Realty Glossary

Cap and Collar: These both words are market jargons where cap meaning is maximum amount by which rent can be increased and second one collar meaning is maximum limit where rent can be decreased.

Gross Face Rent: The actual rent for space excluding maintenance, security and other incentives.

Gross Effective Rent: This includes all expenses such as maintenance, security and other incentives.

Base rent: The fixed rent amount to be paid to landlord excluding other expenses.

Net Leasable Area: The net usable area between two tenancies finished surface and walls. It usually includes window frames and structural columns, cupboards and excludes plant and motor rooms.

Gross Leasable Area: This includes usually total area including loading that further includes common area such as lift, stairs, lobby, pump house, space for firefighting mechanism and so on.

LESSEE: The legal person who takes property on rent and whose name must be mentioned in the leasing agreement.

LESSOR: Property legal owner or landlord.

Resource Consent: This is taking approval from the concerned authority regarding zoning and permission to change the use of land or premises.

Right to Renewal: This is right of any lessee to extend the lease for an agreed time prior to the expiration of current lease agreement.

Statutory Expenses: All the expenses those are levied by area civic body such as water and sewer rate and usage charges.

Sublease: When a LESSEE under the provision that allows a lessee to find the one or more than one lessees to occupy the space but this matter is totally subject to LESSOR.

Common area: Area that can be used for common purpose such as lobby, corridor, parking lots, canteen.

Common area maintenance (CAM): Charges paid by the tenant for upkeep the common area.

Generic space: The space that can be used for multi-purpose.

Frontage: The front part of the building, land or property that are measured alongside the road.

Fit-outs: work of maintenance, retrofitting, redevelopment, installation of equipments or new mentioned development at client whim before the client possession.

Token/ Bayana: This is property dealing terms denotes the money given to landlord to close the negotiation on a particular property after the meeting have held and condition have made and agreed by both parties.

Bare Shell/Artic Shell/Cold Dark Shell/Grey Shell: This property is with un-furnished interiors and lacking HVAC (heating, ventilation, and air- conditioning) and also usually without lights and plumbing fittings. These fitting are taken place once the letter of intent for lease agreement is done.

Warm Shell/Vanilla Shell: This property is with furnished interiors and having facilities of HVAC (heating, ventilation and air-conditioning) and also with lighting, plumbing fittings and fall ceiling.

Semi-furnished: This property is with furnished interiors with cabins & workstation but without furniture and equipments. Furniture fitting will be taken place once the letter of intent for lease agreement is done.

Fully-Furnished: This property is fully furnished ready to use for commercial purpose and space will be painted, retrofitted and maintained before client possession.

TIA: Tenant Improvement Allowance, once the letter intent or lease agreement is cleared landlord may offer financial support for better improvement of space that a client is going to take. The money is given by landlord to defray the development expenses but excluding FFE (furniture, fixture and equipment) fittings.

Build-Out: This is a page of description for TI (tenant improvement) agreed by the both parties LESSOR and LESSEE that mentions the position and situation of both that how to start development of workplace.

Building Consent: When you take approval from the concerned authority for carrying out construction on the premises.

Occupancy Ratio: This ratio is calculated by dividing the total net leasable area by non-leasable area. Average occupancy ratios vary between 1:15 and 1:30 square feet per person.

Make Good: this clause defines the tenant's duty towards the landlord to return the space to its original condition before he leaves out or expiration of lease agreement.

Rent Review: In this mechanism a LESSEE rent can be reviewed every year as per market rate or at a fixed rate. The actual review structure is mentioned in the lease agreement.

Ratchet Clause: Ratchet clause that prevents LESSEE to decrease the rent under a rent review.

Assessed Value: property real value on which tax can be levied by the tax assessor.

Appreciation potential: The possibility of increment of real estate investment.

Labor pool: A group of workers that represents the all laborer.

Condominium: A Big building or structure of two or more Building.

Absorption: The total numbers of units of any commercial building become occupied during a specific time period.

Cost of occupancy: As the name suggests cost of occupancy includes the cost that incurs while you possess a commercial space for use, the cost includes base rent, maintenance, taxes, property repairs, common area maintenance, expense on HVOC (heating, ventilation and air-conditioning), FFE(furniture, fixture and equipment) expenses and other operating expenses.

Secondary Expenses: All the expenses beside the actual rent such as maintenance of area, lift, AC, common area cleaning, security, janitorial and electricity.

EDC: External Development Charges is levied by the developer that includes maintenance of street lights, roads, sewerage, water and electricity supply

IDC: Infrastructure Development Charges that is levied upon builder by the government and it is utilized for the development and maintenance of infrastructure around the project.

PLC: Preferential Location Charges is levied when you select property facing location such as see facing, park facing, and road facing. PLC is a premium charge that depends on the size, alignment and the price of the flat. Interestingly, PLC on floors varies from city to city based on the climatic conditions.

Utility charges: These charges encompass such as club membership, parking charges, gym/fitness charges and lift. Club membership of houses may accounts for significant amount. This may be charged on a yearly basis or for a lifetime.

Registered Will: It is one type of will unlike unregistered will and it can b typed or hand written. It plays an important role for any property transfer.

Succession certificate: It is also an important document after absence of a registered or unregistered will. It is a document issued by a court authenticating a rightful person to be the successor of a deceased person. The heirs should have a succession certificate as the need comes and these documents are required to prove that the heir is the rightful owner of the inherited property.

Possession under Protest: It is a clause that allows a buyer to take possession under protest and starting the defect liability period clause. In simple words, it means, buyer has taken possession with the knowledge of builder that there are some defects and the builder would be liable to get them repaired.

Defect Liability Period: It is also a clause by which any buyer has the right to repair any defect in construction or any manufacturing defects ranging from one to three years after getting possession of the flat.

Encumbrance Certificate: It shows that a property has any liability or not if yes then how much it is important to maintain the record and it reflects all the property transactions carried out.

Succession Certificate: This certificate certifies the right successor(s) to realize debts and securities of the deceased person.

Stamp Duty: It is paid to the state government while getting the property registered. These are the mandatory charges to be paid even if the property is transferred through a gift deed. The stamp duty and registration charges vary from state to state.

Value Added Tax: VAT is only charged on the construction value of under-construction property. It varies from state to state.

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