Useful Terms and Terminology Explained

Useful Terms and Terminology Explained

When a property owner voluntarily gives up his rights of ownership or interest. This usually occurs when the owner can no longer afford the monthly payments or interest rates and chooses to rather opt out.

Abandonment Value

The value a project, property or car will have if it gets liquidated immediately. Also known as liquidation value.

Absentee Bid

A process which allows the bidder to take part in the auction without being physically present. All the bidder has to do is to submit his or her offer sometime prior to the auction.

Absentee Owner

The owner of the property being sold doesn’t live on the property.

Absolute Auction

A property or vehicle gets sold on an auction to the highest bidder without any budget limitations.

Absorption Rate

The ratio used to determine the value of a certain property. It calculates the number of other properties sold within the specific area and compares it against the property in question to get the most accurate valuation.

Accelerated Depreciation text

The decrease in the value of a property due to time.

Acquisition

The method of taking ownership or title of a new property.

Acquisition Costs

The additional cost that comes with buying a new property other than the normal purchase price like insurance and tender fees.

Ad Idem

When all parties involved are in agreement and have consensus.

Adjusted Cost Base

Used to determine ones capital gain or losses. Adjusted Cost Base equals the cost of the property plus the cost of any renovations or improvements done.

Aesthetic Value

This can be described as the value of the property and its immediate surroundings.

Agreement of Sale

Also known as the Offer to Purchase and refers to a legal and obligatory document signed by both the buyer and seller, whereby the buyer agrees to buy a property from the seller. The seller, in his turn, agrees to sell the property to the buyer for a certain amount as well as any other conditions that may go along with the transaction.

Alligator

Any property that delivers a negative cash flow. /p>

Amenities

Any positive attributes that adds value to a property i.e. a pool or air conditioning. These attributes can also include attractions Positive features of a particular property (such as a pool, central air conditioning, etc.) or attractions like schools or shopping centres situated nearby the specific property.

Assets

Any items of value owned by an individual whether it’s property, bank accounts, stock or even mutual bonds. These items can when needed, quickly be converted to cash.

Assets and Liabilities

Everything in your possession as well as everything you still owe.

Auction

The process of selling a property to the highest bidder.

Auction Clerk

The person, employed by the principal auctioneer or auction firm, who records everything that everyone says, who bids on what as well as the difference prices decided on.

Auction Plan

The final decision by the seller and auctioneer concerning the pre-auction, auction day and other post auction activities.

Auction Price

The starting price for any property at auctions, determined through the auction’s marketing or online listings.

Auctioneer

The person, appointed by the seller, in charge of the auction.

Bankruptcy

A legal arrangement that allows a person or business to eliminate, or in some instances restructure, their debts and negative assets in cases of financial problems.

Bearer / Seller

The legal owner of a property.

Beetle Certificate

In some coastal areas it’s a legal requirement to verify that any structures on ones property is free of any form of infestation, whether termite or borer, before any transfers can start. Also known as an Entomologist’s Certificate.

Bird Dog

A term used to describe anyone who is on the hunt for any property on sale.

Bidder Card

A card every bidder gets issued with when registering at an auction. When placing a bid, the buyer simply raise his or her card for the auctioneer to see. Each card has a unique number registered to each buyer’s name and whoever places the highest bid’s number will be recorded alongside to bid for administrational use.

Bidder Number

When registering at an auction, each bidder receives a unique number to use in the bidding process.

Bidder's Pack

As with any other item purchased, each property also needs to have its own history and necessary information available to potential buyers. This information is compiled in a bidder’s pack and distributed to the bidders of each property.

Betterment

The process of renovating or improving property in order to increase the market value.

Bid

A system normally used at auctions where numerous buyers gets the chance to submit proposals for the same property. The amount of bidders is controlled by the auctioneer and client.

Book Value

The value of a property as a monetary asset.

The value of a property as a monetary asset.

