Built up area is Carpet Area + Area of Walls and Ducts + ½ the Area of Terrace. This is usually 10-15% more than the carpet area. A terrace is considered as half the actual area for calculating built up area.
Carpet Area of a property is defined as the net usable area under the walls of your house. In layman words: the area where you can spread a carpet – from the inner sides of one wall to another. It does not include the wall thickness, general passage area, stair case area, lift area etc. Till a few years back, builders were selling their flats on this concept. But it is very rare now and most of the flats are sold as per built-up and super built-up area.
Super Built up Area is built up area + area occupied by common amenities like lifts, corridors, club house, stairs, walkway, amenities, etc. Super built up is usually around 25% more than Built up area. This is most commonly the Saleable Area. This is the area which is being sold by every developer today and is the centre point of mis-selling.
Stamp duty While purchasing a property (house or land), you need to pay a stamp duty. Generally a certain percentage of the actual cost of the property and is levied by the respective State Government. Every state has its percentage defined and can vary from 5-14 percent.
Registration of Agreement Any immovable property document has to get registered at the time of purchase only. All the agreements related with such transactions should be registered with the sub-registrar of assurances under the provision of the Indian Registration Act. Do remember registration happens only when you pay the stamp duty to the government.
FSI: Floor Space Index The Floor Space Index (FSI) also commonly known Floor Area Ratio (FAR) is the ratio of the total floor area of buildings on a certain location to the size of the land of that location considering the Road width of the property.
No objection certificate (NOC) /Occupation Certificate (OC) while constructing a building in particular area, every builder has to take NOC from the municipal corporation. This shows that the completed project is as per the approved plan. Required facilities like the water connection, sanitary, electricity connection and the necessary amenities have been provided as per the plan submitted. You can always ask this document from the builder for authenticity.
Allotment Letter When you sign a deal for purchase of a property, an allotment letter is issued to you. This letter contain details of price agreed by you, payment made, unit of interest, construction schedule, plan of the house, the delivery date and liability of the builder if he misses the completion date.
Construction linked payments This has been the latest features in most of the properties selling today. The home buyer or the lender pays to the builder according to the phases of construction completed.
Sale Deed The Final Stage, a sale deed is signed and registered at the concerned Sub-Registrar Office; it transfers the properties to the buyer at a price paid or considered. One must remember that every sale deed is required to be compulsorily registered.
Bare Shell the condition of any property after completion of construction activity and installations of basic building services. A bare shell includes basic flooring – tiled, mosaic, cement or granite, plastered walls, Electricity Points with Switches, etc. Apart from this, pantry, plumbing & toilet facilities may also be operational in such condition.
Basic Rent A monthly rental net of maintenance and interest costs charged or quoted by landlords for any property. The base rent comprises of only the payment made for usage of the subject property under a lease agreement. Imputed costs such as holding costs, fit out costs and building service charges are not usually included in the base rent.
Business Park A landscaped area containing high tech facilities for business purposes, as distinct from high-tech park or a science park. Building density is lower than would be usual in a traditional industrial estate. Business parks are preferentially located where motorway, rail and airport communications are within a short distance.
Buy-out rate Is a funding agreement between a developer and a prospective purchaser, the pre-determined investment yield which will be used to capitalize the annual income receivable at the time of sale to determine the buy-out price.
Catchment Area The area which contains those people who can be expected to obtain goods, services, employment, transport or other benefits with ease from a particularly property. More especially related to retail premises, where the success of forecasting depends on the accuracy of estimating the number of purchasers (catchment population) likely to be attracted from the different parts of the area and the average expenditure which might be expected from them.
Central Business District (CBD) The functional centre around which the rest of a city in comparison shopping, office accommodation, leisure facilities, buildings for recreational use, public museums, art galleries and governmental functions. Generally an area of highest land values within a city.
Clearance Area An area which is to be cleared of all buildings. Generally promulgated by way of a government declaration, which is normally followed by the acquisition of the land and clearance of the area.
Condominium A building or a structure of two or more units, the interior space of the individually owned and the balance of the property (both land and building) being owned in common by the owners of the individual units.
Current yield The remunerative rate of interest which is, or would be, a appropriate at the date of valuation, assuming the property to be let at its full rental value. It will be the same as the reversion yield where the reversion is to full rental value, and the same as the term yield where the rent receivable under the lease is full rental value.
Developer An entrepreneur who has an interest in a property, initiates its development and ensures, that this is carried out (for occupation, investment or dealing) and from the outset accepts the responsibility for providing or procures the requisite funds needed to finance the whole project.
