Real Estate Terms
Category Tenant Advice
Real Estate terms got you perplexed? See our comprehensive glossary to guide you in understanding common terms used in a real estate transaction relating to rentals.
ABANDONMENT
The surrender or relinquishment of a real estate property, including a piece of land or a housing unit.
ALIENATION
In the context of real estate, 'alienation' refers to the sale, exchange of donation of immovable property (or, 'land') and commonly used in some sale agreements as well as the legislation referred to as the Alienation of Land Act 68 of 1981.
AMENITIES
Material and immaterial features of a given property that increase its value or make it more desirable.
APARTMENT
A residential unit inside a structure built for housing.
AUCTION
This refers to the method of selling a property to a person who makes the highest bid.
BODY CORPORATE
The controlling body of a sectional title scheme made up of every single owner of the various units in the scheme. Until such time as the developer has sold the last unit, he remains a member of the body corporate.
BODY CORPORATE RULES
Rules for the control, administration and management of a Sectional Title scheme.
BREACH OF CONTRACT
If either a Landlord or Tenant does not perform according to the terms of the lease agreement they have signed, they are deemed to be "in breach". Under these circumstances, the agreement usually states what rights the other party enjoys.
CODE OF CONDUCT
A set of ethical rules drawn up by the Property Practitioners Regulatory Authority (PPRA) to regulate property practitioners' ethical conduct. This code is enforceable by law through disciplinary committees appointed by the PPRA.
COMMON PROPERTY
In a sectional title complex, common property is the land on which the buildings are built, together with those parts of the building that are not included in a particular section, i.e., stairwells, lifts, carports, swimming pools, etc
COMMISSION
The professional fee (commonly expressed as a percentage of the selling price) property practitioners charge for carrying out real estate duties such as selling, letting etc.
COMPARABLES
A part of a valuation technique that determines the value of a current asset by using a recently sold asset similar enough for indicating the expected sale price.
CONTRACT
A legally enforceable agreement, i.e., a lease agreement.
CONTRACTUAL CAPACITY
The capacity that the law recognises a contracting party enjoys in order to enter in a contract lawfully.
CURB APPEAL
A concept expressing the attractiveness of the house's visual look as viewed from the street level.
DEFECTS
A Patent Defect is a defect in the property that is clearly visible to the naked eye. A Latent Defect is a defect which exists but is not visible or discoverable upon a reasonable inspection of the property and which impairs its utility of effectiveness.
DOMICILE
The official physical address that a party to a contract nominates as being one's place of residence and where one can receive legal process, such as receiving of summons. In a contract, this will formally be referred to as the domicillium citandi et executandi.
DEPOSIT
The rental deposit is usually equal to one month's worth of rent, although it might be more. The landlord and tenant will agree on an amount. The landlord is required by law to invest the rental deposit in an interest-bearing account. A payment collected from the tenant by the landlord to secure funds for covering any property damage.
DUPLEX
A sectional title unit on two levels with stairs.
EVICTION
A legal process for the removal of a person from their current home. The reasons include lease agreement violations and unpaid rent.
EVICTION NOTICE
A legal notice from the landlord that describes the tenant's default connected to the lease terms. Eviction notices aim to inform tenants of a pending eviction suit against them.
EXCLUSIVE USE
In a sectional title property, the owner of a specific unit cannot become the exclusive owner of a portion of the common property but for his ownership of his undivided share. Certain portions can be set aside for the exclusive use of a particular owner (e.g., parking bay or garden) and this could be done either through Body Corporate Assignment or a Notarial Deed of Cession.
FREEHOLD
A free standing house on a plot of ground with its own Lot or Erf no.
HOMEOWNERS ASSOCIATION (HOA)
An organisation consisting of homeowners residing in a specific estate or complex with an aim to create and enforce guidelines and rules in the building.
INVESTMENT PROPERTY
A property that is purchased by the owner to generate profit through renting the property out to tenants.
LANDLORD
An owner of a property who receives payments from tenants taking residency in the owned rental unit.
LEASEE
A contract outlining the terms and conditions between a landlord and tenant under which the tenant gets an exclusive right to use the home for a fixed term. In turn, the landlord receives payments for the duration of the contract.
LEASE OPTION
An agreement that provides the tenant with an option to buy the property during or at the end of their tenancy. This agreement prevents the owner from selling the property to any third parties until the lease expires.
LEASE RENEWAL
The continuing of the lease after its initial expiration.
LEASE TERM
The time restriction regulating a tenant's right for the home's exclusive possession.
LEASING AGENT
A person, namely a property practitioner, who leases real estate properties and signs them on behalf of the lessor.
LESSEE
A tenant who rents the property from the landlord.
LESSOR
A landlord who grants the lease to the tenant.
LEVY
An amount paid monthly by the owners of a sectional title unit to the sectional scheme for the running and maintenance of the scheme and can cover costs such as insurance, maintenance, security etc.
LONG-TERM RENTAL
A long-term lease is often defined as anything that is agreed-upon for more than one year.
MAINTENANCE
An umbrella term for regular activities that keep the property in good condition.
MANDATE
An instruction or authority given to a property practitioner to render a particular estate agency service for a client for which the agent will receive remuneration.
NOMINEE
A person nominated or appointed by another person for a specific purpose.
