An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

Homeowner's warranty

A type of insurance often purchased by homebuyers that will cover repairs to certain items, such as heating or air conditioning, should they break down within the coverage period. The buyer often requests the seller to pay for this coverage as a condition of the sale, but either party can pay.


Refers to the heating, ventilation, 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.

Immovable Property

Includes 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 standing timber, growing crops not grass.

Industrial Property

Any property used for a manufacturing purpose. Areas where industrial activity may be carried out are specified by the respective local authorities.

Investment Property

Real Estate owned with the intent of supplementing one's income and is not intended for owner occupancy (i.e. rental houses, apartment buildings, etc.).


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.


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 part 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.

) 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 cash flow generated is to be sufficient to repay the original outlay at the end of the project life.

Joint Ownership Agreement

An agreement between owners defining their rights, ownership, monetary obligations and responsibilities.

Joint tenancy

A form of ownership or taking title to property which means each party owns the whole property and that ownership is not separate. In the event of the death of one party, the survivor owns the property in its entirety.


A decision made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor's real property as collateral for the judgment's creditor.


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 only during peak times and be closed securely when there are no customers. Kiosks are now sometimes included in managed shopping schemes.


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

Late charge

The penalty a borrower must pay when a payment is made a stated number of days. On a first trust deed or mortgage, this is usually fifteen days.


A written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess the real estate for a specified period of time.

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.

Lease hold estate

A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it.

Lease option

An alternative financing option that allows home buyers to lease a home with an option to buy. Each month's rent payment may consist of not only the rent, but an additional amount which can be applied toward the down payment on an already specified price.

Legal description

A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.


A term which can refer to the institution making the loan or to the individual representing the firm. For example, loan officers are often referred to as "lenders."


A person's financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others.

Liability insurance

Insurance coverage that offers protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily injury or property damage to another party. It is usually part of a homeowner's insurance policy.


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 authorize 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 authorize by license some act or omission by a tenant, which would otherwise be a breach of the terms of the lease.


A legal claim against a property that must be paid off when the property is sold. A mortgage or first trust deed is considered a lien.

life cap

For an adjustable-rate mortgage (ARM), a limit on the amount that the enterest rate can increase or decrease over the life of the mortgage.

Line of credit

An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower.

Liquid asset

A cash asset or an asset that is easily converted into cash.

Load bearing

He 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.

Loan officer

Also referred to by a variety of other terms, such as lender, loan representative, loan "rep," account executive, and others. The loan officer serves several functions and has various responsibilities: they solicit loans, they are the representative of the lending institution, and they represent the borrower to the lending institution.

Loan origination

How a lender refers to the process of obtaining new loans.

Loan servicing

After you obtain a loan, the company you make the payments to is "servicing" your loan. They process payments, send statements, manage the escrow/impound account, provide collection efforts on delinquent loans, ensure that insurance and property taxes are made on the property, handle pay-offs and assumptions, and provide a variety of other services.


A sum of borrowed money (principal) that is generally repaid with interest.

Loan-to-value (LTV)

The percentage relationship between the amount of the loan and the appraised value or sales price (whichever is lower).

Loan-to-Value Ratio (LTV)

The ratio of the amount of your loan to the appraised value of the home. The LTV will affect loan programs available to the borrower and generally, the lower the LTV the more favorable the terms of the loan programs offered by lenders.


An agreement in which the lender guarantees a specified interest rate for a certain amount of time at a certain cost.

Lock-in period

The time period during which the lender has guaranteed an interest rate to a borrower.

Long-term Capital Asset

This means a capital asset held by an assesses for nothing less than thirty six months immediately preceding the date of transfer.


In property parlance, the keeping of a building, structure or other physical feature in a specified condition e.g. wind and weather tight conditions. The approved cost of maintenance may be deductible for income taxation.

Maintenance Charges

Charges 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.


The difference between the interest rate and the index on an adjustable rate mortgage. The margin remains stable over the life of the loan. It is the index which moves up and down.


The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.

Merged credit report

A credit report which reports the raw data pulled from two or more of the major credit repositories. Contrast with a Residential Mortgage Credit Report (RMCR) or a standard factual credit report.


Occasionally, a lender will agree to modify the terms of your mortgage without requiring you t refinance. If any changes are made, it is called a modification.


