Real estate agents, lawyers, surveyors, and others who are regularly involved in real estate transactions, often speak in jargon that outsiders can find difficult to understand.

Today's column addresses that issue, offering you an easy-to-understand primer about the terms most commonly used in real estate transactions.

Agent — the real estate agent usually contracted for the benefit of the Vendor, or Landlord.

ARV — annual rental value set by Government to assess Land Tax on each property. The ARV for a particular property can be checked on Government's website: www.landvaluation.bm/

Assignee — a person who takes an Assignment (transfer) of a Lease and so becomes Tenant.

Assignment — a transfer in ownership of a Lease from the Assignor to the Assignee.

Assignor — a person who (as Tenant) transfers a Lease to an Assignee (who then becomes the Tenant).

Chattels — the furniture and easily removed items at a property e.g. beds, chairs, refrigerators and stoves.

Condominium — a type of property ownership almost equivalent to freehold ownership, but which does not include ownership of the ground under the condo, or the structure of the building, in which the condo is situated. A true condominium is under the Condominium Act 1983. Most condos in Bermuda are in fact Leasehold, because they are not set up pursuant to the Condominium Act 1983.

Closing or Completion Date — the date the Purchaser, or Tenant, becomes the occupier.

Conveyance — a document transferring ownership of a freehold or true Condominium, from a Vendor to a Purchaser.

Deposit — for a purchase the Deposit is usually ten percent of the price. For a Lease the deposit is usually equal to one month's rent but if the property is Rent Controlled the Deposit should not exceed the equivalent of two week's rent. The Deposit may be lost in the event of default.

Easement — a legal right that comes with a property or which is exercised over a property.

Fixtures and Fittings — items attached to the fabric of a building or incorporated into a property.

Freehold — a type of property ownership, at the top of the property ownership chain.

Freeholder — a person who owns a Freehold.

Guarantee — a promise to pay a sum of money if a third party does not pay.

Land Tax — a property tax assessed twice a year, in equal instalments by Government. Assessment of Land Tax is based on ARV. Certain properties such as churches and those occupied by Bermudians over 65 years of age may be exempt from Land Tax.

Landlord — a person who owns a property and has rented it to a Tenant. A Landlord is usually entitled to receive rent either directly from a Tenant or through an Agent.

Lease — a document made between a Landlord and a Tenant that creates a Leasehold.

Leasehold — a type of property ownership limited in time, the owner is called a Tenant. On expiry of the Lease the property reverts back to a Freeholder. A Tenant usually has financial or other obligations, to a Landlord.

Leaseholder — an owner of a leasehold interest, often also called a Tenant. Rent Controlled — a residential property with an ARV of $27,000 or less. If a property is Rent Controlled there are a number of restrictions e.g. the rent should not be higher than the rent at which the property was first let or that maximum level set by the Rent Commission for the particular property.

Mortgage — a loan secured to a property giving the lender preferential rights over others. A Mortgage essentially transfers ownership to the lender, with the lender promising to transfer the property back, when the loan is repaid.

Mortgagee — a person (often a bank) who gave a loan, secured to a property (Mortgage).

Mortgagor — a person who has a loan, which is secured to a property (Mortgage).

Purchaser — the buyer of a property.

Redemption — the sum of money paid to the lender to pay off a Mortgage.

Sale and Purchase Agreement — a contract being a promise by a Vendor to sell and by a Purchaser to buy, a property on a stated Closing Date. In the event of default a Deposit may be lost and/or parties may sue each other for loss of bargain and/or expenses.

Stamp Duty — a Government tax charged on legal documents including e.g. Sale and Purchase Agreements, Mortgages, Conveyances and Re-conveyances. The tax is based on the type of documents and the money value stated in the document.

Title Deeds — every property has a packet of Title Deeds, indicating ownership. If the Title Deeds are lost, the owner may be unable to sell or Mortgage the property. Title Deeds may become obsolete if Government passes legislation to create a land registry for all Bermuda property.

Tenancy — another way of saying Lease but usually only for a short-term interest.

Tenant — a person owning a Leasehold and who usually pays rent to a Landlord, for the privilege of occupying.

Vendor — the seller of a property.

Of course, knowing what the terms mean is only part of the equation.

If you are considering entering into a real estate transaction, it is always advisable to seek legal advice from an attorney expert in the area.

Attorney Neil Molyneux is a member of the Property Practice Group of Appleby. A copy of this column is available on the firm's web site at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters described herein, persons are advised to consult with a lawyer.