A
Acceptance Consent to the terms of an offer.
Act A set of rules that has been passed by Parliament , received Royal Assent and become law.
Affidavit A written statement in the name of the person who signs it and swears or affirms to its truth.
Agency authority Written agreement for the agency to act on behalf of a Rental provider.
Appraisal An opinion of the market worth of a property without resorting to a full – scale valuation.
Auction of Land A public sale of property in which yje highest bidder at or beyond the reserve price is normally the purchaser of the property.
Authorised financial institution A financial institution approved by Consumer Affairs Victoria.
Authority to Lease A legally binding document that is signed by the rental provider. It details the
agreement between the rental provider and the agency. Many aspects of the authority, such as commission , advertising costs and the authority period, are negotiable between the parties.
Authority to purchase A legally binding document that is signed by the buyer. It details the agreement between the buyer and the buyers agency. Many aspects of the authority, such as fees and the authority period, are negotiable between the parties.
Authority to sell A legally binding document that is signed by the vendor. It details the agreement between the vendor and the agency. Many aspects of the authority to sell, such as commission,advertising costs and the authority period, are negotiable between the parties.
B
Bond An amount paid as an assurance that the tenant will not breach the conditions of the tenancy, for example, the tenant will pay rent and on vacating will leave the premises in a state of good repair and order. See security deposit.
Breach of duty notice Written notice that informs one party ( rental provider or renter ) that a breach of the tenancy agreement has occurred and requests that the breach be rectified.
Breach of contract The breaking of one or more of the terms or conditions of the contract.
Building permit A permit issued by local government authorities for the erection of a building or for structural alterations to a building.
Business broker An estate agent or agents representative who specialises in the sale or lease of businesses.
Business day Any day other than a Saturday, Sunday or gazetted public holiday.
Buyer’s agent An estate agent who acts solely for the purchaser in sourcing suitable properties and representing the purchaser throughout the buying process. Also known as a buyer’s advocate.
Buyer’s advocate See buyer’s agent.
C
Caveat A note on the title that an interest in the land is claimed by a third party.
Certificate of Completion A document issued by a building surveyor on completing the final mandatory inspection of the property. It is not evidence that the building complies with the Building Act 1993 or building regulations. See Certificate of Completion.
Certificate of Occupancy A document issued by a building surveyor, which shows that the building is suitable for occupation. It is not evidence that the building complies with the Building Act or building regulations. See Certificate of Completion.
Certificate of Title A document that shows who owns the property, the size of the land and whether there are any limitations on the title such as mortgages, easements or encumbrances.
Chattels Moveable personal property or furniture. Also referred to as ‘goods’ in the context of a sale of property.
Commerical property Property zoned and used as office buildings, shops and retail premises.
Common property Areas of a property that are used by and belong jointly to all the owners of strata title property. This applies to common driveways, paths, courtyards, stairs, passageways, lifts , lobbies, fences, common garden areas and other facilities in multi-dwelling complexes.
Company title Each owner in a block of flats has shares in a company that has total ownership of the land and buildings of the flats. The owners receive a parcel of the shares with rights attached. Each owner is entitled to exclusive occupation of a flat, but this subject to the company’s Memorandum and Articles of Association. See strata and stratum titles.
Conciliated offer An offer that is made during the mediation process.
Condition report A report on the current condition of residential property to be leased where a bond is to be taken. The condition report must be completed by the agent and given to the tenant before the tenant takes possession of the property. The tenant must sign and return one copy of the condition report within three business days of occupying the premises.
Conjunctional sale A sale where agencies work in conjunction with other agencies and agree to share commissions on sales.
Contract A document that legally formalises the purchase, sale, exchange or other conveyance of real estate between parties. The contract must be signed by all parties concerned to be enforceable.
Contract law The law that arises from the enforceable rights and obligations of parties to an agreement.
Contract of sale of business A legal document prepared by the vendor’s solicitor that outlines the conditions of the sale of a business. The contract of sale is legally binding when signed by both the purchaser and the vendor.
