Glossary

Affordable Rental Housing Complex (ARHC): Sub-scheme of Pradhan Mantri Awas Yojana - Urban (PMAY-U) by the Ministry of Housing and Urban Affairs (MoHUA) to provide dignified living to urban migrants/ poor near their workplace.

Build-to-rent (BTR) Housing: Housing developments designed and constructed with the primary intention of being rented out, where developers retain ownership and rent out the units, rather than selling them.

Co-living: A modern form of group housing where residents share communal spaces and amenities, while retaining private bedrooms. Such housing fosters a sense of community and convenience and often appeals to young professionals and students due to the flexibility it affords.

EMI to Income Ratio: Financial metric that assesses an individual's ability to repay debts by comparing their monthly debt payments (including loan EMIs) to their gross monthly income.

Equated Monthly Installment (EMI): Fixed amount paid by the borrower to the lender each month, covering both the principal loan amount and the accrued interest, until the loan is fully repaid. The EMI amount is calculated based on the loan amount, the interest rate, and the loan tenure.

Eviction: Eviction is the civil process by which a landlord can legally remove a tenant from a rental property. An eviction may occur when the tenant stops paying rent, when the terms of the rental agreement are breached, or in other situations permitted by law.

First-generation Rent Control: First-generation rent control, also known as strict price ceilings or rent freezes, involves government intervention to prevent rent increases, typically by freezing rents at the level existing when the law was enacted.

Floor Area Ratio (FAR): Ratio of total building floor area to the area of its zoning lot. Each zoning district has an FAR which, when multiplied by the lot area of the zoning lot, produces the maximum amount of floor area allowable on that zoning lot. For example, on a 10,000 square foot zoning lot in a district with a maximum FAR of 1.0, the floor area on the zoning lot cannot exceed 10,000 square feet.

Floor Space Index (FSI): Ratio of the combined gross floor area of all floors, excepting exempted areas, to the plot area available. It is expressed as a numerical multiplier, not a percentage. FSI is similar to FAR, except that FSI allows a variety of built-up areas, such as balconies or stairwells or corridors (varying from one authority to another) that are excluded from the area count.

Goods and Services Tax (GST): Value-added tax levied on most goods and services sold for domestic consumption. The current GST rate for property purchases is 1% for affordable housing and 5% for non-affordable or luxury housing

Housing Finance Company (HFC): Financial institution that provides loans for housing, including home loans (for purchase), loans for home improvement, and loans for home construction HFCs are governed by the Companies Act of 1956 and are regulated by the Reserve Bank of India (RBI).

Housing Rent Allowance (HRA): House Rent Allowance is an allowance given by an employer to an employee to cover the cost of living in rented housing. This tax incentive is only applicable to salaried people who have an HRA portion of their pay structure and live in rental housing. The allowance is not available to self-employed workers.

Landlord: Owner of a house, apartment, condominium, land, or real estate which is rented to an individual or business. In the case of a lease, the landlord is addressed as the ‘lessor’.

Leave & Licence Agreement: An easement right and is governed by Section 52 (Chapter VI) of the Indian Easement Act, 1882. This formal binding contract allows the Licensee to temporarily use and occupy the Licensor’s immovable property for a fixed amount called License Fee (or rent). This also ensures that there is no transfer of interest from the licensor to licensee and no property rights are created. As no ownership right nor any tenancy rights are available to the licensee by entering into a license agreement with the licensor, it makes eviction and termination easy.

Lease Deed: Deed to be registered within 4 months upon leasing a property. Failure to do so will result in a heavy penalty. A lease deed must exceed 12 months and can go up to 99 years. A lease creates an interest in the property unlike leave and license contract and it is a long-term commitment to the residential/commercial property. Subletting is permitted under a lease with permission from the owner.

Loan Against Property (LAP): A type of secured loan that allows individuals or businesses to borrow money by pledging their residential or commercial property as collateral.

Loan Against Rent Receivables (LARR): A secured loan where the future rental income from a property is used as collateral, allowing property owners to borrow funds based on their expected rental income.

Micro Housing Finance Corporation (MHFC): A housing finance company that offers affordable housing finance to urban and rural populations in India, particularly those with lower incomes. It aims to make housing finance accessible to a wider segment of the population, including those who might not qualify for traditional loans.

