Allotment
In order to define allotment, we have to take into consideration what it refers to. While generally, it refers to a certain amount of something that is allocated to a particular person, the most common use of the term can be seen in the corporate world regarding shares distributed across different entities. The term also has an application in the real estate world, but the idea is relatively similar. In both instances, a party makes an initial public offering (IPO), and interested parties express their desire to have amounts of something allocated to them.
If there’s a higher demand, the amount of something allocated might be smaller than the amount desired. In the opposite case, with lower demand, the amount of something allocated might be larger or cheaper than the original amount desired. Let’s take a closer look at what happens when this concept is applied in the real estate industry.
What is Allotment in Real Estate?
The residential allotment meaning describes a piece of land that is one part of a developmental land for a proposed development (i.e., residential) that will only be used for a single-family home, prohibiting further subdivision of the piece of land. This is a scenario where a real estate developer has 30 lots available within their residential development, and each lot is an allotment for a particular individual.
The allotment process is an equitable distribution of lots, and the individual who gets the lot allotted to them proceeds to make the purchase. The downside of this process can be seen when the supply is lower than the demand. If there are 30 lots available for allotment and 50 families interested in them, the distribution will leave 20 families without an allotted lot. In that scenario, the 20 families will be unhappy, disgruntled potential buyers that would have to look elsewhere for a developed lot.
Popular Real Estate Terms
A public officer given the right to authenticate a document, accept a person's oath, administer depositions, and to conduct other activities in commercial business. An official seal is used ...
Statement made verbally. It is better legally to have a written statement because verbal ones without witnesses may be denied. ...
Same as term yield: The income earned on an investment, typically stated as a percentage of the market price ...
Reconsideration of the value of real property. An example is getting property appraised each year to determine its current value for tax or purposes of determining whether to sell ...
Giving of a promise or guarantee to the receiver to instill confidence. ...
Amount of money paid for some form of property. In real estate, the price paid for property is usually the market price; however, in the case of a forced sale, as in a foreclosure sale, the ...
Amount of money that must be charged or invested in the initial stage of a business transaction to demonstrate good faith as well as to help offset some expenses. For example, the customary ...
Refurbishing or rebuilding a property, such as a house, back to its original or earlier condition. ...
The units are used as commercial offices. The purchaser of an office condominium owns the title to the individual office unit and not to the property. Maintenance fees are assessed to each ...
Have a question or comment?
We're here to help.