Glossary of Terms: M - Z
M
Mandate: A mandate is an agreement between a Seller and the Estate Agent(s) regarding the marketing of a property, the agreement duration and obligations for both parties.
There are three common types of mandates:
• Sole mandate
A sole mandate is when one Estate Agent has exclusive rights to sell your house within a specific period of time
A sole mandate is when one Estate Agent has exclusive rights to sell your house within a specific period of time
• Multi-listing mandate
A multi-listing mandate is when Agents from different agencies have the right to sell your property. After a sale, the Agent’s commission is split between all listing agencies involved. •Open / dual mandate
An open mandate means that the property is on the books of more than one Estate Agent, and each Agency has the right to sell the property, without being required to share the commission.
A multi-listing mandate is when Agents from different agencies have the right to sell your property. After a sale, the Agent’s commission is split between all listing agencies involved. •Open / dual mandate
An open mandate means that the property is on the books of more than one Estate Agent, and each Agency has the right to sell the property, without being required to share the commission.
Market rental: The most probable rental that a voluntary, informed and prudent lessee will pay a voluntary, informed and prudent lessor in a normal open-market (arms-length) transaction, when neither party is under any compulsion to rent or let, other than their normal desire to transact.
Market value: The most probable price that a voluntary, informed and prudent purchaser will pay a voluntary, informed and prudent seller in a normal open market(arms-length) transaction at the date of valuation – after allowing for proper marketing prior to the valuation date — when neither party is under any compulsion to sell or to purchase, other than their normal desire to transact. See also price and fundamental value.
Mean: See arithmetic mean; median; geometric mean.
Median: Midpoint of a series of observations when arranged in order of magnitude. Thus it is a measure of central tendency that divides the data set into halves. Less affected by outlier observations than the arithmetic mean. For example, the median of 5, 6, 7, 8, 9 is 7. And for 5, 9, 15, 16, 17, 21, 23 the median is 16. See also geometric and arithmetic mean.
Maintenance Costs: The expense of keeping a property in a good state of repair.
Mall: Commonly used to refer to the entire shopping complex but properly a reference to the pedestrian area of the mall that connects shopping areas.
Management Agreement: A contract between an owner of a property and a property management firm in which the firm accepts periodic payments for acting as supervisor of the affairs of the property.
Management Agreement: A contract between an owner of a property and a property management firm in which the firm accepts periodic payments for acting as supervisor of the affairs of the property.
Management Fee: The property manager's compensation for work done.
Management Plan: A written document in which the property manager sets out its goals and the approaches it will use to accomplish those goals in a given period of time for the property.
Mandate: An instruction or authority given to an estate agent to render a particular estate agency service for a client.
Management Rules: Management rules for a sectional title scheme deal with the control, administration and management of the sectional title scheme.
Managing Risk: The steps taken by an investor or manager to control or reduce investment risk.
Mandate: An instruction or authority given to an estate agent to render a particular estate agency service for a client (the person conferring the mandate).
Management Plan: A written document in which the property manager sets out its goals and the approaches it will use to accomplish those goals in a given period of time for the property.
Mandate: An instruction or authority given to an estate agent to render a particular estate agency service for a client.
Management Rules: Management rules for a sectional title scheme deal with the control, administration and management of the sectional title scheme.
Managing Risk: The steps taken by an investor or manager to control or reduce investment risk.
Mandate: An instruction or authority given to an estate agent to render a particular estate agency service for a client (the person conferring the mandate).
Market Price: The consideration actually paid for an asset in an arm's-length transaction.
Market Rent: Also known as economic rent, the amount the owner could charge and obtain for the lease of a property in the current economic circumstances.
Market Risk: The possibility that downward market trends will reduce an investment’s market value.
Market Segmentation: Analyzing sub-markets within a greater market.
Market Value: The most probable price that a property would bring in a competitive and open market under “fair sale” conditions. Market value also refers to an estimate of this price.
Marketability: The ability to sell an investment quickly regardless of its sales price.
Market Rent: Also known as economic rent, the amount the owner could charge and obtain for the lease of a property in the current economic circumstances.
Market Risk: The possibility that downward market trends will reduce an investment’s market value.
Market Segmentation: Analyzing sub-markets within a greater market.
Market Value: The most probable price that a property would bring in a competitive and open market under “fair sale” conditions. Market value also refers to an estimate of this price.
Marketability: The ability to sell an investment quickly regardless of its sales price.
Movable Property: Movable property refers to any property, other than land and improvements to land. This includes shares, paintings, furniture, clothing, vehicles, etc.
Municipal Building Value: The Municipal building value is the value or price associated with a building by the Municipality.
Municipal Land Value: The Municipal land value is the value or price assigned to a piece of land by the Municipality.
Municipal Rates: The Municipal Rates are the taxes that property owners have to pay the municipality.
Municipality: The Municipality is the governing body of a city or town.