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

Mortgage banker

For a more complete discussion of mortgage banker, see "Types of Lenders." A mortgage banker is generally assumed to originate and fund their own loans, which are then sold on the secondary market, usually to Fannie Mae, Freddie Mac, or Ginnie Mae. However, firms rather loosely apply this term to themselves, whether they are true mortgage bankers or simply mortgage brokers or correspondents.

Mortgage broker

A mortgage company that originates loans, then places those loans with a variety of other lending institutions with whom they usually have pre-established relationships.

Mortgage insurance (MI)

Insurance that covers the lender against some of the losses incurred as a result of a default on a home loan. Often mistakenly referred to as PMI, which is actually the name of one of the larger mortgage insurers. Mortgage insurance is usually required in one form or another on all loans that have a loan-to-value higher than eighty percent. Mortgages above 80% LTV that call themselves "No MI" are usually a made at a higher interest rate. Instead of the borrower paying the mortgage insurance premiums directly, they pay a higher interest rate to the lender, which then pays the mortgage insurance themselves. Also, FHA loans and certain first-time homebuyer programs require mortgage insurance regardless of the loan-to-value.

Mortgage insurance premium (MIP)

The amount paid by a mortgagor for mortgage insurance, either to a government agency or to a private mortgage insurance (MI) company.

Mortgage life and disability insurance

A type of term life insurance often bought by borrowers. The amount of coverage decreases as the principal balance declines. Some policies also cover the borrower in the event of disability. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds. In the case of disability insurance, the insurance will make the mortgage payment for a specified amount of time during the disability. Be careful to read the terms of coverage, however, because often the coverage does not start immediately upon the disability, but after a specified period, sometime forty-five days.


The lender in a mortgage agreement.


The borrower in a mortgage agreement.

Multi dwelling units

Properties that provide separate housing units for more than one family, although they secure only a single mortgage.


Mutation means transfer/change of name in the records of the Corporation for the concerned property.

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.

Negative amortization

Some adjustable rate mortgages allow the interest rate to fluctuate independently of a required minimum payment. If a borrower makes the minimum payment it may not cover all of the interest that would normally be due at the current interest rate. In essence, the borrower is deferring the interest payment, which is why this is called "deferred interest." The deferred interest is added to the balance of the loan and the loan balance grows larger instead of smaller, which is called negative amortization.

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.

Non conforming 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.

No cash-out refinance

A refinance transaction which is not intended to put cash in the hand of the borrower. Instead, the new balance is calculated to cover the balance due on the current loan and any costs associated with obtaining the new mortgage. Often referred to as a "rate and term refinance."

No-cost loan

Many lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

Note rate

The interest rate stated on a mortgage note.


A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

Notice of default

A formal written notice to a borrower that a default has occurred and that legal action may be taken.

Original principal balance

The total amount of principal owed on a mortgage before any payments are made.

Origination fee

On a government loan the loan origination fee is one percent of the loan amount, but additional points may be charged which are called "discount points." One point equals one percent of the loan amount. On a conventional loan, the loan origination fee refers to the total number of points a borrower pays.

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.


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

Owner Financing

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

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.

Partial payment

A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan. Normally, a lender will not accept a partial payment, but in times of hardship you can make this request of the loan servicing collection department.

Payment change date

The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM). Generally, the payment change date occurs in the month immediately after the interest rate adjustment date.

Rate able value

The figure upon which property tax is charged in India. This value is determined by the tax authorities and thereafter the tax liability is charged to the owner(s) of the property on the basis of certain pre-determined tax slab rates.

Rate lock

A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time at a specific cost.

Real Assets

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


Synonym of "Real Estate Agent".

Real estate agent

A person licensed to negotiate and transact the sale of real estate. Real Estate Settlement Procedures Act


A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

Real property

Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.


The public official who keeps records of transactions that affect real property in the area. Sometimes known as a "Registrar of Deeds" or "County Clerk."


The noting in the registrar's office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.

Refinance transaction

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


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


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 to registering a transaction, which varies from state to state.