Boom

Easily described as the rise in the property market. A process where the demand for property increases which in return means an increase on investments and property prices

Borehole Certificate

A legal certificate issued by a borehole contractor stating the amount of litres of water the borehole produces each hour. Usually only needed on agricultural holdings.

Boundary

The border lines of a property, usually defined on a diagram to show the layout of each property.

Bounds

Any boundaries that are natural, i.e. trees or rocks, or artificial, i.e. roads or railroads, and stands in the way of any reservation without construction.

Breach of Contract

Failure to keep to a binding contract without any legal excuse.

Bubble

When the demand for property increase far beyond the average demand.

Capital

Money used for investment purposes.

Capital Expenditure

The cost of increasing the value of a property by means of expansion or renovation.

Certificate of Occupancy

Documents issued by the municipality to indicate that all new and existing property complies with local building, safety and health regulations and is suitable for occupation.

Certificate of Title

A report stating that the title to the property is legal and in possession of the true owner.

Cluster

A property situated in a development of similar houses, usually with limited access and security.

Electrical Compliance Certificate

Just like a certificate of occupancy, each property owner needs to be in possession of legal documentation that states that the property’s electrical installation abides to local by-laws. This documentation can be provided by a qualified electrician and is registered by local authority.

Contract

A document defined as a legally enforceable agreement between a buyer and seller. In terms of the Alienation of Land Act 68 of 1981, a ‘contract’ refers to a sale of land on instalments where the purchase price is payable by the purchaser to the seller in more than two instalments over a period exceeding12 months.

Counter Offer

When an offer is rejected and replaced with another, often higher or more favourable, offer. Counter offers are commonly used at auctions

Dead Asset

Any valuable possession that lost its value.

Deeds

By law all homeowners need to prove ownership by means of a deed. Getting the right documentation however can be a tedious yet necessary task, as it guarantees both right and title to property owners as well as potential lenders. Properties are recorded in Deed Registries across the country and the transfer of property can only take place once the appropriate Title Deed is issued and the transaction is recorded. Only then can the buyer claim full ownership.

Deeds Office Registration Fees

In South-Africa the Deeds Registry is a governmental department with regional offices across the country. Registration fees are charged for registering both the home lone or mortgage bond as well as the title deed and can be pricey.

Deed of Sale

Just like every property owner needs to be in the possession of a deed to prove his or her ownership, there also needs to be a deed of sale to prove that a new owner took possession of the property. This is necessary whether it’s a transfer of ownership or real property and needs to be in writing. A Deed of Sale can be obtained from either an estate agent, attorney or directly from the buyer or seller.

Distressed Property

When property bought on a bargain is valued significantly lower than it’s predicted or present price.

Economic Life

The amount of time it will take for renovations or improvements on property to show an increase in capital value.

Economy

Managing the resources belonging to a certain country, business or community and providing in the needs of production, supply and consumption.

Environmental Impact Assessment (EIA)

An assessment of the possible negative or positive impact, a planned project will have on the property’s environmental surroundings. The outcome of the assessment has a direct influence on the decision whether to continue with the development or cancel it immediately. It furthermore also helps in the decision regarding the project’s insurance as a bad assessment can be a liability for insurance companies.

According to the International Association for Impact Assessment (IAIA), EIA can be defined as "the process of identifying, predicting, evaluating and mitigating the biophysical, social, and other relevant effects of development proposals prior to major decisions being taken and commitments made."

Erf Number

The unique number that identifies each property within a suburb.

Evaluation

Used to describe the notion of determining the value of a property or car.

Eviction

The action that takes place when the residents of a property legally gets kicked out.

Expenses

All extra cost like repairs and maintenance deducted from a property’s gross income.

FAR

Floor Area Ratio – This determines the total floor area available to let, development or other use.

FICA

The Financial Intelligence Centre Act, 2001 came to full effect in 2003 as part of the South African government’s fight against corruption and money laundering. In short the system is set in place to act as a regulatory body that introduce different ways to prevent money laundering to companies or individuals who otherwise wouldn’t have had access to.

