Your Common Property Terms (A-C)

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AS YOU can appreciate, I quite regularly get asked to explain what the various property terminology actually means.

Therefore, I thought it might be worthwhile to provide you with your own point of reference, over the next couple of weeks.

And I’ll do that by giving you various definitions starting with those items ranging from “A to C”.

That way, you will be able to quickly find the answer — whenever you are unsure about any property jargon being thrown around, by people who may be simply trying to show off.

What you’ll find here are practical definitions, intended for the every-day Investor.

A to C

Agent

The person or firm appointed in writing by you to act on your
behalf with third parties, and thereby receive a commission.

Agents in Conjunction

You (as a vendor or landlord) may appoint more than one agent;
or an appointed agent may act with another agent who introduces
a purchaser or tenant, to your property.

Air Rights

Rights concerning the building upon, or occupancy of, the
vertical space above the specified site.

Allotment

A small site for home building, sometimes called a block.

Amortisation

Regular repayments are made over an agreed time to recover
your capital investment.

Anchor Tenant

The big-name tenant in a shopping complex, which attracts
other tenants and customers.

Apartment

Originally, the American word for a flat; but in Australia it
might also be a Suite or just a room, not necessarily self-
contained.

Appreciation

An increase in property value triggered by inflation,
improvements or increased demand.

Arcade

A covered walkway, usually with shops along either side.

Arrears

Debts, usually rents, which have not been paid on time.

Assessment

The rates or taxes apportioned to a particular property.

Assets

The sum of a person’s real and personal property, including
equities.

Assignment

The transfer of a property, a lease, rights or an interest; and
sometimes a liability from one party to another.

Average

The term is Subject to Average and it is used by insurers when
responding to a claim on property, which has been covered for
less than its full value.

Body Corporate

Now known as an Owners’ Corporation …
The legal administrative group of owners of offices, home
units, flats, town houses, etc for common property.

Bona Fide

Genuine, honest, in good faith.

Bridging Finance

A temporary loan to bridge the time-gap between paying for one
property and receiving payment from a previous property.

Building Line

The uniform distance, usually from a road, behind which
buildings must be erected.

Building Regulations

Laws laying down standards in materials and construction
methods which you must observe to maintain health, safety and
certain design minimums in any building or alteration.

Buying Commission

The money you pay to an agent for helping you to acquire a
specified type of property.

Capital Gain

The profitable difference between your buying price and
selling price, now subject to Capital Gains Tax.

Capital Improved Value

The amount of money a property might reasonably be expected to
realise, if sold at the time of a municipal valuation.

Cash Flow

The surplus income (usually charted monthly) flowing into a
property investment or business after servicing and operating
costs have been deducted.

Caveat Emptor

Let the buyer beware.

Central Business District

The designated downtown business area for a major city.

Certificate of Title

Certificate of Title The paper that records property ownership. One copy lodged at the Titles Office, the other with the proprietor. When the property is sold, the Titles Office annotates both copies.

Client

A person who engages an agent or valuer, and who is obliged to pay that agent or valuer commission or fees.

Commercial Property

Used for business purposes: Office buildings, shops, warehouses,
hotels, etc.

Compensation

The money paid to a property owner when all or part of the
property is compulsorily acquired by a statutory authority. It
takes into account such things as market value, the effect on
the balance of the property, loss of income etc.

Compound Interest

The combination of interest paid on the principal and on
interest accrued.

Condominium

An American term starting to come into Australian usage
covering ownership of a flat or unit.

Consideration

The price.

Consolidation of Title

When several parcels of land are put together, a new
Certificate of Title is issued to replace all the earlier
certificates.

Construction Costs

The sum of labour and material costs, plus contractors
overheads and profits in the erection or improvement of a
property.

Corridor Development

Planning schemes calling for “finger development” of urban
dwellings, while retaining rural land in between.

Counterpart

An identical copy of an original document.

Covenant

An agreement between landlord and tenant, or vendor and
purchaser, covering specific things which will be done or
cannot be done to a property.

Cover Note

Immediate insurance cover, often issued by an insurance broker
on the insurance company’s behalf, for a property which has just
been bought.

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