Glossary of terms

Body Corporate – When you’re buying a town house or apartment and the title is a ‘unit title’, there is a legal entity that makes arrangements for maintenance of common areas and helps resolve any disputes. They are called the Body Corporate.

Certificate of Title (CT) – The CT is housed at Land Information New Zealand (LINZ) and records all the legal interests in the land. When you buy a property, your lawyer will register a transfer of the land to you and your name will be recorded as the owner on the Certificate of Title.

Chattels - The items in a house that are included as part of the sale, e.g. curtains and whiteware.

Commission – The fee a seller pays to an agent when the house sells.

Conditional agreement – This is a negotiated sales and purchase agreement that is subject to conditions, e.g.  finance or a legal review.

Cross lease title – This generally applies to town houses and flats, when all the owners share ownership in a section of the land.

Easement – This means someone else has to use your property for a particular purpose, e.g. to use a drain on your property.

Equity – If the value of your property is more than how much you owe, the difference between the two is referred to as ‘your equity’.

Fixtures and fittings – These are the items attached to a house which cannot be removed when the seller leaves. See chattels.

Freehold – This is ownership of the land and the house with no restrictions on your ownership rights, apart from those covered by laws or regulations.

Government Valuation (GV) Home loan agreement – See rateable valuation.

Instalments – Your weekly, fortnightly or monthly payments of principal and/or interest off your loan.

Home loan agreement – This is the agreement that outlines the value and terms of the loan, e.g. the interest rate, repayments and how often these are made.  

Insurance certificate – This is the certificate that is issued by your insurer and confirms the assets you have covered and the maximum amount that can be paid out in the event of a loss.

Interest – This is the amount you pay the lender for your loan and it’s a percentage of the amount you borrow.

Fixed interest rate – This is when the interest rate and repayments are fixed for a set period, e.g.  fixed at 5% for 2 years.

Floating or variable interest rate – In this case the interest rate can change depending on market conditions, e.g.  floating rate at 5% for 2 years.

Land registration fee – The fee you pay to Land Information New Zealand to record the transfer of the land to you.

Land Information Memorandum (LIM) – The council document that records all information they hold about the property.

LINZ – This is Land Information New Zealand, the government department that holds the land registration records.

Legally binding – This means the terms of the agreement can be enforced by law.

Market value – This is the price a house is likely to sell for.

Mortgage – A loan to finance the purchase of the house

Mortgagee – This is the bank or funding agency that loans you the money to buy the house.

Mortgagor – This is you, the person who has borrowed the money.

Principal – The initial amount you borrow.

Rateable Valuation (RV) – The estimated value of the property for rating purposes.

Rates – The fees you pay to the council for their services.

Right of way – If you share a driveway with a neighbouring property, then the rights to do this is called a ‘right of way’. 

Sale and Purchase Agreement – The legal documents that records the agreement between the buyer and seller and is legally binding when it has been signed by both parties.

Table loan – The repayments on the loan are the same for the life of loan, assuming there is no change to the interest rates.

Unconditional agreement – This is a legally binding agreement that has no conditions.