Institutions working in compliance with the FICA act have to adhere to requirements that include:

* Identifying all customers;

* Verifying and checking all personal information given by customers;

Keeping records of all information and documentation.

First Time Home Buyer

Someone who owns no property and hasn’t own property for three years prior to purchase of a property.

Flipping

When the buyer buy a property only to sell it for a profit immediately afterwards.

Flood Insurance

Insurance that specifically covers any damage done to a property, specifically damage caused by flooding. This type of insurance is mostly used in relation to property own near flood areas.

Floor Plan

A sketch or drawing, often found on auction sites, showing the layout and design of a property. In most cases the exact specifications of each space as well as the position of doors, windows and staircases will also be indicated.

Foreclosure / Repossession

The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

Forfeiture

The notion of losing property, rights, privileges or money to a What happens after The loss of money, property, rights, or privileges due to the violation of any legal responsibility.

Front Foot

The first measurement of a property’s front width.

In Absentia

Said in a person’s absence.

Income Property

Any form of real estate in your possession, whether it’s a development or property bought, that generate an income.

Increment

The amount by which the auctioneer increases the bidding. The auctioneer can increased or decreased at his own discretion.

Indenture

A contract.

Industrial Property

Property only used for industrial purposes like factories etc.

Insolvent

A person who according to the Insolvency Act 24 of 1936 declared unable to pay his or her debt.

Land Conversions

1 hectare = 10 000 square metres

1 hectare = 2.471 acres

1 square km = 247.1 acres

1 square km = 1 000 000 square metres

1 acre = 0.4047 hectare (ha)

1 acre = 4 047 square metres

1 morgen = 8565 square metres

1 morgen = 2.1165 acres

1 square mile = 640 acres

1 square mile = 26 125 825 Cape square foot

1 Cape foot = 0.314856 metre

Live Auctions

A term referring to a real live auction hosted in concurrence with an auction on the internet. The real time auction can be held anywhere in the country

Zone

Explained as an area selected, by authorities, for specific use or have certain restrictions.

Metes

Dimensions like inches, feet, yards, or miles.

Metes & Bounds

A description of the boundary lines of land, setting forth the boundary lines with their terminal points and angles.

Mineral Rights

Any legal interest in anything of valuable under the surface of a property.

Morgen

A German unit of measurement originally also used in the Netherlands and former Dutch colonies like South-Africa. The size varies between ½ to 2½ acres which again measures at 0.202 to 1.012 hectares* The word is said be de derived from the German or Dutch word “morning” which is means begin equal to that covered by a morning’s ploughing.

Mortgage / Bond

A legal document used to pledge a property to the lender as security for payment of debt. Usually used as means of an agree agreement between you and the bank, stating that the bank will lend you a certain amount of money in the form of a home loan. It also states that you agree to repay the bank over a certain amount of time and at a certain interest rate.

Mortgagee

A person or financial establishment (Bank) lending money to someone else against registration of a mortgage bond over the property. This means that the mortgagee have a mortgage bond over the property

Mortgagor

The person borrowing the money, who allows the registration of a mortgage bond by the mortgagee over his property to secure repayment of the loan.

Mortgage Life and Disability Insurance

Also known as a type of life insurance bought by borrowers to cover the total amount of the mortgage. But, unlike other insurance, the amount of cover decreases as the borrower repays more and more of the loan. Some policies also cover the borrower in the event of disability. In the event that the borrower dies while the policy is in force, the debt is automatically covered by the insurance proceeds. In the case of disability insurance, the insurance will make the mortgage payment for a specified amount of time during the disability. Be careful to read the terms of coverage, however, because often the coverage does not start immediately upon the disability, but after a specified period, sometime forty-five days.

Mortgagor

The borrower in a mortgage agreement.

Movable Property

Any property other than the land or any improvements that may have enhanced the value of the land. Movable property can include paintings, furniture, clothing or even vehicles.

