Holiday home glossary – definitions property terms-R

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Rack-rent: A rent representing the full, or nearly the full, letting value of a property on a given set of terms and conditions

Rateable value: The figure upon which property tax is charged in India. This value is determined by the tax authorities and thereafter the tax liability is charged to the owner(s) of the property on the basis of certain pre-determined tax slab rates. In order to qualify, a trust must, among other requirements, be owned by at least 100 shareholders and invest most of its capital in real estate loans or properties and receive income in the hands of shareholders

Real Estate Investment Trust: (USA/UK) A legally constituted organisation (entitled to preferential tax treatment) which enables investors to own and transfer shares of an interest in a property or properties; the shares can be dealt with in a manner similar to corporate stock. In order to qualify, a trust must be formed by at least 100 shareholders and invest most of its capital in real estate loans or properties and receive income from them. The special feature is that such a trust reduces its own taxable income by a distribution to shareholders with no tax deducted, but this is taxable income in the hands of shareholders according to their own tax status. To maintain the trust’s right to gross distributions these must, in aggregate, be equal to minimum of 710 of the total trust income.

Refurbishment: Improvement and modernisation of a building falling short of rebuilding or redevelopment and thus not normally requiring planning permission (other than for alterations to the external appearance), except in the case of listed buildings.

Registration and mutation: It is mandatory for the sale deed of all high value property transactions to be registered at the regional sub registrar’s office of the local municipal authority. Thereafter, the buyer has to apply for mutation, which involves a change in the title records to incorporate the name of the buyer of the property. In order to complete the transfer of property, it is mandatory for the seller to furnish or arrange a valid “certificate of completion” issued from the local municipal authority to the buyer.

Renewal: As distinct from repair, this is “reconstruction of the entirely meaning not necessarily the whole subject matter”.

Rent Act (s): Legislation promulgated by various states in India, which regulates the terms and conditions of the rental market with a view to curb profiteering and hoarding. Though its restrictive nature has not allowed owners to enjoy economic returns from same categories of property, thereby allowing market inefficiencies.

Rent free period: An agreed period, usually for several weeks or months, during which a lessee is allowed to occupy the subject premises without payment of rent:

(a) in consideration for the tenant incurring expenditure on such matters as fitting out premises or carrying out repairs or improvements.
(b) to reflect market conditions which favour tenant eg. where the space available for letting exceeds the total tenant demand in that area or
(c) by virtue of both a and b

Rentable area: The area of floor space for which rent is calculated even though other areas, within or outside the premise, are lawfully used by the tenant. For example, in an office building it is customary to exclude from the direct calculation of rent the space used for corridors, atrium and stairways.

Rental advance: Comprises a lump sum payment to the landlord at the beginning of the lease term, which is thereafter adjusted in equal installments over the lease term against the monthly base rental payable by the tenant. The advance amount generally ranges between 3 to 18 months depending on the city, type, location of property and the period of the lease.

Root of title: (UK) In conveyancing of unregistered land, a document which forms a solid basis to establish the title to the land. It must go back, sufficiently for identification, showing a disposition of the whole interest contracted to be sold and containing nothing throwing any doubt on the title.

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