Real Estate Jargon: Understand the Language of the Industry
Buying or selling a property can be complex, especially when unfamiliar terms come into play. To make the process easier, we’ve created this concise real estate jargon dictionary. Here, you’ll find clear and simple definitions of the most common terms in the industry, helping you navigate every stage of buying or selling your property.
A
A file in which the notary certifies a fact publicly.
The presentation of a written statement with arguments as proof, defense, or justification.
An agreement established between a property owner and a tenant, where the latter is allowed to use a home or premises for a specified period in exchange for a predetermined amount.
The action of placing markers or boundary stones at the dividing line of two properties to serve as a reference point for the beginning of either property.
The repayment of borrowed capital through scheduled payments. It means reducing the interest by including the outstanding capital in the monthly installment.
A licensed professional who acts as an intermediary in real estate transactions and is part of the Real Estate Agents Association, earning a commission for their services. They also offer advisory and valuation services.
An administrative procedure that the authorities can initiate to enforce the collection of debts.
Mediators in a legal dispute between two parties. The arbitrators issue their opinion in the form of an award.
A sum of money that constitutes a part of the property price, given by the buyer to the seller as a guarantee that the agreement will be concluded within the set period. If the buyer does not finalize the deal within the timeframe, the seller is entitled to keep the amount given by the buyer. If the seller does not conclude the deal, they must return double the amount received from the buyer.
The person who grants the right to use their property to a third party in exchange for rent (the owner).
A person obligated to pay rent for the right to use a property that they do not own (the renter).
A sales agent who, after a certain period and level of training, works for a real estate company, attracting new inventory for the company and handling the sale or lease of properties.
A person who acts as a guarantor for a loan and assumes responsibility if the borrower (debtor) fails to repay the amount or interest.
B
Assets that have a fixed location and cannot be moved without causing damage.
C
Urban planning designation that details or establishes the intended use of previously classified land, determining its uses and buildability.
The extinguishing of the mortgage by settling the outstanding debt.
The nominal amount of the mortgage loan. The total debt outstanding, excluding interest.
The time during a loan’s life when only interest is paid, and no capital is amortized.
Limitations on the ownership of real estate. These are documented publicly and registered with the Land Registry. Not all liabilities involve financial rights and are canceled with the termination of the rights they represent.
Official census of rural and urban properties.
A mandatory document for transferring a property and activating basic services, certifying the health and hygiene conditions of the property for accommodation.
A document specifying the energy efficiency rating of a property (home or premises) or the entire building, according to current regulations. The property owner or developer who wishes to sell or lease the property must have this certificate.
An official document issued by the Land Registry certifying the status of the property and indicating the existence or absence of liabilities.
Applies only if prepayments are made. This fee refers to extra payments that the client decides to use to reduce the loan, either by lowering the monthly payment amount or shortening the loan term.
A percentage of the loan, paid as a one-time fee when the loan amount is deposited into the account.
A term for when property ownership rights are shared by multiple people, with a distribution of shares.
An offer made in response to a received offer.
A document signed by the parties involved in a sale or lease, done without the need for a notary’s presence. As the name suggests, it is private, not public. A private contract is fully legal and enforceable in court.
The number indicating the height of a point above sea level on topographic maps.
D
A public deed, registered with the Land Registry, that records the description of new construction carried out.
Loss of value of a property. It can result from the passage of time or external factors unrelated to the property itself.
The right granted to an individual to cancel a sale made by a third party and take their position in the contract, provided they were not given the right of first offer.
A real right of use, where the owner of a property grants another person the use and enjoyment of the property, provided its preservation and custody are maintained.
To define and distinguish the limits of a piece of land.
The moment when the obligation to contribute arises.
The percentage added to the reference index when revising the interest rate in mortgage loans.
The division of a property into several independent registry entries, each assigned a coefficient of co-ownership or participation in the total property. It is recorded in the Land Registry.
E
Defined as the square meter of constructed area divided by the square meter of land. It refers to the constructed surface above ground level.
Incorporating a private document into the notary’s protocol, making it public and thus eligible for registration in the Land Registry.
