14 Commercial Real Estate Terms You Need to Know

Jan 21, 2021 | Blog, CRE - Commercial Real Estate

When buying or leasing investment properties, the commercial real estate

vocabulary can be intimidating and quite challenging to navigate. Maybe you’ve
heard of commercial real estate terms like “tenant improvement,” or “usable
square footage,” but you don’t know what lies beneath. You might know some of
the more common commercial real estate terms, like lease clause and net
operating income, but when it comes time to talk to sellers and brokers and review
leases, you may still feel under-informed.
If you are ready to dive into the real estate investment market, we’ve outlined 14
key commercial real estate terms that you’ll need to know. Knowing these
commercial real estate terms will benefit your business, help you make informed
decisions, and clarify any misconceptions about the terminology.
1. Right of Expansion (Pure Option)
Your tenant’s lease contract may include a Right of Expansion clause, or what’s
also called a Pure Option, for future use. In such a case, you – the landlord – are
responsible for providing additional available space for the tenant for the
entire lease term, before the tenant actually needs the space. The tenant may
or may not exercise the option to use the available space at any time during the
lease.
The benefit to you is that, as the landlord, you can increase the rent based on the
additional space, but you will need to keep an eye on this as it can cause
problems later on if more tenants in the same building have expansion requests.
2. Option to Buy
If you’re leasing a fee-simple, single-tenant property to a tenant who wants to do a
lot of build-outs or simply wants to buy the property at the end of the lease term,
there may be an “option to buy” in the contract. If an option-to-buy lease
clause exists, you will want to specify the terms under which the tenant can
buy the property, as well as the price you expect, if you should decide to sell.
Tenants usually perform the option-to-purchase at the conclusion of the lease.

