Complex Real Estate Abbreviations
You might have heard realtors asking what the plc rate is. We have received the OC. Did that project get the CC? Have you got NOC? Or many other abbreviations used in real estate. The real estate sector is filled with hundreds of complex terms and abbreviations that a normal outsider cannot understand, but today, we will simplify the most used abbreviations in real estate and provide their meanings and definitions.
#1 Preferred Location Charges (PLC)
PLC full form in real estate stands for preferred location charges. You might wonder what it is, so when a buyer wants a specific unit in a building, such as a corner unit, a unit of a particular floor, a garden facing unit, a river facing unit, road facing or wants any unit as per their convenience, for that developer takes some extra charges, which is called PLC.
#2 Basic Sale Price (BSP)/ Market Value (MV)
BSP full form in real estate stands for Basic Sales Price Or Sometimes Market Value (MV). It is the cost on which a developer advertises their property, excluding all the extra charges such as GST, PLC, Power Backup, maintenance charges, etc.
#3 Loan To Value Ratio (LTV)
LTV stands for loan-to-value ratio. It is the metrics used to calculate the percentage of loan that can be allotted to your home. For example, you bought a property costing 1 cr. As per RBI, the LTV for any home exceeding the value of 75 lacs is 75 percent of the property’s cost. So, 75 percent of 1 crore is 75 lacs, so your loan-to-value ratio becomes 75%. You can only get a loan of up to 75% on your home. Banks use this measure to assess potential risks.
The Reserve Bank of India (RBI) sets loan-to-value (LTV) limits for home loans based on the amount:
• Up to 90% for loans up to Rs 30 lakh
• 80% for loans between Rs 30 lakh and Rs 75 lakh
• 75% for loans over Rs 75 lakh
• Factors like age, credit score, and liabilities affect LTV.
#4 Power Of Attorney (POA)
A Power of Attorney (POA) is a legal document that authorises someone to manage your property or make decisions on your behalf if you cannot do so yourself, such as when you're hospitalised, travelling, or deceased. NRIs commonly use it to allow a trusted person to handle property matters, including sales. The POA is usually valid for a specified period and can be customized to specific needs.
#5 Completion Certificate (CC)
CC full form in real estate, stands for Completion Certificate. It is given to the builder by the RERA authority of the concerned state. It ensures that the construction of the building is completed as per the approved building plan, even if the project has all the requisite connections, including water supply and electricity. Always collect these essential documents from the developer.
#6 Occupancy Certificate (OC)
OC full form in real estate, stands for Occupancy Certificate (OC), is a legal document issued by local authorities that confirms a building meets all safety and construction standards and is safe to live in. The process to get an OC can differ depending on where you are. Essentially, it proves that the property is ready and suitable for occupancy.
#7 Floor Area Ratio (FAR) Or FSI in real estate
FAR full form in real estate stands for floor area ratio. The Floor Area Ratio (FAR) is a measure used in urban planning to determine the density of a building on a specific piece of land. It is calculated by dividing the total floor area of a building by the total area of the plot of land on which it stands.
#8 No Objection Certificate (NOC)
NOC full form is No Objection Certificate is an essential document when buying property. It proves that a property complies with all legal requirements and building regulations. Developers must obtain this certificate from local government authorities to ensure their project meets all necessary standards.
The NOC will not be issued if a property does not meet these standards. The process involves thorough inspections to confirm compliance with building codes and other regulations.
#9 Return on Investment (ROI)
Return on Investment (ROI) measures the profitability of a real estate investment. To calculate ROI, you subtract the total investment cost from the total profit earned, then divide that amount by the total investment cost.
For example, if you earned 50,00000 from selling a property and your total investment was 30,00000, the ROI would be calculated as follows: (50,00000 - 30,00000) / 30,00000 = 0.66 or 66%. This percentage shows how much profit you made compared to your initial investment.
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