Multi-dwelling Units

A property that provides more than one housing units but are all still secured under one mortgage.

Municipal Building Value

The value or price of a building according to the Municipality.

Municipal Land Value

The value or price of a piece of land according to the Municipality.

Municipal Rates

The tax all property owners have to pay to the Municipality.

Municipality

The governing body of a city or town responsible for water, electricity etc.

NHBRC

The National Home Builders Registration Council (NHBRC) is a regulatory body created to protect the interests of homebuyers and to regulate property developers and builders in terms of their trade. One of their core functions is to enforce a quality benchmark in terms of building and craftsmanship, and to hold developers and builders accountable for the quality of the housing that consumers buy from them.

Null and Void

Simply means without any legal effect. If you are in possession of a contract that is null in void it simply means that it is no longer valid and can not be enforced by either party’s.

Obsolescence

When the value of a property decreases due to it being out of date as a result of changes to the design and use or elements of depreciation.

Occupancy

Living in, owning, holding or occupying property.

Occupancy Permit

A permit issued by your local building department which give you written permission to enter and reside in a newly built building without any form of danger.

Occupancy Rate

The amount of space rented or used in a specific building or community.

Occupant

A person who lives in or resides in a particular property or area.

Occupation

The exact date on which the occupant moves into the property

Offer to Purchase

This is the written offer from the buyer to the seller, usually prepared by an estate agent. Once this offer gets signed, it’s considered legally binding for both the seller and buyer.

Offeree

The person to whom an offer is made, usually the seller.

Offeror

The person who makes the offer, usually the buyer.

On-Site Auction

An auction taking place on the exact property in question

Online Auction

An auction taking place live on the internet or by means of tenders.

Opening Bid

The first bid offered by a bidder at an auction.

Operating Expenses

Money outlays necessary to operate and maintain a property.

Option

When making an offer, the buyer undertake not to revoke the offer for a certain number of time. In doing so, the offeree has the option to accept or reject the offer based on his or her own discretion.

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.

Property in Possession

A property becomes a Property in Possession (PIP) or Bank Repossessed Property, once a customer has defaulted and the bank's reserve price was not achieved. The property then has to be sold in order for the bank to get its money back.

Optionee

A person who has the legal right to either purchase or reject future property deals.

Optionor

A person, also revered to as the seller, gives someone else (optionor) the option to buy a property. If the optionor however uses this option and buy the property in question, he or she is legally bound to oblige to any stipulations in the contract. If not, the optionor is not interested, he has no obligation concerning the contract.

Overdraft

Explained as a loan extended to a bank accountholder. Unlike other loans, an overdraft allows you to access your line of account without having to apply for new loan each time, given that you repay your loan and calculated interest in compliance with the prior agreement. In doing so this loan agreement can go on indefinitely, giving you financial flexibility.

Overdraft Protection

An extra service that most financial institutions offer to their checking account clients. The client has a credit limit much like that of a credit card but if the client writes a check for an amount greater than what is in the checking account, the bank automatically writes the client a loan. Interest is charged on this, and usually an annual fee.

Preliminary Title Search

The first look at all documentation of a specific property to make sure that it in indeed can be sold.

Praedial Servitude

The right acquired by a person as new owner of someone else’s immovable property.

Pre-Approval

A loosely used term which generally means that a borrower has completed a loan application and provided debt, income, and savings documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making assumptions about what the interest rate will actually be at the time the loan is actually made, as well as estimates for the amount that will be paid for property taxes, insurance and others. A pre-approval applies only to the borrower. Once a property is chosen, it must also meet the underwriting guidelines of the lender.

Potential Gross Income

The amount of money that a property will generate if it is used to its full potential and without any interruptions in income.

Possession

When a property gets transferred to the buyer after registration of transfer and is thus now the legal property of the new owner

Portfolio Income

Income from interest, dividends, royalties, or the disposition of property held for investment.

Positive Cash Flow

When rental and other income exceeds all of the other costs of ownership.

