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National Real Estate Vocabulary

Terms in this set (463)

Abandonment
the relinquishment of all rights and title to a property with no intention of reclaiming ownership
Abstract of Title
A condensed history of the title to a parcel of land consisting of a summary of every recorded instrument, together with a statement of liens, charges or encumbrances affecting title to that land
Abutting Owner
An owner whose land touches a highway or other public place.
Acceleration Clause
A clause in a mortgage or installment contract stating that upon default of payment due, immediate and full payment of the balance of the obligation becomes due and payable
Access Right
The right of property owner to have ingress and egress to and from his property
Accession
The acquisition of title to additional property by its annexation to real estate already owned. This can be the result of human actions (as in the case of fixtures) or natural processes (such as accretion or reliction)
Accretion
Gradual additions to land by deposits of sand or soil by bordering waters through natural causes
Accrued Depreciation
The difference between the cost of replacement new, on the date of the appraisal, and the present appraised value
Acknowledgment
A formal declaration made before a notary public or other authorized person, by a person who has executed an instrument, that such execution is his free act and deed
Acre
A measure of land equal to 60 square rods, 4,840 square yards, or 43,560 square feet
Action of Ejectment
A legal action brought about to regain possession of real property; used when there is no relationship of landlord and tenant, such as re-entry by the actual owner against a claimant under adverse possession
Actual Authority
Such authority that a principal intentionally gives his agent
Ad Valorem
Tax according to value
Adjoining Owner
One whose property is contiguous; to be next to
Adjustable-Rate Mortgage (ARM)
A loan in which the interest rate is periodically increased or decreased to reflect changes in the cost of money
Administrator
A person appointed by the court to administer the estate of a deceased person who died intestate, and left no will
Adverse Possession
The means of acquiring title to land against the real owner, where possession has been actual, open, hostile, exclusive, continuous, and under claim of right for the statutory period
Affidavit
A statement reduced to writing and sworn to before a notary public or some other authorized officer
Affirm
To confirm or to ratify
Agency
The legal relationship resulting from an agreement that the agent is authorized by a principal to perform certain acts on behalf of the principal in dealing with a third party
Agreement of Sale
A written agreement in which the buyer agrees to buy certain realty and the seller agrees to sell upon terms and conditions set forth therein. Title remains with the seller until terms and conditions are fulfilled
Air Rights
The rights vested by a grant of an estate in real property to all or any portion of the space above the ground
Alienation
The transferring of real property from one person to another
Alienation Clause
A provision in a security instrument that gives the lender the right to declare the entire loan balance due immediately if the borrower sells of otherwise transfers the security property. Also called a due-on-sale clause
Alluvion
That increase of soil on a shore or bank of a river as a result of accretion
Amenities
Those things which are marked by such qualities as pleasantness, comfortableness, and agreeableness. In appraising, the amenities of property are those qualities which increase the pleasure of ownership and are not necessarily related to monetary values
Amortization
The gradual paying off of a debt on an installment basis
Annexation
The act of attaching, adding, joining, or uniting one thing to another
Appraisal
An estimate of value of real estate: the report stating and supporting the estimated value of realty
Appraisal by Capitalization
Determining the value of property by dividing new annual income by the capitalization rate. Use on income producing properties
Appraisal by Market Data
An appraisal of property through the examination and compare actual sales of comparable properties. Also called a "comparable"
Appreciation
An increased value of property due to economic or related causes which may prove to be either temporary or permanent
Appurtenance
That which has been added to a property, which becomes an inherent part of the property, and will pass with it when conveyed
Assemblage
Putting together two or more lots to form a large parcel. To be distinguished from plottage, which is the resulting value
Assessed Value
An assessment of property values by the government for the purpose of taxation
Assessment
A charge against real estate made by a unit of government to cover the proportionate cost of improvements
Assignee
The person to whom an agreement or contract is transferred
Assignment
The method of manner by which a right, specialty, or contract is transferred from one person to another
Assignor
A party who assigns or transfers an agreement or contract to another
Assumption of Mortgage
Taking of title to property by assuming liability for payment of an existing note secured by a mortgage
Attachment
The act of taking realty by judicial order and placing within the custody of the court
Avulsion
The sudden removal of land of one owner and deposition on the land of another when a stream changes its channel
Balance
An appraisal principal which holds that the maximum value of real estate is achieved when the agents in production (labor, coordination, capital, and land) are in proper balance with each other
Balloon Payment
The final installment payment on a note which is greater than the preceding intallment payments and pays the note in full
Bargain and Sale Deed
A deed used to convey title to real property, which may or may not include warranties; if any, they are generally limited to an assertion by the grantor that he has possession of the property.