3. Common Area Maintenance (CAM) Fees

CAM fees include all the costs of operating the commercial property. These
fees include maintenance of shared areas: hallways, elevators, stairways, lobbies,
public restrooms, parking lots, sidewalks, etc. Being a landlord, you will need to
know how the CAM fee is calculated per tenant.
As different tenants will have different needs, you will also need to be able to
communicate clearly how CAM fees will affect each individual lease contract. You
could advise your tenants to think about what they would use from the common
areas. Tenants could outline their expectations in a request for proposal
document.
This way you’re demonstrating a very open and partner-like approach in helping
each tenant be on the same page with you about all the details making up their
individual lease agreements.
4. Usable Square Footage
Usable square footage is the amount of space that is being leased. It is the
footprint that your tenant will take in a building. Usable square footage
determines wall-to-wall space under the lease terms and includes the square
footage of the place that is reserved for your tenant. Knowing this information will
help you determine whether you have enough space for each of your potential
tenants.
5. Rentable Square Footage
Rentable square footage includes the usable square footage plus some part
of the square footage that will be shared among tenants. This may include
bathrooms in hallways, lobbies, restrooms, elevators, or cafeterias. It may even
cover spaces like maintenance and janitorial areas. Therefore, the rent amount is
determined by the rentable square footage.
6. Parking Ratio
Remember that a lease involves all the available parking spaces reserved for
tenant employees. To determine the parking ratio, take the total rentable
square footage of a space, and divide it by the number of parking spaces.
The lease contract should suggest how many parking spaces will be available for
each tenant.
You can also advise your potential tenants to consult with their employees to learn
how many of them drive to work, and how many would take public transportation.
Small things like this will show your tenants that you are a good landlord who
takes care of their needs.
7. Tenant Representative
The tenant representative is often the real estate agent who represents the
tenant. He or she helps the tenant negotiate with you, the landlord. A tenant
representative works on commission, splitting it with the landlord’s leasing agent,
and acts as an intermediary between tenants and landlords. Moreover, the
representative will try to resolve some issues between the tenant and the landlord.
As a landlord, you may mention the option of the tenant having their own
representative just so there would be no awkward situations during the lease term.
People tend to forget details, and having a tenant representative will make your
life easier as you’re putting one extra degree of separation (and liability) between
you and the tenant.
8. Landlord Representative (Leasing Agent)
The landlord representative works as the leasing agent. This agent
represents the landlord and takes care of the landlord’s interests. When you
become the owner of one or more commercial properties, your leasing agent is
one of your best friends, so choose wisely.
The landlord representative’s first job is to get you the highest amount of rent with
the least amount of expense. The Holy Grail deal is a triple-net (NNN) lease, of
course! Your leasing agent also negotiates with the tenant’s representative on
your behalf to draft an agreement that (ideally) optimizes rental costs, security
deposit, tenant improvement allowances, etc.
Choosing a good leasing agent will help you get the best possible deal with every
tenant. But be careful – you don’t want an overly aggressive deal where the tenant
is cornered so much that the lease agreement becomes a legal liability for you.
9. Co-Broker
Some landlords sign an exclusive listing agreement with a commercial real
estate broker. As these brokers are there to hasten the rental process, they may
invite other brokers to look over the property and to rent it. These other
brokers, from your perspective, are co-brokers.
If your broker and his or her co-broker find a tenant who agrees to lease the
property, the two brokers divide up the commission. Since the co-broker is not
directly connected to you, you are not liable for paying extra commission for the
co-brokers involvement.
Therefore, you should be perfectly fine with your broker reaching out for help from
other brokers. It’s a benefit to you as you will have two brokers working together
and you only pay for one broker.
10. Referral Fee
A referral fee is a fee paid from one broker to another when they refer a
client. Usually, it is the percentage of the commission. This is how your broker
works with a co-broker. The two of them usually agree to split the fee 50/50. You
get double the help, they split the money, everybody’s happy.
 11. Building Classifications
There are three classes of buildings (A, B, and C), and you need to understand
what these commercial real estate terms mean.
 Class A buildings are almost new, at a highly attractive location, and are
known for good maintenance.
 Class B are average buildings with fewer amenities.
 Class C buildings are older than 20 years, and they need a lot of
improvement and repairs.
Class A buildings will be the most attractive for tenants, but will usually be the
most expensive to buy and to rent out. Class B buildings are usually cheaper to
buy, have lower rent, and are less desirable. Class C are typically the cheapest
buildings to buy, but you may face a lot of renovation expenses that may even
include zoning and environmental issues and permit renewals.
It helps to understand these commercial real estate terms to ensure you are not
paying more than you should for a building that doesn’t meet your perceived value
or meet your expectations.
12. Rent Concessions
Rent concessions are allowances that permit discounted or free rent for a
fixed period of time. Usually, rent concessions are linked to renovations or
adaptations performed by the new tenant. It can also mean pushing forward the
first rent payment, so the tenant is not facing extra expenses to move into your
building.
You will need to be very wise here as you don’t want to get too far into
concessions that would hurt your bottom line. You will also need to pay attention
to the cash flow, as you may face tax liabilities, especially when postponing the
first payment.
You will want your broker nearby to think through this carefully and make your
property attractive to solid tenants without hurting profitability.
13. Tenant Improvements
“Tenant improvements” is a lease subset of rent concessions that you would
discuss with the tenant. These improvements are changes made to the
property by the tenant. Your tenant may decide to alter the property and make
some changes that suit the business’s needs better. Such improvements may
include flooring, ceilings, painting etc., and should be negotiated before signing
the lease.
You will want to have counter-offers for all the improvements, so you know the
rent concessions will not be overly expensive for you. In some cases, you may be
better off doing tenant improvements yourself and flipping the rent toward a higher
number, rather than accepting a rent reduction because of tenant-performed
improvements.
14. Letter of Intent (LOI)
This is a written document that reinforces the tenant’s commitment to lease
the property. The Letter of Intent (LOI) includes the terms of the lease such as
negotiations, concessions, and timeframes and it is signed before the lease
agreement.
If you are presented with an LOI, make sure your broker quickly evaluates how
serious the LOI really is. In some cases, co-brokers will hasten the Letter of Intent
without checking if the tenant is really a solid pick. It will be up to you and your
broker to leave no stones unturned and make sure you are closing a deal with the
right tenant.
Sometimes, you will have more than one Letter of Intent. This is actually preferred
so that you can pick which tenant you like the most. Bottom line, it’s your place
you’re renting, and you should have the option to choose.
If you are purchasing a NNN lease property, you will be the one presenting the
LOI. In this case, a Letter of Intent is a non-binding, good-faith proposal by you,
the buyer, to the seller. This document sets the goals for an official offer to
purchase. It is a time-saver that crystalizes the prospective transaction details,
minimizes misunderstandings, and documents progress toward an official offer. It
is often used as a tool for the property identification process in a 1031
exchange and for NNN investments.
To Wrap it Up – Knowing Key Real Estate Terms Benefits Your ROI
Getting into commercial real estate as a landlord can be quite scary if you are not
familiar with the basics, which include the key real estate terms and their
meanings. As a new investor, absolute NNN lease property investing can be the
easiest and often most lucrative route, as NNN leases tend to be straightforward
and the tenant pays for everything – taxes, insurance, and CAM. You simply
collect the rent.
However, whether you purchase a fee-simple, single-tenant property, a ground
lease, or a multi-tenant property investment, it is very important that you educate
yourself on the basics of the process and working with real estate brokers and
tenants. Working as a team to make sure there are no blind spots in any
negotiation and any lease contract you sign is imperative.
Rent Glossary: 50 Rental Terms You Need to Know

