Commonly used Terminology:
BODY CORPORATE – (a) A term used in the Strata Titles Act to describe the body representing the building owners; (b) The control and administration of common property is vested in a statutory Body Corporate which comes into existence automatically on the registration of the plan, and to which the provisions of the Companies Act do not apply. The registered proprietors of the units are the only members of the Body Corporate. Associated rights and obligations are fixed by scheduled by-laws.
BUILDING CODE OF AUSTRALIA (BCA )- Sets minimum community standards for buildings in terms of health, safety and amenity in buildings for regulatory purposes.1 Produced by the Australian Building Codes Board (ABCB), refer to www.abcb.com.au
BUILDING INSPECTOR – An authorised person who is responsible for checking buildings in the course of construction and completed buildings to ensure that they have been constructed in accordance with building control provisions.
SETBACK/BUILDING LINE – The setback from the site boundary required by statutory authorities for buildings.
BUILDING REGULATIONS – The Building Code of Australia and other regulations stipulated by local authorities relating to the design and construction of buildings.
CERTIFICATE OF TITLE – A document issued under the Torrens System of Title, showing ownership and interest in a parcel of land.
COMMON PROPERTY – (a) Land or a tract of land considered as the property of the public in which all persons enjoy equal rights. A property not owned by individuals but by groups; (b) In a home (villa) unit or flat development that part of the property owned and used in common by all the unit or flat owners or occupiers and which is maintained by the Body Corporate.
COOLING OFF PERIOD – A short statutory period after the contract is made, during which the purchaser may cancel the contract unconditionally. Usually does not apply in the case of auctions.
DEVELOPMENT APPROVAL (DA) – Approval from the relevant planning authority to construct, add, amend or change the structure of a property.
EASEMENT – A right to use the land of another (not involving the taking of any part of the natural produce of that land, or any part of its soil) or a right to prevent the owner of that land from using that land in a particular manner. Most commonly used where Government authorities have the right to run, for example, electrical mains or drainage through private property. Some form of compensation may be payable.
ENCUMBRANCE – A charge or liability on a property; for example, a mortgage or a special condition on the use to which it may be put (e.g. easements, restrictions and reservations).
FOREIGN INVESTMENT REVIEW BOARD – An Australian Government entity that reviews foreign investment proposals and advises Government on foreign investment policy.
HOLDING DEPOSIT – An amount given by a buyer to the estate agent acting for the seller. It shows the buyer’s serious commitment to the property and is commonly 10% of the purchase price.
LAND TAX – A tax payable annually in respect of the beneficial ownership of land, the rate of which is determined by the assessed valuation. Usually based on unimproved value of land.
PROPERTY – At law, property consists of the private rights of ownership. To distinguish between real estate (realty), a physical entity, and its ownership, a legal concept, ownership of land is known as real property. Physical items other than real estate are legally termed ‘personalty’ and their ownership is known as ‘personal property’. The word ‘property’ used without further qualification or identification may relate to real estate, personalty or a combination. Colloquially, property is anything that can be owned or in which an interest can be held, over which control can be exercised, which can be traded or left in an estate or from which current or future rights to receive benefits can be held. Property can include, but is not limited to, real estate and associated interests therein, personalty, intellectual property, rights, licences and options, plant and machinery, art and jewellery, goodwill and shares.
RATES – Periodic property taxes levied by Local and State Governments (e.g. water rates).
SETTLEMENT – This is the final stage of the sale when the purchaser completes the payment of the contract price to the vendor and takes legal possession of the property.
SETTLEMENT DATE – The date on which a contract of sale is finalised and the balance of money is paid for an asset.
STAMP DUTY – The tax imposed by state governments on certain contracts (e.g. Contracts of Sale and Registered Leases). The amount of tax payable is calculated as a percentage of the contract value. See also individual state legislation.
STRATA PLAN – The registered plan of a strata title property showing the boundaries of lots and unit entitlements. Pursuant to legislation on strata or unit titles.
STRATA TITLE – (a) The formal ownership of property held within a strata plan where property is defined within horizontal and vertical boundaries; (b) A scheme of property ownership where each proprietor owns parts of a building and has joint rights with other proprietors over the land and other common areas.
SUBDIVISION – Divisions by a land owner, of all or part of a parcel of land, into separate allotments (or sections), each with a separate title, in accordance with a ‘plan of subdivision’ approved by the planning authority.
TITLE – The form of ownership of real estate (i.e. Torrens, strata or company title).
TITLE DEEDS – Documents evidencing the ownership of property.
TORRENS TITLE – The title to land by registration. Originating in South Australia under the stewardship of R.R.Torrens (later Sir Robert Torrens) and enacted in 1858. The Torrens titles has superseded the ‘Common Law Title’ system throughout Australia. Under the Torrens system dealings and ownership of land are managed by registration with the Titles Office.
TRUST ACCOUNT – A legislatively required bank account where monies are held by an agent for or on behalf of another person e.g. deposits, rental etc.
UNENCUMBERED PROPERTY – Property free and clear of mortgages, restrictive covenants, leases and assessments of any kind.
UNIT (STRATA) – Each dedicated lot / unit area designated within a strata plan.
VACANCY RATE -The proportion of inhabitable rental premises which are vacant.
VACANT POSSESSION – In real estate this refers to a right to possession of land or built-up property in respect of which there is no current occupant.
VALUATION – (a) The process of estimating value.5; (b) The prediction of the value of an asset at a point in time, depending on the purpose for which the valuation is required.
VALUATION REPORT – A document that records the instructions for the assignment, the purpose and basis of the valuation, and the results of the analysis that led to the opinion of value. A Valuation Report may also explain the analytical processes undertaken in carrying out the valuation, and present meaningful information used in the analysis. Valuation Reports can be either oral or written. The type, content and length of a report vary according to the intended user, legal requirements, the property type, and the nature and complexity of the assignment. The terms, Valuation Certificate and Valuation Report, are sometimes used interchangeably.
VALUER – A person who is: (a) registered / licensed / approved to carry out property or plant and machinery valuations under any State, Territory or Commonwealth legislation; and / or (b) a member of the Australian Property Institute who is accredited as a Certified Practising Valuer.
VARIATION – An addition to, omission from, or alteration to a contract or to the contract conditions.
VENDOR – One who sells anything. In real estate transactions, the person(s) or entity selling the property.
YIELD – The derived percentage return of a property assessed from the net income and the market value or price. It is calculated by dividing the net income by the opening market value or price.
ZONING – A local planning tool to control the present and future development of land including residential,