Mutatis Mutandis: With the necessary changes
Municipal Land Value: The Municipal land value is the value or price assigned to a piece of land by the Municipality.
Municipal Rates: The Municipal Rates are the taxes that property owners have to pay the municipality.
Municipality: The Municipality is the governing body of a city or town.
Mutatis Mutandis: With the necessary changes
N
n: Number of respondents.
N/A: Not available — fewer than two Respondents or Not Applicable.
Net Asset Value: It is the value of the property after deducting the outstanding loan/bond.
Net Income: This is the annual net income after all annual expenses and bond repayments. This will exclude equity in the property and annual growth.
Net Leasable Area: The area in a building which is available for rent to tenants (excludes common areas, wasted space, etc.).
Net Lease: Lease under which the tenant pays the agreed-upon rent plus utilities and taxes.
Net Lettable Area: Same as Net Leasable Area, the area in a building which is available for rent to tenants (excludes common areas, wasted space, etc.).
Net Listing: A price under which an owner will not sell the property. The broker is entitled to the excess over the net listing as his commission.
Net-Net-Net Lease: Lease under which the tenant pays the agreed-upon rent plus utilities, taxes, insurance and maintenance.
Net Operating Income (NOI): The effective gross income from a property minus operating expenses.
Net Rental: This is the amount payable by the tenant excluding VAT and excluding operating costs recovered by the landlord, if any.
Net Return on Investment: The equity less capital expenditure plus Profit/Loss.
Net Spendable Income: Amount remaining after expenses and debt service and any taxes due have been deducted from the gross income.
Net Worth: The value of all of a person's assets, including cash, minus all liabilities.
Net Income: This is the annual net income after all annual expenses and bond repayments. This will exclude equity in the property and annual growth.
Net Leasable Area: The area in a building which is available for rent to tenants (excludes common areas, wasted space, etc.).
Net Lease: Lease under which the tenant pays the agreed-upon rent plus utilities and taxes.
Net Lettable Area: Same as Net Leasable Area, the area in a building which is available for rent to tenants (excludes common areas, wasted space, etc.).
Net Listing: A price under which an owner will not sell the property. The broker is entitled to the excess over the net listing as his commission.
Net-Net-Net Lease: Lease under which the tenant pays the agreed-upon rent plus utilities, taxes, insurance and maintenance.
Net Operating Income (NOI): The effective gross income from a property minus operating expenses.
Net Rental: This is the amount payable by the tenant excluding VAT and excluding operating costs recovered by the landlord, if any.
Net Return on Investment: The equity less capital expenditure plus Profit/Loss.
Net Spendable Income: Amount remaining after expenses and debt service and any taxes due have been deducted from the gross income.
Net Worth: The value of all of a person's assets, including cash, minus all liabilities.
Notice of Default : A formal written notice to a borrower that a default has occurred and that legal action may be taken.
Nuisance
A legal term referring to any use of land which interferes with the use and enjoyment of neighbouring lands. A nuisance may be actionable by the injured party.
Null and Void: Without any legal effect. Any agreement of which is null and void is not valid in any respect and cannot be enforced by either party.
Nuisance
A legal term referring to any use of land which interferes with the use and enjoyment of neighbouring lands. A nuisance may be actionable by the injured party.
Null and Void: Without any legal effect. Any agreement of which is null and void is not valid in any respect and cannot be enforced by either party.
O
Office building grades defined by quality of finishes and facilities:
• Grade A: Generally not older than 10 years, unless renovated; prime location; high-quality finishes; adequate on-site parking; air-conditioning. Commands a gross market rental as indicated in the accompanying table.
• Grade B: Generally 10 to 20 years old, unless renovated; accommodation to modern standards; prime location; air conditioning; on-site parking. Commands a gross market rental as indicated in the accompanying table.
• Grade C: Generally 20 to 30 years old, unless renovated; in fairly good condition, although finishes are not up to modern standards; good location; may have onsite parking; unlikely to be centrally airconditioned; commands a gross market rental as indicated in the accompanying table.
• Grade D: A building reaching the end of its functional life; old and in poor condition; near the bottom of the rental rate range; typically no air-conditioning and no on-site parking; may have good location.
These grades might be further sub-divided into sub-grades A+, A-, B+, B-, C+ or C-.
Office demand: Office stock less office space vacant (space on the market for renting irrespective of whether there is still a valid lease over the space). In other words, demand is office space occupied.
Office stock: Total rentable office space.
Office take-up: Change in office demand. Where take-up is positive, it can also be called the growth in demand.
Office vacancies: This is the floor area available for leasing at any given time, irrespective of whether there is still a valid lease over the space. Often expressed as a percentage of the stock in rentable m².
Operating costs: See outgoings.