Registration and mutation

It is mandatory for the sale deed of all high value property transactions to be registered at the regional sub registrar's office of the local municipal authority. Thereafter, the buyer has to apply for mutation, which involves a change in the title records to incorporate the name of the buyer of the property. In order to complete the transfer of property, it is mandatory for the seller to furnish or arrange a valid "certificate of completion" issued from the local municipal authority to the buyer.

Remaining balance

The amount of principal that has not yet been repaid. See principal balance.

Remaining term

The original amortization term minus the number of payments that has been applied.

Rent Act (s)

Legislation promulgated by various states in India, which regulates the terms and conditions of the rental market with a view to curb profiteering and hoarding. Though its restrictive nature has not allowed owners to enjoy economic returns from same categories of property, thereby allowing market inefficiencies.

Rent free

period An agreed period, usually for several weeks or months, during which a lessee is allowed to occupy the subject premises without payment of rent: a. in consideration for the tenant incurring expenditure on such matters as fitting out premises or carrying out repairs or improvements. b. to reflect market conditions which favor tenant e.g. where the space available for letting exceeds the total tenant demand in that area or c. by virtue of both a and b

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. For example, in an office building it is customary to exclude from the direct calculation of rent the space used for corridors, atrium and stairways.

Rental advance

Comprises a lump sum payment to the landlord at the beginning of the lease term, which is thereafter adjusted in equal installments over the lease term against the monthly base rental payable by the tenant. The advance amount generally ranges between 3 to 18 months depending on the city, type, location of property and the period of the lease.

Rent loss insurance

Insurance that protects a landlord against loss of rent or rental value due to fire or other casualty that renders the leased premises unavailable for use and as a result of which the tenant is excused from paying rent.

Repayment plan

An arrangement made to repay delinquent installments or advances.

Replacement reserve fund

A fund set aside for replacement of common property in a condominium, PUD, or cooperative project -- particularly that which has a short life expectancy, such as carpeting, furniture, etc. reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one’s credit record

Residential Property

Any property, which is used for residential purposes. These areas are specifically earmarked as such by the concerned local authority.

Revolving debt

A credit arrangement, such as a credit card, that allows a customer to borrow against a preapproved line of credit when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any interest due.

Right of first refusal

A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.

Right of ingress or egress

The right to enter or leave designated premises.

Right of survivorship

In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.

Sale-lease back

A technique in which a seller deeds property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller.

Second mortgage

A mortgage that has a lien position subordinate to the first mortgage.

Secondary market

The buying and selling of existing mortgages, usually as part of a "pool" of mortgages.

Secured loan

A loan that is backed by collateral.


In lending, security refers to the collateral given, deposited or pledged to secure the payment of the loan

Security deposit

Comprises of an interest free lump sum payment to the landlord at the commencement of the lease, which is refundable at the end of the lease term. Though the deposit amount varies depending on city, property type, location and the period of the lease, it may range anywhere between 6 to 18 months of monthly rental. It is not uncommon for some landlords to provide a bank guarantee to the tenant as security for the repayment of the initial deposit amount.

Serviced accommodation

Suites of offices or rooms where the landlord provides a range of services within the individual premises extending beyond the traditional ones associated with the maintenance and management of the building itself or the operation and maintenance of the installation or plant therein e.g. furniture, telephone, fax machine, room cleaning, and/or provides centralized specialized services, such as a receptionist and secretarial and communication facilities.

Seller carry-back

An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage.


An organization that collects principal and interest payments from borrowers and manages borrowers' escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.


The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

Shopping Mall

A group of retail outlets designed and built with ways for pedestrians on one or more levels to form a unified whole under one roof.

Site Plans

A drawing of an area of land, on a horizontal plane, showing the boundaries and physical extent of the land included in a particular parcel. It may also show any existing buildings or the proposed layout of a development.


A person (usually a dealer) who undertakes a transaction in property, in expectation of asking for a profit but with the risk of not doing so.


A housing development that is created by dividing a tract of land into individual lots for sale or lease.

Sub Leasing

A method wherein, the primary lessee of a property has the right to further lease out a part or whole of the property to another occupier or lessee. Essentially, the right to sub lease is decided beforehand at the time of signing the main lease agreement and is with the consent of both the Landlord and the lessee.

Subordinate financing

Any mortgage or other lien that has a priority that is lower than that of the first mortgage.


A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.