PITI

This stands for principal, interest, taxes and insurance. If you have an "impounded" loan, then your monthly payment to the lender includes all of these and probably mortgage insurance as well. If you do not have an impounded account, the lender still calculates this amount and uses it as part of determining your debt-to-income ratio.

PITI Reserves

A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.

Plat Book

A public record containing maps of a specific piece of land showing the division of the land into streets, blocks, and lots. It also includes the measurements of any individual parcels.

Price

The amount that was offered, asked, or actually paid for a property.

Property Guarantee

A written document issued by the bank that promises to pay the sum referred to on registration in the Deeds Office to the person or financial institution named as seller.

Property Management

A monthly fee paid to a management company to manage your property. This includes screening possible tenants, collecting rent or responding to any tenant or property needs.

The classification of commercial investment real estate into the four primary types: retail, industrial, office and residential.

Provenance

This is especially important at auctions since an interesting line of ownership can lead to added value. A piece owned by a famous celebrity or public figure can be worth thousands more than a piece owned by someone outside of the limelight

Public Auction

A meeting of people in an announced public location to sell a property in order to repay a mortgage that is in default.

Punch List

A list prepared by the architect, designer and owner of a specific property noting all deficiencies that needs to be fixed. When construction is done, the list is checked to insure everything is changed or fixed and done in the discussed manner. 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.

Qualification Period

The qualification period is a period after a new insurance policy has been taken out during which the insurance company will not allow any claims to be made by the policyholder. The insurance firm uses this time to assess the accuracy and validity of the application before granting any future claims.

Qualified Buyer

A buyer needs to prove to a lender that he or she is financially able to qualify for a loan, as qualifying the buyer is one of the primary steps taken by the lender (normally a Bank) as part of the loan process.

Qualifying Ratios

Calculations that the banks use in determining whether a borrower can qualify for a mortgage or not. There are two ratios: The "top" or "front" ratio is a calculation of the borrower's monthly housing costs (principle, taxes, insurance, mortgage insurance, homeowner's association fees) as a percentage of monthly income. The "back" or "bottom" ratio includes housing costs as will as all other monthly debt.

Qualitative Analysis

The examination of a company's qualities which cannot be calculated scientifically or mathematically. Qualities include staff morale and managerial style.

Quantitative Analysis

In contrast to qualitative research, quantitative research is a mathematical examination of a company's qualities. In this case however the qualities include the company’s total assets and future sales.

Quorum

A quorum is the minimum number of people who must attend a meeting in person, or by proxy, to constitute a legal and binding meeting. If a meeting is held where fewer than the minimum attend, the meeting should be dismissed and any decisions taken considered invalid.

For general meetings the quorum for a body corporate should consist of at least 50% of the owners in a scheme with less than 11 units and 35% of the owners in a scheme with between 11 and 49 units. In a scheme with more than 49% of units, 20% of the owners should attend. The quorum for different matters on the agenda will differ but for a special resolution to be passed, the quorum for a general meeting still applies. For a unanimous resolution to be passed, 80% of all owners must attend the meeting but for a quorum for a trustees' meeting, the greater number of two trustees or half the total number of elected trustees must attend.

Raw Land

Usually relates to property that has not been developed, improved or in most cases incorporated into town planning schemes.

Real Estate

Any land or property, plus any improvements made to the land.

Real Property

Defined as the land and any trimmings, including anything of a permanent nature such as structures, trees, minerals, the interest, benefits, and inherent rights thereof.

Reasonable Wear and Tear

Damage sustained in the course of normal day-to-day use.

Recorder

The public official who keeps records of transactions that affect real property in the area. Also known as a "Registrar of Deeds”.

Redemption

The buying back of one's own property after a forced court sale.

Redevelop

To remove existing improvements and buildings on a parcel of property and replace them with new, more useful and profitable improvements.

Refinance Transaction / Refinancing

The process of paying off one loan with the proceeds from a new loan using the same property as security.

