REAL ESTATE TERMINOLOGIES

Abstract of title - A document that shows an overview of the history of a particular title. This
includes transfers and claims against the property.

Abutting - The adjoining of lands. Abutting properties have a shared boundary.

Acceleration clause - A contract term that enables a mortgage company to require a borrower to repay
the outstanding balance on the loan, in the event that the latter fails to meet certain requirements.

Accelerated depreciation  - An accounting method that involves allowing an income property to depreciate at
a faster rate compared to a straight-line method. 

Accession - A method of acquiring property with additional value as a result of additions or improvements. For
example, a person who owns a property near a river also owns the extra land created by natural deposits along
the riverbank.

Accrued depreciation - The reduction of property value through time. The common reason for diminished
value is wear and tear.

Acquisition - The process of gaining ownership of a property. A person executes a legal action to purchase real
estate.

Actual eviction - The physical removal of a tenant from the rental property, as a result of a legal decision. A
common reason for the eviction is failure to pay rental fees. The process is different from constructive eviction,
in which a tenant leaves the premises as a result of a landlord’s wrongful act making the rental unit unsafe for
occupancy.

Acquired Assets - Acquired assets are real estate properties under a bank loan whose owner defaulted on the
monthly payment and interest, leading to the foreclosure of the property. The bank acquires title to the property
when a property owner subjects it to a bank loan. The property is still under contract to be sold, and the down
payment is still being paid. However, the property will be covered by a contract of sale after obtaining a
mortgage. In a contract to sell, ownership is transferred after the final payment is received.

Acquisitive prescription - A mode of acquiring property through the lapse of time and in compliance with
conditions set by the law; that is, that the possession should be in the concept of an owner, public, peaceful,
uninterrupted, and adverse. This concept has two types: ordinary acquisitive prescription, which requires
possession of things in good faith and with just title for 10 years, and extraordinary acquisitive prescription,
which is uninterrupted adverse possession for 30 years without good faith and just title.

Ad valorem tax - A type of tax where the amount is based on the value of the property.\

Adjustable-rate Mortgage  - The opposite of a fixed-rate mortgage, an adjustable-rate mortgage has a variable
interest rate, depending on the prevailing rates as set by the country’s monetary authority (in the case of the
Philippines, the Bangko Sentral ng Pilipinas). The interest rate in an adjustable-rate mortgage can either go low
or high depending on the current economic climate.

Affidavit - A written statement sworn under oath, which can be used in the court of law. An example of this is
an affidavit of self adjudication, a document a person drafts when they want to declare that the entire estate
belongs to them.
Agreement of sale - A document that shows the buyer agrees to the purchase a property, and the seller agrees
to sell, under specific terms and conditions stated.

Air rights - The right to use and develop the space above the land. Property owners can sell it to entities that
construct skywalks or power lines.
Alienation The complete transfer of a property from one party to another. It can be voluntary, such as in the
case of a sale, or involuntary, in the context of the government taking over the real estate for public
consumption.

Alienation clause - A provision in a mortgage contract that allows the lender to make the loan immediately due
in case the owner sells the property or transfers its title.

Amendments - Changes made to previous agreements.

Amenities - Facilities and services that a neighborhood enjoys, apart from their actual property. Some common
examples are swimming pools, clubhouses, bike lanes, community parks, and gardens.

Amilyar - (n.) Refers to land or property tax

Amortization - The method of spreading payments over a period of time. An amortized loan, for instance, shall
be paid on a monthly basis, the amount covering principal and interest.

Apartment - (n.) A self-contained housing unit that is part of a larger building. It is fitted especially with
housekeeping facilities and is usually leased for use as a dwelling.

Appraisal - The assessment of the value of a property. Almost all real estate transactions require an appraisal
report, as the property’s worth changes frequently. Some of the factors that affect value are population,
location, improvements on the property, renovation potential, and more.

Appreciation - The increase in property’s value over time. 

Arbitrage - The buying and selling of a property at the same time, with the latter at a higher price. The aim is to
get a higher yield from the transaction.

Arbitration - A form of alternative dispute resolution, in which arguments are settled outside the court. In
arbitration, two parties discuss and decide on a subject with the help of a neutral third party. Most people resort
to arbitration because it’s less expensive than litigation. They use it to settle disputes on inspection issues,
claims of misrepresentation about the property’s condition, and costs of repairs.

