Does real estate excite you? Do you want to know in detail about terms being commonly used in the sector? Here, we have compiled a list of commonly used real estate jargon. Some of the terms have assumed more importance following the enactment of Real Estate Regulation Act (RERA), 2016 SINCE May 1, 2017 across the country. Buyers must know the technical implications of such jargon.
Amenities are the enhancements that builders offer their owners or tenants. These usually include a doorman, health club, garage, children's playroom, common lounge, etc.
Amortisation is the periodic payment of principal and interst on a liability (including a mortgage), or the write-off of a non-depreciable asset over a scheduled term.
Appreciation is an increase in the value of a property due to changes in market conditions or other causes over a period of time
Benami ownership - in benami ownership the title of the property is in one party's name an dthe real ownership is in another party's name.
Built-up area/carpet area/super built up area. Carpet area is the area enclosed within the walls and is 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. Built up area is the carpet area plus the thickness of outer walls and the balcony. Super built up area i the built up area plus proportionate area of common areas such as the lobby, lifts, shaft, stairs, etc. Sometimes, it may also include common areas like swimming pool, garden, clubhouse, etc. According to the provisions of RERA it is now the duty of the developer to make buyers aware of the carpet area and quote prices based on this and not the super built-up area.
As per RERA, carpet area is defined as 'the net usable floor area of an apartment, excluding the area covered by external walls, areas under service shafts, balcony or veranda, open terrace area, but includes the area covered by the internal partition walls of the apartment.
Collateral is an asset (such as car/home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract. In a housing loan scenario, collateral would mean additional security over and above the security of the property being financed.
Estimated cost of a real estate project - as per RERA estimated cost of a real estate project means 'the total cost involved in developing the real estate'. Per article VII of the Act penalties would be imposed ont he promoter for violations prescribed under the Act, based on the estimate cost of the real estate project.
Escrow account - RERA provides that the promoter shall maintain a 'separate account' for every project undertaken by him wherein seventy per cent of the money received from the allottees shall be deposited for the purpose of construction and land cost. The account has to be self-maintained and is not an escrow account requiring the approval of the authority for withdrawal.
Commencement Certificate is a certificate issued by the appropriate local authority certifying that the construction may commence. Typically, this is done after the concerned party has obtained sanction of plans for the construction of a multi-storeyed building and has put the columns in place indicating the building boundaries.
Common areas are those portions of a building, land and amenities owned (or managed) by a planned unit developemnt (PUD) or condominium project's homeowner's 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 and parking areas.
Co-ownership is when there are more than one owner for an immovable property, the status of the property is known to be of the co-ownership type. A co-owner can do whatever he or she wishes with his or her part of the propperty as long as he/she does not affect the share of the co-owners.
Completion Certificate relates to the completion of the entire project certifying that the project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority.
Deposit is 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 amount paid to a landlord as part of a rental transaction.
Depreciation is a decline in the value of property brought about by age, physical deterioration, functional or economic obsolescence, etc.
Encumberance certificate is a report issued by the Registrar of Assurances for Sub-Registrar's office after due verification of the relevant documents certifying that the property in question is free from a encumberances such as mortgages, leases, easements or restrictions.
Freehold property is a property where title paramount has conveyed the property in favour of the purchaser by conveyance/sale deed with no restruction 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.
FSI (Floor Space Index)/FAR (Floor Area Ratio) is the maximum amount of construction permitted on a given plot of land. It depends on the plot area and varies from locality to locality based on factors such as the road width.
Loan-to-Value Ratio (LTV) is the ratio of the amount of your loan to the appraised value of the home. The LTV will affect loan programmes available to the borrower and generally, the lower the LTV, more favorable the terms of the loan programmes offered by lenders.
Occupancy Certificate relates to the occupation of the apartment/building which has provision for civic infrastructure such as water, sanitation and electricity and is habitable.