Real Estate Glossary

ABSENTEE LANDLORD
An owner or sub-lessor who does not reside in the place or area in which he/she owns real estate from which he/she derives rental income.
ADJUSTMENTS
Apportionment of rates, taxes, body corporate fees, rent, insurances etc up to the date of possession or settlement on a sale or letting.
ADVISOR/AGENT
A person authorised to act for another (usually for the owner) in the selling, buying, renting or management of a property. Commonly used to refer to licensed real estate agents and real estate representatives.
APARTMENT
A room or suite of rooms used as a dwelling unit. Not necessarily self-contained. The term flat is used to describe a self-contained dwelling unit in multi-unit dwellings.
APPRAISAL
The term commonly used in America to indicate what is termed in Australia as a Valuation. In Australia, the term means an opinion of the potential saleability/let-ability of a residential property by a licensed Real Estate Agent.
ARREARS
Unpaid debts.
AUCTION
A sale usually in public, by an auctioneer, in which property is sold to the highest bidder.
AUCTIONEER
One who is licensed to sell, or offer for sale, real estate where persons become purchasers by competition, being the highest bidders.
BOND (RENTAL)
Consideration held usually under a lease to ensure performance of lease terms and conditions. Normally refundable if possession of property is returned in good condition.
CAPITAL GAIN
The amount by which the net proceeds from resale of a capital item exceed the book value of the asset.2 Refer to The Australian Tax Office (ATO).
CAPITAL GAINS TAX
A Commonwealth tax payable on the Capital Gain made on the sale of an investment property. Refer to current requirements of the Australian Taxation Office (ATO).
CERTIFICATE OF TITLE
A document issued under the Torrens System of Title, showing ownership and interest in a parcel of land.
CHATTELS
Any fixed asset other than freehold land. Items such as machinery, implements, tools, furnishings, fittings, which may be associated with land use, but which are not fixed to the land or premises or, if fixed, may be removed without causing structural damage to a building. Legally known as personalty.
CLIENT
One who engages the services of an agent or valuer and to whom the agent or valuer should look for payment of his commission or fees, in return for services rendered.
COMMISSION
The fee or payment made to an agent for services rendered, such as the sale of property, often calculated with reference to the value of the property, contract or agreement.
COMMON PROPERTY
(a) Land or a tract of land considered as the property of the public in which all persons enjoy equal rights. A property not owned by individuals but by groups; (b) In a home (villa) unit or flat development that part of the property owned and used in common by all the unit or flat owners or occupiers and which is maintained by the Owners Corporation.
CONDITIONS OF SALE
The conditions applicable to a sale contract made between a vendor and purchaser.
CONSIDERATION
Payment in the form of money or other form of benefit in exchange for an agreed action (e.g. the receipt of goods and / or services).
CONTRACT
A legally binding agreement.
CONTRACT OF SALE
An agreement relating to the sale of property, which expresses the terms and conditions of sale.
CONVEYANCING
An deed which transfers ownership of common law title from one person to another.
COOLING OFF PERIOD
A short statutory period after the contract is made, during which the purchaser may cancel the contract unconditionally. Usually does not apply in the case of auctions.
DATE OF SETTLEMENT
The date on which a contract of sale is finalised and final payment is made.
DEPOSIT
Percentage of total consideration, or an agreed amount, paid on exchange of contract for purchase of an asset.
EQUITY
(a) A synonym for a share (as distinct from fixed interest) investment3; (b) the interest or value that an owner has in an asset over and above the debt against it. For example, a home-owner has equity in that part of the value of his or her house above the amount borrowed from a lender.
EVICTION
Removal of an occupant, either tenant or owner, by law enforcement for failure to perform as promised on a note or lease contract.
EXCLUSIVE LISTING/AGENCY
Where a single agent only is appointed to sell or lease a property under an Exclusive Agency Agreement. Under the terms of an Exclusive Agency Agreement, the appointed agent is usually entitled to any commission resulting from a transaction relating to the property, even if it is sold/leased by another agent or the vendor during the term of the agreement. Also known as an Exclusive Agency or a Sole Agency.
FITTINGS
Installed items that may be removed from real estate without causing irreparable damage to the land, structure or use of the premises.
FIXTURES
Those parts of a property affixed to structures or land, usually in such a manner that they cannot be independently moved without damage to themselves or the property housing supporting or pertinent to them. Fixtures are usually included in a sale and commonly include items such as carpets and awnings.
INVESTMENT
Property (land or a building – or part of a building – or both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both.
INVESTMENT PROPERTY
Property (land or a building – or part of a building – or both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both.
LANDLORD
The owner of leased property. The lessor.
LEASE
An agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time.
LICENSED REAL ESTATE AGENT
A Licensed Real Estate Agent may perform the activities in the conduct of a real estate business. He/she is licensed to hold responsibility for an agency’s legislative compliance activities.