Ari-ariang lupa at bahay - (n.) refers to real estate properties

Assessed Value - The assessment level, set by ordinances multiplied by the property’s fair market value, results
in the assessed value. The property’s assessed value can be considered as its taxable value. The assessed value
of a property or piece of land determines how much tax must be paid on it. The public tax assessor will
determine your home’s assessed value, which will be the basis for calculating your property tax.

Assignment - The process of transferring real estate rights or benefits (which include interest in the case of a
bond or lease) to another. The one who does the transferring is called the assignor, while the recipient is the
assignee.
Assumption of mortgage - An agreement in which the outstanding loan balance is transferred from the current
owner to a buyer of the property. This is typically done to save on closing costs or avoid higher interest rates on
a new mortgage.

Atik - (n.) (Tagalog spelling for Attic) a space or room just below the roof of a building.

Attorney-in-fact - The person authorized to do business-related transactions on behalf of someone else. For
instance, an investor may permit someone to sign contracts, buy or sell real estate, or deposit funds when they
are not able to do so themselves.

Authority to Sell - An owner or seller’s written consent to have their property advertised and sold is known as
the “authority to sell,” “authority to offer to sell,” or “authority to negotiate for sale.” Having a written and valid
authority to sell is required by the Civil Code of the Philippines and the Professional Regulatory Board of Real
Estate Service (PRBRES) of the Professional Regulation Commission, in addition to the mutual protections
offered to both the owner/seller and the Licensed Real Estate Broker (PRC).

Avulsion - The abrupt detachment of a parcel of land from one property and its attachment to another, as a
result of the current of a river or a body of water. The general rule is that the original owner retains the title of
the land, provided that they remove the part of the property that shifted.

Azotea - (n.) (Spanish origin) an open balcony or veranda; a rooftop deck

 

Bahay - Tagalog for house. It is a type of structure that has a roof and is surrounded by a wall. The main
purpose of a bahay is to shelter and serve as protection for people against heat, cold, rain, and other disasters.
The house is also used as a place where family and friends get together. A typical bahay in the Philippines
contains a living room, a bedroom, a toilet, and a kitchen.

Balloon payment mortgage - A kind of mortgage that did not fully amortize over the term stipulated in the
agreement. Therefore, a remaining balance is left at maturity. The lump sum is called balloon payment, as it is
significantly larger than the monthly payments. This often happens in commercial properties.

Banyera (Bañera) - (n.) (Spanish origin) bathtub; the bathing area of a home

Barandilya/Balustre - (n.) the baluster or balustrade of a staircase.

Bargain and sale deed - A type of title deed that doesn’t have warranties against liens or claims against a
property of someone who owes money. However, it does enable a grantor to convey the title. The grantee,
however, could find little to no legal recourse in case the title defects emerge later.

Base line - Imaginary lines that stretch from east to west, crossing a principal meridian at a specific point.
Surveyors use it as a guide in finding and identifying land under the rectangular survey system of property
description.

Beachfront - refers to the land strip fronting the beach. It is typical in coastal towns that are directly facing the
sea. A beachfront is often used to build vacation homes.

Benchmark - A reference point surveyors determine to calculate differences in elevation.

Bequest -The inheritance. It is a provision in the will stating how the personal property will be distributed.
Bilateral contract - A legal document that states that each party commits to do an act in return for another’s
commitment to do something. Put simply, the seller promises to sell a property, while the buyer promises to
buy. It’s distinguished from a unilateral contract, wherein only one party has a duty to perform.

Bill of sale - A certificate that confirms the passing of the title of a property.

Biyenes Estados - (n). A property consisting of land or buildings

Blanket mortgage - A type of loan that covers multiple portions of property. Developers take this out
to purchase huge sizes of land to subdivide them and create smaller pieces, which will be sold for profit later.

Broker - A broker is a person or an agency that organizes transactions between a property buyer and a seller. A
broker earns a commission for every successfully completed transaction. Brokers that take on dual roles as
buyers or sellers are considered primary parties to the transaction.

Bungalow - (n.) A bungalow is a one-story house, cabin, or cottage. Bungalows typically feature a low-pitched
roof and wide front porch.