Opportunity cash flow (OCF): A valuation term introduced by Rode. The OCF quantifies the amount gained or foregone by the landlord in that the property is either over rented or under rented. More precisely, for each lease and the space that such a tenant occupies, it is, until expiry of such a lease, the present value (PV) of the contractual rental less the open-market rental (as at the valuation date) escalating at the open market escalation rate (as at the valuation date).
Occupancy: Holding, possessing, or occupying premises.
Occupancy Permit: Issued by local building departments, permission to enter and occupy a newly built or renovated dwelling after an inspection has established that there are not potential threats to the safety of occupants.
Occupancy Rate: The percentage of available rental space that is actually rented and in use in a given building or community.
Occupant: Someone who occupies a particular property or place.
Occupation : This is the date on which the buyer moves into the property.
Occupational Interest / Rent: A purchaser who has taken occupation of a property before it is registered in his name, is usually required by the seller to pay a monthly amount for such occupation. This amount is referred to as occupational interest (sometimes called occupational rent).
Offer to Lease: An agreement that binds the lessor to continuing negotiations in good faith once a qualified tenant has been found, until all negotiating points have been covered. In effect, it takes the space off the market during the negotiating period.
Offer to Purchase : This is an offer in writing from the buyer to the seller, which is usually prepared by the estate agent. Once signed by all parties, it becomes a legal and binding contract between the buyer and the seller
Offeree: Person to whom an offer is made and is selling he’s property is the offeree. The person making the offer is the offeror.
Offeror: Person who makes an offer. In sale transactions, the purchaser is usually the offeror i.e. the person who makes an offer to the seller of a property (the offeree) to buy the Property. See also ‘Offeree’.
Office Park: Similar to an industrial park but for offices, a property designed and developed specifically to attract corporate offices and provide them with all facilities required to carry on business.
On-Site Auction: An auction conducted on the premises of the property or items being sold.
Online Auction: This term refers to an auction hosted either "live" (see live auctions) on the internet or in a "tender" (see tender auctions) format.
Opportunity Cost: The “cost” of selecting one alternative is the benefit foregone from the next best alternative.
Option: An offer made to a person, coupled with an undertaking by the person making the offer (the offeror) not to revoke his offer for a specified period. The person to whom the offer is made (the offeree) is then said to have an option. The option is exercised when the offer is accepted timeously. An option falls away if the offer is not accepted by the offeree before the expiry date.
Option To Purchase Leased Property: A clause of a rental agreement allowing the tenant the right to buy the leased property upon terms and conditions set out in the agreement.
Occupancy Permit: Issued by local building departments, permission to enter and occupy a newly built or renovated dwelling after an inspection has established that there are not potential threats to the safety of occupants.
Occupancy Rate: The percentage of available rental space that is actually rented and in use in a given building or community.
Occupant: Someone who occupies a particular property or place.
Occupation : This is the date on which the buyer moves into the property.
Occupational Interest / Rent: A purchaser who has taken occupation of a property before it is registered in his name, is usually required by the seller to pay a monthly amount for such occupation. This amount is referred to as occupational interest (sometimes called occupational rent).
Offer to Lease: An agreement that binds the lessor to continuing negotiations in good faith once a qualified tenant has been found, until all negotiating points have been covered. In effect, it takes the space off the market during the negotiating period.
Offer to Purchase : This is an offer in writing from the buyer to the seller, which is usually prepared by the estate agent. Once signed by all parties, it becomes a legal and binding contract between the buyer and the seller
Offeree: Person to whom an offer is made and is selling he’s property is the offeree. The person making the offer is the offeror.
Offeror: Person who makes an offer. In sale transactions, the purchaser is usually the offeror i.e. the person who makes an offer to the seller of a property (the offeree) to buy the Property. See also ‘Offeree’.
Office Park: Similar to an industrial park but for offices, a property designed and developed specifically to attract corporate offices and provide them with all facilities required to carry on business.
On-Site Auction: An auction conducted on the premises of the property or items being sold.
Online Auction: This term refers to an auction hosted either "live" (see live auctions) on the internet or in a "tender" (see tender auctions) format.
Opportunity Cost: The “cost” of selecting one alternative is the benefit foregone from the next best alternative.
Option: An offer made to a person, coupled with an undertaking by the person making the offer (the offeror) not to revoke his offer for a specified period. The person to whom the offer is made (the offeree) is then said to have an option. The option is exercised when the offer is accepted timeously. An option falls away if the offer is not accepted by the offeree before the expiry date.
Option To Purchase Leased Property: A clause of a rental agreement allowing the tenant the right to buy the leased property upon terms and conditions set out in the agreement.
Outgoings (operating costs): In the case of office buildings, the following items are included under total gross outgoings, irrespective of who pays for these:
• Cleaning.
• Repairs & maintenance.
• Common-area electricity & water (not tenant’s own).
• Security.
• Management (excluding head office overheads).
• All leasing expenses: broker’s commission and in-house payroll, advertising, tenant installations & relocations (unless recovered), buy-outs, etc.
• Municipal tax.