When you're looking for an apartment to rent, it can be

overwhelming to research the potential location, the complex
itself and the cost of living, let alone navigate through the lease
terminology and understand all of the rental terms.
From duplexes, walk-ups and kitchenettes to half-baths, soft lofts and shotguns,
there are plenty of rental terms that describe apartment rentals that can make
your head spin. Throw in the legal and professional jargon within the lease and
surrounding your agreement terms, and you may get even more confused.
Rental terms you should understand
So, how do you know what all the rental terms mean? Fear not. We've put
together a list of 50 common rental terms and lease terminology for you to
reference when searching for your next apartment.
1. Abatement
An abatement is a lease clause stating that if your apartment is damaged or under
repair (not by you or someone in your care's fault or from a disaster, also known
as force majeure), your landlord will allow you to suspend your lease and not
charge you rent while the apartment is uninhabitable and you're living elsewhere.
2. Accessible
An accessible apartment is an apartment that's able to be reached and occupied
by a person with a physical disability. For a wheelchair user or person with
mobility difficulty, this often includes lease — or government-specified items —
like ramps, larger doors, adapted bathrooms, lowered light switches, wide
hallways and elevator access.
For people with hearing impairments, this might include doorbell and smoke alarm
lamp signalers or bed shakers. For people with visual impairments, handrails and
special lighting might be included.
As a tenant, your lease may specify that you're accountable for keeping areas
where wheelchairs may go free of items, such as bicycles and trash cans, that can
block the path or doorway.
3. Application
A document a potential tenant fills out so a landlord can decide if they're qualified
to rent the apartment. In addition to basic information, such as your workplace,
Social Security number and previous addresses, you may have to provide items,
such as pay stubs, bank statements, references and recommendations.
4. Arrears
When you're behind in your payments — whether you're late with rent or have a
past-due utility bill — your finances are in arrears.

5. As-is condition
The tenant agrees to rent the apartment in exactly the condition that it's currently
in. This includes accepting any defects, flaws and repairs needed and agreeing
that you'll rent the space as-is.
6. Boarder
A resident in your apartment that's not on the lease and is not subletting, but is
paying a stipend to dwell there. A boarder is usually not responsible for utilities
and often has meals provided for them by the tenant.
They also don't have to go through a formal eviction process if you wish to remove
them, as they have limited legal occupancy rights.
7. Broker
A broker is a professional agent who works on commission and helps negotiate
lease agreements between the landlord and the renter. Most states require a
license to do this.
8. Building code
A set of rules and standards set by the local government that dictates things like
safety standards, design requirements and improvements on how buildings are
constructed and maintained.
9. Certificate of occupancy
A certificate that verifies the spaces available for rent have been inspected,
approved for occupancy and deemed as a quality place to live.
10. Clubhouse
A building that's a shared space on a rental property. Clubhouses usually have
office space, tables, couches, TVs, games and other entertainment options
available for common use. Everyone in the rental property can access the
clubhouse.