Registered Right

A right over property registered in a deeds office against the title deed of the property. The purchaser of immovable property is bound by the rights registered over the property whether or not he knew of their existence at the time of the sale.

Registrar

The person who has the task of collecting, recording, and maintaining instruments related to the title of land. He or she is also responsible of ruling on the acceptability of documents submitted for registration and for making decisions as to how to correct title defects.

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 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 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.

Remodel

To refurbish, redesign or redecorate.

Redemption

The buying back of one's own property after a forced court sale.

Redevelop

To remove existing improvements and buildings on a parcel of property and replace them with new, more useful and profitable improvements.

Refinance Transaction / Refinancing

The process of paying off one loan with the proceeds from a new loan using the same property as security.

Registered Right

A right over property registered in a deeds office against the title deed of the property. The purchaser of immovable property is bound by the rights registered over the property whether or not he knew of their existence at the time of the sale.

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 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.

Remodel

To refurbish, redesign, redecorate.

Renovate

Similar to remodel, with an emphasis on upgrading the existing property.

Residential Property

A property used for residential purposes, not for business or office purposes.

Reserve Auction

An auction in which the seller reserves the right to establish a reserve price, to accept or decline any and all bids or to withdraw the item at any time prior to the announcement of the completion of sale. Also known as an auction 'subject to confirmation'.

Repossess

To take possession again of a property or goods after non-payment of money owned. This might follow a court order. Also referred to as foreclosure.

Reproduction Cost Analysis

A technique used to evaluate a property by estimating the cost of building the same or similar structure, adding the cost of land and subtracting an allowance for wear and tear.

Res Ipsa Loquitur

It speaks for itself, the facts speak for themselves

Real Estate

Land, property, plus improvements to land.

Real Property

Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.

Reasonable Wear and Tear

Damage sustained in the course of normal use.

Recorder

The public official who keeps records of transactions that affect real property in the area. Also known as a "Registrar of Deeds”.

Redemption

The buying back of one's own property after a forced court sale.

Redevelop

To remove existing improvements and buildings on a parcel of property and replacing them with new, more useful and profitable improvements.

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Risk

The probability that the actual cash flow from an investment will vary from the predicted cash flow.

Risk Profile

A person’s credit worthiness.

Road Network

The manor in which the roads of a city are laid out.

Rules

In terms of sectional title schemes, there are both management rules and conduct rules that apply to all the owners and occupants of sections in the sectional title scheme. Unless a body corporate has followed the strict procedures to amend or replace the model management and conduct rules, contained in Annexure 8 of the Sectional Titles Act, the model rules will automatically apply.

Rules and Regulations

For tenants the building standards that are binding are usually set forth in a part of the lease covering such things as use of common areas, door lettering, signs, noise, odours, moving or installation of equipment, special locks, etc.

Sale Cost

The brokerage commissions and fees plus any additional transactional costs that are incurred during the sale of the property.

Sale Date

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

The price as registered at the Deeds office and don’t be alarmed if you 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

A written agreement (contract) that states the terms and conditions under which a property will be sold, signed by both buyer and seller.

SAPOA

South Africa Property Owners Association

SASRIA

SASRIA indemnifies the insured against loss of or damage to property, directly related to or caused by: (i) any act (whether on behalf of any organisation, body or person, or group of persons) calculated or directed to overthrow or influence any State or government, or any provincial, local or tribal authority with force, or by means of fear, terrorism or violence;

(ii) any act which is calculated or directed to bring about loss or damage in order to further any political aim, objective or cause, or to bring about any social or economic change, or in protest against any State or government, or any provincial, local or tribal authority, or for the purpose of inspiring fear in the public, or any section thereof;

(iii) any riot, strike or public disorder, or any act or activity which is calculated or directed to bring about riot, strike or public disorder;

(iv) any attempt to perform any act referred to in clause (i), (ii) or (iii) above;

(v) the act of any lawfully established authority in controlling, preventing, suppressing or in any other way dealing with any occurrence referred to in clause (i), (ii), (iii) or (iv) above.

