Real Estate Dictionary

Administration/Application fee

This is a charge levied by the lender to cover the costs of processing a mortgage application. If an application is not completed, the fee may not be refunded.

Annual percentage rate (APR)

Calculated by using a standard formula, the APR shows the cost of a loan. It is expressed as a yearly interest rate and includes interest, mortgage insurance and other fees associated with the loan.

Appraisal/Valuation

A full inspection of the property, conducted by a valuator/valuer, who will then write a detailed report setting out the value of the property. Suitable for any house, commercial building or parcel of land.

Appraised value

The value of a property, as estimated by a valuer or valuator (the latter is the US terminology).

Appreciation

The increase in the value of a property as a result of changes in market conditions.

Asset

Any form of property owned by a person, including real estate, currency, stocks and enforceable claims against others.

Attorney

Legal expert handling all documentation for the sale, purchase and sometimes rental of a property.

Break/Termination clause

A break/termination clause gives the tenant or landlord the right to terminate a Tenancy Agreement, under specific circumstances, before the date it is officially due to end. Usually requires written notice.

Bridging Loan

A short-term loan commonly used to cover or “bridge” the overlap between the purchase of a new property and the sale of an old one, or the construction period of a building until a mortgage can be obtained for the building and land.

Building insurance

An insurance policy that pays the cost of repair or rebuilding in the event your property is damaged or destroyed. Most mortgage lenders will require building insurance to be taken out as a condition of their loan.

Capital

The amount of money either put into buying a property or the deposit and/or cash in hand placed on a property. Also known as equity.

Commission

A payment received from conducting business, especially on the sale or rental of property.

Common Area Maintenance (CAM) Charge/Service Charge

The cost of repairing and maintaining external or internal communal parts of a building charged back to the tenants or lessees e. g. insurance, rates, taxes, maintenance of the elevator, pool and gardens.

Common areas

Shared areas of land or buildings, such as foyers, hallways, recreational facilities, pools, gardens, tennis courts, parking areas, driveways and the exterior of the building including windows, roof and external doors.

Comparative search

A search that looks at the actual sale or rental values of similar properties in the same area as your property. This search is normally carried out by an expert who has access to statistical data and should give an indicative sale or rental price for a property.

Completion

The completion date is the date on which money is forwarded from the buyer’s solicitor to the solicitor of the vendor. It is the date that the buyer becomes the legal owner of the new property.

Conditions of sale

The details which determine the rights and duties of the buyer and seller. These may be statutory, or legal conditions of sale and are usually stated in the agreement for sale.

Condominium/Apartment/Flat

A flat or apartment that has been created by the subdivision of a larger property into condo units.

Contents insurance

Insurance that covers the contents of a property, including electrical goods, carpets, appliance, furniture and curtains.

Contract

A legal agreement between the parties involved in a real estate transaction or in a business arrangement.

Conveyancer

A qualified individual such as a licensed attorney who deals with the legal aspects of buying, selling or renting a property. This expert is versed in common law as well as the different requirements to convey property.

Conveyancing

The legal process surrounding the transfer of ownership of a property from buyer to seller.

Conveyancing fee

The charge made by a solicitor or conveyancer for undertaking the legal process necessary for the transfer of ownership of a property.

Covenants

Rules and regulations governing the property, contained in its title deed or lease.

Credit check

The procedure by which a check is made on the credit history of an applicant applying for say a mortgage, usually conducted by one of the dedicated credit check agencies, banks and/or lending institutions. The check will reveal history of credit card repayments, outstanding debts, arrears, employment as well as assets.

Credit history

A record of an individual’s or company’s past borrowing, including information about late payments and bankruptcy.

Deed of Release and Discharge Fee

A Deed of Release is registered after a mortgage has been paid off in full. A discharge fee and an attorney fee will be paid at the end of the mortgage term to cover costs of transferring the property from the mortgagor to the mortgagee.

Deeds

Legal documents proving ownership. There are different types of deeds:- a deed of ownership; a deed of lease; a deed of mortgage.

Deflation

A situation in which prices have fallen (the opposite to inflation).

Deposit

A sum of money (usually one month’s rent) paid by the tenant prior to moving in or a deposit and sum of money a purchaser pays down to secure a property when executing a sales agreement.

Depreciation

The decline or reduction in the value of a property caused by changes in market conditions (the opposite of appreciation).

Development

A neighbourhood.

Disbursements

Fees paid by the buyer’s solicitor on the buyer’s behalf such as stamp duty, land registry and search fees.

Discharge of Mortgage

Paying off a mortgage.

Down valuation

When the lender restricts the amount you can borrow after the valuation report indicates the property is not worth the sum.

Draft contract

Preliminary, unfinalized version of the contract.

Duplex

Two townhouses joined by a common wall.

Early Repayment Charge (ERC)

A charge levied by the lender as a penalty if a mortgage is paid off before the maturity period.

