Following on from last week, here is Property Terminology Part II, aiming to provide a simple and clear definition of property terms you may come across from time to time.
Strata Title: The formal ownership of a property within a strata plan where the property is defined within horizontal and vertical boundaries, and proprietors have joint rights over the land and common areas.
Company Title: The building and land are owned by a private company and ownership of defined numbers of shares entitles shareholders to exclusively occupy part of the building.
Torrens Title: The highest form of Australian property ownership where the land title is registered and guaranteed by the government.
Fittings: Items within a home that can be removed upon sale without damaging the items of the space they occupied, for example, refrigerators.
Fixtures: Items fixed to a property that would cause damage if removed and are normally included in a sale, for example, built-in shelving.
Bridging Finance: A short-term loan used to allow a buyer to purchase a new property if the proceeds of a property he/she recently sold have not yet cleared.
Deposit Bond: An alternative to a cash deposit, provided by a bank which guarantees the 10% deposit will be paid to the vendor in circumstances where the deposit would normally be forfeited.
Lenders Mortgage Insurance: Payable when a borrower does not have a big deposit, it is designed to protect the lender against default.
Mortgage Protection Insurance: Insurance policy which covers a borrower’s mortgage repayment in the event of illness or injury.
Negative Gearing: When the earnings from an investment property are – in the short term – less than the costs associated with the investment. The shortfall can be used to reduce tax liability.
Positive Gearing: When the earnings from an investment property are more than the costs associated with the investment. The return on capital leads to a magnification of returns to equity.
That concludes our two-part glossary of property terms – here at Wright Place, we live and breathe property, we are always available to explain or clarify anything to our buyers/sellers or wider community, related to property.
