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About Real Estate

Real Estate is a legal term that encompasses land along with improvements to the land, such as buildings, infrastructure and other improvements that are fixed in location and are immovable property which can be bought, leased, sold, or transferred together or separately. Real estate is one of the primary (and indeed one of the only) assets whose value does not depreciate over a period of time.

Real estate is a broad term refers to:

  • Residential new homes and existing (resale) homes.
  • Commercial shopping centers and offices.
  • Industrial and Institutional buildings.
  • Vacant land and farms.
  • The profession or work of an agent in the purchase and sale of Real Estate It is an attractive form of collateral because it cannot be stolen or destroyed.

Registration

A legal documenting and subsequent recognition of a transaction under the State. This can either be a rental or capital transaction and there is a fee attached to registering a transaction, which varies from state to state.

Free Hold Property

Means a property where the owner has complete and absolute ownership of the land, and all buildings that stand on the land. The owner of the freehold property is therefore in a position to do what they wish to and with the property, in accordance with local planning regulations. The majority of property in the market is freehold, and most buyers don't even need to check.

Lease Hold Property

Means a long tenancy - the right to own, occupy and use the Property for a long period known as the 'term' of the lease. This can be for between 99 - 999 years; and the property can be bought and sold within that period. There are 'long' leases and 'short' leases, referring to the number of years left on the lease.

Lal Dora Property

The term “LAL DORA” was used for the first time in the year 1908. It is a name classification given to that part of the village land which is part of the village “Abadi” (Habitation). It was supposed to be used for nonagricultural purpose only. It is that part of the land which was supposed to have been an extension of the village habitation, wherein the villagers used to have their support systems, livestock etc. Lal Dora was exempt from the building bye laws, and strict construction norms and regulations there was / is no need to apply for the building sanction plans etc.

Apartment/Flat

Means a part of any property, intended for any type of independent use, including one or more rooms or enclosed spaces located on one or more floors or any; part or parts thereof, in a multi-storied building to be used for residence or office or for the practice of any profession or for the carrying on of any occupation, trade or for business or such other type of independent use as may be prescribed, and with a direct exit to a public street, road or highway or to a common area leading to such street, road or highway, and includes any garage or room (whether or not adjacent to the multi-storied building in which such apartment is located) provided by the promoter for use by the owner of such an apartment for parking any vehicle or as the case may be for the residence of any domestic aide employed in such an apartment.

Benami Ownership

In Benami Ownership, the title of the property is in one party's name and the real ownership is in another party's name.

Beneficiary

The person/persons/institution designated to receive the income from a trust, estate or a deed of trust. A contingent beneficiary has conditions attached to his/her/their/its rights.

Appreciation

An increase in the value of a property due to changes in market conditions or other causes over a period of time.

Types of Property

Property can be primarily divided into two types: -

Residential Property

As a layman a residential property means a housing unit used for living purpose and is not used for carrying any kind of business operations. A residential property can be of following types: -

  • Apartments
  • Builder Apartments
  • Penthouses
  • Group Housing/Society Flats Duplex’s
  • Studio
  • Land/Builder Plots
  • Villas/Kothi’s/Town Homes

Commercial Property

As a layman Commercial Property means a property which is used for carrying any kind of business activity. The term commercial property (also called investment or income property) refers to buildings or land intended to generate a profit, either from capital gain or rental income. A commercial property can be of following types:-

Industrial: -

  • Manufacturing Industry
  • Service Industry
  • Institutional
  • Hospitals
  • Educational Institutes
  • Community Centers
  • Clubs

Residential Property: -

  • Local Retails Markets
  • Malls
  • Hotels
  • Office Space/ Business Parks
  • Shop Cum Offices (SCO)

BUYER

means an entity that is looking to buy a property either for investment purpose, for living or a combination of both investment and living.

BROKER

In modern language known as Real Estate Consultant means an entity who is involved in a business of assisting buyer in the purchase of a property from the builder. In case of primary sales a broker normally doesn’t charge his service fees for the buyer, broker charges the service fees from the builder, the service fees is known as Brokerage charges or commission charges.

BUILDER

means an entity who is involved in a business of construction of property for the purpose of selling it to the buyer.

Carpet Area

The actual area you use. The area on which ‘you can put a carpet’, the area of inner side of wall to wall. The carpet area is generally around 70 -75% of the Super built up area.

Built up area

Over and above the carpet area and includes the space covered by the thickness of the inner and outer walls of the flat it is generally around 10% more than the carpet area.

Super built up area

The super built up area means the covered area of the demised premises inclusive of the area under the periphery walls, area under columns and walls within the demised premises, half of the area of the wall common with the other premises adjoining the demised premises, cupboards, plumbing / electric shafts of the demised premises, total area of the balconies and terraces, and proportionate share of the common areas like common lobbies, lifts, common service shafts, staircases, machine room, mumty, electric substation and other services and other common areas etc. In Northern India property is sold according to super built up area and the buyer pays on the super built up area size.

Builder Buyer Agreement

It is the most important document in case of primary bookings, it’s the agreement that contains all the terms and conditions of the purchase of the property, the total prices of the property and the payment schedule. It is signed by both the buyer and the builder. There are two copies of the same in original; one is retained by builder and the other by the buyer.

EWS

Means Economic Weaker Section, the government has made mandatory in some group housing projects and Townships to build houses particularly for selling it to individuals belonging to Economically Weaker Sections of the society.

Property Tax

Taxes are paid to the government according to the rules and regulations. As of Property tax is not applicable in Noida, Greater Noida, Gurgaon & Faridabad, it’s only applicable in Delhi.

Service Tax

This tax is paid on total cost of the property. If the super built up area of the apartment is below 2000 sq ft or the property cost is less than 1 crore than 3.09% service tax is applicable. If the property cost is more than 1 crore or the size is more than 2000 sq ft than 3.708% of total cost is charged as Service tax.

PLC

All the apartments in the complex don’t enjoy a premium location, some apartments are better than others, so to differentiate between an apartment at a good location and bad location the builder charges Preferred Location Charges (PLC).

EEC

Electric connection charges are being charged for the laying of the electricity wires and points. EEC is mandatory charges.

FFC

Fire Fighting charges are being charged for the installation of firefighting equipment’s. FFC is mandatory charges.

Lease

Lease is where there are no two kinds of payments made to the landlord by the tenant unlike a rental transaction. A sum of money is paid to the landlord at the beginning of the lease tenure, which is repaid without interest when the tenure ends. No monthly payments are made.

Lease Hold Property

A property "bought" for a certain period of time. The "owner" of such a property will have "bought" the property from the original landlord and is entitled lawfully to rent, lease or "sell" the property to a third party during the period of leasehold. After the leasehold period, the property goes back into the original landlord's possession.

Loan-to-Value Ratio (LTV)

The ratio of the amount of your loan to the appraised value of the home. The LTV will affect loan programs available to the borrower and generally, the lower the LTV the more favorable the terms of the loan programs offered by lenders.