Equity

The amount of money either put into buying a property or the deposit and/or cash in hand placed on a property. This amount exceeds the sum of any money borrowed against the property. Also known as capital.

Excess

The initial sum paid on an insurance claim by the policyholder.

Exchange of contracts

The point at which signed contracts are physically exchanged, legally committing the buyer and seller to the purchase and sale of a property at the agreed price. The time at which a deposit (generally 10%) is paid.

Exclusive Listing Contract

When a contract is signed between a client and Nealco to sell or rent a property for a fee. Nealco must advertise, must show, and must provide feedback.

Fixed Rate Mortgage

A mortgage in which the interest rate is set for an agreed period of time.

Fixtures & fittings

All non-structural items included in the purchase of a property e. g. curtain rods, light fixtures, appliances, air-conditioning units and systems, shower enclosures, water tanks and pump, water heater, electronic gates and remotes.

Freehold

Where the owner of the building, be it residential or commercial, also owns the land on which it is built.

Ground Rent or Lease Rent

The charge, usually annual, levied by the freeholder to the leaseholder.

Guarantor

The lender may sometimes require a borrower to appoint a guarantor. This is someone who promises to pay the borrowers debt if the borrower defaults.

Household insurance

An insurance policy that protects against loss or damage to the property caused by fire, some natural causes and acts of vandalism. Also see Buildings insurance and Contents insurance.

Inflation

The general rise in prices over time.

Interest charges

The charges that banks make on a loan, calculated as a percentage of the amount borrowed.

Interest-only Mortgage

A type of mortgage in which the borrower only repays the interest on the loan for the duration of its term and repays the full loan amount at the end of the mortgage period.

Inventory

A list describing fittings, fixtures, furnishings and contents and their condition within a property at the commencement of the tenancy, against which dilapidations/weaknesses which occur during the tenancy can be measured.

Joint income

The total gross income of the two or more borrowers in a joint mortgage.

Joint tenants

A form of ownership for two parties whereby if one of them dies, their share of the property will automatically transfer to the remaining party, giving them full ownership (regardless of the terms of the deceased owner’s will).

Key Money

The money paid to a tenant to buy out a lease.

Land registration

The process of registering the legal title of an area of land with the land registry, typically handled by an attorney.

Land registry fee

The fee payable for the registration of land.

Landlord

The owner of a rental property.

Landlord's reference

A reference given by a previous landlord, which confirms an applicant’s history of payment of rent and previous conduct as a tenant.

Lease Rent or Ground Rent

The charge, usually annual, levied by the freeholder to the leaseholder.

Lease/Tenancy agreement

A legal agreement signed between both parties for the rental of a property. It is designed to protect the rights of the tenant and landlord setting out all terms and conditions of the rental arrangements.

Leasehold

A type of ownership in which a person owns a property, but not the land on which it is built. The owner of the Freehold will grant a lease on the property for a specified length of time.

Legal charge

A mortgage on the property.

Lender

The party, typically a bank, building society or mortgage company, offering the loan.

Lender's arrangement/Negotiating fees

Charge passed on to the buyer by the lender for arranging a loan.

Lessee/Tenant

An individual, group of individuals or company who holds or possesses property for a period of over one year in the case of residential and three years in the case of commercial.

Maintenance Charge/Common Area Maintenance (CAM) Charge

The cost of repairing and maintaining external or internal communal parts of a building charged back to the tenants or lessees e. g. insurance, rates, taxes, maintenance of the elevator, pool and gardens.

Mortgage

An amount of money advanced by a lender such as a bank or institution on the security of a property and repayable over a long period.

Mortgage Broker

A company which advises lenders on the types of loans available and which helps to process any subsequent application.

Mortgage Deed

The legal document that confers ownership or title of a property to the mortgagor being a bank or lending institution. Also see Deed of Mortgage.

Mortgage Indemnity Insurance Premium

An up-front, one-off premium paid to the insurance company to protect the lender against the borrower defaulting on the loan. A requirement on any mortgage that exceeds 90% and over of the value of the property.

Mortgage Payment Protection (MPP)

This is an insurance designed to pay your monthly mortgage for a limited period, usually a year if you are unable to work through illness, disability or redundancy.

Mortgage rate

The standard variable interest rate quoted by all mortgage lenders that normally varies in line with the base rate of The Central Bank of Trinidad & Tobago. All discounted rates are based on this mortgage rate.

Mortgage term

The period of time over which a mortgage loan must be repaid.

Mortgage type

This may be a fixed, variable, capped, discount, tracker or another type of mortgage.

Mortgagee

The lender of a mortgage (i. e. bank or building society).

Negative equity

A situation in which the value of a property has fallen to below the level of the loan secured on it.

Negotiating/Application fee

This is a charge levied by the lender to cover the costs of processing a mortgage application. If an application is not completed, the fee may not be refunded.

Non-exclusive Contract

When a contract is signed between a client and Nealco to sell or rent a property for a fee. However, the client has appointed other brokers as well as Nealco. Nealco is under no obligation.

