"as is" condition
The sale, purchase, lease or conveyance of a property or item in its existing state, i.e., without any change, improvement, addition, alteration or repair. Also called “as is where is” in some countries.
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abandonment
The act of voluntarily giving up a right (of ownership or lease or any other right) over a property.
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absentee landlord / owner
Owner of a property who resides elsewhere (usually in another city or country).
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absolute title
The right of ownership of a legal estate in registered land; a title that is guaranteed by the state that no one has a better title that is subject to any minor interests or overriding interests.
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abstract
Summary of a lengthy document or piece of writing which contains all or most of the salient points of the original.
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abut
Adjacent or contiguous to. For example, if a property is adjacent or next to another, they can be said to abut each other.
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accelerated depreciation
An accounting term indicating any method of depreciation which allows owners to claim depreciation benefits at rates greater than those calculated under the straight-line method.
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acceleration clause
This is a clause in a loan deed or mortgage agreement that allows the lender to demand full and immediate repayment of a loan. It is usually triggered by an event such as default in the payment of installments or a change in the ownership.
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acceptance
The act of voluntarily agreeing to accept an offer.
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access right
The right to enter and exit one’s property from a public road or land or thoroughfare. This right is usually implied in all property transactions in almost all parts of the world, i.e., any transaction involving property is deemed to include the right to enter and exit that property. However, it is prudent to obtain legal advice on this matter as some less developed countries or jurisdictions may not guarantee this right or may require that a separate application be made to obtain right of access upon payment of certain fees to the local authority.
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accessory buildings
Annexes to a building such as servants’ quarters, sheds, garages, etc.
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accord
Agreement by which a creditor accepts less than the full consideration of the contract as full and final settlement of dues/liabilities under that contract. An agreement to this effect between a creditor and debtor is known as “Accord and Satisfaction.”
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accounts payable
Amounts owed to creditors for goods and services bought on credit.
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accounts receivable
Amounts due to a business from customers for goods and services sold on credit.
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accrual method of accounting
Method of accounting that recognizes revenue when earned and expenses when incurred in order to appropriately match income with expenses in an accounting period.
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accrue
To become due and to increase as a result thereof.
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accrued expenses
The obligation to pay business expenses that were incurred, but not paid, during an accounting period.
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accrued interest
The unpaid interest accumulated from an investment or a loan.
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accumulated amortization
A deduction from intangible assets to show the total amount of periodic charges to income over the estimated useful lives of those assets. Also called Reserve for Depreciation.
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accumulated depreciation
A deduction from fixed assets to show the total amount of periodic charges to income over the estimated useful lives of those assets. Also called Reserve for Depreciation.
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accumulated interest
Interest dues that have accumulated as a result of non-payment in the past.
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accumulation index
Financial index reflecting total return i.e., price appreciation and income return combined.
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acquisition costs
The cost of acquiring a property; includes purchase price and all other allied costs like insurance and legal fees, brokerage charges, etc.
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acre
An area of land of any shape containing 43,560 square feet or 4,840 square yards or approximately 4,047 square meters.
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acre foot
A volume of space covering one acre and with a depth of one foot (43,560 cubic feet or 1,233 cubic meters).
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acreage
Vacant land. Also refers to any plot of land that is measured in acres or any plot of land that has no sub-divisions.
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act of god
Damage caused by nature. Example: floods, hurricanes, tsunamis, etc. Also known as force majeure. An unexpected event that prevents one from complying with certain terms and conditions in a contract.
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action to quiet title
Legal proceedings that conclusively establish ownership over a property.
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actual cash value
The price at which a property can be sold at a given point of time.
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ad valorem
Literally, according to the value. Applied, for instance, to a scale of stamp duty, inheritance tax or fees.
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addendum
Something that is added to an existing document. Example: supplementary to an agreement.
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additions
Modifications to a building by adding on structures or creation of additional space, resulting in an increase in dimensions or useable or covered areas.
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ad-hoc
Latin term signifying a decision for a given situation only or specific to.
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adjacent
Next to. May or may not be connected to.
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adjoining
Next to and connected to.
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Adjustable Mortgage Loans (AMLS)
Also called floating rate loans, flexible rate loans, variable rate loans and adjustable rate loans. Here, the rate of interest varies and is adjusted from time to time to coincide with the rate prevailing in the economy or to a pre-determined peg.
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adjusted gross income
Total rental income of a property at full capacity minus amounts that cannot be collected on account of vacancies and other reasons.
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administrator
A person appointed by a court to manage an estate while testamentary proceedings are on. This person also distributes the estate of a deceased person in accordance with the orders of the court.
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adverse gearing
Where the total annual cost of borrowed money on a property or project exceeds the net rental income.
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aerial survey
A survey of an area made by taking sequential photographs from an aircraft; plans are then drawn from the photographs.
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aesthetic value
The value of a property deriving from its architectural beauty or natural or manmade surroundings.
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affidavit
A statement or declaration made in writing and under oath before a competent (usually court) official.
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affirmation
Substitute for an oath.
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afforestation
The planting of a forest where none previously existed.
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agency
Person or body corporate acting under the orders and authority of another. The scope of such authority is usually specified in the agreement between the two parties.