11. Common area

Areas of the apartment complex — such as the gym, laundry rooms, clubhouse
and outdoor spaces — that are for common use. Every renter in the complex is
allowed to use the common area.
12. Co-signer
A secondary (or more) signer of your lease who won't be residing in the
apartment, a co-signer is usually needed when the tenant has a short or poor
rental or credit history and requires someone (usually a parent or employer) to
vouch for them.
This secondary person is equally responsible for upholding the terms of the lease
as backup if you can't.
13. Co-tenant
Co-tenants are two (or more) people who sign the lease with the intent that both
or all will occupy the apartment and be equally responsible for rent and other
lease provisions. Co-tenants have equal and shared accountability and legal
rights under the agreement.
14. Credit history
A public record of how you've managed your credit and debt in your past,
including credit cards, loans and other leases. A potential landlord can request
this from the credit bureaus to ensure you'll be able to pay your lease and have a
history of paying your debts before deciding to rent to you.

15. Eviction
The formal process where your landlord terminates your lease and asks you to
vacate your apartment in a period of time decided by local laws and statutes. You
can be removed from your apartment for failure to pay rent or breaking the other
terms of your lease.
16. First refusal right
The right of an existing tenant to have the first option to re-lease a unit at the
same rent price or under the same conditions before the space is publicly
available for other people to rent or lease.
17. Fixed-term lease
A fixed-term lease specifies a set period of time, usually 12 months, that a tenant
agrees to rent the apartment. This is different from a month-to-month lease under
which a tenant can pay each month and decide whether or not to stay the
following month. In a fixed-term lease, the tenant is required to fulfill the time
period outlined in the lease before moving out.
18. Guarantor
Similar to a co-signer, a guarantor is a third party who “guarantees" you'll pay your
rent and fulfill your financial obligations as a renter. However, a guarantor can't
live in the apartment, even if they're on the lease itself.
19. Guest
A temporary visitor to your apartment who does not reside there, including your
or your roommate's significant other who sleeps over often. While someone visits
you, they're required to abide by the terms of your lease, as well, such as quiet
hours, behavior or parking restrictions.
20. HVAC
An acronym for heating, ventilation and air conditioning.
21. Kitty
A combined fund between apartment co-tenants for non-rent financial
responsibilities, such as groceries, cleaning supplies and utilities. Usually, all
parties agree to contribute equally to the kitty rather than on a per-use or
amortized basis.
22. Landlord
This is a rental term you've problably heard of. The landlord is the owner of your
property, or an agent of the owner, who leases out the apartment. They're
responsible for their end of the lease, and are liable for structural maintenance of
the apartment as outlined in the lease. They're also the ones that can evict you for
breaking your rental agreement.

23. Lease
A residential tenancy agreement, a contract between you (and your co-tenants)
and the landlord or owner. This is where the amount of the rent, lease term, rules,
regulations and your and your landlord's responsibilities for the apartment are
outlined in exchange for letting you live in the unit. Nearly every lease is a written
contract — a lease can even be an oral agreement.
24. Lease commencement date
The date that the lease officially starts and the renter has access to move into the
facility. This does not mean the renter has to move in on this date.
25. Lessee/lessor
The lessee is the tenant, or lease-holder, and the lessor is the landlord or owner
who provides the lease to you.
26. Lien
The right of a landlord to keep possession of a renters property until a debt has
been paid.
27. Mediation
This is a formal (and often legal) arbitration with an impartial third party employed
to resolve disagreements between you and your landlord. Your lease may spell
out conditions as to when mediation may be engaged and who will do the
mediating.
28. Mixed-use zoning
An apartment complex that's mixed-use zoning will include residential and/or retail
and office space. Parts of the building will be rental and living spaces while the
other parts of the building will have commercial spaces. Usually, the ground level
is retail/office while the higher levels are residential.

29. Month-to-month
A rental agreement that's automatically renewed at the end of each month (as
opposed to the end of the year or some other length) until ended by either party
under the terms of the lease within a certain window of time.
30. Notice to quit
A formal notice given to a tenant by the landlord stating they intend to end the
lease and begin eviction. It will often state some cause that can be corrected,
such as paying back owed rent or removing an illegal boarder, by a certain date to
resolve the violation.
31. Notice to vacate
A formal notice given to the landlord by a tenant stating they intend to end
occupancy of the premises and not renew the lease. Your lease will usually state
a window during which you can do this without penalty.
32. Parking ratio
The number of parking spaces available per unit or per tenant.
33. Pet deposit
A pet deposit is usually a one-time fee required by the rental complex that allows
a pet to live on the premises. If the pet damages the apartment or parts of the
complex, this fee covers the repairs. This rental term is different than a pet fee,
which may be an additional charge on your monthly rent.
34. Profiling
An illegal discriminatory practice and pattern of refusing to rent to or rejecting a
potential tenant based on their race or ethnicity or another protected status, such
as disability or religion, often through deceptive or surreptitious means.
35. Prorated
The amount of rent charged to a tenant when the first or last month of a lease is
less than a full month. If you move in the middle of the month, the landlord will
often only charge you for the percentage of the month you actually occupied the
unit.