Town and country planning

The determination of policy for the development and use of land and the control of its implementations in urban and rural areas by district and country planning authorities.

Transfer of ownership

Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property "subject to" the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device.

Transfer tax

State or local tax payable when title passes from one owner to another.


A fiduciary who holds or controls property for the benefit of another.


A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage rate (APR) and other charges.

Two- to four-family property

A property that consists of a structure that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed.

Two-step mortgage

An adjustable-rate mortgage (ARM) that has one interest rate for the first five or seven years of its mortgage term and a different interest rate for the remainder of the amortization term.


A 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 rent in case of rental transaction.

Urban centers

i.e. cities were classified into categories such as A, B and C and a ceiling on the maximum permissible usage on land by respective owners was set under provisions of the act.


1. The use or enjoyment of a property or of a right over property. 2. A person who uses, enjoys or has a right over a property.

Vaastu shastra

A traditional Indian architecture and design system, which specifies the detailed methodology of designing buildings, buying land etc. in order to maximize benefits, from the same for the occupier. This system relies in harmonizing any real estate development with the five elements of Indian Mythology namely air, water, earth, fire and space.


1. The process of making an estimate of worth of real property or real property or other assets for a particular purpose e.g. letting, purchase, sale, audit, rating, compulsory purchase or taxation. That purpose and the relevant circumstances will determine assumptions and facts that are appropriate and hence the process used.

2. A statement, usually in writing, setting, out the facts, assumptions, calculations and resultant value. 3. Colloquially, the value arrived at as a result of the valuation process.


The price that might an interested in property or some other asset might reasonably be expected to fetch if disposed of at right.

VA mortgage

A mortgage that is guaranteed by the Department of Veterans Affairs (VA).


Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn.

Veterans Administration (VA)

An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military services. The guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans.

Warehouse Premises

Designed and built for the purpose of bulk storage of raw materials or finished or partly finished goods, pending either onward transit or division into smaller batches and subsequent distribution.

Written-down value

At a given time, the result of making one or more annual of periodic deductions for depreciation against capital cost or worth.


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


In planning terms, the dividing of an area by a local planning authority into zones for particular uses or activities.

What is the purpose of registration?

By Registration of transaction of immovable property will become permanent public record. This is a notice to the general public. Those getting transfer of property should verify whether such property has been previously encumbered. b. According to Transfer of Property Act right, title or interest can be acquired only if the deed is registered.

What is the difference between Built-up area, Superbuilt-up area and 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/office unit/showroom etc. Built up Area is the carpet area plus the thickness of outer walls and the balcony. Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.

What is the difference between lease and leave and licence agreement?

Lease is defined under Section 105 of The Transfer of Property Act,1882 and a lease of immoveable property is a transfer of a right to enjoy such property for a certain time or in perpetuity on consideration to be rendered periodically or on specified occasions, while a licence is defined in Section 52 of the Indian Easement Act,1882 and it does not create any interest in the premises in favour of the licensee excepting a mere right to use and occupy the premises for a limited duration. Both documents have now to be registered. A lease deed is required to be stamped and registered. However the stamp duty payable on lease is more than on Leave and Licence for a period upto three years. For a period exceeding three years the stamp duty is same for both agreements. The implications of entering into a lease agreement would be: i) That stamp duty would have to be paid ii) That the document would have to be registered iii) That Municipal taxes may go up iv) Of course, Income-tax would have to be paid on your income; and v) The question of Wealth-tax would have to be considered. One property is exempt from Wealth-tax. However, if you have any other property, this implication would have to be considered.

What is the difference between a Khata and a Title Deed?

A khata is an account of assessment of a property for the payment of tax. The khata does not confer ownership. However, the title deed is the document through which a person derives a title or ownership of the said property.

What should a lessee or occupant keep in mind while purchasing a office?

Some of the factors a lessee or occupant must keep in mind while rent a office is: Locality i.e. transport, schools, hospitals, market, business district, entertainment centers, hotels, restaurants, pollution levels Quoted area of the office i.e. Carpet, Built Up Area and super Built Up Area Car parking space State of the premises, quality of construction, fixtures and fittings in the premises Reputation of the Lesser Sufficient water and electric supply, other utilities Cost components: rent, stamp duty, registration charges, transfer fees, monthly outgoings and society charges, costs of utilities. Any other distinguishing features or advantages of the property.