A document created by a notary and entered into their protocol (a book containing all the deeds they perform), containing one or more legal acts signed by the parties, along with the notary’s seal and signature, certifying the act.
Occurs when there is a discrepancy between the area recorded in the Land Registry and the actual area.
F
The land or building from which other properties derive. It is the “mother” property.
G
Fees incurred for processing and managing documentation in the Notary, Land Registry, and Tax Administration.
H
A figure used as a guarantee for a loan, where the property itself is used as collateral for the repayment of the credit. The borrower assumes an obligation, and if it is not fulfilled, the lender can sell the property and keep the proceeds.
I
The tax levied on acts formalized in public deeds. It is calculated as a percentage of the structured value.
A municipal tax levied on the ownership of land and property. It is calculated by applying a percentage to the property’s cadastral value. The seller must be up to date with the payment of this tax before transferring the property.
An entry made in the Land Registry. Entries can be of various types, such as property registration, mortgage registration, liens, etc.
A tax levied on the transfer of goods, both movable and immovable, not subject to VAT. Currently, in the Balearic Islands, there are three brackets: up to €400,000, 8%; between €400,000 and €600,000, 9%; and over €600,000, 10%.
A tax levied in favor of the municipality where the property is located, triggered by the sale or transfer of the property. The law stipulates that the seller must pay this tax. The settlement is based on the difference in value of the property since the last transfer.
L
A permit issued by the local authority required to start a commercial activity open to the public.
A municipal permit required to begin construction or make architectural modifications to a property.
Issued by the local government, this certificate confirms that the property complies with the necessary safety and construction standards. It is required to obtain a certificate of habitability.
N
Land that is protected by a special protection regime (such as scenic, historical, or environmental) and therefore cannot be built on.
An accessory record in the books of the Land Registry, indicating changes in the registration status of the property.
A document issued by the Land Registry describing the property and indicating the existence or absence of encumbrances affecting it.
A public official authorized to certify legal acts, such as sales, civil and commercial partnerships, wills, powers of attorney, acts of fact, donations, inheritances, etc.
O
A verbal or written act in which a prospective buyer or tenant expresses their price and payment method.
P
A contract in which each party agrees to give something in return for something else. If money is involved, it must not exceed half the value of the operation, otherwise, it automatically becomes a sale.
A contract where a financial entity provides a fixed sum of money with the agreement that it will be repaid in regular installments, plus interest, with the property as collateral.
Each of the owners participates in the common elements and is the exclusive owner of the private elements.
R
It is the institution whose primary function is to give publicity to the acts carried out between individuals or legal entities by registering the titles that contain the transfer, modification, extinction, or encumbrances of ownership or possession of real estate.
S
Separation of a part of a property to form an independent one by itself.
A real encumbrance on one property for the benefit of another belonging to a different owner. There will always be a dominant property and a servient one, meaning the dominant property has control over the use of the servient property.
An easement where a property, lacking an exit, may demand a passage through the neighboring property in exchange for compensation for opening that exit. If it is necessary to cross telephone lines, electrical lines, or pipes, the servient property must allow passage for the laying of those lines and for surveillance and maintenance access.
A form of the transfer of obligations. The substitution of one creditor by another in their rights and claims.
This surface includes all square meters within the perimeter of the dwelling.
The percentage of land that remains free from buildings.
The sum of the different surfaces of the dwelling, excluding the thickness of the walls. Balconies and galleries are also not counted.
T
A technical report that determines the real value of a property based on its physical characteristics, location, use, and market research and analysis.
U
A parcel that has road access, water supply, sewage system, and electricity supply. In other words, it is prepared for construction.
A parcel that is neither urban nor non-developable, but can be converted into urban land by providing the necessary minimum urban services for construction.
V
The valuation listed in the land registry for a specific property.
Still Have Questions?
It’s normal to have questions during the buying or selling process, and we’re here to help. If you need further clarification or have more questions, don’t hesitate to reach out to us. Our team of experts is ready to guide you every step of the way and address any concerns you may have.