Buyers Equity - the difference between contract price and the amount which can be loaned.
 
C
 
Capital Gains Tax - type of tax applied to the profits that you earned for the sale of an asset. The capital gains
tax is deducted from the property’s gross selling price or market value, whichever is higher.

Certificate of Ancestral Domain Title - It refers to a title that formally acknowledges indigenous cultural
communities or indigenous people’s ownership and possession rights over their ancestral domains. Native title,
or pre-conquest rights to lands and domains dating back into time immemorial, is the fundamental prerequisite
for receiving a certificate of ancestral domain title. Recipients of the certificate of ancestral domain title shall
comply with the responsibilities bestowed upon the recipients according to Republic Act No. 8371.

Certificate of Ancestral Land Title - It refers to a title that formally acknowledges indigenous cultural
communities or indigenous people’s rights to their ancestral lands. Unlike the certificate of ancestral domain
title, the certificate of ancestral land title is limited as it only grants the rights to transfer or redeem the
ownership of the ancestral land. Recipients of certificate of ancestral land title are only permitted to use the
ancestral land as a dwelling.

Certificate Title - Issued by the city or municipality, the Certificate Title states an owner’s exclusive rights to a
particular property. The Registry of Deeds should be able to provide a certified true copy of this document to
confirm its authenticity.

Closing Costs - costs incurred upon the transfer of ownership of the property from the sellers to the buyers,
which are usually shared by both parties. Included in closing costs are the surveyor fees, attorney fees, taxes,
escrow fees, and title insurance fees, to name a few.

Comedor - (n.) (Spanish origin) dining room/area

Commission - This refers to an agent’s compensation in performing his duties. S/he gets a percentage from
selling or rental of property.
Condominium  - (n) Also known as a condo, a condominium is a privately-owned individual unit within a
large property complex. Condo owners receive a deed to the individual unit and also jointly own shared
common areas, such as hallways, pools, elevators, and gyms, among others. 

Condominium Act  - Formally known as Republic Act No. 4726, the Condominium Act aims to implement
clear rules and regulations regarding condominium development, ownership, and operation. Only if they are
officially noted in the accompanying certificate of title of the land and entered in the Register of Deeds of the
province or city where the property is located will the requirements of this act apply to property divided or to be
divided into condominiums.

Conjugal Property  - refers to property and assets a married couple owns. All properties, whether acquired
before or during the marriage, are considered conjugal property under the Family Code. This means any
property owned by a husband when they were still single is also owned by their wife (and vice versa) upon
marriage. When a couple gets married, part or all of their property becomes conjugal property. Part or all of
your spouse’s property also becomes conjugal property according to Philippine law.

Contract of Lease - regarded as the most significant legal document in the real estate industry. The rental
agreement in the lease contract outlines the tenant’s right to occupy the space and the landlord’s right to
maintain ownership. In addition, the Contract of Lease protects both the tenant and landlord against disputes.

Contract to Sell  - has all the final terms and conditions of the sale. This will be issued to the buyer by the
seller after the down payment has been made. Note though, that ownership of the property remains with the
seller until the full purchase price has been completed. The Contract to Sell must also be notarized.

Curb Appeal  - This refers to the attractiveness of a property for sale and its surroundings when viewed from
the street. It usually includes the landscaping and the front entrance of a house.
 
D
 
Deed of Donation - a legal document that certifies the transfer of property from its owner donor to another
person (donee). This kind of transfer doesn’t call for payment, so it’s generally performed without charge.
Donations must be done in good faith, which is why it commonly happens between family members and close
friends.

Deed of Sale  - a crucial legal document that establishes that both parties have met their responsibilities and that
the sale is already at an advanced stage of completion. An absolute deed of sale is also frequently used in
transactions involving pure obligations, which are debts that are immediately enforceable and subject to no
conditions. Pure obligations are also typical in direct real estate deals where the buyer makes a full payment in
cash or by check. The seller must then release an absolute deed of sale as documentation that the buyer paid the
amount required and was given ownership and legal rights to the subject property once the buyer has delivered
the money.

Depreciation - The decrease in property’s value over time. This loss in value brought about by deterioration
through ordinary wear and tear or economic obsolescence.

