Body Corporate - When you’re buying a town house or apartment and the title is a ‘unit title’, there is a legal entity that makes arrangements for maintenance of common areas and helps resolve any disputes. They are called the Body Corporate.
Capital Gain - The profit from the sale of an investment or asset, calculated by the difference between the purchase price and the selling price.
Capital Growth Rate - The rate at which the value of an investment or asset increases over time.
Cash Flow - The net amount of cash and cash-equivalents being transferred into and out of a business, typically measured during a specific period.
Certificate of Title (CT) - The CT is housed at Land Information New Zealand (LINZ) and records all the legal interests in the land. When you buy a property, your lawyer will register a transfer of the land to you and your name will be recorded as the owner on the Certificate of Title.
Chattels - The items in a house that are included as part of the sale, e.g. curtains and whiteware.
Commission – The fee a seller pays to an agent when the house sells.
Conditional agreement – This is a negotiated sales and purchase agreement that is subject to conditions, e.g. finance or a legal review.
Cross Lease - A form of property ownership where multiple parties own a share in the land, and each has the right to occupy specific buildings.
Debt Structuring - The process of organising and arranging the terms and conditions of a debt arrangement to meet the borrower’s financial needs.
Easement – This means someone else has to use your property for a particular purpose, e.g. to use a drain on your property.
Equity – If the value of your property is more than how much you owe, the difference between the two is referred to as ‘your equity’.
Fixtures and fittings – These are the items attached to a house which cannot be removed when the seller leaves. See chattels.
Fixed interest rate – This is when the interest rate and repayments are fixed for a set period, e.g. fixed at 5% for 2 years.
Floating or variable interest rate – In this case the interest rate can change depending on market conditions, e.g. floating rate at 5% for 2 years.
Freehold – This is ownership of the land and the house with no restrictions on your ownership rights, apart from those covered by laws or regulations.
Government Valuation (GV) Home loan agreement – See rateable valuation.
Home loan agreement – This is the agreement that outlines the value and terms of the loan, e.g. the interest rate, repayments and how often these are made.
Insurance certificate – This is the certificate that is issued by your insurer and confirms the assets you have covered and the maximum amount that can be paid out in the event of a loss.
Interest – This is the amount you pay the lender for your loan and it’s a percentage of the amount you borrow.
Income - Money received on a regular basis, typically in the form of wages, rent, or interest.
Interest Rate - The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage.
Interest Only - A loan repayment arrangement where only interest is paid for a specified period, with the principal repaid later.
Landlord Cover - Insurance coverage for landlords that protects against potential financial losses associated with their rental property
Land Information Memorandum (LIM) – The council document that records all information they hold about the property.
LINZ – This is Land Information New Zealand, the government department that holds the land registration records.
Leasehold - The right to use and occupy real estate for a specific period under the terms of a lease agreement.
Leveraging - Using borrowed capital to increase the potential return on an investment.
Mortgage - A loan used to purchase real estate, with the property itself serving as collateral.
Principal and Interest - The components of a loan payment where “principal” is the original loan amount and “interest” is the cost of borrowing.
Rateable Valuation (RV) – The estimated value of the property for rating purposes.
Rates – The fees you pay to the council for their services.
Right of way – If you share a driveway with a neighbouring property, then the rights to do this is called a ‘right of way’.
Revenue - The total income generated by a business from its primary operations.
Risk Tolerance - The degree of variability in investment returns that an individual or entity is willing to withstand.
Sale and Purchase Agreement – The legal documents that records the agreement between the buyer and seller and is legally binding when it has been signed by both parties.
Short Fall - The amount by which a financial deficit or shortfall falls short of the required or expected amount.
Surplus - The excess amount remaining after all expenses have been deducted from income.
Top-Up - An additional amount of money added to an existing loan or financial arrangement.
Unit Title - A form of property ownership where individuals own a unit or apartment within a complex, along with a share of common areas.
Unconditional agreement – This is a legally binding agreement that has no conditions.
Vacancy - The condition of a property being unoccupied, often used in the context of rental properties.