For your convenience please find following a list of real estate terms and there related meanings. If you need any further information or assistance please do not hesitate to contact us at Tony Cant Real Estate.
Abatement - A covenant in a lease or a right to rent reduction because of a certain happening (fire, water damage, structural repairs etc
Abstract of Title – A document setting out the history of the title which is provided in the sale of the old system land.
Agistment - A right to graze stock on the land of another (usually for a fee)
Agreement for Lease - Formal written agreement for lease but generally part oral and partly embodied in exchange of letters between solicitors for the parties. Determined by the ordinary rules of contract.
Appraisal - A term used in America for a valuation. In NSW it is generally taken to mean an agent’s opinion as to current reasonable selling price.
Auction - Sale by public outcry subject to any reserve decided by the owner.
Assignment - The sale or transfer of a lease to another party. Right to assign or prohibition of assignment is a critical factor in leases. A guarantee usually accompanies the assignment of the balance of the lease.
Base Rent - a set sum or series of set sums from which rent is determined generally using turnover provisions.
BASIX - Building sustainability Index System. (Green building practices). Applies to all new buildings and to all renovations and additions to building and to all renovations and additions to buildings from 2006
Binding - Legally enforceable.
Bond - With residential properties it is any security received by a landlord (or his agent) against failure by a tenant to comply with nay terms or conditions of a lease. (Lodged with Rental Bond Board and subject to the provisions of the Act)
For non – residential properties it may take many forms according to the lease (bank guarantees).
Breach - Failure to honour a contractual agreement or an equitable duty.
Building Certificate - Basically a certificate of “non-action” issued by the Council.
Building code of Australia - (BCA), is the sole mandatory building regulation for the State. It is many times referred to as the Building Fire Code (Was known as Ordinance 70)
Capitalisation - A method of valuing property base on the net return of the property and the current yield expected by the market for this type of property.
Caveat - An injunction lodged with the Land Titles Office claiming an interest in land and acts as a warning to those dealing with the land. (See indefeasibility)
Caveat Emptor - Let the buyer beware.
Certificate of Classification - A certificate issued by the council which indicates the class of classes of buildings (whole or portion of). It is an offence to use a building for a class not approved. Mainly to do with fire regulations (See BCA)
Charge - A security over property
Chattel - Property which is not land, which is moveable and tangible
Chose - A thing of object.
Civil Action - Any legal action other than criminal.
Commission - Fees for undertaking the selling (agreed or subject to maximum)
Community Title –Allows for community title to land other that individual lots
Company - Corporation
Company Title - A share in building with certain rights of occupation of a unit in the building
Complete (Notice to) - A notice which may be served by either party to force settlement.
Consumer Price Index –An index quarterly provided for each capital city of changes in cost of a basket of goods and services. Often used in non-residential adjustments.
Contract - An agreement made between two or more parties and intended to be enforceable at law
Conveyance - Legal instrument by which land or interests in land change ownership.
Cooling off period - (Residential Sales). A five business day period generally available to a purchaser to withdraw from a contract for the purchase of residential land.
Corporation Licence – As well as being incorporated under the Companies Act, a company acting in real estate must have a corporation license under the Auctioneer and agents Act.
Covenant - An agreement, promise or condition contained in a contract (deed), whereby one party pledges to another that something will be done or abided by
Covenant Chargee - The holder of a positive covenant which requires the owner of the land burdened by the covenant to do some act (repair) or make an expenditure of money.
Curtilage - The area surrounding the main dwelling on the same title.
Damages - Generally liquidated damages for non-performance.
Deed - A written document which is signed, sealed and delivered.
Default - Failure to carry out a duty or obligation.
Depreciation - The diminution in value of land, generally buildings, through any cause. May be actual or an accounting or taxation exercise.
Disclosure - The now statutory requirement regarding the conveyance of residential land.
Drainage Diagram - One of the essential documents which muse accompany the contract for the sale of residential property supplied by the local Water Board showing drainage lines.
D.S.E. - Dry Sheep Equivalent is a term used to indicate carrying capacity or the ability of the land in normal conditions to support a given number of sheep, cattle or beasts per hectare (1cow = 3 dry sheep)
Easement - A right enjoyed by the owner of land over the lands of another (Generally registered on the title)
Ejectment - Legal remedy to recover possession of land.
Encroach - To intrude upon other land.
Encroachment - Part of a building, fence or overhand incorrectly erected on or over the land of another (will be established in the survey.
Encumbrance - Any type of disability or burden that affects land (Crown reservations, easements, covenant or restriction – generally recorded on the title)
Essential documents –Those documents which must be available with the Contract for the Sale of Land before it is listed.
Estate - An interest in land
Estoppel - Where a person is prevented from denying something which they by words or conduct have lead another person to believe.
Exclusive Agency - Where an agent is given the exclusive right to sell the property
Existing Use Right –A use which does not conform with the current zoning, but which was previously a legal use and so retains the right to continue such use. (Also know as non conforming use)
Express - Direct, written or spoken
Fee simple - Absolute ownership of land
Fixtures - Things which become part of the land be being attached to the land. Tenants’ fixtures are those that may be removed at the end of the lease or are under hire purchase. Landlords’ fixtures are those that were fixed by the landlord or have become part of the land by being fixed
Forfeiture - The taking away of the Lessee’s interest generally by the lessor exercising a right of re-entry provided in the lease for some specified breach of the lease.
Gazumping - Where a property is for sale at a price and this is then increased as prospective purchasers compete for the property
Goodwill - A value attributed to the business separate form the real estate which revolves around the continuity of operation on the same site and the customer support which is this available
Guarantees - A covenant in the lease to protect the lessor in case of default on the part of the lessee.
(See Assignment)
Gross Rent - The total amount of rent received (usually on a per annum basis.