On what basis is the rent charged?

Rent for a premises can be charged either on floor area or lump sum charge for the premises. Usually office or shop premises are charged rent on floor area.

What are non-occupancy charges?

Non occupancy charges are levied by the society when the owner himself does not reside in the office but rents it out to a third party.

What are types of documents to be signed for renting an office or a shop?

Documents generally prevalent for renting offices or shops can be a lease, leave and license agreement, business centre agreement or conducting rights agreement.

What should I inspect in a premises before renting it?

You should learn as much as you can about the condition of the premises before you hire it. You need to investigate the condition of the property and all its systems such as : plumbing systems, drainage, water faucets and sanitary fittings electrical systems, circuit breakers, wires, capacity of the electric meter, functioning of light fittings roof, walls, ceilings, floors, paintwork foundation, basement and visible structures doors and windows, latches, locks structural stability of the building fixtures and fittings electrical load • water supply

Checklist for renting commercial property?

Market Trends about prevalent rates of property in the vicinity and last known transactions Identify the property you wish to rent Formulate commercial terms Distinguish between terms and conditions of the contract which are negotiable and those, which are fixed eg. Rent, payment schedule, time of completion etc. Compile or Ask for photocopies of the all deeds of title related to the property to be purchased. Examine the deeds to establish the ownership of the property by the Lessor, preferably through an advocate. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Previous encumbrances and loans, if any on the property must be cleared before renting of the property. The title of the Lesser must be clear and marketable Finalize commercial terms. Ascertain stamp duty, registration charges and outgoings to be paid i.e. property tax, water and electricity charges, society charges, maintenance charges Request Lesser to obtain, if applicable, consent, permission, sanction, no objection certificate of various authorities such as the (a) society (b) any other authority Permanent Account Number of Vendor and Purchaser under Income Tax laws Payment of stamp duty on the formal agreement or document for transfer of the property, signing by both the Vendor and Purchaser and registration.

Checklist for selling commercial property?

List out all deeds of title related to the property under sale. You may be required to give photocopies of the deeds to the potential purchaser. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Prevailing market rates in the vicinity, current market trends and last known transactions. Formulate commercial terms i.e. price, payment schedule, transfer fees, statutory charges e.g. stamp duty. Distinguish between negotiable and fixed terms and conditions of the contract e.g. Price, payment schedule, time of completion etc. Finalize commercial terms of sale. Obtain, if applicable, consent, permission, sanction no objection certificate of various authorities such as the.

a. Society
b. the income tax authority
c. Municipal Corporation
d. the competent authority under the Urban Land Ceiling and Regulation Act
e. any other authority

Check if the purchaser will be taking a loan for payment of the consideration amount. Ask for a pre approval letter from the lending institution. Permanent Account Number of Purchaser under Income Tax law. Payment of stamp duty on the formal agreement or document for transfer of the property, signing of document by both parties and registration. After receiving the entire sale price hand over legal possession of the property along with documents of title in original. Change name of the holder of the property to the purchaser in the records of the society, electricity company, municipal corporation, Index II etc.

Does one have to pay any amount for registration of the sale/transfer documents?

Yes. Registration of sale/transfer documents will involve payment of registration fee, as prescribed in the Registration Rules and as applicable in the States in India, where the Property is situated.

What You Should Do Prior to Land Registration?

In real estate laws, the first thing that you are advised to do is to get in touch with a licensed or well known land surveyor. The surveyor can take the exact measurements of the land including its borders. It saves you from a number of troubles later. It is also advisable to contact the Survey Department and obtain a survey sketch of the land but this is not easy to accomplish. Red-tapism in these departments makes it difficult for an ordinary person to get the sketch. However, give it a try. This comes in handy when you want to make a comparison to assure yourself of the accuracy of measurements.

7/12 Extract

It is a basic document of title and recording a record of rights herein the A-land survey no. with Hissa No, Ghat No, measurement of A. Land area , name of the owner/ hold/tenant along with the types of the crop taken. It is available from the Talathi of the village.

6 and 6/12 Extract

It denotes various mutation entries pertaining to different types of rights attached to or created or transferred to the legal heirs or other person in respect of particular land. It records how the A-Land has changed hands and what other rights are created on it. It is read in conjunction with the 7/12 extract.