Escalation Clause Specified in lease agreements wherein renewals of lease period are built in. It involves an increment in the base rent at every renewal of a lease agreement and is generally a percentage rate that is either pre agreed or negotiated before the renewal of the lease agreement.
Fire certificate A certificate covering matters of safety required under the legislation for hotels, boarding houses, factories, offices shops and railway premises, excluding those buildings containing less than a minimum number of employees. In order to obtain a fire certificate,one must apply to a fire officer, who then inspects the building and issues a list of requirements (eg. Fire escape doors/stairways). Once the fire officer is satisfied that those requirements have been met he will issue the fire certificate. It enables fire officers, in the event of an emergency, to have prior knowledge inter alia of the permitted number of people on each floor; it also informs officials if any authorised inflammable /explosives materials are found on the premises.
Fit outs Relate to the interior permanent furnishings required in a property including heating, ventilation, air conditioning ducting, fire protection system implementation, establishment of workstations and telephone/computer cabling among others, in order to make the property fit for usage.
Force majeure A force, which cannot be resisted, in other words, something beyond the control of the parties involved . It includes acts of God and acts of man, eg. Riots, strikes, arson. In many contracts and insurance policies, specific provision is made for damage or injury arising from force majeure. For example, the financial liability of a building contractor for failure to complete by a specific date may be relieved to the extent it was caused by force majeure. This is a common clause in most property contracts.
Freehold In general parlance this is used as shorthand for the tenure of an estate in fee simple absolute in possession. Strictly speaking, however, freehold includes fee simple, entailed interests and tenancies for life.
Frontage (line) the full length of a plot of land or a building measured alongside the road on to which the plot or building fronts. In the case of contiguous buildings individual frontages are usually measured to the middle of any party wall.
Hi-tech building (high technology building) Primarily a modern industrial building which is particularly suited to the flexible uses and space needs of business organisations engaged in modern technologies. Such activities usually require more office or laboratory space than a traditional factory and also more sophisticated and adaptable installations for services and communications.
HVAC Refers to the heating, ventilation, air conditioning system installed in a building to regulate temperature. This includes air conditioning plants, chillers and ducting systems, which ensure the uniform transfer of the cold or hot air, as the case may be throughout the building.
Indian Stamp Act, 1899 A legal statute, which provides for the payment of stamp duty in case of all real estate transactions to duty to the local government. The value of the stamp duty depends on the rental payable and the lease term or the sale value as the case may be. This duty is paid by purchasing non judicial Indian Stamp Paper, on which the lease/sale agreements are documented.
Kiosk A small enclosed retailed outlet, normally without toilet facilities and in the retail area, frequently located in a public concourse or other place where it may remain open only during peak times and be closed securely when there are no customers. Kiosks are now sometimes included in managed shopping schemes.
Landlord The owner of an interest in land who, in consideration of a rent or other payment (eg. a premium), grants the right to exclusive possession of the whole or part of their land to another person for a specific or determinable period by way of a lease or tenancy.
Lease Agreement An agreement, usually written, between the lessor and the lessee, which allows for the conveyance of property to the tenant under a contract, and confers usage and control rights to the tenant for the duration of lease. Apart from financial terms and conditions, several clauses describing the other binding terms and conditions of the agreement are also documented.
Load Bearing The capacity of an element in a building structure to support a weight in addition to its own, whether vertically or laterally. Thus a load bearing wall is one which supports part of the structure in addition to its own weight.
Maintenance the keeping of a building, structure or other physical feature in a specified condition or expected condition. eg. Wind and weather tight conditions, regular maintenance in reference to Plumbing, Electrical, AC & other minor issues. The approved cost of maintenance may be deductible for income taxation.
Mortgage The conveyance of a legal or equitable interest in freehold or leasehold property as security for a loan and with provision for redemption on repayment of the loan. The lender (mortgagee) has powers of recovery in the event of default by the borrower (mortgagor). A mortgage is a form of land charge and can be either legal or equitable.
Open market value
• The best price which might reasonably be expected to be obtained at arm length for an interest in a property at the date of valuation, subject to any statutory assumptions which may be required.
• For the purpose of asset valuations the best price which might reasonably be expected to be obtained for an interest in a property at the date of valuation assuming:
1. there is a willing seller
2. there is a reasonable period in which to negotiate the sale
3. that values will remain static during that period
4. that the property will be freely exposed to the market; and
5. that no account will be taken of any higher price that might be paid by a person with a special interest.
Property Management The range of functions concerned with looking after buildings, including collection of rents, payment of outgoings, maintenance including repair, provision of services, insurance and supervision of staff employed for services, together with negotiations with tenants or prospective tenants. The extent of and responsibility for management between landlord and tenant depend on terms of the lease(s). The landlord may delegate some or all of these functions to managing agents.
