Here’s a list of basic real estate terminology all realtors should know.
LEAVE AND LICENSE AGREEMENTS
LICENSOR – One who is entitled and gives the premises on leave and license basis.
LICENSEE – One who takes the premises on leave and licensor form the licensor/owner.
PREMISES – The flat and the car parking spaces are collectively referred to as the premises.
COMPENSATION/LICENSE FEES- The monthly fee paid by the Licensee to the Licensor for use of the premises.
NOTICE PERIOD – The minimum period which is made available to either party in case of termination of the agreement.
TERMINATION/DETERMINATION – Any premature cancellation of the agreement is legally referred to as termination or determination.
SCHEDULE – The schedule contains in detail the description of the property viz, building, location, cadastral survey number, society name, floor, area, car parking, etc..
SALE OF PROPERTY
SALE DEED – The document whereby the seller conveys his right, title and interest in the property to the buyer.
AGREEMENT FOR SALE – The document whereby the seller agrees to sell to the buyer property at some point of time in the future.
MEMORANDUM OF UNDERSTANDING – Often called as MOU, is a document where lists the terms and conditions of a future sale.
EARNEST MONEY – A sum of money, which forms part of the consideration given by the proposed purchaser to the proposed seller generally on signing of the MOU. The object is to bind both parties.
SELLER/VENDOR/TRANSFEROR – The person/s who sell/agrees to sell the property.
PURCHASER/TRANSFEREE – The person/s who buy/agrees to buy the property
CONSIDERATION – The sum of money agreed by the parties as the fair value of the property.
SPECIFIC PERFORMANCE – A term used wherein the parties are specifically bound to honour their respective set of obligations under the contract.
INJUNCTION- An injunction is a specific relief granted by the court wherein the party is ordered to do or refrain from doing something in order to protect or enforce the rights of the other party.
MORTGAGE is often referred to as a loan against property.
MORTGAGE DEED – A document which describes the property, the parties i.e.. borrower and lender, the terms and conditions and the property which is mortgaged.
MORTGAGOR – is the person who mortgages the property.
MORTGAGEE – is the person to whom the property is mortgaged
RIGHT OF REDEMPTION – The right of the Mortgagor to have the title documents delivered to him and the property re-conveyed to him only after the mortgage money and interest due thereon has been paid in full.
RIGHT OF FORECLOSURE –The mortgagee’s right (post the time when the mortgage money has become due but prior to a decree being passed by a court) to obtain a decree that the mortgagor be absolutely debarred of his right to redeem the property or a decree that the property be sold.
Types of Mortgage – Simple, mortgage by conditional sale, Usufructuary Mortgage, English Mortgage, Mortgage by deposit of title-deeds and Anomalous Mortgage.
Right of Pre-emption is a personal and non-transferable right. It is the right given to a person in the event of sale of immovable property to purchase the same upon agreed terms. In the event the person chooses not to exercise his right, then the property can be sold to others.
Recitals – Are a set of connected facts or events. They introduce the type of agreement, the parties to the contract and the sequence of events including title flow to show how the property has devolved in the hands of the grantor.
Co-owner also sometimes referred to as joint-owner, is a part owner of the property subject to the nature and extent of his interest.
Landlord – the owner of immovable property
Tenant – a person to whom immovable property is let out on tenancy basis.
Covenant – a clause in a deed agreeing to do or not to do a thing/act, etc..
Encumbrance – is a right to, interest in, or legal liability on real property that does not prohibit passing title to the property but that diminishes its value.
Charge – Were immovable property of a person is either by act of parties or operation of law made security for the payment of money to another and the transaction does not amount to a mortgage, such property is said to have a charge.
Exchange – When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing nor both things being money only, the transaction is called an “exchange”. A transfer of property in completion of an exchange can be made only in manner provided for the transfer of such property by sale.
It is the transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the Donee, and accepted by or on behalf of the Donee.
Acceptance must be made during the lifetime of the donor and while he is still capable of giving.
If the Donee dies before acceptance, the gift is void.
A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined.—The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.
Demise – is a term used to denote the transfer or a lease.
Advocate Rajesh Narang is our legal expert at Pro Realtors.