8/A Extract

This is in the form of a booklet containing therein the details of Payments of Land Revenue tax, types of crop taken, owner’s name, etc. Together with 7/12 & 6/12 extract, 8/A extract gives a full view of the title

Land Revenue Tax Receipts

The Tehsildar upon payment of Land-Revenue Tax issues these receipts to the agriculturists and other cases if any.

Part – Village-Map & Block Plan

This is to be obtained to locate, identify and tally the location of the A-Land vis-a-vis the Physical location of the A-Land.

Size, shape & dimensions of the plot

These are to be noted with a particular view to determine and verify the access to the A-Land, existing or proposed. It should be tallied by an actual survey of the A-Land

What is a title search about?

A title search is the process of examining all relevant records to confirm that the seller is the legal owner of a property and that there are no liens or other claims outstanding. It is an analysis of the status of the title of a property including property description, names of title holders, how the property is held, etc. The title researcher collects the information on record for the property and compiles the results in a report called a “Title Search”.

Do I need a title search?

A title search can be sought for a variety of purpose. Some users are interested in the purchase of the property for investment purpose. These users are desirous of knowing the past history of the property as well as the present status of the property. Some users are real estate buyers, who are desirous of knowing the ownership of a property. Knowing the past history, ownership, present status, liens, mortgages, etc. of the property helps the purchaser to negotiate the price of the property. It also helps the users to keep a check on their own property by regularly updating themselves about the outstanding liens on their property, if any.

Whether I can do a title search?

A title search can be done by anyone. The records of the property can be extracted from the local departments, but to extract the relevant information, documents, etc. can be complicated and time consuming. One should know exactly what one desires, or else it can result in waste of time, energy and money. Using our services ensures that someone with experience in collecting all relevant documents is performing the title search.

What is a defect in the title search?

Anything which encumbers the owner’s right to quiet and peaceful enjoyment of the property, or which may cause the owner to lose certain portion of the property, is called a title defect.

What are the chances that a title defect would appear?

There are few chances of a title defect appearing, but a real estate transaction entered into without having a title search can lead to devastating financial consequences. Getting a title search can reduce the chances of future losses.

What is Chain of Title?

Chain of title refers to the sequence of ownership created by the repeated buying and selling of the same property. Each time a property is sold and purchased a new ownership is created which over time results in a chain of title.

What are non-occupancy charges?

A title search can reveal the details about the title and ownership of the property as well as it can also show any title defects, liens, and other encumbrances and restrictions, attached to the property, which may limit the use of the property.

Are property report and title report different?

The property report usually contains information about the current owner of the property and does not provide additional information regarding the property. The information provided by the property report is insufficient to make a decision regarding the purchase of the property. The title report provides entire details about the property including the chain of documents, liens, mortgages, etc. It helps the buyer to take a rational decision before investing in the real estate industry.

What should I inspect in a premises before renting it?

You should learn as much as you can about the condition of the premises before you hire it. You need to investigate the condition of the property and all its systems such as : plumbing systems, drainage, water faucets and sanitary fittings electrical systems, circuit breakers, wires, capacity of the electric meter, functioning of light fittings roof, walls, ceilings, floors, paintwork foundation, basement and visible structures doors and windows, latches, locks structural stability of the building fixtures and fittings electrical load • water supply

What is a Sale Deed?

With the help of a Sale Deed, also known as Conveyance Deed, the Seller transfers his rights and interest in the subject matter to the purchaser, who in turns acquires absolute ownership over the property.

Checklist for selling commercial property?

No. A deed is just a document used to show transfer of ownership and it is an evidence to show that you have purchased whatever rights the seller had in the property. A deed does not show the liens and claims that may be outstanding against the property nor does it show the rights that others may have on the property

What is a khata?

A khata includes complete details of the property, such as location, built-up area, size, name of the owner on record, etc. It is essential for the purpose of payment of property tax and to identify the person responsible for the payment of the same.

Is a khata the same as a title deed?

No. The khata is a document used for assessment of the property for payment of tax whereas the title deed is a document which defines the ownership and title of the property.

What is encumbrance?