Paying Guest (PG) Accommodation: A type of rental accommodation in which one can rent a room or space within someone else's property. In this case, the occupant pays a fee for lodging as well as amenities like utilities, housekeeping, and sometimes meals, offering a more affordable and convenient living option than renting an entire apartment.

Pradhan Mantri Awas Yojana - Urban (PMAY-U): A programme by the Ministry of Housing and Urban Affairs that aims to provide housing to eligible urban families. Under the Mission, the Ministry has been providing central assistance to States/UTs for addressing the housing requirement of slum dwellers and other people belonging to Economically Weaker Sections (EWS), Low Income Group (LIG) and Middle Income Group (MIG) categories in urban areas.

Property Appreciation: In real estate, the term appreciation refers to the increase in the value of a property over time.

Property Price to Income Ratio: A financial metric that measures the affordability of housing by comparing the median house price to the median household income in a specific area.

Property Tax: An annual charge levied by the Government of India on property owners. It is calculated as a percentage of the assessed value of the property. This tax, collected by the local government or the municipal corporation, forms a substantial source of revenue for local governments in India.

Public-Private Partnership (PPP): A collaboration between the public sector and the private enterprise for the purpose of delivering a project or a service traditionally provided by the public sector. Such collaborations typically facilitate large-scale government projects, to be completed with private funding.

Rajiv Awas Yojana (RAY): A Central Sector Scheme under the Ministry of Housing and Urban Affairs, it aims to promote a slum-free India and to bestow property rights on slum dwellers and the urban poor.

Real Estate Investment Trust (REIT): A company that owns and manages income-generating properties. It allows pooling of money from multiple investors into a trust registered with Securities and Exchange Board of India (SEBI).

Rent: A payment made periodically by a tenant to a landlord in return for the use of land, a building, an apartment, an office, or other property.

Rent Agreement: An official contract signed by the owner of a property and the tenant who wishes to take temporary possession of the property for a pre-decided amount known as rent. The notice period and the tenure for the same is stated in the contract and is usually agreed upon by both the parties. In an event of dispute between both the parties, the rent control court comes into play to solve the matter. Even if the tenant fails to pay the rent on time, the amenities provided by the owner cannot be disrupted. Such an agreement is strongly in favour of the tenants, limiting the power of the owner with respect to eviction.

Rent Control: The practice of imposing a rent ceiling upon the rent in a particular housing market, below the equilibrium rent. It limits the rent an owner may charge for an apartment and restricts the right of any owner to evict tenants.

Rent-to-own Scheme: Housing or consumer financing model where a tenant rents a property with the option to purchase it at the end of the rental period, often with a portion of the rent applied towards the purchase price.

Rent Stabilisation: A form of rent regulation that aims to protect tenants from excessive rent increases by allowing landlords to raise rents by a certain, often pre-determined, percentage each year. Almost half of all apartments in New York City are rent stabilised. Rent stabilised apartments are most often located in buildings containing 6 or more units, which were built before 1974.

Rental Management Agency: A rental management agency, also known as a property management company, is a business that handles the daily operations of rental properties on behalf of the property owner, including tasks like finding tenants, collecting rent, and managing property maintenance

Rent Subsidy: A rent subsidy is a form of financial assistance, often provided by the government, that helps low-income individuals or families cover a portion of their rental costs, making housing more affordable.

Rental Yield: Real estate metric that expresses the annual return on investment from a property's rental income, as a percentage of the property's value or purchase price.

Second-generation Rent Control: Second-generation rent control, also known as tenancy or vacancy decontrol, limits rent increases during a tenancy but allows rents to rise to market rates between tenancies, meaning new tenants pay market rates, but increases are limited for their duration.

Security Deposit: A returnable sum payable when a house is rented, to cover possible loss or damage.

Subletting: Re-renting of property by an existing tenant to a new third party for a portion of the tenant's existing lease contract.

Tax Deduction: A tax deduction or benefit is an amount deducted from taxable income, usually based on expenses such as those incurred to produce additional income.

Tenant: A person who pays money (rent) to the owner of a room, flat, building or piece of land so that they can live in it or use it. In the case of a lease, the tenant is called a ‘lessee’.