36. Quiet enjoyment

A term often found in leases meaning you have an inherent right to peaceful and
pleasurable use of your apartment within accepted standards. For example, this
protects your basic rights to not have your landlord knocking on your door every
day to bug you or having the lawn mowed at four in the morning.
37. Renewal
The option the tenant has to continue living in the apartment after the initial term
of the lease is over. There's often a choice of renewing for the original term or
converting to month-to-month.
38. Rent
An amount of money you and your landlord have agreed on in your lease for you
to pay on a regular and constant recurring basis (usually monthly) in exchange for
living in the apartment.
39. Rent control
Rent control is a legal price limit that some communities in California, New York,
New Jersey, Maryland and Washington, D.C., have set that restricts the amount of
rent a landlord can charge.
It's in this way that some cities, most famously New York City (think "Friends"),
have inexpensive apartments that would normally be exorbitantly-priced, although
many are occupied by tenants that have lived there for decades.
40. Roommate
It's simply someone who shares a room or apartment with you. There's no legal
definition of roommate, and it could describe co-tenants, you and a boarder, you
and a sub-letter or you and your significant other.
41. Screening
This is when a potential landlord runs a background check on your criminal, credit
or rental history in order to discern if you have the right financial and legal
background to pass muster as a qualified tenant.

42. Security deposit

A security deposit is the extra sum of money you provide to your landlord upon
signing the lease or moving in that proactively covers any damage you might do to
your apartment or rent you don't pay during the term of your lease. Your landlord
holds this money in escrow until you vacate the apartment.
Upon move-out, your landlord will assess the condition of your apartment and
refund your deposit less any money he or she decides to charge for damage or
repair beyond normal wear and tear. Many landlords, however, are moving to a
cheaper and more flexible insurance-based system.
43. Step-up lease
A lease agreement where rent prices will increase or “step-up" at specified periods
of time throughout the course of the lease.
44. Sublease
When a renter rents out part or all of an apartment to another person. You can
rent out a single extra bedroom in your apartment or the entire place (either for a
profit or because you'll be away for an extended period).
But you can't sublet your apartment without your landlord's permission and you,
as the primary lease-holder, are ultimately responsible for the rent getting to your
landlord and for any actions or damage caused by your sub-letter.
45. Tenant
A person who enters into a lease and pays rent to occupy a space in an
apartment or rental unit owned by another entity or person. A sub-letter or boarder
is not a legal tenant.
46. Term
The amount of time specified on your lease during which you'll occupy the
apartment and pay rent. This is usually a year but can be nearly any timeframe or
even open-ended.
47. Termination
Any situation in which either party to the rental agreement — you or the landlord
— decides to end the agreement for whatever reason. Eviction, non-renewal and
vacating for cause by either side are all types of rental agreement termination.
48. Utilities
The other expenses in your apartment for which you're responsible that are billed
on a consistent and recurring basis, sometimes depending on usage. Utilities can
include cable, heat, water, electricity, internet, garbage removal, storage, parking,
natural gas, rental insurance, grill propane and sewer.
Some of these costs may be included in your rent. For those that are not, these
are bills that are usually split equally between roommates, should you have them.
49. Vacancy rate
The number of vacant apartment units compared to the total number of units
available for rent.
50. Wear and tear
A term found in most leases that describes the acceptable amount of damage that
does not trigger a monetary penalty deducted from your security deposit upon
vacating the apartment. This takes the burden of responsibility away from the
tenant for normal, unavoidable usage deterioration.
Repainting and carpet cleaning, as well as damage such as chips, scuffs and
small scratches on cabinets usually fall under acceptable or normal wear and tear.
Knowing rental terms before you sign up
Understanding rental terms is important when looking for an apartment, so you
can sign a lease with confidence — and fully enjoy your new place.
Common Rental Terms Explained
Updated: March 2021

Whether you're a first-time renter or a seasoned apartment dweller, you will likely have
to sign a lease before you move in. Because a lease is a legal document, it includes
terms that are not used in everyday conversation. You want to fully understand them –
particularly if you are a first timer. A lease will also tell you what you can and cannot do
in your apartment, according to NOLO.com.

