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.
ABSTRACT OF AUCTION - A summary of
the auction advertisements which appears in the property page of a
newspaper.
ABSTRACT OF TITLE - A chronological
summary of conveyances, mortgage or leases and other deeds giving the
names of the parties and the description of the land, arranged to
show the continuity of ownership of general law land not under the
Torrens system.
ACCELERATION CLAUSE - A clause in a
mortgage document which requires the immediate repayment of the
entire balance due under the said mortgage at any given time should
there be a breach of the conditions of the mortgage e.g. repayment
default.
ACCESS RIGHTS - The right of ingress
to and egress from a property that abuts upon an existing street or
highway. Details will be shown on Certificates of Title of both
parties granting and receiving the right.
ACCESSIBLE HOUSING - A dwelling
designed to allow easier access for physically disabled or vision
impaired persons.
ACQUIRING AUTHORITY - A government
department, local authority or other body empowered by statute to
acquire land compulsorily.
ADAPTABLE HOUSING - A dwelling
designed to facilitate low-cost modification to enhance access for
physically disabled or vision impaired persons.
ADJUSTMENTS - Apportionment of
rates, taxes, body corporate fees, rent, insurances etc up to the
date of possession or settlement on a sale or letting.
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.
AGENTS IN CONJUNCTION - Two or more
agents who agree to sell or lease real estate and share commission.
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 of
a residential property by a licensed Real Estate Agent.
APPRECIATION - An increase in value.
ARBITRATION - The determination of a
dispute by one or more independent third parties rather than a court.
Arbitrators are appointed by the parties in accordance with the terms
of the arbitration agreement or in default by a court. The
arbitration is conducted pursuant to the Arbitration Acts in each
State and the award given by the arbitrator/s binds the parties.
ARREARS - Unpaid debts.
ASSESSED, RATEABLE, OR TAXABLE VALUE
- A value which is based upon definitions contained within applicable
laws relating to the assessment, rating, and/or taxation of real
property.
ASSUMPTION OF MORTGAGE - When a
buyer takes ownership of real estate encumbered with a mortgage and
has assumed the responsibility as the guarantor for the unpaid
balance of the mortgage. Such a buyer is liable for the mortgage
repayment.
AUCTION - A sale usually in public,
by an auctioneer, in which property is sold to the highest bidder.6
AUCTION AGENCY AGREEMENT - An
agreement that the vendor must sign when a property is listed for
auction. Details the reserve price and the costs of the auction,
including advertising and the agent's commission. Usually includes a
condition that one agent will have the exclusive right to sell the
property for a period during and after the auction.
AUCTIONEER - One who is licensed to
sell, or offer for sale, real estate where persons become purchasers
by competition, being the highest bidders.
BASIS POINT - One percent (1%) is
the equivalent of 100 basis points.
BID - A verbal or written offer to
purchase.
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.
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.
BUILDING CODE OF AUSTRALIA (BCA )-
Sets minimum community standards for buildings in terms of health,
safety and amenity in buildings for regulatory purposes.1 Produced by
the Australian Building Codes Board (ABCB), refer to www.abcb.com.au
BUILDING INSPECTOR - An authorised
person who is responsible for checking buildings in the course of
construction and completed buildings to ensure that they have been
constructed in accordance with building control provisions.
BUILDING LINE - The setback from the
site boundary required by statutory authorities for buildings.
BUILDING REGULATIONS - The Building
Code of Australia and other regulations stipulated by local
authorities relating to the design and construction of buildings.
BUILDING RESTRICTIONS - Planning and
development controls that limit the use, size and location of
buildings or other improvements on land.
BUSINESS BROKER - An estate agent
licensed to sell businesses.
BUYER'S MARKET - The condition which
exists when, under competitive conditions, the pressures of supply
and demand are such that market prices are at a relatively low level,
giving the buyer an advantage. An over-supply causing prices to
decline.
BUYER'S AGENT - Represents a
property buyer in negotiations with a vendor or his/her agent. The
buyer's agent is paid by the buyer. Buyer's agents should be licensed
to act as a buyer's agent.
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).
CAVEAT - A notice on title
proclaiming a possible interest other than that of an owner.
CAVEAT EMPTOR - 'Buyer beware', that
the risk in a property transaction lies with the purchaser.