NULL AND VOID
Without any legal effect. An agreement of lease that is null and void is not valid in any respect and cannot be enforced by either party.
OCCUPATION
The right to be physically present on a property. A Seller must give a purchaser occupation of a property, which means that he must remove his furniture and hand over the keys so that the Purchaser can take actual occupation.
PROPERTY
A real estate asset that includes land and any accompanying permanent structures, such as houses or other buildings.
PROPERTY INSPECTION
A visual inspection of a building that has to be carried out by a qualified professional in a non-invasive manner.
PROPERTY MANAGEMENT AGREEMENT
An agreement clarifying the service, responsibilities, and payments that will be signed by the landlord and a property management company.
PROPERTY MANAGER
A person managing a real estate property that belongs to someone else. Property managers get compensated for dealing with accounting, maintenance, and rent collection among other duties.
PROPERTY SHOWING (aka SHOW HOUSE)
A scheduled appointment that allows prospective tenants to make a walk-through tour in the property.
REAL ESTATE
A portion of land that may or may not have attached permanent structures, such as buildings.
RENT COLLECTION
An activity that is undertaken by the landlord or a property management company to collect the money from each of the tenants under the terms stated in the lease agreement.
RENT-TO-OWN
A lease agreement that provides the purchasing possibility to the tenant.
RENTAL DISCOUNT
A discount given by the landlord to the tenant when certain previously agreed criteria are met. For example, the discount could apply on automatic lease renewal.
RENTAL PROPERTY
A property occupied by tenants who pay the owner in return for utilising the living space and any permanent or temporary attached fixtures.
RENT RATE
An amount of money the tenants have to pay to landlords over a fixed time period for renting a property.
REPAIRS
An action to fix broken or obsolete pieces of the property, including any fixtures inside the living space.
RESOLUTIVE CONDITION
A clause in an agreement of lease in terms of which the agreement will become null and void only if the event stipulated in the clause occurs. It is the opposite of a suspensive condition, (see note under Suspensive Conditions).
RETURN ON INVESTMENT (ROI)
A metric that shows how much profit an investor makes on the investment property as a percentage of the investment cost.
PROPERTY PRACTITIONER (previously REAL ESTATE AGENT
A qualified professional who leases and sells real estate properties.
SECTIONAL TITLE
The Sectional Titles Act 95 of 1986 made it possible, in the case of a block of flats, for each unit to be owned by a different person.
SEMI-DETACHED
Two separate homes side by side joined together, with one common dividing wall.
SERVITUDE
A registered right which a person/entity has over the immovable property of another. It usually entitles the holder of the servitude to do something on the property. A common example is a registered right of way to travel over property owned by another.
SHAREBLOCK
Under a shareblock scheme a person acquires a share in a company entitling him to use and occupy a specific apartment, flat or office, in a building owned by the company, which is a shareblock company.
This differs from sectional title as the owner does not become the owner of the unit, but merely acquires the right to use and occupy it.
SIMPLEX
A sectional title unit on one level.
STSMA
Sectional Title Schemes Management Act 8 of 2011.
SUB-DIVISION
When land is sub-divided, it is divided into two or more portions. A specific legal and technical procedure must be followed.
SUB-LETTING
Renting a property by a tenant to a third-party tenant for a specified segment of the tenant's lease agreement.
SUSPENSIVE CONDITION
A clause in an agreement of lease in terms of which the agreement would become enforceable only if the event stipulated in the clause occurs.
TENANT
A person occupying or temporarily possessing a land, building, or a specified unit under an agreement with the landlord for a fixed period.
TENANT APPLICATION
An application that has to be filled out by a potential tenant in case of interest for a particular rental property.
TENANT DAMAGES
Any damage occurring during the lease term that isn't considered as normal wear and tear.
TENANT SCREENING
A process carried out by the landlord or a property management company to verify the background of a potential tenant. The process may include a credit check, interviews, and background check.
TITLE DEED
A legal document showing proof of ownership, filed in a deeds office, containing details of the property and its owners.
TOWNHOUSE
A house of usually two or three stories that connects to matching houses by a shared wall.
TRUST
A trust is not a legal entity as such and cannot enter into an agreement in its own name. All agreements binding a trust must be concluded by the Trustees of the Trust, authorised in writing by the Master of the High Court.
TRUST ACCOUNT
A bank account in which the account holder holds money in trust for another person until occurrence of a certain event. The money in such an account is referred to as trust money. Every estate agency business must have a trust account which must be audited by an auditor every year.
TURNKEY PROPERTY
A residential property that requires no urgent investments by the buyer and can immediately be rented out after purchase.
UTILITIES
The services provided for people residing in a property, including electricity, refuse collection and/or water.
VACANT PROPERTY
A property that lacks any people and personal property inside.
VACATION RENTAL
A rental property that is fully furnished and rented out to guests for short-term periods (e.g., two-week holiday).
VIRTUAL TOUR
An online means to presenting a property to prospective tenant, often in the form of videos or interactive media content.
WALK-THROUGH INSPECTION
An inspection carried out by the landlord during the move-in and move-out procedures to document any damage, missing items, and other issues in the rental property.
ZONING
Zoning limits the purpose for which a property may be used (e.g., residential, commercial, industrial etc.)
Author: Wakefields Real Estate