Ground Rent - Rent paid for the long term lease of land generally on which the tenant may erect a building.
Heritage Act - An act to provide for the protection of works, buildings or places
Improvements – Work done to land or buildings to improve its value
Indemnity - A promise or duty to make good any loss
Injunction - Order of a court not to do something (prohibitive) or to do something (mandatory)
Judgement - An order or decision of a court
Lease - The right to exclusive possession for a period on the payment of rent or other consideration.
Lessee - Tenant
Lessor - Owner
Liability - A legal obligation
Licence - The right to do something in relation to land which would otherwise be a trespass (cross land, graze sheep, take water, serviced rooms etc)
Lien - A right to retain possession
Listing - The act of giving a property to an agent to sell (requires formal written agreement)
Market Value - The price, value or rent that is available in the general market place relating to real property
Mitigation of Damages – An express or implied duty on the lessor to mitigate or seek to limit his damages (such as by re-letting).
Mortgage - A charge on the land which is generally registered on the title
Mortgagee - Lender
Mortgagor - Borrower
Multiple Listing - Where an agent is given an exclusive listing with written instructions t list it with other agents in the multi list group (unless instructed to do so an agent is not required to multi-list a property).
Negligence – Absence of reasonable conduct (duty of care)
Net return - The sum left from the gross return when all outgoings and costs have been deduction (usually on a per annum basis) (Does not include interest on funds borrowed)
Non-conforming Use – A use which does not comply with the current zoning, but it still may be a legal use. (Also known as existing use rights)
Notice of Sale (or transfer) - A document submitted to the Land and Property Information NSW (LPI) confirming the sale or transfer of real property. The local
Council, Water Authority and The Valuer General are also notified (usually electronically) of the transfer. (For rating and taxing purposes)
Obligation - A legal duty
Open listing - Where a property is listed with more than one agent (only one commission is paid)
Old system - A type of land holding based on a series of transactions going back to a good root of title.
Option - A covenant in a lease allowing the lessee to take up a lease for a further period at a rent already determined or to be determined by some formula or a right to purchase.
Personal Property - Moveable goods (chattels)
Plants and Fittings - Items which have not become fixtures and do not form part of the real estate.
Precedent - A legally binding court decision
Precinct - A term used to describe an area in an L.E.P (Local environmental Plan) that is subject to special planning provisions, such as historic or federation. Any development is subject to special consideration.
Premium - a lump sum paid by the lessee in advance. As it is rent in advance (rent is generally paid as well) to find out equivalent periodic rent you must adjust using interest tables (present value of $1 per annum using appropriate interest rate)
Prescribed documents - These are the essential documents which must accompany the Contract for the Sale of residential land.
Priority - Right over other claims
Private Sale - Where the owner undertakes the selling of a property
Private Treaty - A sale by an agent no involving an auction
Property - Anything that may be owned real or personal
Re-entry - The act or right of the lessor to re-enter and take possession of the premises.
Registration - The registration of a document or a lease at the Land and Property Information NSW
R.E.I - Real Estate Institute of New South Wales. An industry group representing licensed agents.
Release - To Discharge a legal right
Repudiation - Unwillingness or inability to perform the obligations of the lease.
Remedy - A right to a claim or damages
Requisition on Title – A standard form or list of questions asked of the vendor by the purchaser to seek information regarding title. Of little consequence since new warranty and vendor disclosure provisions
Rescind - Cancel, revoke or terminate
Restrictive Covenant –A covenant which is some way restricts the use of the land and binds present and future owners
Resume - Compulsory taking of land by the crown
Right - A benefit or interest recognised at law
S.A.V. - Stock of Value. When purchasing a business you pay so much for the business (goodwill and/or profit rental) and then for the stock at wholesale price.
Seal - A formal signature or imprint
Search - In essence a search or check of Old System Title back to a good root. (Usually 30 years). Often with Torrens Title, it simply means obtaining a printout of the folio of the Register
Sole Agency - Where one agent is given the sole right to sell the property. The owner retains the right to sell the property privately as well.
Specific Performance – Sought when damages for non-performance is not considered adequate. A request to specifically comply with the contract
Stock Mortgage - Security for monies, advanced by means of a mortgage over livestock and registered at Land Titles Office
Strata Title - The subdivision of land and buildings into individual strata lots which can be sold separately
Surrender - The act of terminating both the lessee’s interest and the contract. Requires the consent of both parties or by operation of law.
Survey - Process of establishing the extent of the land and buildings on the land particularly in relation to adjoining properties.
Tender - Invitation to submit offers in writing, generally in accordance with terms of the tender documents
Title - Ownership of real property as evidenced by documents
Torrens Title - Good title simply by registration. In New South Wales often referred to as Real Property Act Land. Land registered under the Real Property Act.
Tort - A civil wrong which is not contractual.
Trust Account - A bank account into which an agent must pay all monies received on behalf of another person
Turnover - Total gross sales and a criteria used in shopping centre leases.
Use - Whether the premises can be legally used for the use intended. It may involve a change of use which requires a development application that must comply with fire regulations (Building Code of Australia) (B.C.A)
Valuation - An investigation as to the highest and best use to which land may be put to establish its market value (by a registered valuer)
Vendor - seller
Waive – To disclaim or renounce a right
Warranties - promises or undertakings express or implied
Warranty - Since 1 May 1986 every vendor of residential land is deemed to have included in the contract the prescribed warranties referred to in the regulations (as with vendor disclosure it limits the concept of caveat emptor)
W.I.W.O - Walk in walk out. A set sum is paid for the business generally, including stock, fittings etc.
Zoning - Statutory restriction on the use of land in a planning instrument (uses permitted and prohibited). One of the key elements of Section 149 Certificate)