• Insurance (fire & SASRIA). In the case of self-insurance, the landlord’s provision should be included.
• Refuse & sewerage less recoverable amount.
• External & common area repairs & maintenance.
• Audit fees.
The following items are excluded:
• VAT.VI
• Head office overheads.
• Tenant’s own electricity and water.
• Tenant installations/relocations recovered.
• Internal maintenance.
• Recoverable refuse & sewerage.
P
Price: The amount actually paid for an asset. Not the same as market value, because special circumstances may have applied when the transaction was concluded.
PLS: Property loan stock, also known as variable loan stock (VLS) (type of listed property fund).
PUT: Property unit trust (type of listed property fund).
Parking Ratio: This is the number of parking bay's the tenant can rent in relation to the space they occupy. For example if the parking ratio is 4/100 the tenant can only rent 4 parking bays for every 100m² let. The tenant is under no obligation to rent the total number of bays as per the parking ratio.
Patent Defect: A defect which is clearly visible is a patent defect.
Percentage Lease: Lease under which the tenant pays a fixed minimum monthly rent plus a percentage of his or her gross monthly income in excess of that minimum. Used primarily in retail leases.
Personal Servitude: Right acquired by an individual over the property of another e.g. usufruct or use of another's possessions or property for a specific period or the lifetime of the usufructuary
Potential Gross Income: The amount of money that a property will generate if it is fully utilized with no gaps, vacancies or other interruptions in income.
Potential Rental Income: The total amount of rental income for a property if it were 100% occupied and rented at competitive market rates.
Potential Rental Income: The total amount of rental income for a property if it were 100% occupied and rented at competitive market rates.
Prime Rate : The interest rate that banks charge to their preferred customers. Changes in the prime rate are widely publicized in the news media and are used as the indexes in some adjustable rate mortgages, especially home equity lines of credit. Changes in the prime rate do not directly affect other types of mortgages, but the same factors that influence the prime rate also affect the interest rates of mortgage loans.
Prime Space: This typically refers to new or 'A-grade' space that is currently available for lease and which has never before been occupied by a tenant.
Prime Tenant: A tenant who occupies a great portion of the space available within a given building that may, in addition, be owned by that tenant.
Prime Space: This typically refers to new or 'A-grade' space that is currently available for lease and which has never before been occupied by a tenant.
Prime Tenant: A tenant who occupies a great portion of the space available within a given building that may, in addition, be owned by that tenant.
Pro Forma: A set of figures projecting costs and income on a proposed new property. Used as a basis for capitalization. A financial statement based on anticipated, not actual, income and expenses.
Pro Rata: Proportionately, in proportion
Pro Rata: Proportionately, in proportion
Property Management: A monthly fee paid to a management company in exchange for operating the property. This can include screening tenants, contracting tenants, collecting rents and responding to tenant and property needs. Though additional fees can be incurred for court appearances and maintenance, this fee should provide total hands off involvement by the owner. The fee is calculated as a percentage of collected rents.
Purchase Agreement / Deed of Sale : Contract signed by buyer and seller stating the terms and conditions under which a property will be sold.
Purchase Price: The consideration paid for the purchase of a property as set out in the agreement. This is not necessarily the market value as special circumstances may have applied when the transaction was concluded.
Purchaser: The person who buys a property.
R
Reit: A reit is an entity that invests primarily in real estate and qualifies for special tax status, so there is single taxation at the investor level.
Rental:
• Basic rental (base rental in the USA): A set amount used as a minimum rent in a lease which also employs a percentage of turnover or other allocation for additional rent.
• Gross rental: The total rental payable by the tenant, excluding VAT, the tenant’s own electricity and water charges, but including other operating costs recovered by the landlord (if any), as well as promotion expenses payable by the tenant in the case of shopping centres. See also rental, net.
• Net rental: The amount payable by the tenant, excluding VAT and excluding operating costs recovered by the landlord (if any). See also rental, gross.
• Nominal rental: This has a dual meaning:
o Firstly, it refers to rentals where the analyst or valuer assumes no incentives like a rent-free period, free relocation, cash upfront, or balance-of-installation allowance. It also excludes amortisation of tenant-installation costs.
o Secondly, it can also mean actual rental values (i.e. not deflated). See also rental, real.
• Pioneer rental: The highest rental actually achieved – and could be a once-off outlier deal; hence “pioneer” is not “market”. The difference between pioneer and the highest market rentals may be used as a blunt tool to gauge the prospects for market rental growth in the short term. If the differential is positive, it is an indication of growth prospects in the node. If the differential is negative, it is an indication that landlords are finding it difficult to find new tenants at the going market rental rate.
• Real rental: Deflated rental, typically observations (values) over time (a time series) from which the relevant inflation has been removed. See also rental, nominal.
Rent-free period: No rent is payable by the tenant for an initial portion of the term of a lease. It is offered by a landlord as a rental concession to attract tenants.
