Real Estate Jargon Explained

The purchase and selling of real estate involve potentially complex legal transactions, and from time to time you may come across jargon in contracts and legal paperwork that you’re not familiar with. Here are some of the most common terms you may encounter and their meaning:

A – C

AgentA person given permission to act on behalf of a client in the sale, purchase, letting or management of the real estate. Agents must be licensed by the relevant state agency.
AllotmentAn area of land that is subdivided into smaller pieces. These smaller allocations of land are known as allotments.
AmenityThis is a feature of a neighbourhood. For example, public swimming, school or park can be considered as amenities.
ApartmentA self-contained residential unit that is usually part of a shared building or complex.
AppreciationThe increase in the value of a real estate caused by external economic factors and market forces.
ArchitraveA moulding surrounding a door or window opening.
AuctionA public sale in which property is offered for sale through a competitive bidding process.
BeamA horizontal, load-bearing piece of timber or metal that has structural properties.
BearerA sub-floor timber or steel beam that supports floor joists.
Body corporateA body of owners in a block of units. The council of the body corporate – elected by property owners in the block – meet at regular intervals to discuss various matters of administration, including repairs, maintenance and security.
BoundaryA-line separating adjoining properties.
Breach of contractBreaking the conditions of a contract.
Brick veneer constructionA system in which a timber frame is tied to a single brick external wall.
Bridging financeinance that is obtained for a short period of time as a “bridge” to long-term
finance. This funding may be required if a home purchase completes before the owner’s sale.
Building regulationsRules which are designed to maintain public safety, health and minimum acceptable standards of construction.
CaveatWarns a person buying real estate that a third party has some right or interest in the property.
Caveat emptorThis principle of law requires that the buyer is satisfied with the property they wish to buy before completing the transaction. The buyer purchases the property on an “as is” basis.
Certificate of titleA document that confirms the ownership of land. It shows who owns it and whether there are any outstanding mortgages or loans against it.
ChattelsProperty other than real estate that is included in a sale, including items of furniture.
Clear titleA title that isn’t encumbered with outstanding mortgages or loans.
Cluster housingDetached group of houses that have a common open space.
CommissionA fee or payment made to a real estate agent on completion of the sale of a property.
Common areaA shared area that is available for use by more than one person, which might include the stairwell of an apartment block.
Common law titleSometimes referred to as an “old system title”, a common-law title consists of a series of title documents referred to as “a chain of title”.
Compulsory acquisition (resumption)The power of central or state governments to purchase property without the owner agreeing to sell. A compulsory acquisition order could be used for the building of new transport links.
Contract of saleA document that lists the terms and conditions of a property sale between the vendor and the purchaser.
ConveyanceThe legal process of transferring the ownership of property from the seller’s name to the purchasers.
CovenantA requirement noted on the title of a property that forces the property’s owner to adhere to named terms, conditions and restrictions regarding the property.
Cover noteA document issued by an insurance company to temporarily prove that a property has current insurance.

D – Q

DeedA legal document that is a record of an agreement, obligation or conveyance of property.
DepositThe sum of money normally paid by the buyer at the time of exchanging contracts. It is typically between 5 and 10 per cent of the final purchase price.
Dual occupancyAn area of land or an existing dwelling that is zoned in such a way that allows the owner to construct a building that has two separate living arrangements.
DuplexA residential property with 2 apartments – both of which have separate entrances.
FittingsGoods or articles that can be removed from a property without causing damage or an obvious reduction in its value.
Some examples:
• Paintings or mirrors that are not bolted but hung or screwed to a wall
• Carpets
• Curtains and curtain rails
• Free-standing ovens, refrigerators and washing machines
• Beds/sofas and other freestanding items of furniture
• Lampshades
• Television aerials and satellite dishes
FixturesItems such as baths, toilets and walk-in wardrobes that form part of the property and cannot be removed without causing damage. Some examples:
• Light fitments
• Central-heating boilers and radiators
• Built-in wardrobes/cupboards (e.g. if they use a wall to form one of their sides and would thus be incomplete if they were removed)
• Bathroom suites (sinks/baths/toilets)
• Plugs
• Kitchen units
• Wall paintings
FreestandingA property that stands independently of others.
GazumpingThe withdrawal from a verbally agreed sale by the vendor in favour of a quicker or more profitable sale. This practice is perfectly legal before contracts are exchanged and real estate agents usually act in the vendor’s best interest and take the higher offer. Any deposits are refundable but no compensation is owed.
Home unitA residential property grouped with others, having shared common areas and owned under a group title system. An apartment within a block of apartments may be referred to as a home unit.
Interest-only loansThe principal amount borrowed is not repaid until the end of the loan. Only interest is payable in the interim, but the owner will be expected to save through endowment or other property savings schemes.
InventoryA list of items included with a property, including furniture and furnishings.
InvestmentThe purchase of an asset (like real estate) in order to produce a capital gain.
Joint tenantsJoint tenancy is the holding of property in equal shares by two or more persons.
Land taxA State government tax payable by owners of property based on the unimproved capital value of the property.
Listing agreementA contract between a property owner and a real estate agent that sets out the terms, conditions and commission associated with the sale of a specific property.
MortgageA legal document that gives a lender an interest over a property to secure the repayment of a loan.
MortgageeAn entity that lends money on the security of a mortgage.
MortgagorAn entity that borrows money offering the security of a mortgage.
Option to buyA legal document giving a person a right to buy according to an option price and predetermined terms and conditions.
Principal and interest loanA loan whereby the lender repays a combination of interest and the principal borrowed throughout the term of the loan.
Private treaty saleSale of property through a real estate agent on the open market.
Progress paymentsFunds paid by a loan provider in instalments to a builder – as the building work meets predetermined targets.
Property managementThe management of a property on behalf of the owner.

R – Z

RatesThe amount charged by the local council or water authority to provide services to a property.
Real propertyLand with or without improvements on it.
Reserve priceThis is the minimum price a seller has specified that they will accept to sell their
property at auction.
SearchThe process of investigating title to land in order to ascertain if the vendor has the right to
transfer ownership.
Semi-detachedTwo houses joined together by a common wall
SettlementWhen the sale of a property is legally finalised.
Stamp dutyA government tax administered by individual states. It is calculated according to the sale value on the contract of sale. Mortgages, however, it is calculated on the amount to be advanced.
Strata titleA system of title that allows the owner of an apartment to have a separate title for that specific unit of the building.
SurveyShows the dimensions and boundaries of land and the exact location of buildings.
TenancyThe right to occupy land or buildings as provided by the terms of a lease or other agreement.
Tenants in commonThe holding of property by two or more owners.
TerraceOne of a row of houses joined together with common walls.
Torrens titleThe name of the government system of recording ownership of land.
Town HouseTwo-storey attached dwellings usually registered under a strata title.
TransferA document registered at the Land Title Office recording the change of ownership to a
UnencumberedUsually describes a property free of secured loans and mortgages.
ValuationA written opinion of a property’s value – usually by a real estate agent.
VendorA legal property owner who offers the property for sale.
VillaSingle-storey dwelling usually registered under strata or community title.
ZoningDescription of the allowable uses of land, as set out by local councils or planning authorities.
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