Here's an overview of terms that will help clarify what your lease entails.

LES SE E AND LESSOR

Throughout the rental lease agreement, you will see the terms "lessee" and "lessor."
These terms are placeholders used instead of specifically naming the two parties
involved, according to Investopedia. They explain that you are the lessee, or tenant,
and the property owner or management company is the lessor.

LEA SE RENEWA L
Your lease should include information regarding what needs to be done if you want to
renew your agreement after the initial time period has passed, says Investopedia.
They say that sometimes you can renew your lease for the same length of time, or the
landlord may offer you the option of renting on a month-to-month basis.

S ECUR ITY DEPOSIT

According to Apartments.com, you will likely have to pay a security deposit as proof of
your intent to move in and take care of the place. They explain that the security deposit
is calculated based on state laws, the cost of monthly rent, the type of amenities that
are available and what the rental application reveals about the tenant. Security deposits
can be refundable or not, depending on the terms of the lease and the condition the
renter leaves the rental property in, Apartments.com adds.
GRAC E PERIOD
In many cases, rent is due on the first of the month, but there may be a grace period
before rent is considered "late," says RentPrep.com. They explain that the grace
period depends on state laws and what is stated in the lease, but it could be up to five
days. RentPrep further notes that once that grace period has expired, there will likely
be fees added on to the price of rent. The lease usually includes how long the grace
period is every month. It should also explain the financial consequences of paying rent
late specific to the property you are renting, says RentPrep.

E VICTION
An eviction is the legal process a landlord or property owner uses to remove the tenant
from the property, terminating the lease early, according to TheBalanceSMB.com. An
eviction takes place as a result of certain conditions, which should be described in your
lease, they explain.

According to TheBalanceSMB, some of the common situations that can lead to the start
of the eviction process include nonpayment of rent, causing damage to the property,
having a prohibited pet, taking part in some illegal activity or otherwise violating the
terms of the lease.

SU BLEA SE
It may not seem like a big deal to let a friend move into your spare bedroom, but the
legal term for this is subleasing, according to Investopedia.com. They define
subleasing as re-renting a property to another party for a portion of the existing lease.
Your lease will have rules about this, they explain. It may specify that you can have a
friend stay with you for a certain amount of time, according
to iPropertyManagement.com, but they need to be added to the lease if that time is
exceeded. Keep in mind that if your live-in guest is not on the lease, you'll be
responsible for any damage they do.

DE CORATIN G
The rules regarding decorating vary widely from property to property,
says RentecDirect.com. Be sure to read these rules carefully so you understand the
restrictions. They explain that prohibitions may include things like no holes in the walls,
no painting and no changing of fixtures. These are usually written into the lease to
prevent the property from being damaged. If you go against these rules, you may lose
your security deposit, says Rentec Direct.

RE NT INC REA SES

Your lease should outline when the property has scheduled rent increases, according
to ApartmentGuide.com. Often, rentals raise rents when the lease renews, they
explain, so make sure you know what to expect so you can budget accordingly.

P ET POLICY
Your lease will dictate whether you can have pets. RentCafe.com also notes that your
lease should outline any breed restrictions and whether additional costs are associated
with having a pet. If your lease does not allow pets, don't bring one into your home,
recommends The American Kennel Club (AKC). If you have a pet that is not allowed
according to your lease terms, the ramifications can be serious, in that you might have
to move or surrender the pet, says the AKC.

RE NTER S IN SURA NCE

If you come across this term in your lease, it usually means the property manager
requires renters insurance.

Although your landlord likely has insurance on the property itself, this will not help you if
disaster strikes. Landlord insurance covers the structure of the building, but not your
belongings.

Renters insurance protects you as well as your belongings. If your personal property is
stolen or damaged by covered events involving fire, smoke, water, windstorms,
lightning or vandalism, a renters insurance policy can help pay to repair or replace
your stuff.