Required rate: see hurdle rate.
Retail price: In the context of property syndication, this means the price at which a property-holding company’s shares are sold to the public or the price at which these shares trade. See also wholesale value.
Rode Report: Rode's Report on the South African Property Market, a quarterly journal for the professional property practitioner.
Rate of Return: The percentage return on each Rand invested, also known as yield.
Rates and Taxes: Taxes are levied on all property owners by the municipality. Rates are included in the levy if you buy Sectional Title. They are payable on a monthly basis and are calculated as a percentage of the value of the property.
Rates Clearance Certificate: Issued by the local authority stating that the rates and taxes have been paid to a future date in respect of the property.
Registration against Title Deeds: A right is registered against the title deed of a property when details concerning such right are stipulated on the title deed by the Registrar of Deeds in terms of the Deeds Registries Act 47 of 1937.
Registration Date: The Registration date is the date on which a property is registered at the Deeds Office.
Registration Deposit: At an auction, this deposit is paid upon registration as security for the buyers’ purchases. This deposit is refundable should the buyer not purchase any items. It may also be used as part payment against any purchases the buyer has made.
Registration Deposit: At an auction, this deposit is paid upon registration as security for the buyers’ purchases. This deposit is refundable should the buyer not purchase any items. It may also be used as part payment against any purchases the buyer has made.
Registration of Transfer: The process whereby ownership of property transfers from the seller to the buyer via a Deed of Transfer.
Registration Rate Payer: The Registration rate payer is the person or body responsible for paying the Municipal rates for a property.
Release Clause: A statement in a blanket mortgage that allows a specific described parcel to be released from under the blanket lien after a sum of money is paid, or a period of time is up.
Renewal Option: A right which arises out of a term in a contract and takes effect at or near the termination date of a contract; the party who enjoys the right may choose to continue the agreement on terms as set out in the option clause or to treat the contract as at an end upon the termination date.
Rentable Area: The generally accepted means of measuring space within an office building. From the inside of the outside wall (or in new buildings from the glass line) to the outside of the inside wall (or hall wall) and centre to centre on the division walls. Columns are included.
Rental Concessions: Concessions a landlord may offer a tenant in order to secure their tenancy. While a rent-free period is one form of a concession, there are many others such as: increased tenant improvement allowance, signage, lower than market rental rates and moving allowances are only a few of the many.
Rental Rate: The amount charged for the occupation of a property.
Rental Concessions: Concessions a landlord may offer a tenant in order to secure their tenancy. While a rent-free period is one form of a concession, there are many others such as: increased tenant improvement allowance, signage, lower than market rental rates and moving allowances are only a few of the many.
Rental Rate: The amount charged for the occupation of a property.
Right of First Refusal: A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.
Right of Ingress or Egress: The right to enter or leave designated premises.
Right of Pre-Emption: A contractual right entitling a person to make the first offer to purchase a particular property. Also known as a right of first refusal. Lease agreements sometimes provide that, should the lessor wish to sell the property, the lessee has a right of pre-emption to purchase it.
S
sale-and-leaseback: is a financial transaction in which one sells an asset and leases it back for the long term; therefore, one continues to be able to use the asset but no longer owns it.
Sapoa: South African Property Owners Association.
SARB: South African Reserve Bank (viz.the central bank)
Secular trend: A long-term growth path of an economic variable, around which there might be short-term (business cycle) or other fluctuations. See also cyclical trend.
Shopping centre configurations:
• Mall: Typically enclosed with common walkway between two facing strips of stores. This is the design mode for super regional, regional and most community shopping centres.
• Strip centre: Is an attached row of stores or service outlets managed as a coherent retail entity, with on-site parking, usually located in front of the stores. Store-fronts may be connected by open canopies, but there are no enclosed walkways linking the stores. Store configuration is either a straight line, “L” or “U” shaped. This is the design mode for most neighbourhood, convenience and value (power) centres.
Shopping centre types:
• Super regional: More than 100.000 rentable m² of shop space; substantial comparison-shopping; principal tenants are three or more major department stores; more than 250 shops. Examples are: Eastgate and Sandton City (Johannesburg); Menlyn Park (Pretoria); Gateway (Durban metro); Canal Walk (Cape metro).
• Regional: 30.000 to 100.000 rentable m² of shop space; principal tenant(s) are one or more major department stores; approximately 40 to 250 shops. Examples are: Westgate, Fourways Mall, Cresta (Johannesburg); Brooklyn Mall (Pretoria); The Pavilion (Durban metro); Sanlam Centre in Parow, Tyger Valley, Kenilworth (Cape metro); Greenacres (Port Elizabeth); Mimosa Mall (Bloemfontein); Vincent Park Shopping Centre (East London).