Offer

A sum of money that the purchaser or tenant offers to pay for a property.

Offer of a loan

A formal document approving the mortgage you have requested and detailing the terms and conditions that will apply.

Open market value

The price a property should achieve where there is a willing buyer and a willing seller.

Penalties

A specified charge that is levied by the lender under certain circumstances, usually for full or part repayment within a specific period linked to a discount, tracker, fixed or other product type.

Peppercorn ground rent

A nominal rent usually paid annually.

Preliminary enquiries

The initial enquiries about a property put forward to a seller, which the seller must answer before the exchange of contracts.

Premium

The annual amount payable for an insurance policy.

Premium lease

Where rent for the property is paid in full up front.

Principal

The amount of debt outstanding (excluding interest).

Property Management

The management of a property on behalf of the owner.

Public liability insurance

Insurance that covers injury or death to anyone on or around a property.

Purchaser

A person who is buying a property.

Re-mortgage

Refinancing a property by either switching a mortgage from one lender to another or by taking out a second mortgage to take advantage of any equity gained by a rise in value.

Redemption

When a mortgage is fully repaid.

Redemption Statement

A statement which is provided by the lending institutions consisting of the outstanding monies due on the mortgage.

Renewal of contracts

Opportunity to renew a contract which has or will shortly expire.

Rent Restriction Act

This Act prohibits landlords from increasing their rental price when the tenant is paying a nominal rent. This has caused a number or landlords to refuse to upkeep their properties.

Repayment mortgage

A mortgage in which monthly charges are used to repay the interest and reduce the outstanding capital.

Repossession

When the mortgage lender takes possession of a property due to non-payment of the mortgage.

Retention

The ability of a lender to hold back releasing a mortgage until certain conditions are met.

Return on Investment

Income from a property calculated as a percentage of its value. See Yield.

Service Charge

See Maintenance Charge or Common Area Maintenance (CAM) Charge.

Share of freehold

Where the freehold on which the property stands is owned by a limited company and the shareholders of that limited company are the owners of the property. This describes the condominium/townhouse scheme of ownership.

Shop-worn Listing

A property that has been exposed to the market for over ninety days.

Stamp duty

A government tax paid by purchasers or tenants depending on the value of the property.

Standard variable rate

Mortgage lender’s standard rate of interest, which may be increased or decreased periodically by the lender depending on prevailing economic conditions.

Structural survey

This is based on a detailed inspection of the property and it reports on the general structural integrity of the building and land/improvements.

Studio flat

A flat consisting of one main room or open-plan living area, incorporating cooking and sleeping facilities usually with a separate bathroom/shower room.

Subject to contract

A phrase which confirms that an agreement is not yet legally binding.

Surveyor

A professional person qualified to estimate the boundaries and size of land.

Tenancy

The temporary occupation of a property by a tenant.

Tenancy/Lease agreement

A legal agreement signed between both parties for the rental of the property. It is designed to protect the rights of the tenant and landlord setting out all terms and conditions of the rental arrangements.

Tenant/Lessee

An individual, group of individuals or company who holds or possesses property for a period of over one year in the case of residential and three years in the case of commercial.

Tenants in common

A form of ownership by two or more people in which if one of them dies, their share of the property forms part of their estate and does not automatically pass to the other(s).

Tenure

Conditions on which a property is held i. e. length of lease.

Term

Definition of time.

Termination/Break clause

A termination/break clause gives the tenant or landlord the right to terminate a Tenancy Agreement, under specific circumstances, before the date it is officially due to end. Usually requires written notice.

Title deeds

Documents showing the legal ownership of a property.

Title insurance

An insurance policy which a buyer can take out to ensure good title.

Title Search

An official summary document of an investigation of the history of the ownership from the land registry. This investigation is carried out by an attorney to check for any liens, unpaid claims, mortgages, restrictions or any other problems that may affect ownership.

Title search

An investigation, carried out by an attorney, into the history of ownership of a property. The search will check for liens, unpaid claims, restrictions or any other problems that may affect ownership.

Under offer

The status of a property when a vendor or a landlord has accepted an offer from a prospect, prior to exchange of contracts, and receipt of a deposit.

Vacant

Period of time where the property is empty/unoccupied.

Vacant Possession

A phrase usually used in an agreement for sale meaning that the property is being sold empty/vacant/unoccupied.

Valuation/Appraisal

A full inspection of the property, conducted by a valuator/valuer, who will then write a detailed report setting out the value of the property. Suitable for any house, commercial building or parcel of land.

Value

The price of a property under normal conditions, i. e. when the buyer is not forced to buy and the seller not forced to sell.

Variable base rate

The basic rate of interest charged on a mortgage. This may change in reaction to market conditions, so monthly payments can go up or down.

Vendor

The person selling a property.

Void

An empty area or space.

Yield

Income from a property calculated as a percentage of its value. See Return on Investment.