FIN AL STEPS
Before you sign your lease, tour the apartment or home with your property manager,
advises NOLO. Note any existing damage or other conditions that could affect getting
your security deposit back. Point out if there is anything that needs fixing before you
move in. Once you are happy with everything, it's time to sign on the dotted line and
start packing for your upcoming move.
Apartment Lingo - A Glossary of Terms You Need to Know

Saturday, Aug. 20, 2016

Imagine this. You're out apartment hunting and you are chatting it up with a
leasing consultant or you've moved in somewhere and are inquiring on a
situation. All of a sudden they start throwing words at you that you have no
idea what they mean. They just threw apartment lingo at you. We've all been
there.
You know, on that side where we don't want to act like we don't know what
someone is talking about. And it's not just an affliction of the property
management business. A lot of industries have employees that get comfortable
using their specific lingo, phrases, acronyms, etc. It doesn't make them bad
employees, don't get me wrong. It's just that we forget sometimes that there
are those that are unfamiliar with things we do and say on a daily basis. I'm
guilty of this myself. So below is your one-stop shop glossary of all of the
words, phrases, and acronyms. Here is the apartment lingo you should know. 
A
ADA  Handicap accessible apartment. 
 
Addendum  An accompaniment to the master lease. This can be used for a
number of things like adding a washer and dryer (Laundry Addendum) or
adding a pet (Pet Addendum).
 
Amenity  Community extras such as pools, fitness centers, movie theaters,
etc. 
 
Applicant  Any persons that will be on the lease as either a leaseholder and/or
occupant. 
 
Arrears  Delayed or behind billing. Example. Water bill billing cycles are two
months in arrears. When you pay with April rent, you are paying for services
two months prior. 
 
B
xBR/xBA   Bedroom/Bathroom The numbers in front will mean the number of
both respectively. Example: 3BR/3BA means 3 bedrooms, 3 bathrooms.
 
C
Conc  Pronounced - conk - This is the abbreviation for concession (see below).
 
Concession  Monies credited/taken off of your account. Example. You rented
while the community was having a special on application fees. Because you
were not charged, you received a concession.
 
D
Deposit  Monies paid and retained during your tenancy that will be credited
back less any final charges post-move-out. This can be for things like security
of rent based on credit or pets for a couple of examples.

photo courtesy of Camden Washingtonian

E
Eviction  The legal response to non-payment of rent or other circumstances
where the community must take action to remove (evict) you from your home. 
 
F
Fair Housing These are laws that exist to protect specific classes from
discrimination. You can read all about Fair Housing Laws by visiting the Fair
Housing website. 
 
G
Guarantor  A co-signer. Someone who is assuming financial responsibility for
your lease in the event you cannot or do not pay rent or other balances.
 
L
Lease  Your rental contract that outlines policies and guidelines to abide by
during your residency.
 
Lease Takeover  This is when you are removed from your rental contract and
someone else is screened.
 
Ledger Your charges, credit, and payments list. This will reflect any and all
transactions. 
 
Long-term  Any lease 12 months or longer. 
M
Market rate  The rate at that specific time is based on the prices in the
surrounding area or comparable apartment communities. 
 
P
Prorate A per diem calculation of rent or other charges. 
 
Prospect  Before you lease and become a resident, you are a prospect.
Someone who is shopping for an apartment. We aim to turn you into a resident
(insert wink and a smile).
 
R
RAD  Resident Appreciation Day. This is a day dedicated to our wonderful
residents. This is by far one of our favorite days at Camden. You can find
out all about our RAD's by reading the Feeling #CamdenHappy: Camden
Resident Appreciation Day blog. 
 
Renewal After your initial lease term is up, any lease thereafter is considered
renewed and referred to as a renewal. 
 
RIF Resident Information Form. This is filled out upon move-in, renewal or
transfer. 
 
photo courtesy of Camden Design District
S
Screen  The running of your criminal, credit and rental history as part of the
application process.
 
Short-term Any lease shorter than the standard 12 month lease. 
 
Sister Community  Another community managed by the same company.
 
Steering  Encouraging a prospective tenant to lease a certain apartment within
your community or elsewhere altogether. I would like to point out this is illegal. 
 