Despacho - (n.) (Spanish origin) home office 

Duplex - (n.) A house divided into two separate living spaces, with a separate entrance for each. These two
units always share a common wall but there is no interior connection between the two units.
E
 
Earnest Money - given to the seller if the buyer wants to signify their intent and good faith in the transaction.
Essentially,it tells your seller that you are a committed buyer. Earnest money is usually kept in the escrow
account.

Escalation Clause – stipulation in a promissory note authorizing periodic increase of interest rate, or a
provision in a longterm lease authorizing periodic increase of rental.

Escrow – Is a neutral third party in a mortgage that safeguards deposits or documents for the transaction.
Usually, this term is brought up toward the end of the buying process. An escrow may also be the term used for
the party responsible for safekeeping the insurance money or the taxes that accumulate until the loan is
reimbursed. The escrow then pays “on behalf” of the payer.
 
F

Fixed-rate Mortgage - means that the interest rate of your loan will remain the same until the contract matures
or after an agreed-upon time frame. This type of mortgage gives the buyer the advantage of knowing exactly
how much to shell out for their monthly payments.

Foreclosed properties - are a type of distressed property taken over by the creditor as the owner could no
longer pay for it. Compared to normal real estate properties, these are cheaper as they are sold as-is. Foreclosed
properties are owned by banks or lending institutions that issued the mortgage to the previous owner.

Foreclosure - This happens when the property’s titular owner is unable to keep up the periodic repayments to a
lender or the real property tax owed to the local government.
 
H

Halige - (n.) the structural post of the house/building

HDMF - The Pag-IBIG Fund also referred to as the Home Development Mutual Fund, is a government-owned
and controlled corporation. It is in charge of managing the country’s savings program and providing Filipinos
with financing for affordable housing. The main objective of HDMF is to encourage property ownership by
providing low and middle-income earners with various financing options.

HoldOver Clause – a provision in listing which entitles the broker to the commission even if he closed the sale
after the period of his authority provided the sale is to a buyer whom the broker registered in writing to the
seller and with whom he has negotiated during the period of his listing.

Home equity - refers to the value of your homeownership. It’s the property’s market value at the time of
purchase minus the current mortgage balance.

Home Owners Association - (HOA) is a private organization that manages a community (condominiums,
townhouses) that often requires monthly, semi-annual or yearly payments. They often determine the rules,
regulations and fees that come with living in that particular community.

Kilo - (n.) the rafters and truss that support the roof
Kolateral na bahay o lupa - also known as real estate mortgage, is an agreement where the land or house is
used as collateral or a guarantee to pay the debt. A kolateral na bahay o lupa is a type of accessory contract in
that it cannot stand on its own. In order to execute a contract on kolateral na bahay o lupa, there must be some
type of principal contract such as a contract of loan.
 
L

Land Title - also called a certificate of title, is a record that attests to someone’s or a group’s legal capacity to
acquire and own property. The basic goals of land title registration are protecting property rights, facilitating
real estate transactions, and enabling the use of real estate as collateral for loans. A title also offers real estate
investment benefits, stimulating sustained economic growth.\

Lease Contract - A contract between an owner and a tenant that specifies the conditions upon which the tenant
may occupy and use the property and the term of the occupancy.
Lessee - A lessee is a person who rents land or property from a landlord or lessor. Also known as a tenant or
renter in the Philippines.

Lessor - A lessor is a person who leases land or property to a lessee or tenant. Also known as a landlord in the
Philippines.

Letter of Intent - This is a non-binding letter submitted by the buyer to express his or her intent to buy the
property.

Listing – the authority given by the principal to the broker for the latter to negotiate the sale, purchase, lease,
exchange or mortgage of property within a stipulated period and at stated price and terms.

Local Transfer Tax  - This is the tax levied on the transfer of ownership of a real property. It varies from 0.5-
0.75% of the selling price or zonal value (whichever is greater). The percentage also varies from location to
location, so you should consult your City or Municipal Treasurer.
 
M
 
Maceda Law - The “Realty Installment Buyer Act,” often referred to as the “Maceda Law,” regulates real
estate financing and purchases of residential properties such as houses, lots, and condominiums. The Maceda
Law seeks to safeguard consumers against deceptive payment terms and conditions. Low-income and middle-
class purchasers who want to own a piece of property are the primary beneficiaries of the Maceda Law.