• Community: 10.000 to 30.000 rentable m² of shop space; principal tenant is typically a variety store (e.g. Clicks) or a discount department store (e.g. Dion or Game); approximately 30 to 60 shops. Examples are: Sunnypark (Pretoria); Musgrave Centre (Durban); Middestad Mall in Bellville, Meadowridge Park ‘n Shop, Goodwood Mall, Constantia Village (Cape metro);
• Neighbourhood: 3.000 to 10.000 rentable m² of shop space; principal tenant is a supermarket; 15 to 40 shops.
• Convenience: 300 to 1.200 rentable m² of shop space; principal tenant is a café or grocer like Kwik Spar; 5 to 15 shops.
• Retail warehouse: Stand-alone; single tenant; >10.000m²; air-conditioned, no ceiling, warehouse-like finishes, e.g. Makro, Hypermarket, Game, Dion.
• Value centre: Multi-tenanted strip centre; >10.000m²; warehouse type finishes in order to deliver lower prices to consumers.
Standard deviation (SD): A measure of dispersion in a set of data. For instance, assume a mean of R10 and an SD of R1,50. This means there is a 68% chance the values will lie between R10 - R1,50 = R8,50 and R10 + R1,50 = R11,50.
Stats SA: Statistics South Africa, South African government’s statistics department.
Sale Cost: The brokerage commissions and fees, and any additional transaction costs that are incurred during the sale of the property.
Sale Date: A properties sale date is the date as signed on the sale agreement. This is different to the registered date, which is the day the property is registered at the Deeds Office.
Sale Price: A Properties sale price is the price as registered at the Deeds office. You may see a value of 0 for the sale price. This may be due to several different reasons. An example would be if the property was inherited or transferred from a trust. This would also explain sale prices that are low in comparison to surrounding properties.
Sales Agreement: Written agreement (contract) that states the terms and conditions under which a property will be sold, signed by both buyer and seller.
Sales Comparison Approach: Method of estimating value of a property by comparing similar properties that have been sold recently.
Sale Date: A properties sale date is the date as signed on the sale agreement. This is different to the registered date, which is the day the property is registered at the Deeds Office.
Sale Price: A Properties sale price is the price as registered at the Deeds office. You may see a value of 0 for the sale price. This may be due to several different reasons. An example would be if the property was inherited or transferred from a trust. This would also explain sale prices that are low in comparison to surrounding properties.
Sales Agreement: Written agreement (contract) that states the terms and conditions under which a property will be sold, signed by both buyer and seller.
Sales Comparison Approach: Method of estimating value of a property by comparing similar properties that have been sold recently.
Section: A section in a sectional title scheme is that individually owned part of the building (or buildings) in the sectional title scheme. An owner's section is his/her apartment, flat or townhouse. We say that the owner has title to his/her section.
A section in a sectional title scheme: constitutes the space between the four walls, the floor and the ceiling of an apartment, flat or townhouse. The walls of a section include the windows and doors.
The Sectional Titles Act states that the boundaries of a section are the median lines between a section and neighbouring sections, or neighbouring common property. This means that a section includes the inside halves of the walls, windows, doors, ceilings and floors that surround a section, according to the sectional title plan for the sectional title scheme.
The 'outer skin' of the section does not form part of an owner's section in a sectional title scheme.
Sectional Title: This is an entire complex (flats and townhouses) divided into individual units and sold separately.
Sectional Title Plan: A registered land surveyor must draw up a sectional title plan for any new sectional title development. The sectional title plan then gets submitted to the Surveyor General, for his/her approval. The sectional title plan gets registered in the deeds registry, as an important part of the title deeds for the sections in a sectional title scheme.
The sectional title plan contains a scale plan of the sections in the sectional title development scheme, the allocation of common property, servitudes that apply to the land, and exclusive use areas created in terms of section 27 of the new Sectional Title Act.
Each sectional title scheme in South Africa has a set of sectional title plans registered in the deeds registry. Each sectional title plan is allocated a registration number, which indicates when the sectional title scheme was registered. SS 17/2001 is an example of such a sectional title plan number, and it indicates that the sectional title plan was the 17th sectional title scheme registered in 2003 (in the regional department of the deeds registry).
The sectional title plans for a sectional title scheme can be obtained from the Surveyor General's office. The trustees of a sectional title scheme also have a responsibility to have the sectional title plans for the sectional title scheme available for inspection or reproduction by members of the body corporate or their bondholders.
Security : The property that will be pledged as collateral for a loan.
Security Deposit: An amount of money paid by a tenant before moving into the premises to cover any damage incurred while living there, or to protect the landlord in the event that the tenant leaves without being current on rent payments. If the tenant is current and the unit only has a normal amount of wear and tear, then the deposit is generally refunded.
Security Deposit: An amount of money paid by a tenant before moving into the premises to cover any damage incurred while living there, or to protect the landlord in the event that the tenant leaves without being current on rent payments. If the tenant is current and the unit only has a normal amount of wear and tear, then the deposit is generally refunded.