Contract of sale real estate A legal document prepared by the vendor’s solicitor that outlines the conditions of the sale. The contract of sale is legally binding when signed by both the purchaser and the vendor.
Conveyancing Transferring the ownership of a property from the vendor to the purchaser. It is often performed by a solicitor or conveyancer.
Cooling-off period The period of three clear business days after the purchaser signs the contract of sale for residential or rural property of not more than 20 hectares, during which the purchaser may withdraw from the purchase. The cooling-off period does not apply in certain circumstances, including where property is sold by auction.
Co-owners Where a number of people have joint ownership of a property. See tenants in common and joint tenants.
Counter offer Anew offer as to price, terms or conditions made in reply to a prior unaccepted offer.
Covenant An agreement that creates an obligation on the owner of a property not to do something. For example, a covenant could state that no more than one dwelling may be built on the land. A covenant runs with the land and the liability to comply with it or the right to take advantage of it passes from owner to owner.
D
Debrief A review of a situation to evaluate the effectiveness of a response, assess and improve performance and work out new ways of doing things.
Deed A document in writing where an agreement is reached, obligation entered into or property conveyed. It is signed under seal.
Defect of title Any matter, for example an encumbrance or an illegal structure built without a permit, which restricts the purchaser from obtaining a clear title to the property.
Demographics The statistics of a population or section of a population.
Deposit An amount of the purchase price paid by the purchaser, usually at or around the time of making a written offer. It is usually 10% of the purchase price . The deposit must be held in a trust account by an estate agency or by the solicitor or conveyancer, or maybe held jointly in a trust account by the vendor and purchaser.
Disbursements Expenditure by the estate agent on behalf of the principal including, for example , advertising expenses, rates, taxes and insurance.
Disclosure statement A document containing all the information that the prospective tenant requires regarding a retail premises for lease.
Domestic building insurance Insurance taken out by builders to protect home owners from loss arising from defects to a building or for incomplete work. Builders must take out domestic building insurance for most home building or renovations with a contract price over $12,000. However, the insurance may only be claimed against where the builder has died , is insolvent or has disappeared.
Duration of lease The period of the lease. The remaining time for which the property is leased. Also known as the lease term.
E
Easement A right held by one person to make use of the land of another. For example land set aside for drainage and sewerage pipes.
Encumbrance A third party’s that obstructs the unencumbered use or transfer of a property. Examples are easements, mortgages and caveats.
Estimated selling price The price an estate agent estimates a property will attract. It must be recorded on the authority to sell as either a single figure or as a range where the difference between the top and bottom figures does not exceed 10%, for example, $400,000 – $440,000.
F
Family Violence Intervention Order An order issued by the Magistrates Court against a person who is violent towards anyone in their family.
Family Violence Safety Order An order issued after normal business hours by a police sergeant against a person who is violent towards anyone in their family. A notice only lasts 72 hours , so an extension would be through an application for an order to the Magistrates Court.
First Home Owner Grant A scheme funded by the Victorian Government that provides first home owners with non-means tested one- off payment. More information can be found at ^www.firsthome.gov.au^.
Fittings Items that can be removed without damaging the property, such as garden ornaments, lighting and drapes. They must be listed in the contract of sale if the purchaser wants them to remain with the property.
Fixed term tenancy A tenancy where there is an agreement that ends on a specified date. Except where the tenant has breached the law or tenancy agreement, the rent provider is not entitled to terminate the tenancy before the expiry of the fixed term. On expiry , a fixed term tenancy automatically continues as periodic tenancy unless a new fixed term agreement has been entered into.
Fixtures Items that are attached to the property and cannot be removed without causing damage to the property, such as bathroom suites, built-in wardrobes and kitchen stoves. They are usually included in the sale.
G
Goods In relation to a sale of a property, goods include personal items , chattels and fittings.
Goods and Services Tax (GST) A consumption tax of 10% levied on the final consumer of the goods or services. The supplier of the transaction is responsible for collecting the GST and sending it to the Australian Taxation Office.
H
Hearing A proceeding , usually by a court or tribunal, where evidence is taken for the purpose of determining an issue of fact and reaching a decision based on that evidence.