CERTIFICATE OF TITLE - A document
issued under the Torrens System of Title, showing ownership and
interest in a parcel of land.
CHATTELS - Any 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.
COMMERCIAL PROPERTY - Property
intended for use by all types of retail and wholesale stores, office
buildings, hotels and service establishments. In many property
circles, commercial property refers specifically to office property.
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 (OPEN) LISTING - See Open
Listing.
COMMON LAW TITLE - A system of title
based upon traditional English land laws which depends upon tracing
the ownership of the subject land from the original Crown grant
through all succeeding dealings.
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 Body Corporate.
COMPANY TITLE - (a) Method of
obtaining ownership of real estate by way of company shares (usually
preceded Strata Title Act); (b) Under Company Title, land and
buildings are owned by a private company. The company's shareholding
structure is organised so that ownership of a certain number of
shares entitles the shareholder to exclusive possession of a part of
the building.
COMPOUND INTEREST - Where interest
is calculated on a sum that includes previous interest payments.
COMPULSORY ACQUISITION - Where an
asset is acquired by a statutory authority through legislation,
irrespective of whether an owner is willing to sell or not.
CONDITIONS OF SALE - The conditions
applicable to a sale contract made between a vendor and purchaser.
CONJUNCTION AGENCY - See Agents in
Conjunction.
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.
CONVEYANCE
- An deed which transfers ownership of common law title from one
person to another.4
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.
COUNTER OFFER - A new offer as to
price, terms and conditions, made in reply to a prior unacceptable
offer. Normally the counter offer terminates the previous offer.
CROWN LAND - Unalienated land owned
by a State or the Commonwealth Government.
DATE OF SETTLEMENT - The date on
which a contract of sale is finalised and final payment is made.
DEED - A document executed under
seal. For example, a conveyance.
DEPOSIT - Percentage of total
consideration, or an agreed amount, paid on exchange of contract for
purchase of an asset.
DEPRECIATION - (a) In accounting
terms, the writing down of the original cost of an asset
systematically over the life of that asset; ( b) An effect caused by
physical deterioration, or obsolescence, or both; (c) In valuation
terms, the writing down of the current cost of an asset to calculate
its current value. The accumulated effect on the value of an asset
due to physical, functional, technological and economic obsolescence.
DEVELOPMENT APPROVAL - Approval from
the relevant planning authority to construct, add, amend or change
the structure of a property.
DISBURSEMENTS - Recoverable costs.
For example, in the case of real estate sales, expenses paid by an
agent on behalf of an owner, such as advertising, rates and taxes.
DISPLAY HOME - A building which
represents a completed example of a dwelling type offered for sale.
DRY ROT - Decay of seasoned wood
caused by fungus.
EASEMENT - A right to use the land
of another (not involving the taking of any part of the natural
produce of that land, or any part of its soil) or a right to prevent
the owner of that land from using that land in a particular manner.
Most commonly used where Government authorities have the right to
run, for example, electrical mains or drainage through private
property. Some form of compensation may be payable.
EFFECTIVE
AGE - The age of an item, such as a building, as indicated by its
physical condition and utility compared to its useful life, in
contrast to its chronological age. The amount of maintenance and care
given to the building will help determine its effective age. A 5-year
old building may have an effective age of 10 years due to poor
maintenance of the building.5
EFFECTIVE CAUSE OF SALE - Where the
efforts of a particular real estate agent are considered to have been
an essential element in a purchaser entering into a binding contract
with a vendor for the sale of a property. An agent considered to be
the effective cause of sale will usually be entitled to a commission
in respect of that sale.
EFFECTIVE DATE - The date something
commences or closes.
EGRESS - The exit point from a
property.
ENCUMBRANCE - A charge or liability
on a property; for example, a mortgage or a special condition on the
use to which it may be put (e.g. easements, restrictions and
reservations).
ENVIRONMENTAL IMPACT STUDY - A
multi-disciplinary assessment of existing environmental conditions
and the likely effect on a specified environment of the introduction
of a proposed development or actions which may change the existing
environmental conditions and ecological balance.
EQUITY
- (a) A synonym for a share (as distinct from fixed interest)
investment; (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.7
ESTATE AGENT - See Agent.
EVICTION - The removal of a person
from a property.