A restriction which hinders the transfer of property is called encumbrance. Encumbrances include liens on real estate, outstanding mortgages, easements, unpaid property taxes, etc. Encumbrances are attached to the title of the property and can complicate or prohibit or restrict the transfer of the property until they are resolved.

What is a mortgage and what are its types?

A mortgage is a legal contract through which the borrower transfers to the lender an interest in the property to secure the repayment of the debt. The following are the different types of mortgages in effect in India:

  • Simple Mortgage: In a simple mortgage, the mortgagor without delivering possession of the mortgaged property binds himself personally to pay the mortgaged money and agrees explicitly or implicitly that if he fails to pay the debt and interest in terms of the mortgage deed, the property will be sold and the proceeds applied in payment of the mortgaged money.
  • Mortgage by conditional sale: In a Mortgage by conditional sale, the property is sold subject to the condition that on default in payment of the mortgaged money on a certain date the sale shall become absolute or that on such payment the sale shall become void or on such payment the buyer shall transfer the property to the seller. Possession of the property shall be with the mortgagee.
  • Usufructuary Mortgage: In this mortgage, the mortgagor delivers possession of the mortgaged property to the mortgagee who retains the possession until the satisfaction of debt. The mortgagee will take the usufruct in lieu of the interest or part payment of the principal or partly in payment of interest or partly in payment of principal. The mortgagor is not personally liable to pay the debt and the mortgagee is not entitled during the term of the mortgage to demand his mortgage money.
  • English Mortgage: In an English Mortgage, a mortgagor binds himself to repay the mortgaged money on certain date and transfers the mortgaged property absolutely to the mortgagee subject to the proviso that he will re-transfer it to the mortgagor upon payment of the mortgaged money as agreed.
  • Mortgage by deposit of title deeds (Equitable Mortgage): In this mortgage, a Memorandum of Mortgage by deposit of title deeds is prepared by the mortgagee to secure the specific mortgage money.
  • Anomalous Mortgage: It is a combination of any of the above forms of mortgage or any mortgage other than those set out above.
What is the difference between carpet area, built-up area and super built-up area?

Carpet area is the area where carpet can be laid i.e. the area which can be actually used. Built-up area includes the carpet area + area of the balcony + area of the walls. Super built-up area includes built up area + common spaces like lobby, lifts, etc.

What is the benefit of knowing the carpet area, built-up area and super built-up area of the property?

The price of the property is fixed on square feet basis. By knowing the break up of the square feet the price of the property may vary considerably. It is important to check that the square feet break up is mentioned in the agreement.

What do you mean by valuation of property?

Valuation of property means to find out the market value of the property in question. The valuation of property is based on a number of factors like, location, size, encumbrances, defects, etc.

Who calculates the value of the property?

The property valuation is carried out by valuation experts having rich and comprehensive knowledge and vast experience in valuation of property. There are various factors to be considered for correctly determining the value of the property. The valuation experts collect and evaluate the information, related to the property, in a systematic and organized manner and prepare a valuation report on the basis of the same.

What does Vastu means?

Vastu means the dwelling of humans and Gods. Vastu shastra is an ancient science which helps one get the natural benefits freely offered by the five basic elements of the universe in which we all live. These basic elements are Akash (SKY), Prithvi (EARTH), Jal (WATER), Agni (FIRE), and Vayu (WIND). Vastu Shastra can be applied by keeping in harmony with these basic five elements of nature.

What is a Lien?

Liens are used to establish a security interest in a property. When a transaction is about to take place between a buyer and seller of a property, Laywer will do a title search to see if there are any liens on the property by searching public records to get the information.

Is registration and stamping of the Deeds and Documents compulsory?

Registration and stamping of the Deeds and Documents is compulsory for any immovable property transacted over the value of Rs. 100/-.

What is a Housing Society?

Housing society is a term used to describe residential complexes usually consisting of buildings each having flats, especially in India. A housing society is a group of house owners generally residing in the same building or the same premises formed as per relevant laws for smooth functioning of utilities and other amenities provided to them. The housing society formed must be formally registered with the registrar of Co-operatives. Each state has its own rules in this regard. Each building in the same premises may have separate housing society or one. Many housing societies form one federation. Housing societies run on the fees or charges levied by them on house or flat owners.