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agency agreement (agency listing)
The term describing a listing under which the broker’s commission is protected against a sale by other agents and often by the principal.
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agent
One who acts on behalf of a principal.
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agent’s commission
The fee payable for services rendered by a real estate professional.
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agrarian
Relating to land, or to a division or distribution of land.
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agreement for lease/sale
It is a contract by which land or property is leased or sold by one party to another.
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agricultural property
Land which is used for agricultural purposes or for the purpose of raising livestock.
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air rights
This is the right to use the space above a property. It does not include the right to use the land surface on which the property is located.
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alienation
To transfer the ownership of a property from one person to another.
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alley
A narrow path.
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allodial tenure
Absolute right of ownership over real estate assets which can be bequeathed / sold / gifted or otherwise disposed of by the owner according to his wishes.
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alterations
Modifications in a building without changes to its dimensions.
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alternative user value
The value of land and buildings which reflects a prospective use which is different from that of the current use.
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amendment
A change or alteration in an agreement or court document.
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amenities
Those facilities, like swimming pools, jogging tracks, health clubs, etc., which add value to a building.
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amortization
1) The concept of writing off the capital cost of a wasting physical asset by means of a sinking fund. 2) Payment of a debt in equal installments of principal and interest, as opposed to interest only payments.
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amortization rate
The rate of interest used for purposes of amortization. The percentage of a periodic payment that is applied to the reduction of the principal; in a level-payment mortgage this corresponds to the sinking fund factor.
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amortization term
The period, usually expressed as a number of years coinciding with the useful life of an asset, over which the value of the asset is written off.
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amortize
To bring down outstanding debt by regular payments referred to above.
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anchor tenant
One or more department or variety chain stores, supermarkets or hypermarkets, introduced into a shopping center in key positions to attract the shopping public into the center for the purpose of encouraging other retailers to lease shops en route. The larger the development the more anchors required.
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ancillary use
A planning term describing the use of a property in a manner different from, but functionally related to, its main use.
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annexure
A written or visual addendum which is attached to a legal document (not necessarily an agreement), e.g., floor plan, structural certificate, etc.
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annual debt service
Amounts of principal and debt repayments due per year.
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annual sinking fund
A sinking fund where payments and interest accumulated are calculated yearly.
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annuity
The payment of a certain sum of money to a person annually for life or for a given period of years.
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annuity method
Method for appraising the present value of a property which takes into account expected future incomes before depreciation.
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apartment
A form of property ownership in which each owner holds title to his / her individual unit, similar to western definition of condominium.
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apartment hotel
A property offering guests a complete self-contained sole occupancy unit consisting of bedrooms, a living room, a kitchen with full cooking facilities and dining area. Usually requires a hotel license to operate as such. Serviced apartments which are let on a daily basis function like an apartment hotel.
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appraisal
Alternative term for valuation.
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appraiser
One who carries out appraisals (valuations). The term is used in the USA for a valuer.
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appreciation
Increase in the value of a property.
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arbitrage
The system by which dealing in securities is carried out in order to profit from a variation in the price quoted in different markets. Often effected by buying and selling in two different markets at the same time in order to profit from the margin.
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arbitration
A method of resolving a disagreement between two parties by presenting their different views to an independent arbitrator. The award is binding on the parties but an arbitrator’s decision can be challenged in a court of law under certain circumstances.
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arbitration clause
A clause in a contract providing for disputes arising from the contract to be referred for the decision of a third party (arbitrator). Common examples are disputes over rent review clauses in leases or the terms of building contracts.
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arbitrator
An impartial person who is appointed to settle a difference between two parties.
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arm’s length
Term implying the absence of any special relationship between two parties that could lead to claims of partiality or impropriety.
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arrears
1) Money paid after the due date. Thus a debt is in “arrears” if unpaid after the due date.
2) Rent is said to be paid in arrears where the lease provides for the rent for a particular period to be paid at the end of that period.
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asbestos
A material that is resistant to fire and heat and was previously used in insulation. It is now linked to cancer.
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asking price
The price at which vendor offers a property for sale. The eventual selling price may be different after negotiation with the purchaser.
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assess
To calculate the value or worth of a property usually for the purpose of taxes or sale.
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assessed value
The value assigned to a property by a tax authority.
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assessment
The act of assessing.
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asset
Something owned by and having continuing value to its owner or a business.
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asset allocation
Allocation of a portfolio between real estate, equities, bonds and cash based on a fund manager’s risk-return preferences.
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asset management
Active approach to asset acquisition / disposal and property management with the objective of optimizing asset performance.
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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 of interest to, for example, shareholders or is required for company takeovers, share flotation’s or mortgages.
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assign
Transfer any interest or the right of ownership over a property or any other asset.
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assignee
One who receives the right of ownership over a property or any other asset.
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assignment
The act of transferring ownership of something from one person to another.
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assignment of lease
The transfer by a lessee of all his rights over a leased property. In such a case, the assignee becomes a lessee under the original lessee. Some leases contain clauses specifying the conditions under which leases can be assigned. Assignment of lease is different from sub-lease and the two should not be used as synonyms.
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assignor
The person who assigns an agreement to another.
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