Sublease/Sublet  Where someone other than yourself is living in the apartment
and paying the rent but you are still the leaseholder.
 
T
Term  The length of your lease.
 
Term Fee  A fee that is owed when you are cancelling your rental contract. 
 
U
Utilities Electric, water, gas bills. These are more often than not paid
separately. 
 
W
Writ Official document filed when we take possession of an apartment during
the eviction process's final steps.
 
Y
Yield Pricing  Daily pricing driven by the changing market rates as well as
supply and demand.
 10 Basic Terms You Should Know Before Buying a Property in India

Buying a property is possibly one of the most significant financial investments in ones’ life.
Not only does the purchase of property involve a hefty sum of money, but it is also an
investment that is more or less permanent, and hence irreversible to a large extent. As you can
guess, this makes the purchase even more crucial. To better understand the nuances related to
buying a home or office, you must first be acquainted with some specific terms pertaining to
the process.

1. Carpet Area

It is that area of a residential property that you can use to move around or to lay carpet. Hence,
it only includes the area within the walls. This area consists of the space dedicated to terrace as
well as the balcony. However, it excludes the areas which cannot be used as open spaces, such
as the lobby, stairs, lift, and so on.

2. Built-up Area

As the name suggests, built-up area refers to the entire periphery of the property, including the
thickness of the outer as well as inner walls, the carpet area as well as the area covered by
balcony and terrace. However, like in the case of carpet area, built up area does not include the
lobby, stairs, lift, and so forth.

3. Super Built-Up Area

The super built up area comprises of the entire extent of the house, i.e., built-up area along with
other usable areas such as corridors, lobbies, stairs, lifts, and so on. In case of apartment
buildings, the common spaces such as lifts and hallways are divided proportionately amongst
flat owners.

4. Per Square Foot Rate

When it comes to sell or purchase of the property, the deciding unit for the price is ‘square
foot’, hence the term per square foot rate. While plots of land and bungalows can be easily
measured in square feet area, the price for flats is determined on the basis of the super built-up
area.

5. Floor Space Index (FSI)

Floor Space Index refers to the ratio of the total built-up area and the actual plot area as
permitted by the government. The higher the FSI, the larger is the built-up area. Before
finalising the sales deed, the developer must produce the FSI for the buyer.

6. Freehold Property

A property, the owner of which has full and unconditional ownership, is known as a freehold
property. This term is usually used in the context of the property, where the owner has
complete rights over the land as well as the building that stands on the area.

7. Real Estate Broker

Also known as relators, real estate brokers are essentially the specialists who help the seller of
a property find some potential buyers and vice versa. It is the responsibility of the broker to
mediate between the seller and the buyer, during the process of purchase of a commercial,
residential or industrial property. The broker usually takes a percentage of the agreed price of
the property as their fee.

8. Home Loan

This is a loan that is offered by banks, non-banking financial institutions and housing finance
corporations as well as online lenders to buyers who wish to purchase a residential property but
do not have sufficient money to do so. A person applying for a Home Loan offer must
repay it in the form of Equated Monthly Instalments or EMIs, over an agreed period, which
usually spans anywhere between 5 to 30 years.

A Home Loan is usually taken to:

 Buy a residential property currently under construction

 Purchase a ready-made residential property
 Buy a plot in a private development
 Construct a new property to be used as a house
 Purchase a plot with the aim of construction of a home

9. Loan Term

Loan term refers to the tenure through which you plan to repay your loan in the form of EMIs.
In case you opt for short duration Home Loans, you will be required to pay higher EMIs.
However, this will considerably reduce the interest rates, thus helping you save a better part of
your hard earned money.

On the contrary, a long-term loan will need you to pay lower EMIs but will increase the
interest rate significantly, thus requiring you to shell out a more considerable sum of money
eventually. Of course, there will be other factors, such as the type of Home Loan, the amount
and your repaying capacity that will have a direct effect on the rates.

10. Credit History

If you have a record of repaying your Credit Card bills, loans, and other debts well within time,
your credit history will reflect the same. This will result in a high credit score of above 650 for
you. A good score will ensure lower rates on your Home Loan and quick approval of the same.
On the other hand, an unsatisfactory rating ca.n, in some cases, lead to the Home Loan
application rejection.