Baseline and Meridian
Imaginary lines used by surveyors in locating and describing land under the rectangular survey method. The north-south line is the meridian, the easst-west line is the base line. Used in 30 states.
Basis
A figure used in calculating a gain on the sale of real estate for federal income tax purposes. Also called cost basis
Benchmark
A permanent reference mark or point established for the use in measuring differences in elevation.
Beneficiary
A person who receives and benefits from the gifts or acts of another; one who receives the proceeds from a will, insurance policy, or trust.
Bequeath
The giving of personal property by will
Bilateral Contract
A contract in which both parties have reciprocal obligations towards each other.
Bill of Sale
A written instrument which passes title of personal property from seller to buyer
Blanket Mortgage
One mortgage covering two or more specific parcels of realty.
Blockbusting
The discriminatory practice of encouraging members of one race or creed to move into a neighborhood, and then exploiting the situation by persuading residents to sell their houses at deflated prices becuse of the alleged social deterioration of the neighborhood
Blue Sky Laws
Laws that regulate the promotion and sale of securities in order to protect the public from fraud.
Bona Fide
In good faith, without fraud; genuine; real
Breach of Contract
Violaton of any of the terms or conditions of contract; default; non-performance.
Broker
A licensed person who negotiates the purchase and sale of real estate for another
Brokerage
A real estate broker's business
Budget Mortgage
A mortgage with payments that cover principal and interest, plus taxes, fire insurance, lease rent. PITI
Building codes
Regulations defining materials and/or performance standards for structural components, as well as heights, safety features, sanitation and health requirements, and setback and sideline restrictions. Also: Rules established by local government to regulate construction standards.
Building Line
A line at a certain distance from the front and/or sides of a lot, beyond which no building may project.
Building Restrictions
Rules concerning building size, placement, or type, they may be public restrictions (in zoning ordinance, for example) or private restrictions (CC&Rs for example)
Bundle of Rights
Ownership concept in real estate which embraces the rights of possession, use, enjoyment, and disposition.
Capital Experdintures
Money spent on improvements and alterations that add to the value of property and/or prolong its life
Capital Gain
Profit realized from the sale of a capital asset. Ig the asset was held for more than one year, it is a long-term capital gain; if the asset was held for one year of less, it is a short-term gain.
Capitalization
The act of converting future income into current equivalent value.
Capitalization Rate
The relationship or ratio between the net income from a real estate investment and the value of the investment, usually expressed as a percentage; the rate of interest whiche is considered a reasonable return on the investment.
Caveat Emptor
Let the buyer beware; the buyer must examine the goods or property and buy at his own ristk.
Certificate of Eligibility
The document which verifies the entitlement of an individual to the benefits of the Servicemen's Readjustment Act of 1944 by establishing his service record qualifications with the government agency.
Certificate of No Defense
An instrument executed by the mortgagor to the assignee upon the slae of the mortgage, setting fort the present status of the mortgage and attesting to its validity; estoppel certificate.
Certificate of Occupancy
A statement issued by a local government agency (such as the building department) verifying that a newly constructed building is in comliance with all building codes and may be occupied.
Certificate of Reasonable Value
Commonly known as a C.R.V.; this is the appraisal commitment of the Veterans Administration used to fix the value of the property being proposed for purchase by a veteran under the GI bill of rights.
Certificate of Sale
The document given to the purchaser at a mortgage foreclosure sale; becomes a sheriff's deed only after the redemption period expires.
Certified Property manager
Commonly known as C.P.M., this identification is bestowed upon any property manager who has met the requirements of the Institute of Property Management operated under the auspicesof the National Association of Realtors.
Chain of Title
A sequential history of the conveyances, encumbrances, and records of ownership of a piece of property through the years from the original grant to present, as revealed through the public records.
Chattel
Personal property which is tangible and moveable
Chattel Mortgage
A personal property mortgage
Client
The principal to a real estate transcation who emplys the agent.
Closing
The time when a transaction is consummated, or the actual signing over the documents and delivery of the deed; the time after signing when the documents are recorded.
Closing Statement
A statement of settlement made by the broker or an escrow company that reflects the financial position of the buyer and seller in that particular real estate transaction.
Cloud on Title
Any condition revealed by a title search which may affect or impair the owner's title to property because of their apparent of probable validity.