Seller's Commission: At an auction, this is a predetermined value which is negotiated with the Seller. This premium plus the applicable state sales taxes is then deducted from the gross auction proceeds and the remaining amount is then the net seller realisation.
Seller's Market: Demand is greater than supply, such that the vendor may demand a higher price.
Seller's Market: Demand is greater than supply, such that the vendor may demand a higher price.
Servitude: A right which a person has over the immovable property of another and which is registered against the title deed of the owner. 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 person.
SDF: Spatial Development Framework
Servitude: A registered right which a person 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.
Soft Market: Also known as a "buyers or tenants market", when vendors far outnumber buyers and prices fall; or where high vacancies lead to falling rental rates.
Sole Mandate: When a property is marketed by an estate agent, a 'sole mandate' implies that one particular estate agency is granted the sole right and responsibility to market the property for a certain period.
In return for the sole mandate the estate agent will take additional steps in marketing the property, including placing feature advertisements in the local press, property magazines, etc. According to most credible estate agencies, a sole mandate substantially increases the closing rate on property sales.
In return for the sole mandate the estate agent will take additional steps in marketing the property, including placing feature advertisements in the local press, property magazines, etc. According to most credible estate agencies, a sole mandate substantially increases the closing rate on property sales.
Sublease: A lease that is given by a tenant of part or all of the leased premises to another person for a period shorter than the original lease, while still retaining some interest.
Surveyor General’s Diagram: A diagram that shows sub-divisions, servitudes and expropriations.
Suspensive Condition: A clause in an agreement of sale or lease in terms of which the agreement will become enforceable only if the event stipulated in the clause occurs. A typical example is a clause in an agreement of sale of a house stating that the agreement is subject to the suspensive condition that the purchaser obtains a loan from a financial institution before or on a certain date.
T
Tenant Installation (TI) allowance (TI) Lis a financial contribution from the landlord to assist the tenant with the fit out of the premises for base building items such as flooring, walls, painting and ceilings.
Time series: A set of observations for the same variable at different times (see graph). The intervals or frequencies may be of any length, e.g. years or quarters for national income or property data, monthly for prices, and weekly, daily, or even minute by-minute for stock exchange prices.
Total return: Normally measured over a year, in which case it is the income yield for the applicable year (net income in year 1 divided by the purchase price or value in year 0) plus the change in capital value over that year. Also known as the combined return because it combines the income yield and capital return in one measure.
Tenant: A person who occupies a property, but does not own it and pays rent in return.
Tenant Fixtures: Items added to a leased premises by a tenant that might normally be considered fixtures (and, therefore, part of the premises) but that, by contract or law, the tenant is entitled to remove at the end of the lease period.
Tenant Installation Allowance (TIA or TI): An allowance the landlord gives the tenant towards renovations/alterations on the leased premises. This allowance is normally only given on a three year or longer rental agreement. The allowance may take the form of a total Rand value, an equivalent rent free period or a schedule quantifying the work to be undertaken at an agreed specification for the various items.
Tenant Fixtures: Items added to a leased premises by a tenant that might normally be considered fixtures (and, therefore, part of the premises) but that, by contract or law, the tenant is entitled to remove at the end of the lease period.
Tenant Installation Allowance (TIA or TI): An allowance the landlord gives the tenant towards renovations/alterations on the leased premises. This allowance is normally only given on a three year or longer rental agreement. The allowance may take the form of a total Rand value, an equivalent rent free period or a schedule quantifying the work to be undertaken at an agreed specification for the various items.
Term: The period of time between the beginning loan date on the legal documents and the date the entire balance of the loan is due.
Terms: Exact way a property will be purchased.
Terms: Exact way a property will be purchased.
Title: Title is a legal term that describes the ownership of immovable property. One can obtain title, or ownership, to land, or a section in a sectional title scheme.
Title Company: A company that specializes in examining and insuring titles to real estate.
Title Deed: A legal document as evidence of ownership of property and filed in a deeds office containing details of a property and its owner. It indicates the purchase price, restrictive conditions of title and limited real rights. A title deed is proof of ownership of a defined property; if other persons or an institution have rights over the property, i.e., where a bank or other institution holds a mortgage bond over the land, details thereof are also endorsed on the title deed.
Title Deed Number: The Title Deed number is the unique number that identifies a Title Deed. A Title Deed is a legal document proving a persons title to a property.
Title Insurance: Insurance that protects the lender (lender's policy) or the buyer (owner's policy) against loss arising from disputes over ownership of a property.
Title Search: A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.
Title Company: A company that specializes in examining and insuring titles to real estate.
Title Deed: A legal document as evidence of ownership of property and filed in a deeds office containing details of a property and its owner. It indicates the purchase price, restrictive conditions of title and limited real rights. A title deed is proof of ownership of a defined property; if other persons or an institution have rights over the property, i.e., where a bank or other institution holds a mortgage bond over the land, details thereof are also endorsed on the title deed.