LISTING
(a) A term commonly used by agents for obtaining an instruction to sell or lease real estate; (b) The recording of properties as being available for sale.
MANAGEMENT AGREEMENT
A written contract recording the agreement between the owner and manager of real estate concerning the duties, responsibilities and liabilities of the owner and the manager in the management of that real estate.
MANAGEMENT FEE (PROPERTY)
The fee charged by the property manager to the landlord for the service of managing a property or properties. This service typically includes collecting rents, paying recurrent property expenses, selecting and supervising property service contractors such as cleaners, plant service providers and security. It may also include negotiating new leases, marketing of the property, rent reviews and overseeing building refurbishment. In respect of property trusts, it refers to the fee levied on unit holders by the responsible entity to cover the cost of trust administration.
MARKET PRICE
The price actually paid, or agreed in a contract to be paid, for an asset. It differs from market value in that it relates to an accomplished fact, whereas market value is and remains an estimate until proved. Market price may involve circumstances not normally included in market value.
MARKET VALUE
Market value is the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion.
OFFER
The consideration offered to purchase or lease an asset.
OUTGOINGS
The expenses incurred in generating income. In real estate, these expenses include, but are not necessarily limited to, property rates, insurance, repairs and maintenance and management fees.
OWNER
In relation to land, the owner includes every person who jointly or severally whether at law or in equity: (a) is entitled to the land of an estate in freehold possession; or (b) is entitled to receive rent or profits thereof, whether as beneficial owner, trustee, mortgagee in possession or otherwise.
OWNERS CORPORATION (FORMERLY BODY CORPORATE)
(a) A term used in the Strata Titles Act to describe the body representing the building owners; (b) The control and administration of common property is vested in a statutory Body Corporate which comes into existence automatically on the registration of the plan, and to which the provisions of the Companies Act do not apply. The registered proprietors of the units are the only members of the Body Corporate. Associated rights and obligations are fixed by scheduled by-laws.
PERIODIC LEASE
Where a tenant continues to rent / occupy the property after the lease has formally expired.
PRINCIPAL
(a) A term used in most Australian contracts in lieu of ‘client’ or ‘proprietor’; (b) A licensed estate agent holding responsibility for an agency’s legislative compliance activities including legal responsibility for trust accounts.
PRIVATE SALE
Where an owner offers a property for sale without engaging an agent.
PROPERTY MANAGEMENT
The management of a property on behalf of the owner. For example, the leasing of space, collection of rents, selection of tenants and generally the overall maintaining and managing of real estate properties for clients.^ Top
RENT
A payment made periodically by a lessee to a lessor for the use of premises.
RENT REVIEW
A periodic review of rental under a lease using a predetermined method. For example, an increase in line with Consumer Price Index (CPI) or in accordance with a market valuation.
RESCIND
To terminate a contract of sale.
RESERVE PRICE
The lowest acceptable price fixed by the vendor.
RESIDENTIAL TENANCIES TRIBUNAL
Specialist bodies exist in most Australian States and Territories to resolve disputes between landlords and residential tenants in low-cost manner, usually without the involvement of lawyers. Specifically, these bodies in Victoria are the Victorian Civil Administrative Tribunal (VCAT).
RIGHT OF ENTRY
Where a landlord may inspect the premises, provided reasonable notice is given to the tenant.
SETTLEMENT
This is the final stage of the sale when the purchaser completes the payment of the contract price to the vendor and takes legal possession of the property.
SETTLEMENT DATE
The date on which a contract of sale is finalised and the balance of money is paid for an asset.
STAMP DUTY
The tax imposed by state governments on certain contracts (e.g. Contracts of Sale and Registered Leases). The amount of tax payable is calculated as a percentage of the contract value. See also individual state legislation.
STRATA PLAN
The registered plan of a strata title property showing the boundaries of lots and unit entitlements. Pursuant to legislation on strata or unit titles.
TENANCY AGREEMENT
A form of lease, generally in an abbreviated form. It may be registered on an owner’s certificate of title.
TENANT
A person or entity paying rent in exchange for the occupancy of a building or dwelling.
TENDER
A person or entity paying rent in exchange for the occupancy of a building or dwelling.
TITLE
The form of ownership of real estate (i.e. Torrens, strata or company title).
VACANCY RATE
The proportion of inhabitable rental premises which are vacant.
VACATE
To give up occupancy; to make vacant; move out of property.
VALUATION
a) The process of estimating value. (b) The prediction of the value of an asset at a point in time, depending on the purpose for which the valuation is required.
VALUER
A person who is: (a) registered / licensed / approved to carry out property or plant and machinery valuations under any State, Territory or Commonwealth legislation; and / or (b) a member of the Australian Property Institute who is accredited as a Certified Practising Valuer.
VENDOR
One who sells anything. In real estate transactions, the person(s) or entity selling the property.