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 on time with the rent and the unit only has a normal amount of wear and tear, then the deposit is generally refunded.

SDF

Spatial Development Framework

Shortfall

A shortfall arises when the bank's estimate of what it will cost to complete the building work is higher than the contract price quoted by the builder.

Simplex

A sectional title unit on one level with no stairs.

Smallholding

A property of maximum 20 hectares situated within close to a built-up area.

Soft Market

Also known as a "buyers or tenants market", when vendors far outnumber buyers and suddenly prices suddenly 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.

Sole Proprietorship

A sole proprietorship is a business that is owned by only one person. Even though he or she does not have to pay corporate income tax, the person's liability in terms of business debts and obligations is unlimited.

South African Institute Of Auctioneers

A non-statutory association of individual South African auctioneers united to promote the mutual interests of its members; formulate and maintain ethical standards for the auction profession; make the public more aware of the advantages of auction selling; and generally improve the business conditions affecting the auction profession.

Space Analysis

The analysis of an existing office situation to locate problem areas and to provide a basis for judgment in evaluating major changes. Also, it can be in the form of planning tools that will be used by the client in developing a planning decision. This includes space standards, adjacency requirements and space requirements.

Space Planning

Architecturally designing any space with all the amenities and mechanical gadgets to make it more functional for the occupants. Besides amenities, gadgets and good communication systems, it includes better sound and light control within the space.

Space Standards

The standard-size spaces for particular functions--a necessary tool in planning for any growing organization. The absence of standards leads to a situation where space is allocated to offices in a random, non functional manner.

Special Levy

An unusual levy, which sectional title trustees can impose on all the members of a body corporate, to fund an unforeseen or emergency expense.

Sale in Execution (SIE)

A public auction held by a Sheriff of the Court. This means the bank or other financial institution providing the money for the property obtained a court order to sell the property to recover the money that has not been repaid on a home loan. The bank or financial institution can however not accept or decline offers on these properties as the are not the legal owners. These properties are advertised in the Government Gazette as well as in any two local newspapers distributed in the area in which the property is situated.

SPTN

Strategic Public Transport Network

Stamp Duty

Stamp duty is a kind of tax imposed by the government.

Statutory Law

The written law of the country.

Street Address

The physical location of a property broken down into street number, street name and suburb name.

Subsidy

A housing allowance.

Sui Generis

When something is unique or one of a kind.

Summons

A document which starts a court action and generally requires a person to appear in court, to answer a claim or make a statement.

Supply And Demand

The principle of supply and demand states that the price of real property varies directly, but not always accordingly, with demand and inversely, but not necessarily proportionately, with supply.

Surface Right

A legal interest in the use or occupation of the top part of the land as opposed to the "subsurface" or "mineral rights".

Survey

A drawing or map showing the precise legal margins of a property, the location of improvements, easements, rights of way, encroachments, and any other physical features. The term can also refer to a measurement of land, prepared by a registered land surveyor, showing the location of the land in reference to surrounding well-known points, its dimensions, location and dimensions of any buildings.

Surveyor General’s Diagram

A diagram that shows sub-divisions, servitudes and expropriations.

Suspensive Condition

A clause in an agreement, of sale or lease, stating which part of 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.

Sweat Equity

Any contribution to the construction or rehabilitation of a property in the form of labour or services rather than cash.

Tenancy

The temporary possession or occupancy of property that belongs to another. It can also refer to the period of a tenant’s possession.

Tenancy at Sufferance

A tenancy that exists when, after expiration of a lease, the tenant remains in possession without the consent of the landlord or the person entitled to possession. No notice is however required to terminate this tenancy.

Tenancy at Will

A contract or lease wherein the landlord agrees that the tenant may stay in possession after expiration of the lease and pay rent for the time the space is occupied, until either landlord or tenant desires to terminate the tenancy.

Tenancy in Common

As opposed to joint tenancy, when two or more individuals are entitled to a piece of property, this type of ownership does not pass ownership to the others in the event of death.