Codicil
A supplement or addition to a will which adds to, subtracts from, alters, revokes, or qualifies the provisions of a will.
Color of Title
That which appears to be a good title but which is not in fact a good title, such as title held under a defective deed.
Commingling
Mixing money belonging to clients with personal funds.
Commission
An agent's compensation for performance of the duties of his agency; in real estate practice, a percentage of the selling price of the property, or percentage of rentals, etc.
Common Element
In a condominium land and all parts of a building normally used by all of the owners for their mutual convenience or safety.
Common Interest
The percentage of undivided interest in the common elements of a building appertaining to each apartment
Community Property
Property accumulated after the marriage (generally) by husband and wife. Community property is owned equally in undivided halves of each.
Compensation
Paid to a broker for services in connection with real estate transaction (usually a percentage of the sales price)
Competent Parties
Those who are qualified or mentally competent to enter into a contract
Competition
An appraisal principle which holds that profits tend to encourage competition and excess profits tend to result in ruinous competition.
Condemnation
The process by which property of a private owner is taken for public use, with just comensation to the owner, under the right of eminent domain.
Conditional Use Permits
A permit that allows a special use, such as a school or hospital, to operate in a neighborhood where it would otherwise be prohibited by the zoning. Also called a special use permit or special exception permit.
Condominium
Property developed for common interest ownership, where each co-owner has a separate interest in an individual unit, combined with an undivided interest in the common elements of the property
Condominium Ownership
The individual outright ownership of a single unit in a multi-unit property together with an inerestin the common elements of that property
Conformity
An appraisal principal which holds that the maximum value of property is realized when there is a reasonable degree of social and economic homogeneity in the neighborhood
Consideration
Valuable consideration, a promise or act of legal value bargained for and received in return for a promise; good consideration, love and affection.
Constructive Notice
Notice given by the public records; legal presumption of notice given by the public records. Also called legal notice.
Contingent
Dependent upon an uncertain future event
Continuation
An update of a title search, covering the period from the preliminary title report to the time of the recording of the documents
Contract
A legal agreement between competent parties for a consideration to perform or refrain from performing certain acts.
Contractual
They may elect to form no community at all, own only portions of their property together, or limit the other spouse's rights to incomes from separate parties
Contribution
An appraisal principal which holds that the value of real property is greatest when the improvements produce the highest return commensurate with their cost (the investment). also called the principal of incresing and decreasing returns
Conventional Loan
A mortgage which is not FHA insured, or BA guaranteed
Conversion Value
The value in real estate created by changing the use of a property from one classification to another, such as razoring, or creating a higher and better use for the parcel
Conveyance
The transfer of the title of land from one to another; an instrument which carries from one person to another an interest in land
Cooperative Ownership
Ownership that usually takes the form of shares of stock in a corporation owning the entire building and a proprietary lease giving the stockholder/tenant the right to occupy a unit for which he pays a proportionate share of the maintenance and operating expenses.
Corporation
A vehicle used to carry on business with its owners heaving liability only to the extent of their stock ownership; considered to be an individual or separate enitity.
Correction Deed
A deed used to correct a prior erroneous deed; a deed of confirmation; a reformation deed.
Correction line
A line every twenty-four miles, running due north and south from the base line, to compensate for the curvature of the earth in the earth in the rectangular method of survey
Cost
The amount paid for anything in money, goods, or services.
Counteroffer
A response to a contract offer, changing some of the terms of the original offer; it operates as a rejection of the original offer (not as an acceptance). also called qualified acceptance.
Convenant
An agreement written into deeds and other instruments which promises or guarantees that something shall or shall not be done; an agreement stipulating certain uses or non-uses of property.
Cul-De-Sac
A passage way or street with only one outlet; a blind alley; a turn-around
Curtesy
The right which a husband has in his wife's estate at her death
Damages
The indemnity recoverable be an injured party to compensate him for the loss suffered through an act or default of another.
Datum
An artificial horizontal plane of elevation, established in reference point to sea level, used by surveyours as a reference point in determining elevation.
Debt Service
The amount needed for payment of principal and interest on an amortized debt.
Declaration
To make known openly and in definite terms; that which, along with the by-laws, defines the rules by which a condominium will exist.
Dedication
An appropriation of land by its owner for some public use, and acceptance for such use by authorized public officials on behalf of the public. In certain casses five years of interrupted public use will be coonsidered an acceptance.
Deed
An instrument in writing, duly executed and delivered by th grantor that conveys to the grantee some right, title or interest in or to real estate.
