Real Estate Glossary: Key Terms Every Buyer Should Know

1. RERA (Real Estate Regulation & Development Act, 2016)

RERA mandates transparent pricing, carpet area disclosures, and consumer protection. It requires developers to register projects and offer compensation for execution delays.

2. Carpet Area

The actual usable floor space inside your home—not including walls or common areas. Under RERA, properties must be marketed by carpet area.

3. Built-Up Area

Includes carpet area plus the internal and external walls and balcony space—typically 10–20% larger than carpet area.

4. Super Built-Up Area

Also known as "saleable area," it includes built-up area and a share of common facilities, such as elevators, corridors, and amenities. Often includes a loading factor of 25–60%.

5. Encumbrance Certificate (EC)

A legal document proving that a property has no pending liabilities or legal claims—critical to ensure clear title.

6. Commencement Certificate

This official permit allows the developer to start construction after securing all required clearances. It's mandatory before building begins.

7. Sale Deed

The final legal document that transfers ownership from seller to buyer. It must be executed on stamp paper and registered with the sub-registrar.

8. Agreement of Sale

A binding contract between buyer and builder specifying price, payment timelines, project milestones, and delivery date. Also called the sales contract.

9. Freehold vs Leasehold

• Freehold: You own the land and property indefinitely.
• Leasehold: Ownership is limited for a defined lease period (e.g., 99 years).

10. Home Loan Terms — Appraisal vs Pre-Approval

• Appraisal assesses the current market value of a property for loan eligibility.
• Pre-Approval confirms your financing capability before finalizing the deal. Understanding these helps avoid surprises at closing.

11. Stamp Duty & Registration Charges

State-mandated fees required to legally register a property. Rates vary by city/state and property type.

12. Contingency Clauses

Buyer-protective clauses allowing withdrawal or renegotiation if conditions (like home inspection or mortgage approval) aren’t met. Common in India's buyer contracts.

13. Caveat Emptor

Latin for "buyer beware." Highlights the importance of diligence and understanding the purchase conditions before buying.

14. Fixer-Upper

A property priced below market value because it requires renovation. Common for buyers planning to renovate and increase resale value.

15. Escrow

A neutral third-party account that holds funds until all contract conditions are fulfilled (e.g. home loan, title transfer). Ensures transaction safety.

16. Benami Transactions

Illegal property transfer where the buyer is not the real owner. Prohibited under the Benami Transactions (Prohibition) Act, 1988, with strong penalties.

17. Gazumping & Re-Trade

• Gazumping: Seller accepts a higher offer from another buyer during a pending transaction.
• Re-trade: Buyer demands a lower price after due diligence. Both practices can complicate transactions—caution advised.

What is the difference between Agreement of Sale and Sale Deed?

• An Agreement of Sale is a preliminary contract outlining the terms, conditions, and payment schedule between buyer and seller.
• A Sale Deed is the final document that legally transfers ownership. It is executed after full payment and must be registered.

How do I verify if a property title is clear in Hyderabad?

• Check the Encumbrance Certificate (EC) for 13–30 years.
• Ensure the property has no legal disputes or unpaid dues.
• Confirm builder registration on the RERA Telangana portal.

What is the carpet area, built-up area, and super built-up area?

• Carpet Area: Actual usable area inside the house (excluding walls).
• Built-Up Area: Carpet area + internal walls + balconies.
• Super Built-Up Area: Built-up area + proportionate share of common spaces.

Why is RERA important for homebuyers in Telangana?

• RERA ensures transparency, timely delivery, and legal protection.
• Developers must disclose carpet area, project details, and adhere to timelines.
• Buyers can file complaints on the RERA portal for disputes.

What documents are required for property registration in Hyderabad?

Common documents include:

• Sale Deed
• Encumbrance Certificate
• Khata Certificate & Extract (property tax records)
• Property Tax Receipts
• Identity Proofs (PAN, Aadhaar)

What are stamp duty and registration charges in Telangana?

• Stamp duty: 4% of property value
• Registration fee: 0.5%–1%
• Transfer duty (for GHMC areas): 1.5%
• Rates vary for residential vs commercial properties.

Is Patancheru a good location for property investment?

• Yes, Patancheru is emerging due to ORR connectivity, industrial growth, and proximity to IT hubs like HITEC City.
• Property rates are still affordable compared to central Hyderabad, ensuring high ROI potential.

What is the meaning of freehold property in India?

A freehold property means full ownership of land and building, with perpetual rights to transfer, sell, or lease without government approval (except zoning laws).

What are the benefits of buying an IGBC or LEED-certified green home?

• Lower energy bills through solar and water efficiency.
• Healthier living due to better air quality and green spaces.
• Higher resale value as sustainable homes gain demand.

How do I calculate home loan eligibility in Hyderabad?

• Use bank/NBFC calculators considering income, CIBIL score, and liabilities.
• Typically, 40-50% of monthly income can be EMIs.
• RERA-approved projects ease loan approvals.