Monthly Equity
Monthly equity refers to the difference between your mortgage balance and the value of your home. As the
mortgage is paid off, the monthly equity will increase. Monthly equity is essential if you plan to acquire a home
equity loan. The higher the monthly equity is, the higher the chance for a homeowner to be approved for a
higher loan amount.

Mortgage - type of long-term loan that finances the purchase of real estate properties, such as a house and lot or
a condominium unit.

Mortgage Redemption Insurance - or MRI for short, is a type of insurance whose benefits are applied to the
insured’s outstanding home loan when they become payable. Banks frequently demand mortgage loan insurance
when approving home loans. Having an MRI prevents foreclosure of the mortgaged property in the event of the
borrower’s death at a period when financial help is most needed. Beneficiaries of the borrower will get any life
insurance proceeds over and above the outstanding loan balance.
Mother Title- A property’s initial and very first recorded title is known as a mother title. The mother title
contains a chronological list of every transaction the property underwent, including donations and inheritances.
If you encounter a mother title while acquiring a property, it can indicate that the heirs abandoned any plans to
divide the land into the inherited sub lots.

Muebles - (n.) (Spanish origin) furniture pieces

 
N

Nangungupahan - (n.) tenant or border

 
O

Open House - This is a scheduled time period in which a home is open to public viewing by potential property
seekers.
 

Pabahay - is a Filipino word that refers to the housing programs the government implements to aid poor
Filipino citizens in acquiring their own houses to prevent them from squatting. Pabahay is overseen by the
National Housing Authority (NHA) in partnership with the local government unit (LGU) and other government
agencies, such as the Department of Social Welfare and Development (DWD). The primary beneficiaries of
pabahay are illegal settlers and displaced people.

Pasalo - See assume balance

Pasamano - (n.) Tagalog for window ledge

Paupahan - (n.) a property for rent

PD 957 Presidential Decree 957,- formally known as Subdivision and Condominium Buyer’s Protective
Decree, was signed on July 12, 1976. The law strictly monitors and controls real estate professionals, owners,
and developers in the Philippines. This law’s primary goal is to safeguard purchasers from all kinds of real
estate misrepresentations.

Pingkas - (n.)  a property that cannot easily be moved; another translation for “real estate”

PRC - formally known as Professional Regulation Commission, is responsible for administering, carrying out,
and enforcing the nation’s regulatory laws and policies concerning the licensing and regulation of the various
professions and occupations that fall under its scope. This includes maintaining and enhancing professional and
occupational standards and ethics, as well as enforcing the laws and regulations that are relevant to it. In the real
estate industry, a real estate salesperson is required to apply for a license at PRC.

Pre-selling - Prior to its general release, pre-selling units are sold on the open market. That could imply that the
actual property is either still being built or is yet to be built. When you buy a pre-selling property, it means you
are entering a legal contract that allows you to buy a property that does not physically exist yet.

Principle of Progression – an appraisal principle which holds that the value of a property tends to be enhanced
by association with superior properties.
Principle of Regression – an appraisal principle which holds the value of a property tends to be adversely
affected by association with inferior properties.
 
R
 
RA 4726 - Also known as Condominium Act, Republic Act No. 4726 was implemented to create a set of
requirements that covers the creation of condominiums and the incidents involving it. Incidents refer to
ownership division, ownership rights, and the use of common areas. RA 4726 also governs all the safety
measurements required to ensure the sturdiness of the building, especially during calamities.

Real Estate Broker - This is a duly registered and licensed natural person who, for a professional fee,
commission or other valuable consideration, acts as an agent of a party in a real estate transaction to offer,
advertise, solicit, list, promote, mediate, negotiate or effect the meeting of the minds on the sale, purchase,
exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any interest therein.

Real Estate Salesperson - This is a duly accredited natural person who performs service for, and in behalf of. a
real estate broker who is registered and licensed by the Professional Regulatory Board of Real Estate Service
for or in expectation of a share in the commission, professional fee, compensation or other valuable
consideration.

