Glossary

  • A


    Adjustment date
    Date at which outgoings for a property (water rates, taxes etc.) are calculated/adjusted for payment.

    Adjustments
    Denotes the notion of calculating the share of the outgoings of a property (taxes, government rates, body corp rates etc.) and attributing these costs fairly for the time period each party (buyer and seller) are in possession of the property.

    Agency Sale Agreement
    Agreement between a vendor of a property and the real estate agent responsible for the property being sold. This agreement outlines all the details to the arrangement for sale e.g. sales commissions, market value and other terms of sale.

    Agent
    An Individual who can act on behalf of another person in the sale, purchase, letting or management of a property.

    Auction
    A type of sale where the property is sold to the highest bidder.


    Go to top

     

    B


    Bank Cheque
    A cheque guaranteed by the bank and is as secure as cash - as opposed to a personal cheque which is not. Bank cheques often take a few days to clear and may cost a small fee to issue.


    Go to top

     

    C


    Caveat
    A claim that is registered on the title of a property by an individual who has an interest in the property.

    Caveat Emptor
    A buyer beware concept, whereby the buyer assumes all risk and must conduct his/her due diligence.

    Certificate of title
    A document that stipulates the owners of the property and any other particulars of the title. The title will usually be held by the financial institution until any mortgage on the property has been settled in full, at which point the document will be given to the owners/registered proprieters.

    Chattels
    Moveable personal property e.g. furniture.

    Commission
    The fee charged by the agent to the vendor and is payable upon sale of the property.

    Common property
    Common areas within a strata plan which are not individually owned by anyone (not part of any lot). These areas are owned collectivley by all owners.

    Community title
    Divides land into lots and common property. Two types of community title exist: community strata scheme and community scheme.

    Contract of sale
    A legal document between a vendor and purchaser setting out the terms of sale.

    Conveyance
    The transfer of property ownership from vendor to purchaser.

    Cooling off period
    Time perioid during which the purchaser can legally walk away from the contract without incurring significant financial penalty. Please note: cooling off period lengths, costs and conditions vary dependant on state.

    Counterpart contract
    The purchasers copy of the contract of sale, including copies of the original documents which are contained in the vendors copy.

    Covenant
    A written agreement between the vendor and purchaser of a piece of land that restricts what the land can be used for. For example, the type of building design that can be built on it.


    Go to top

     

    D


    Deed of release/deed of rescission
    A document stating that both parties agree to release one another from a contract after the contract has been signed.

    Deposit
    Money paid by the purchaser to the vendor to secure the property and show that they are serious about purchase. Usually this amount is 10% of the total purchase price. If the vendor agrees, the deposit amount can vary.

    Deposit Bond
    A deposit bond is an insurance policy. It is a substitute for a cash deposit during the exchange of contracts. It is commonly used when a cash deposit is not immediately accessible upfront.

    Development lot
    A piece of land within a community plan.

    Disbursements
    Payments to a third party in order to complete the conveyance and settlement, for example council rates, applicable taxes etc.

    Discharge of mortgage
    The document provided to the borrower by the lender, when a mortgage has been repaid in full.


    Go to top

     

    E


    Easement
    A piece of land registered on a title which gives a thirdd party the right to use that section of land for a set purpose - even though they are not the owner, e.g. shared driveway.

    Encumbrance
    A claim against a property by a party other than the owner, such as a mortgage, caveat, lease. Encumberances can impact the transfer of a property in some cases.

    Exchange of contract
    Denotes the phsycial swapping of signed copies of the contract and thereby making the sale legally binding.

    Exclusions
    Items which are specifically excluded from the sale.


    Go to top

     

    F


    Fee simple
    The highest possible ownership interest that can be had in real property.

    Final Inspection
    An inspection carried out a day before on the day of settlement (prior to settlement) on the property by the purchaser to ensure everything is as desired by the purchaser and the same as when first inspected.

    Fittings and fixtures
    Items which can be removed from a property without causing damage e.g. dishwashers, curtains etc. However, Fixtures can include stoves, cupboards, toilets etc. that may damage the property upon removal. There is still argument about what constitutes a fixture so these should be detailed in depth in the contract.


    Go to top

     

    G


    Gazumping
    Where a purchaser’s offer has been accepted by the vendor, but then the vendor goes and accepts a higher offer from someone else.


    Go to top

     

    H


    None


    Go to top

     

    I


    Inclusions
    Items which are specifically included in the sale.

    Inventory
    Items included with a property, usually movable items e.g. furniture.


    Go to top

     

    J


    Joint tenants
    Is there shared ownership of a property in equally, whereby if one owner dies, their share passes to the surviving owner/s.


    Go to top

     

    K


    None


    Go to top

     

    L


    Land Tax
    A tax levied by the state government against some owners based on the value of the property.

    Land titles office
    The state government office which records and registers property ownership.

    Lease
    The individual/entity receiving a loan.

    Lenders mortgage insurance
    This insurance aims to protect the lender against the event of default on the loan by the lendee. The premium paid is dependant on the loan to value ratio or LVR and is a once off payment.

    Lendor
    The individual/entity lending money, such as a financial institution.

    License
    A right given by a vendor to a purchaser that lets the purchaser live in or move their possessions into the property prior to settlement. There may be a rental charge for this arrangement.

    Licensee
    The individual/entity receiving the licence.