EXCHANGE OF CONTRACTS - A formal
legal process that creates a binding contract for the sale of real
property on agreed terms. The vendor and purchaser each sign a copy
of the sale contract and then exchange these documents, after which
time the contract becomes legally binding on the parties. The parties
are then bound to proceed to settlement, subject to any cooling off
period that may apply. A deposit is usually also paid by the
purchaser to the vendor during the exchange process. Any party that
unilaterally declines to proceed to settlement may forfeit deposit
monies or be subject to a damages claim.
EXCLUSIVE AGENCY - See Exclusive
Listing.
EXCLUSIVE AGENCY AGREEMENT - The
agreement between an agent and a vendor establishing an Exclusive
Listing.
EXCLUSIVE LISTING - 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.
EXTENSION OF LEASE - An agreement
extending or renewing the terms of a lease for a period beyond the
expiration date.
FIRE RESISTANCE RATING - Means the
minimum period of time during which an element of a structure may be
expected to function satisfactorily while subjected to a standard
fire test, as set down by the relevant authority.
FIREPROOFING - The use of
incombustible materials to protect structural components of a
building so it can withstand a complete burn-out of contents without
losing structural integrity.
FIRST REFUSAL (RIGHT OF) - The right
granted to a person to have the first privilege to buy or lease real
estate, or the right to meet any offer made by another.
FITTINGS - Installed items that may
be removed from real estate without causing irreparable damage to the
land, structure or use of the premises.
FIXED INTEREST RATE - An interest
rate that remains unchanged for a set period, for example, for the
whole term of the loan, or the first year of a loan.
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.6
FLAT - A self-contained dwelling
unit in a multi-unit building.
FORECLOSE - Removing the right,
title and interest of the owner of a property or asset, usually due
to a default of due payments.
FOREIGN INVESTMENT REVIEW BOARD - An
Australian Government entity that reviews foreign investment
proposals and advises Government on foreign investment policy.
FREEHOLD
- Absolute ownership subject to limitations imposed by the state;
also known as a fee simple estate. An estate held for perpetuity.5
GAZUMPING - Where the vendor agrees
to sell a property, but then sells it to another party mostly at a
higher price.
GEARING (LEVERAGE) - A measure of
indebtedness i.e. the extent of borrowings as against the equity held
by a person or company in an asset. Usually expressed as a ratio.
Positive gearing refers to the magnification of financial gain
resulting from borrowing when the cost of capital (borrowed) is less
than the return on capital and leads to magnification of returns to
equity. Negative gearing refers to the same relationships but where
the cost of capital exceeds the return on capital. Persons would
normally only negative gear in the expectation of positive returns in
the future.
GENERAL LAW TITLE - See Common Law
Title.
GOING CONCERN - An operating
business that will remain in operation for the foreseeable future. It
is assumed that the entity has neither the intention nor the
necessity of liquidation or of curtailing materially the scale of its
operations. Properties sold as a going concern may be treated
differently for taxation purposes.
GOODS AND SERVICES TAX (GST) - A
consumption tax imposed by the Commonwealth levied on the provision
of goods and services.
GRACE PERIOD - A period when a
mortgage payment or other debt becomes past due and before it goes
into default.
GRADUATED LEASE - A lease which
provides for a certain rent for an initial period, followed by an
increase or decrease in rent over a stated period.
GUARANTOR - A person who undertakes
to fulfil a contract if the main party defaults.
HAMMER PRICE - The purchase price
paid when land or goods are sold at auction.
HEAD LEASE (OR MASTER LEASE) - A
lease to an entity that will subsequently grant leases to sub-lessees
who will be tenants in possession.
HOUSE
- A single, self-contained place of residence detached from other
buildings. A house generally consists of enclosing walls with a roof
to shelter occupants against both climate and intruders9.
IMPLIED COVENANT - A covenant
implied rather than expressly written into a lease. On the part of
the lessor this could include the asset being fit for the purpose for
which it is let and allowing for quiet enjoyment. On the part of the
lessee it could include keeping the premises clean.
IMPLIED EASEMENT - An encroachment
upon property that has been left unchallenged for a long period of
time. One that is apparent by long and continued use.
INGRESS - The entry point to a
property.
INTEREST - The payment made by a
borrower to a lender in return for the loan of money, in addition to
the principal repayments.
INTEREST ONLY LOAN - Only the
interest on the principal is repaid during the term of the loan. At
the end of that time the principal is repaid as a lump sum.