I
Improvements All work done or material used on and for the benefit of the land that improves the values of the land. Does not include workdone or material used for the benefit of the land by the Crown or by any statutory public body. Improvements can take the form of, for example, building, fences, driveways and retaining walls.
Industrial property Property zoned and used for factories and warehouses.
Insolvent A person who has ceased to pay debts in the normal course of business and is bankrupt or in an administrative arrangement with creditors.
Insurance A method of guaranteeing or indemnifying an individual or company against loss from a specified hazard. For the payment of an agreed premium, the insurer issues a policy to the insured that gives financial protection for a stated period of time.
Investment property Property in which a person invests to get a return on money.
J
Joint tenants The form of ownership where two or more people purchase a property in equal shares and if one dies , that person’s share of the property passes to the surviving owner/s. See co-owners and tenants in common.
K
Knocked down The highest bid for the property has been reached and the auctioneer brings down a hammer or gavel, or otherwise indicates that this is the successful bid and the auction is over.
L
Late Bid A late bid that is made by a prospective purchaser after a property has been knocked down at auction to the successful bidder.
Land usage The use being made of land or the uses permitted under zoning ordinances. Zoning ordinances act to control land usage in the community.
Lease A document detailing the conditions agreed between the landlord and the tenant. ‘Lease’ is the preferred expression for commercial and industrial property. ‘Tenancy agreement’ refers to residential property.
Leasehold Property held under a lease that is to continue for a period of time.
Leasing The activity of sourcing a tenant, negotiating rental and ensuring that all the legal documentation and requirements are completed before the tenant takes possession.
Legal capacity Capacity to legally enter into a contract.
Legislation Laws in the form of Acts and Regulations enacted by a state government or the federal government.
M
Maintenance The process of keeping a property in the condition appropriate for its use.
Mediation A structured negotiation process in which the mediator, as a neutral and independent party, assists the parties to a dispute to achieve their own resolution of the dispute.
Mortgagee Person or organisation that lends money under a mortgage agreement.
Mortgage A written contract giving the lender of finance certin rights over specific property , for example, the house being bought by the borrower being encumbered as security for the loan.
Mortgagee sale If the mortgagor ( borrower ) defaults on the mortgage, the mortgagee (lender) can seek to recover the debt by selling the property that was the security for the loan under the mortgage.
Mortgagor A person who takes out a mortgage on the property.
N
Notice of intention to vacate Written notice given by the tenant to the rental provider or agent advising that the tenant wants to end the lease or tenancy agreement and vacate the property.
Notice to vacate Notice given by the rental provider to the tenant advising that the rent provider wants to end the lease or tenancy agreement and wants the tenant to vacate the property.
O
Occupancy Having possession of property. Physically residing in the property as the owner or a tenant.
Off the plan Purchasing ‘off the plan’ means buying a property before it has been built or subdivided. These purchases are usually based on the designer’s or surveyor’s plans and models.
Offer The offer of a promise that, when accepted, constitutes an agreement. It is one of the stages in the creation of a binding and legally enforceable contract.
‘On the market ‘ Available for sale. More usually a term used at auction where a price is reached, at or above which the vendor is prepared to sell. see reserve price.
Owners corporation The body corporate that has collective ownership of the common areas in a subdivision of land or buildings. It is responsible for the administration, upkeep and insurance of the common areas shared by all the owners (the common property)
Ownership The right to possess and use property to the exclusion of others.
P
‘Passed in’ The circumstance where a property for auction is not sold, usually because it has not reached the vendor’s reserve price.
Periodic tenancy Where a tenancy agreement has a commencement date and continues from one rental period to another. Notice to terminate the agreement may be given by either party during this period as set out in the governing tenancy legislation.
Private sale A property or business sold by direct negotiations undertaken privately with prospective purchasers. Not sold by auction. An agent might or might not be involved in the sale.
Property management The activities of leasing property, collecting rents, selecting tenants and maintaining and managing the property for the rental provider.
Purchase price The amount agreed between the vendor and the purchaser for the sale of a property.