    Licensor
    The individual/entity giving a licence.


    Go to top

     

    M


    Mortgage
    Sum of money loaned to an individual or entity and secured through a claim to an interest in an asset (e.g. property).

    Mortgage Brokers
    Are experts in matching the right loan to your personal financial circumstances. They assess your financial situation and make recommendations on the loan that would best suit your needs. They assist you through the application process and ensure you have loan approval to purchase the property you want.

    Mortgagee
    The individual or entity providing the mortgage.

    Mortgagor
    The individual or entity receiving the mortgage.

    Agency Sale Agreement
    Agreement between a vendor of a property and the real estate agent responsible for the property being sold. This agreement outlines all the details to the arrangement for sale e.g. sales commissions, market value and other terms of sale.


    Go to top

     

    N


    None


    Go to top

     

    O


    Old system title
    An older form of title system (pre Torrens system). The old system property title could be proved through demonstration of an unbroken chain in title.

    Order on the agent
    An order that says the purchaser gives the real estate agent authorisation to release the deposit to the vendor after the settlement.

    Owners corporation
    The collective group of owners of all lots in a strata title scheme. E.g. the owners of the individual apartments in an apartment block.


    Go to top

     

    P


    Penalty interest
    When a Purchaser delays a Settlement or cannot meet a deadline set by the Contract, Penalty Interest may be charged by the Vendor on the outstanding amount.

    Permit
    Permission from a Government Authority, such as the Council, to modify a property, such as adding an extension or removing a large tree.

    PEXA
    PEXA is an online property exchange that allows lawyers and conveyancers to electronically lodge Land Registry documents, and complete financial settlement. Financial settlement is completed through a secure process involving the transfer of funds from source accounts via the Reserve Bank of Australia to destination accounts.

    Principal place of residence statutory declaration /PPR
    A document stating that the property you are purhcasing is the property you will reside in.

    Professional Fee
    A fee charged by your conveyancer or solicitor for their services and expertise.

    Purchaser
    The individual or entity buying land.


    Go to top

     

    Q


    None


     

    R


    Registered Proprietor
    The owner of the property/land and whose name appears on the title.

    Registration
    The process of registering the new owners of the land/property with the Land Titles office. Post settlement the title documents are sent to the Land Titles Office to register the new owners. Once this is done, new titles are created with the names of the new owners on them.

    Requisitions and enquiries
    Any questions and/or requests made by the purchaser to the vendor with regards to the title of the property.

    Rescission of contract
    The cancellation of a contract by one party due to the other party breaching the terms of the contract.

    Residue
    Is the difference between the purchase price of the property and the deposit paid.


    Go to top

     

    S


    Searches
    Enquiries made by the conveyancer/solicitor about the property in the process of conveyancing. Searches can include, governement taxes and rates search, title search etc.

    Settlement
    The official transfer of the property. Payment of the balance is made to the vendor by the purchaser. The vendor hands over the ownership of the property to the purchaser and all relevant documentation e.g. title.

    Settlement statement
    Is a document stating the sum of money required to facilitate the purchase including any adjustments e.g. rates, taxes etc.

    Stamp duty
    A tax charged by the state government for the purchase of a property. This is paid by the purchaser unless otherwise entitled to an exemption.

    Statement of Adjustments
    The document showing all the adjustments (taxes, rates, water, rent etc.) and how they are divvied up between the purchaser and vendor. Until settlement, the vendor must pay all expenses pertaining to the property and receives all rental income. Upon completion of settlement these transfer to the purchaser (new owner).

    Strata title
    Subdivision of land into lots and common areas. Individual lots are owned by owners e.g. units, and common areas are areas shared e.g. driveways, gardens etc. These common areas are owned collectively by the owners corporation (all the owners).

    Strata unit
    A defined piece of land within a strata title.

    Subdivision
    Division of one piece of land into many different pieces or lots.

    Subject to finance
    A contract clause stating that purchase of a property is on the condition that the purchaser can obtain finance by a certain date, otherwise they are able to walk away from the contract without financial penalty..

    Survey
    Plan showing land boundaries of a particular piece of land and the position of any buildings on the land.


    Go to top

     

    T


    Tenants in common
    Joint ownership of a property in equal or unequal shares. Each owner can sell his/her share. If one of the owners passess away, in contrast to joint tenancy, shares of that individual do not automatically pass wot the other owners, but rather form part of that persons estate.

    Torrens title
    Torrens title is a system of land title in which a register of land holdings maintained by the state guarantees an indefeasible title to those included in the register. Land ownership is transferred through registration of title instead of using deeds.

    Transfer of land document
    A document showing the details of a property title that will be transferred.


    Go to top

     

    U


    Unencumbered
    No charges, burdens or impediments are present on the title of the property e.g. caveats, mortgages etc.


    Go to top

     

    V


    Vacant Possession
    A property that will be purchased with no tenant or individual living in it, thus being vacant at settlement when the purchaser takes possession or the property.

    Valuation
    A detailed report with a professional opinion on the value of a property.

    Vendor
    The individual or entity selling the land.


    Go to top

     

    W


    None


    Go to top

     

    X


    None


    Go to top

     

    Y


    None


    Go to top

     

    Z


    Zoning
    Zoning describes the control by authority of the use of land, and of the buildings thereon. Areas of land are divided by appropriate authorities into zones within which various uses are permitted.


    Go to top