INTEREST
RATE - The rate of return earned on an investment, or charged by a
lender, expressed in the form of a percentage per annum.3
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.6
JOINT TENANCY - The ownership of
land in common by several persons where there is a right of
survivorship i.e. where on the death of one joint owner the land as a
whole vests in the survivors.
LAND AGENT - See Agent.
LAND TAX - A tax payable annually in
respect of the beneficial ownership of land, the rate of which is
determined by the assessed valuation. Usually based on unimproved
value of land.
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.8
LEASE ABSTRACT - A summary of a
lease document listing the specific details peculiar to that lease.
LEASE TERM - The period of the
lease.
LEASEHOLD - Possession and use of a
property by virtue of a lease.
LESSEE (TENANT) - A person / legal
entity who receives the right to occupy and use a property under the
terms of a lease.
LESSOR (LANDLORD) - The owner of a
property who transfers the right to occupy and use property to
another by way of a lease agreement.
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.
LIEN - A charge, security or
encumbrance upon property for the payment of debt.
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.
LONG-TERM LEASE - Generally
considered to be a lease extending for ten years or more. In some
long-term leases the lessee or tenant may desire, or be required, to
do extensive remodelling or, if the property leased is land, to
construct a building or other improvements.
MAINTENANCE - The act of keeping, or
the expenditure required to keep, an asset in condition to perform
efficiently the service for which it is used.
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.
MANAGING AGENT - A real estate agent
authorised to manage the business affairs in connection with the
property of another. See also Property Management.
MARGIN
SCHEME - Refer to the Australian Taxation Office. www.ato.gov.au
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.6
MEDIAN - The middle number when data
is arranged from lowest to the highest in sequence. If there are two
median scores, they are averaged to provide the true median. The
median is also known as the 50th percentile.
MEDIATION - The process by which a
third party assists two disputing parties to reach a mutually
agreeable solution. A recommendation made by the mediator is not
necessarily binding on the parties.
MORTGAGE - Documentation of a
property loan. Security over real property to ensure payment of a
debt or performance of an obligation.
MORTGAGE GUARANTEE INSURANCE - Paid
by the borrower to protect the lender against failure by the borrower
to keep up mortgage repayments or to pay back the loan in full when
it is due.
MORTGAGEE - Financier who lends
money against property as security.
MORTGAGEE SALE - Sale of a property
where, in the case of a default of payments by the mortgagee, the
mortgagor can sell the property over which the mortgage has been
held.
MORTGAGOR - One who owns an interest
in real estate and who executes a mortgage on that interest as
security for a loan or for the advance of credit.
MULTIPLE LISTING - A method of
exchanging exclusive entries for the sale of properties between real
estate agents who are members of the same organisation.
NEGATIVE GEARING - See Gearing.
NOTICE OF TERMINATION - The notice
given by either the landlord or tenant that they want to end the
rental agreement and vacate the property in compliance with the terms
and conditions of the lease.
NOTICE TO QUIT - A legal notice
served on tenants requiring them to vacate real estate due to a
breach of lease terms.
OFFER - The consideration offered to
purchase or lease an asset.
OLD SYSTEM TITLE - See Common Law
Title.
OPEN AGENCY AGREEMENT - The
agreement between an agent and a vendor establishing an Open Listing.
OPEN LISTING - Where a vendor grants
selling or leasing rights over a property to any number of agents on
a non-exclusive basis. The first agent to procure a buyer ready,
willing and able to purchase or lease the property on terms
acceptable to the vendor receives the commission. Also known as a
Common Listing, Simple Listing or Open Agency.
OUTBUILDINGS - Any building other
than the main structure on a particular allotment of land e.g. a
garage, workshop etc.
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 - See Body
Corporate.
PASSED-IN - If a property is not
sold at auction because the owner's reserve price has not been
reached, it is passed in.
PERIODIC LEASE - Where a tenant
continues to rent / occupy the property after the lease has formally
expired.
PLANNING APPROVAL - Approval from
the relevant authority to use property for a specified use.
PREFERRED LISTINGS - Entrusting a
property sale / lease to a predetermined preferred agent.
PREMISES - A house, building or
other structure together with the surrounding grounds that form part
of the title. Also, the real estate forming the subject of a
conveyance or licence.
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.
PRIVATE TREATY SALE - A sale
negotiated directly between the parties or their agents.
