Office glossary

A ¦ C ¦ D ¦ G ¦ I ¦ J ¦ L ¦ M ¦ N ¦ P ¦ R ¦ T ¦ T ¦

A

Adaptive Reuse

When a building is converted from serving a certain purpose to another in order to meet with trends and demands. For example, a dormitory converting into an old-age home due to the business slowing down in a pandemic.

C

Cancellation Clause

A clause which lets one of the two parties in an agreement cancel their contract or lease at any point of time. Cancellation clauses are decided and agreed to before the contract is made.

Capital Improvement

Any new developments of the property, such as renovations or upgrading utilities, which increase the life of the property are counted as capital improvements. 

Coworking Space

A communal space where multiple offices can rent space as per their requirement, ranging from private rooms to tables or just seats. These agreements can be short or long term, and the space can be rented on an hourly, monthly, yearly, or even event basis.

D

Deed Restriction

Restrictions that limit the use of any property, prohibiting certain activities, constructions, or more.
G

Gross Lease

Also known as a full service lease, it is an agreement where the owner (landlord) pays for maintenance, taxes and other additional costs, so that the renter does not have to cover them.

Ground Lease

An agreement wherein the landlord leases their property to a renter for a long stretch of years. Usually, these agreements are such that when the lease term ends, the landlord owns all construction on the land that was done during the lease period if the lease is not renewed.

Gross Leasable Area

The addition of all rentable and common areas of the building, calculated while putting a building on the lease, is called gross leasable area.

Gross Lease

Also known as a full service lease, it is an agreement where the owner (landlord) pays for maintenance, taxes and other additional costs, so that the renter does not have to cover them.
I

Instrument

A legal document that secures the rights of the parties which participated in an agreement.
J

Joint Tenancy

When a property is owned by more than one person as tenants, such that everyone is equally interested in the right of survivorship.
L

Loss Factor

The percentage of area, that is space, that is lost from use due to constructions such as walls or elevators are accounted for in the loss factor.

Loan to Value Ratio

The percentage ratio between the mortgage loan and the pledged value of the property.

Letter of Intent

A letter listing agreement between two parties which is used to understand the expectations of each other. LOIs are circulated before the actual agreement and are not binding. However, they come with a non-disclosure agreement and exclusivity.
M

Multiple Listing

Often, real estate brokers come together to an agreement of establishing a database that provides lengthy data of the properties that are up for sale. So, when any broker makes a sale, both the listing broker and the selling broker will receive the broker benefit and will share commissions according to the agreement.

Mixed Use Development

When a property is used for multiple purposes grouped together, such as commercial, residential, retail, and more. For example, a building with offices on the ground-level whereas residential homes or lodgings on the others is an example of mixed-use development.
N

Net Operating Income

The total income calculated once the operational expenses have been deducted. Net Operating Income however does not deduct the taxes or the funding expenditures.

Net Lease

A lease where the tenant pays for additional expenses along with the agreed rent, such as maintenance, move-in charges, and more.
P

Percentage Lease

When a property is leased with an agreement which bases the rent of the property upon a percentage of the sales made in that period on the premises. These agreements usually tag along with a base rent and build up from there.
R

Real Estate Owned

When an institutional or private lender of a mortgage loan forecloses a property due to failure of payment, and then goes ahead and sells it to someone is call real estate owned.

Real Estate Syndicate

When two parties come together and form a partnership to invest in a real estate venture, with or without unlimited liability.
T

Term sheet

A deed that summarises the terms and conditions of any real estate agreement. Term sheets guide legal counsel to prepare for the ultimate business agreement.
Z

Zoning Ordinance

The governing authority, such as the state or city government decides how a certain property can be used and how it can’t be used. The law that lays out the permitted usages of a property depending upon its location, construction, and other factors is called zoning ordinance.
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