Design > Real Estate Terms Simplified: A Guide for Homebuyers

Real Estate Terms Simplified: A Guide for Homebuyers

6 min read Mar 30, 2023

Purchasing a property in India can be a complex and challenging process, particularly for first-time buyers. One of the most daunting aspects of buying a home is understanding the terminology used in the real estate industry. Here is a glossary of some of the most common Real Estate terms you’re likely to come across when buying a property in India:

Add-on Charges: Additional costs associated with a property transaction, such as brokerage fees, legal fees, stamp duty, and registration charges.
Advance: The initial payment made by the buyer to the seller as a sign of their intent to purchase the property.
Agreement for Sale: A legal agreement between the buyer and seller, outlining the terms and conditions of the property sale.
Amenities: The facilities and services provided within a building or complex, such as swimming pools, gyms, clubhouses, and security systems.
Annual Maintenance Charges (AMC): A fee paid by the apartment owners to the apartment association for maintenance of common areas and facilities.
Approved Layout: A layout plan approved by the local authorities for the development of a residential or commercial project.
Bank Loan: A loan provided by a bank to the buyer to finance the purchase of a property.
Built-up Area: The total area of a property including the carpet area, plus the area occupied by walls, balconies, and other such features.
Capital Gain: The profit made from the sale of a property that is above the purchase price.
Carpet Area: The net usable area of the apartment/unit, excluding the area of walls, balconies, and common spaces.
Completion Time: The time required for the construction of a building or complex, as specified in the agreement between the buyer and the developer.
Circle Rate: The minimum value at which a property can be registered for the purpose of stamp duty and registration fees.
Common Area: The area within a building or complex that is used by all residents or occupants, such as lobbies, staircases, elevators, and parking spaces.
Completion Certificate: Certifies a completed building meets necessary regulations and standards.
Constructed Property: A property that is already built and ready for occupation or use.
Co-ownership: The ownership of a property by two or more people, where each owner has a share in the property.
Deed: A legal document that proves the ownership of a property.
Developer: A person or company involved in the construction and development of a real estate project.
Down Payment: The initial payment made by the buyer to the seller or the bank, typically a percentage of the total property price.
Earnest Money Deposit (EMD): The initial deposit paid by the buyer to the seller to show their intent to purchase the property.
Encumbrance Certificate: A certificate issued by the government that certifies that the property is free from any legal or financial liabilities.
Encroachment: The unauthorized use or occupation of someone else’s property without their permission.
Encumbrance: Any legal liability or claim on a property, such as a mortgage, lien, or easement, that affects its ownership or value.
Freehold Property: Property with complete ownership and control, including the land it’s on.
FSI (Floor Space Index)/FSR (Floor Space Ratio): The ratio of the built-up area of a building to the total plot area, as permitted by the local authorities.
Green Belt: An area of land surrounding a city or town that is reserved for agricultural or environmental purposes and is not available for development.
Hypothecation: The pledging of a property as security for a loan, where the borrower retains ownership of the property but gives the lender the right to seize the property in case of default.
Joint Development Agreement (JDA): An agreement between a landowner and a developer to jointly develop a property, where the landowner contributes the land and the developer contributes the construction expertise and resources.
Khata: An account of a property maintained by the local municipal authorities for the assessment and collection of property taxes.
Lease Agreement: A legal agreement between the landlord and tenant, outlining the terms and conditions of the lease of a property.
Leasehold Property: A property where the owner has leased the land from the government or the landlord for a specified period.
Market Value: The estimated value of a property based on its location, size, amenities, and other factors.
Mutation: The process of transferring the title of a property from one person to another.
Non-Agricultural Land (NA): Land that is not suitable for construction, only agriculture.
Occupation Certificate: Certifies a building’s compliance with the building code for occupation.
Plinth Area: The area of a property measured at the floor level and includes the area occupied by the walls.
Possession: The legal right to occupy and use a property.
Power of Attorney: Allows one person to act legally or financially on behalf of another..
Property Tax: A tax levied by the local authorities on the property owner based on the property’s value.
Ready-to-Move-In Property: A property that is fully constructed and ready for occupation or use.
Real Estate Agent/Broker: A person or company that acts as an intermediary between the buyer and seller in a real estate transaction.
Real Estate Regulatory Authority (RERA): A regulatory authority established by the government to protect the interests of buyers and regulate the real estate sector.
Registration Fee: A fee paid to the government for registering the property sale deed.
Resale Property: A property that has already been purchased and is being sold by the current owner.
Sale Agreement: A legal agreement between the seller and the buyer outlining the terms and conditions of the sale of a property.
Sale Deed: Legal document that transfers property ownership from seller to buyer.
Security Deposit: A deposit paid by the tenant to the landlord as security against any damages or unpaid rent.
Society: An association of apartment owners or residents formed to manage and maintain the common areas and facilities of a building or complex.
Stamp Duty: A tax paid to the government for stamping and registering the property sale deed.
Super Built-up Area: The total built-up area of a property, including the common areas, such as lobbies, staircases, elevators, and parking spaces.
TDR (Transferable Development Rights): A scheme that allows landowners to transfer their development rights to another property or to the local authorities in exchange for monetary compensation or other benefits.
Tenancy Agreement: A legal agreement between the landlord and tenant, outlining the terms and conditions of the lease of a property.
Title Deed: A legal document that proves the ownership of a property.
Transfer Fee: A fee paid by the buyer to the society or apartment association for the transfer of ownership of the property.
Transfer of Property: The legal process of transferring the ownership of a property from one person to another.
Under Construction Property: A property that is currently being constructed or developed.
Unit: A single apartment or flat in a multi-unit building or complex.
ULC (Urban Land Ceiling) Act: A law that restricts the ownership and use of land by individuals or entities to prevent the concentration of land in the hands of a few.
Value Added Tax (VAT): A tax levied by the government on the sale of a property.
Zoning: The division of a city into specific zones for different types of land use, such as residential, commercial, recreational.