PROPERTY - At law, property consists
of the private rights of ownership. To distinguish between real
estate (realty), a physical entity, and its ownership, a legal
concept, ownership of land is known as real property. Physical items
other than real estate are legally termed 'personalty' and their
ownership is known as 'personal property'. The word 'property' used
without further qualification or identification may relate to real
estate, personalty or a combination. Colloquially, property is
anything that can be owned or in which an interest can be held, over
which control can be exercised, which can be traded or left in an
estate or from which current or future rights to receive benefits can
be held. Property can include, but is not limited to, real estate and
associated interests therein, personalty, intellectual property,
rights, licences and options, plant and machinery, art and jewellery,
goodwill and shares.
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.
RATES - Periodic property
taxes levied by Local and State Governments (e.g. water rates).
REAL ESTATE AGENT - See Agent.
REAL
PROPERTY - All the rights, interests, and benefits related to the
ownership of real estate. Real property is a legal concept distinct
from real estate, which is a physical asset. There may also be
potential limitations upon ownership rights to real property.5
REALTY - See Real Estate.
RENT - A payment made periodically
by a lessee to a lessor for the use of property.
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.4
RENT ROLL - A comprehensive list of
rental properties managed by a real estate agent.
RENTAL DETERMINATION - A valuation
report by an independent valuer fixing a rent, in circumstances where
a lessor and lessee have been unable to negotiate an agreement.
RESCIND - To terminate a contract of
sale.
RESERVE
PRICE - The lowest acceptable price fixed by the vendor.5
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 include the: Residential Tenancies
Tribunal (ACT, SA); Residential Tenancies Authority (QLD);
Residential Tenancies List (VIC); CTTT (NSW); Commissioner of
Tenancies (NT); and Residential Tenancy Commissioner (TAS). Tenancy
disputes may be heard by the Small Disputes Division of Local Courts
in WA.
RESIDENTIAL TENANCY DATABASE - A
risk management tool used by agents to identify tenants with a
history of breaching tenancy rules.
REVERSE MORTGAGE - A mortgage over a
residential property owned by a person (usually over 55 years of
age), where repayments are not required until the property is sold or
the last homeowner dies.
RIGHT OF ACCESS - Where an ongoing
right of access has been granted, usually for inspection of services,
agistment, etc.
RIGHT OF ENTRY - Where a landlord
may inspect the premises, provided reasonable notice is given to the
tenant.
SELLER'S MARKET - The condition
which exists when, under competitive conditions, the pressures of
supply and demand are such that market prices are at a relatively
high level, giving the seller an advantage. An under-supply causing
prices to increase.
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.
SIMPLE INTEREST - Interest that is
calculated on a sum that does not include previous interest charges.
SIMPLE LISTING - See Open Listing.
SOLE AGENCY - See Exclusive Listing.
SPECULATOR - One who speculates;
that is, one who buys any commodity, including real estate, in the
expectancy of selling in a higher market.
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.
STANDARD LEASE - A lease in commonly
used form into which specific clauses or provisions may be written.
STOCK AND STATION AGENT - Stock and
station agents are certified to broker transactions that involve
livestock, rural property and agricultural products on behalf of
their clients.
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.
STRATA TITLE - (a) The formal
ownership of property held within a strata plan where property is
defined within horizontal and vertical boundaries; (b) A scheme of
property ownership where each proprietor owns parts of a building and
has joint rights with other proprietors over the land and other
common areas.
SUB-AGENT - A person employed by an
agent as their sales representative to provide assistance in
transacting the affairs of the principal. In some States a sub-agent
is referred to as a sales representative.
SUBDIVISION - Divisions by a land
owner, of all or part of a parcel of land, into separate allotments
(or sections), each with a separate title, in accordance with a 'plan
of subdivision' approved by the planning authority.
SUB-LEASE / SUB-LET - A contract
whereby the whole or part of the property is let to another person,
the party letting being themselves a lessee. The obligations of the
lessee to the lessor are not diminished. The length of the sub-lease
must not be longer than the unexpired part of the headlease.
SURVEY - The measurement and
depiction on paper of the boundaries of real estate and the location
of the improvements on the land, or measurement of a part of a
building, usually undertaken by a registered surveyor.
TENANCY AGREEMENT - A form of lease,
generally in an abbreviated form. It may be registered on an owner's
certificate of title.