Tenant

A person who occupies a property, but does not own it and pays rent in return.

Tenant Fixtures

Items added to a leased premise 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./p>

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 and can result in an equivalent rent free period.

Tenant Representation Agreement

A contract under which a client agrees to work through no other salesperson except the one designated in the agreement.

Tender

An offer to pay or perform.

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.

Total Expense Ratio

Total obligations as a percentage of gross monthly income including monthly housing

Townhouse

A check of the title records to ensure that the seller is the legal owner of the property and that there are no other claims outstanding.

Tender Auction

This term refers to an auction hosted on the internet with a predetermined start and cut off time. Bidders are then invited to register and submit their bids on the Internet. All auctions are subject to the same terms and conditions as an onsite auction.

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

The exact way a property will be purchased.

Testate

One who dies leaving a will.

Testator

A male person who made a will, or is in the process of making a will.

Testatrix

A female person who made a will, or is in the process of making a will.

Theodolite

Measures horizontal and vertical angles and distance.

Thermostat

A device actuated by temperatures that regulates and controls dampers, valves, switches or other mechanisms.

Title

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 that proves evidence of ownership of property and is filed in a deeds office. The documentation contains details of the property and its owner and also indicates the purchase price, restrictive conditions of title and limited real rights.

Title Deed Number

The unique number that identifies a Title Deed.

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 general term used for either a simplex or a duplex.

Transfer

The process of changing ownership of a property and registering the new owner at the deeds registry.

Transfer Costs / Fee

Fee paid to transfer the property from the seller into the name of the buyer and usually include transfer duty, conveyance 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.

TRP

Town and Regional Planner

Unit

A unit, for the purposes of sectional title schemes, includes BOTH the section AND the share in the common property, which an owner owns.

Unit Office Space

Any fully or semi-enclosed space, providing workspace for a single occupant and involving a circulation provision required to access the space.

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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 however excludes space available for sublease.

Value

The power of a single 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'. This means all defects must be mentioned to the buyer upfront as any defects of which the seller was unaware of will lead to the buyer acquiring 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.

Water Closet (W.C.)

A toilet.

Waiver

A document whereby an individual voluntarily surrenders or relinquishes some right or privilege.

Waiver of Lien

A legal document where a contractor waives his common law right to hold control over a property if he is not paid in full.

Walk-Through

The final inspection of a home, before final transfer of ownership, to check for problems that may need to be fixed.

Wall Base

A defined material applied to the base of walls for general protection and finish. Although it can be provided in various materials, the primary material used is vinyl or rubber. Apart from various heights and colours a base is available as a straight or flat base, for carpeted areas, or a cove base, which is normally used for tile floors as a maintenance and finish advantage.

Warehouse

A large building used for receiving and storing goods, materials or merchandise.

Warrant

To guarantee something to be exactly as represented

Warranty Deed

A deed which guarantees the title from the seller to the buyer.

Waterproofing Certificate

A guarantee by a waterproofing contractor that the item involved has been adequately waterproofed in terms of the instructions specified by the manufacturer.

Weak Market

A weak market is characterised by many sellers, few buyers and decreasing prices.

Wet Columns

Columns where provisions are made to have a plumbing fixture for drinking fountains, sinks, etc. installed; the pipes are taken through the small enclosure (chase) against the column.

Will

An official, legal document containing instructions as to how a person would like his or her estate to be distributed when he or she dies. A person will usually nominate an executor to handle the will. Many people opt to choose a relative, yet it is advisable that individuals with complex estates (i.e. multiple properties, bonds and other assets) nominate a professional executor, such as a broker or their financial or asset management institution.

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Win-Win

A solution to both seller and buyers needs.

Win

The person with the highest bid is the winner of the auction. If you win an auction by placing the winning bid, you can then purchase the item at your winning bid amount.

Zone

An area designated by the authorities for specific use, subject to certain restrictions.

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