Refurbishment Improvement and modernisation of a building falling short of rebuilding or redevelopment and thus not normally requiring planning permission (other than for alterations to the external appearance), except in the case of listed buildings.
Registration and mutation It is mandatory for the sale deed of all high value property transactions to be registered at the regional sub registrar’s office of the local municipal authority. Thereafter, the buyer has to apply for mutation, which involves a change in the title records to incorporate the name of the buyer of the property. In order to complete the transfer of property, it is mandatory for the seller to furnish or arrange a valid “certificate of completion” issued from the local municipal authority to the buyer.
Rent Act (s) Legislation promulgated by various states in India, which regulates the terms and conditions of the rental market with a view to curb profiteering and hoarding. Though its restrictive nature has not allowed owners to enjoy economic returns from same categories of property, thereby allowing market inefficiencies.
a. in consideration for the tenant incurring expenditure on such matters as fitting out premises or carrying out repairs or improvements.
b. to reflect market conditions which favour tenant eg. where the space available for letting exceeds the total tenant demand in that area or
c. by virtue of both a and b
Rentable Area The area of floor space for which rent is calculated even though other areas, within or outside the premise, are lawfully used by the tenant. For example, in an office building it is customary to exclude from the direct calculation of rent the space used for corridors, atrium and stairways.
Rental Advance Comprises a lump sum payment to the landlord at the beginning of the lease term, which is thereafter adjusted in equal installments over the lease term against the monthly base rental payable by the tenant. The advance amount generally ranges between 3 to 18 months depending on the city, type, location of property and the period of the lease.
Sale and Leaseback An arrangement whereby a freeholder or lessee sells his interest in a property for an agreed sum and takes back a lease on the whole or part of the property from the purchaser, generally either at a rack rent or at some lesser rent related to the price paid.
Security Deposit Comprises of an interest free lump sum payment to the landlord at the commencement of the lease, which is refundable at the end of the lease term. Though the deposit amount varies depending on city, property type, location and the period of the lease, it may range anywhere between 6 to 18 months of monthly rental. It is not uncommon for some landlords to provide a bank guarantee to the tenant as security for the repayment of the initial deposit amount.
Serviced Accommodation Suites of offices or rooms where the landlord provides a range of services within the individual premises extending beyond the traditional ones associated with the maintenance and management of the building itself or the operation and maintenance of the installation or plant therein eg. furniture, telephone, fax machine, room cleaning, and/or provides centralised specialised services, such as a receptionist and secretarial and communication facilities.
Site Plans A drawing of an area of land, on a horizontal plane, showing the boundaries and physical extent of the land included in a particular parcel. It may also show any existing buildings or the proposed layout of a development.
Sub Leasing A method wherein, the primary lessee of a property has the right to further lease out a part or whole of the property to another occupier or lessee. Essentially, the right to sub lease is decided beforehand at the time of signing the main lease agreement and is with the consent of both the lessor and the lessee.
Technology Park A landscaped development usually comprising of high specification office space as well as residential and retail developments, designed to encourage localisation of high technology companies such as information technology, software development etc., thereby giving each the benefit of economies of scale. Usually, technology parks are located outside the inner city areas as these are quite land intensive in nature.
• Strictly speaking, the interest of a person holding property by any right or title.
• More usually, an arrangement, whether by formal lease or informal agreement, whereby formal lease or informal agreement, whereby the owner (the landlord) allows another (the tenant) to take exclusive possession of land in consideration for rent, with or without a premium, either:
a. for an agreed period of
b. on a periodic basis until formally terminated
Vaastu A traditional Indian architecture and design system, which specifies the detailed methodology of designing buildings, buying land etc. In order to maximise benefits, from the same for the occupier. This system relies in harmonising any real estate development with the five elements of Indian Mythology namely air, water, earth, fire and space.
1. The process of making an estimate of worth of real property or real property or other assets for a particular purpose eg.letting, purchase, sale, audit, rating, compulsory purchase or taxation. That purpose and the relevant circumstances will determine assumptions and facts that are appropriate and hence the process used.
2. A statement, usually in writing, setting, out the facts, assumptions, calculations and resultant value.
3. Colloquially, the value arrived at as a result of the valuation process.
Warehouse Premises designed and built for the purpose of bulk storage of raw materials or finished or partly finished goods, pending either onward transit or division into smaller batches and subsequent distribution.
Zone A defined area of land or part of a building which is allocated for a particular purpose, eg. development plans may allocate areas of land for different uses or values of property may distinguish between areas of floorspace of a building and ascribe different values to them.