Recto Law - Act No. 4122 was initially known as the Installment Sales Law. It is now included under a set of
provisions under the Civil Code of the Philippines. Authored in 1933 by Senator Claro M. Recto, the Recto
Law protects the rights of buyers of personal property. Its main purpose is to prevent potential abuses by the
seller in case a buyer is unable to make further installments for a property.
RESA Law - Republic Act No. 9646 is known as the Real Estate Service Act (RESA) of the Philippines.
The RESA Law outlines the rules in order to become a legitimate practitioner. The main goal of the RESA law
is to professionalize the real estate service industry by requiring all those who are engaged in the selling of
properties to be duly registered and licensed before engaging in transactions.

Rescission - This refers to the legal cancellation of the contract for a purchase transaction.

RFO - Formally known as ready-for-occupancy, RFO is a term used to refer to houses, condominiums, or
commercial spaces available for move-in anytime the homeowner or renter wants. Most RFO properties are
semi-furnished, meaning it has floor finishes, painted walls, a basic kitchen and bathroom, and limited electric
sockets. In addition, most RFO properties already have electric and water supply, making them the top choice
for property seekers in a rush to move in.

Rowhouses - As the name suggests, these are identical properties laid out in rows, joined together by their side
walls. Typically, there are four to 10 units per row or street in a rowhouse development. The units can be a
single-story, two-story, or three-story home.

Sangla - (v.) to mortgage; to give a lender a claim to one’s property in case debt is not paid when due. 

Magsangla. Isangla - (n.) a mortgage; a claim on property given to a person who has loaned money in case the
money is not repaid when due.

Silong - (n.) Tagalog for basement; the area underneath the floor of the house/building
Single-detached house  - (n.) Also called single detached dwelling, a single-detached house is usually set on a
separate lot and includesownership rights to the land on which it is situated. It has open space on all sides and is
not attached to any other dwelling or structure (except its own garage or shed).

Staging - This means transforming a home to increase its salability. It involves styling and furnishing a property
for sale in order to enhance its attractiveness to potential buyers.

Studio Apartment  - (n.) A single-room dwelling that combines the living area, kitchen, and bedroom into one
space.

Subdivision - A subdivision is a region, portion, or segment that is a part of a larger unit. It is used to describe
parts of a village that has already been divided into smaller pieces.
 
T

Tagatasa - (n.) an assessor/calculator; someone who deals with estimations of property taxations

Tarangkahan - (n.) a gate; an opening in a fence or wall

Total Contract Price - This refers to the fully inclusive, all-in total contract price. It is the cumulative amount
of all monthly purchase amounts owed under a monthly purchase plan, or the total contract price set forth in a
lump sum contract.

Townhouse - (n.)Townhouses are a style of residential building inspired by detached and semi-detached homes.
Each housing unit has walls shared with the adjacent house units, with multiple floors, three or more bedrooms,
and a garage. The only outdoor space you can own in a townhouse is the front yard and backyard, making it a
perfect choice for individuals who want to live in a reasonably priced yet spacious home. However, take note
that the townhouse’s ownership is restricted to the building and the ground it sits on.

Tropical Architecture - The design of tropical architecture is centered on and in response to the tropical
climate. It researches the important factors that impact tropical architecture and creates passive heat-reduction
techniques. Additionally, it promotes airflow inside a house or other structures.

Tropical House Design - Tropical house design is tailored to address integration, ventilation, and climate
problems. It demonstrates the traction between functional structures and organic environments since they were
designed to reorganize and contrast with their surroundings. In addition, tropical modern architecture makes
homes that are more climate-responsive.

Tsalet - designs brought direct purposes to the Filipino home by combining the tropical elements of vernacular
homes with sanitary structural principles and modern materials. An example of this is the introduction of the
pail conservation system for toilet use. During the American era, the Tsalet system developed in Filipino
houses. As history changed from the Spanish to the American eras, an emphasis on hygiene transformed
Philippine architecture

Turnkey Property - This refers to a move-in ready home that doesn’t require any major repairs or
improvements before it is livable. 
 
U

Unearned Increment – increase in the value of real estate without any effort or expense by the owner.
V

Ventanilla - (n.) (Spanish origin) windows with open panels that allow fresh air to pass through

Virtual Tour  - This is the digital version of property viewings, in which the house or condo is showcased
through a collection of images stitched together to form a simulation.