Title Deed Number: The Title Deed number is the unique number that identifies a Title Deed. A Title Deed is a legal document proving a persons title to a property.
Title Insurance: Insurance that protects the lender (lender's policy) or the buyer (owner's policy) against loss arising from disputes over ownership of a property.
Title Search: A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.
Transfer: Transfer is the process of changing ownership of a property. Ownership of a property is transferred to the purchaser, and the new ownership is then registered in the deeds registry.
Transfer Costs / Fee : Fee paid to transfer the property from the seller into the name of the buyer and include transfer duty, conveyancing fees, and registration fees.
Transfer Date: The date on which the sale of a property is actually finalized and a home loan transaction completed.
Transfer Duty: A tax levied by the government on the transfer of land. If the purchase price includes VAT no transfer duty is payable.
Transfer of Ownership : Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property "subject to" the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device.
Transferring Attorney: Appointed by the seller to attend to the transfer of the property into the name of the buyer.
Transfer Costs / Fee : Fee paid to transfer the property from the seller into the name of the buyer and include transfer duty, conveyancing fees, and registration fees.
Transfer Date: The date on which the sale of a property is actually finalized and a home loan transaction completed.
Transfer Duty: A tax levied by the government on the transfer of land. If the purchase price includes VAT no transfer duty is payable.
Transfer of Ownership : Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property "subject to" the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device.
Transferring Attorney: Appointed by the seller to attend to the transfer of the property into the name of the buyer.
Triple Net Lease Lease: under which the tenant pays the agreed-upon rent plus utilities, taxes, insurance and maintenance. (Also can be called net-net-net lease).
Turnkey Project: The construction of a project in which a third party, usually a developer or general contractor, is responsible for the total completion of a building (including construction and interior design) or, the construction of tenant improvements to the customised requirements and specifications of a future owner or tenant.
U
Usable Area: Any area in a given floor that could be used by the tenant. This area includes a point from the perimeter glass line to demising walls; it also includes column areas within such a space.
Usufruct: is a limited real right that unites two properties interest of usus and fructus. Usus is the right to use or enjoy a thing possessed, directly and without altering it.
V
VAT: value-added tax.
Vacancy Factor: The amount of gross revenue that pro forma income statements anticipate will be lost because of vacancies, often expressed as a percentage of the total rentable square meterage available in a building or project.
Vacancy Rate : The calculation, in percentage terms, of all available/unoccupied rental space in a particular building or location.
Vacant Land: Land that may be improved and developed but is not currently in use.
Vacant Space: Refers to existing tenant space currently being marketed for lease. This excludes space available for sublease.
Vacancy Rate : The calculation, in percentage terms, of all available/unoccupied rental space in a particular building or location.
Vacant Land: Land that may be improved and developed but is not currently in use.
Vacant Space: Refers to existing tenant space currently being marketed for lease. This excludes space available for sublease.
Valuation : A written estimate of a property's current market value completed by a person with knowledge of real estate markets.
Valuation Fees: The amount that a financial institution charges to assess the property prior to granting the finance that has applied for.
Value: The power of a thing to command other goods in exchange; the present worth of future rights to income and benefits arising from ownership.
Valuation Fees: The amount that a financial institution charges to assess the property prior to granting the finance that has applied for.
Value: The power of a thing to command other goods in exchange; the present worth of future rights to income and benefits arising from ownership.
Voetstoots : This clause is always found in a sale document and means 'as is'. All defects must be mentioned to the buyer upfront. If there are any defects in the property of which the seller was unaware, the buyer will acquire the property with such defects.
If a voetstoots clause is included in an agreement of sale of immovable property, it means that the seller cannot be held liable for defects which are not visible upon a reasonable inspection of the property, i.e. leaking roof. A voetstoots clause does not exclude the sellers liability if he failed to disclose defect that he was aware of in order to defraud the purchaser.
Void: Something that is unenforceable.
If a voetstoots clause is included in an agreement of sale of immovable property, it means that the seller cannot be held liable for defects which are not visible upon a reasonable inspection of the property, i.e. leaking roof. A voetstoots clause does not exclude the sellers liability if he failed to disclose defect that he was aware of in order to defraud the purchaser.
Void: Something that is unenforceable.
W
Wholesale value: In the context of property syndication, this means the estimated price that a share or shares of a syndicated property-holding company would fetch (excluding winding-up costs) should the holding company be dissolved and the underlying property sold as a normal, non-syndicated property. See also retail price.
Walk-Through: A walk-through is the final inspection of a home, before final transfer of ownership, to check for problems that may need to be fixed.
Wear And Tear: This is the term used for the reduction in value of an asset resulting from normal everyday use.
X
Y
Year-growth: Percentage by which figures have changed compared to the same month, quarter or year of the previous year.
Year 0: Refers to the year ended at the present time.
Year 1: Refers to the period from year 0 to the end of the first year thereafter.
Z