Purchaser The buyer; the person who acquires title to or ownership of a property or an interest in a property.
Q
Quiet enjoyment A right to undisturbed occupation and possession of the premises.
R
Real estate Land and its improvements.
Rent The amount paid by a tenant to a rental provider to occupy premises and to use facilities and services under a tenancy agreement or lease.
Rescission The act of cancelling a contract or putting a contract aside.
Reserve price A vendor’s minimum sale price for the property. It must be recorded on the authority appointing the agency.
Residential property Property zoned and used for dwellings such as houses, flats and apartments.
Residential tenancy agreement Lease prescribed under the Residential Tenancies Act for residential property.
Rural property Property zoned for non-urban uses, included farmland and bush blocks.
S
Sale by tender A sale where tenderers put their offers in writing by specific time and date, and pay a deposit. The most suitable offer acceptable to the vendor obtains the property, usually subject to a reserve price.
Security deposit A bond for a commercial lease.
Set sale A sale where bidders write their offer in a contract of sale of real estate. All offers received by a set date are evaluated and the vendor may elect to accept one or reject all offers.
Settlement The occasion when ownership of a property passes for the vendor to the purchaser and the balance of the purchase price is paid to the vendor.
Special condition A condition that must be met before a contract is legally binding.
Stamp duty A state government tax based on the sale price of a property and paid by the purchaser when ownership of the property is transferred. Also referred to as ‘duty’ and ‘transfer of land duty’.
Statute An Act as made by Parliament.
Statute law The law that is governed by Acts of Parliament.
Statutory body A government agency established through an Act of Parliament.
Strata title Individual ownership of an apartment or unit within a block or multi-unit complex. This is separate from and additional to the joint ownership of common areas shared by all the property owners in the building or complex. See company title.
Subdivision Dividing land or building into lots. The subdivision must be approved by local council.
T
Tenant Any person paying rental in exchange for accommodation or in possession of property with the owner’s permission.
Tenants in common A form of joint ownership of a property in which each person owns a share of the property, equally or unequally. On the death of one owner, the deceased’s share passes to heir/s, who assume the role of tenant in common with the other existing owner/s . See co-owners and joint tenants.
Title A legal document that identifies who has a right of ownership of a property.
Transfer of land A document that records the change of ownership of a property from the vendor to the purchaser.
U
Unregistered mortgage May be a loan from a friend or a relative to cover the cost of purchasing a property; secured by a written mortgage document but not registered on the title.
Urgent repairs Repairs that must be made to a property to ensure that it is fit for use, including repairs to water services, gas supply and sewerage.
V
Valid contract A contract that has been excuted in compliance with all the legal formalities and is binding on, and enforceable by, the individuals who executed it.
Valuation An estimate of the value of a property prepared by a valuer, usually for a fee. A valuation may be used to obtain a mortgage or insurance, or in a legal contest.
Valuer A person( in Victoria ) who has passed the accredited degree course, completed up to two years of supervised practice and passed a professional interview with the Australian Property Institute (API).Once qualified,valuers are Associates or Fellows of the API and called Certified Practising Valuers.
Vendor The person selling the property.
Vendor bid A bid made on behalf of the vendor. Vendor bids can only be made by the auctioneer and only when the auction rules allow it. The auctioneer makes this statement before bidding starts and announces each vendor bid as, or before. It is made.
Vendor’s Statement Information that the vendor must provide to the purchaser advisingof restrictions such as covenants and easements, outgoings such as rates, and any other notices such as compulsory acquisition. The required information is specified under section 32 of the Sale of Land Act.
Vendor terms contract Also known as a terms contract, where finance is supplied by the vendor rather than by an established credit provider. Under a vendor terms contract, the purchaser takes possession of the property before paying the final instalments of the purchase price.
Void Not binding, invalid or has no legal effect.
Voidable An agreement that may be made void at the option of one of the parties.
W
Wear and tear The depreciation of an asset due to ordinary usage.
Working Day See business day
Z
Zoning The system of controlling the use to which land maybe put.