TENANCY
IN COMMON - Ownership that is separate and not held directly with
another person. There is no survivorship.8
TENANT - A person or entity paying
rent in exchange for the occupancy of a building, dwelling or land.
See also Lessee.
TENANT'S AGENT - A Tenant's Agent
should be a licensed real estate agent, who acts on behalf of a
tenant in a commercial property transaction.
TENDER - The sale of an asset
through the seeking of written bids.
TITLE - The form of ownership of
real estate (i.e. Torrens, strata or company title).
TITLE DEEDS - Documents evidencing
the ownership of property.
TORRENS TITLE - The title to land by
registration. Originating in South Australia under the stewardship of
R.R.Torrens (later Sir Robert Torrens) and enacted in 1858. The
Torrens titles has superseded the 'Common Law Title' system
throughout Australia. Under the Torrens system dealings and ownership
of land are managed by registration with the Titles Office.
TRUST ACCOUNT - A legislatively
required bank account where monies are held by an agent for or on
behalf of another person e.g. deposits, rental etc.
UNENCUMBERED PROPERTY - Property
free and clear of mortgages, restrictive covenants, leases and
assessments of any kind.
UNIMPROVED VALUE - A statutory
concept of value used mainly for rating and taxing purposes, which
envisages the land as being in its virgin state but enjoying the
benefits of all external factors which influence the value at a given
date. The value of land as if all existing improvements thereupon,
including site works, had never been built or made, but regarding all
other lands as in their current circumstance, including all
improvements, roads, services and amenities.
UNIT (STRATA) - Each dedicated lot /
unit area designated within a strata plan.
VACANCY-A rental property or any
unit thereof that is unlet.
VACANCY RATE -The proportion of
inhabitable rental premises which are vacant.
VACANT
POSSESSION - In real estate this refers to a right to possession of
land or built-up property in respect of which there is no current
occupant.6
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.
VALUATION
REPORT - A document that records the instructions for the assignment,
the purpose and basis of the valuation, and the results of the
analysis that led to the opinion of value. A Valuation Report may
also explain the analytical processes undertaken in carrying out the
valuation, and present meaningful information used in the analysis.
Valuation Reports can be either oral or written. The type, content
and length of a report vary according to the intended user, legal
requirements, the property type, and the nature and complexity of the
assignment. The terms, Valuation Certificate and Valuation Report,
are sometimes used interchangeably.6
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.
VARIATION - An addition to, omission
from, or alteration to a contract or to the contract conditions.
VENDOR - One who sells anything. In
real estate transactions, the person(s) or entity selling the
property.
VOIDABLE - An agreement which can be
made void at the option of one or both of the parties.
WATER CLOSET - A room equipped with
toilet fixtures and facilities.
WITHOUT RESERVE - An auction term
signifying that a reserve price has not been set, such that the
highest bid will prevail.
YIELD - The derived percentage
return of a property assessed from the net income and the market
value or price. It is calculated by dividing the net income by the
opening market value or price and expressed as a percentage.
ZONING - A local planning tool to
control the present and future development of land including
residential, business and industrial uses.
Unless otherwise referenced, all terms have been sourced from:
- Real Estate Institute of Australia, Property Council of Australia, Australian Property Institute. Glossary of Property Terms. First Edition. 2007
Other references are listed below:
1.
Australian Building Codes Board.
2. Institutional Real Estate Inc.
1994, Language
and Culture of the Pension Real Estate Investment Market.
3.
Goldsmith, Hodgson, Osborne, INVESCO Australia, Oxford
University Press, Oxford Dictionary of Australian Investment Terms,
6th Edition, 2003.
4. Real Estate Institute of Australia. A
Glossary of Terms used in Real Estate and Valuation Practice,
Second Edition.
5. International Valuation Standards Committee
International
Valuation Standards,
Seventh Edition, 2005.
6. Based on a definition by the
International
Valuation Standards
Committee. International Valuation Standards, Seventh Edition, 2005.
Amended
for local use.
7.
The Australian Financial Review. 1996, Dictionary
of Investment Terms from County NatWest,
4th Edition, MacPhersons Printing Group, Victoria.
8. West
Publishing Co. St Paul, Minnesota, Black's
Law Dictionary,
2nd Pocket Edition, 2001.
9. Australian Bureau of Statistics.
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