Deed of Reconveyance
The instrument used to release the security property form the lien created by a deed of trust when the debt has been repaid.
Deed Restriction
Provisions in a deed that restrict use of the property, and which may be either covenants or conditions.
Default
Failure to meet an obligation or promise when due.
Defeasance Clause
The clause in a mortgage that gives the mortgagor the right to redeem his property upon the payment of his obligation to the mortgagee, and declares the instrument null and void upon payment of debt when due.
Deficiency Judgment
A judgment for the balance of a debt; issued when the difference between the indebtedness sued upon and the sale price obtained at the foreclosure sale is less than the debt.
Delivery
The act or intent of transferring an instrument from one person to another in such a way that it cannot be recalled.
Demise
A conveyance of an estate to another for life, for years, or at will; to lease.
Deposit
Money given by one to another as evidence of his good faith; evidence or security for the performance of a contract.
Depreciation
Loss of value brought about by physical deterioration or functional or economic obsolescence.
Descent
Ownership transferred by means
Determinable Fee Estate
A fee simple estate in which the property automatically reverts to the grantor upon the occurrence of a specified event or condition.
Devise
A gift of realty by will
Devisee
One who receives a gift of real estate by will
Devisor
One who gives realty by will
Discount Points
A fee based on a percentage of a loan, charged by a lender, as a service charge, or as an amount needed to produce the same yield on an FHA or VA loan that he would receive in the conventional mortgage market; each point charged represents 1% of the loan amount and increases the yield by 1/8 of one percent for the investor.
Disintermediation
When depositors withdraw savings deposits from an intermediary financial institution, such as a savings and loan association or commercial bank, in favor of direct investment.
Dominant Estate (Tenement)
An estate attached to and benefiting from the servient estate, e.g., an easement runs over the servient estate and serves the dominant estate; also called dominant tenement.
Donee
A person to whom a gift is made.
Donor
A person who gives a gift.
Downzoning
Rezoning land for a more limited use.
Dual Agency
When an agent represents both parties to a transaction, as when a broker represents both the buyer and the seller.
Duress
Unlawful constraint or action against a person forcing him to perform some act against his will.
Earnest Money
Initial payment made by a purchaser or real estate as evidence of good faith.
Easement
A right, privilege or interest which one party has in the land or another.
Easement Appurtenant
An easement that is attached to and runs with the land, it cannot exist apart from the particular land to which it is attached.
Easement by Prescription
A method of acquiring a right to a portion of property by lapse of time, in the manner of adverse possession.
Easement in Gross
An easement which does not attach to the land, usually given to electric or phone company.
Economic Life
The period of time over which a property may be profitably used.
Economic Obsolescence
Loss in value resulting from factors outside the property itself, such as proximity to an airport. Also called external obsolescence, external inadequacy, or lacational obsolescence.
Economic Rent
The rental warranted to be paid in the open real estate maket based upon current rentals being paid for comparable space.
Effective Age
The age of structure indicated by its condition and remaining usefulness (as opposed to its actual age). good maintenance may increase a building's effective age, and poor maintenance may decrease it; for example, a maintained might have an effective age of 15 years, meaning that its remaining usefulness is equivalent to that of a 15 year old home.
Egress
Means of leaving property without trespassing the property rights of other surrounding owners.
Emblements
Trees or crops that are cultivate annually; the rights of a tenant to harvest the annual crop even after his tenancy has ended.
Eminent Domain
The right of government to take private property for public use upon the payment of just compensation.
Encroachment
A building or fixture which intrudes partly or wholly upon the property of another.
Encumbrance
A claim, charge or liability attached to and binding upon real property which affects or limits the title thereof.
Endorsement
The placing of one's signature on a document, to make it negotiable or transferable.
Equity
The interest or value which an owner has in real estate over and above the liens against it; branch of remedial justice by parties in courts of equity.
Erosion
The gradual wearing away of land due to natural causes of wind and water
Escalator Clause
The clause in a mortgage which permits the holder to increase or decrease the interest rate during the eterm of the mortgage.
Escheat
The reverting of property to the state when heirs capable of inheriting are lacking or the property is abandoned.
Escrow
The deposit of instruments and funds with instructions to a third neutral party to carry out the provisions of an agreement or contract
Estate
The degree, quantity, nature, and extent of interest a person has in real property.
Estate for Years
An interest for a certain, exact period of time in property leased for a specified consideration.
Estoppel
A doctrine which bars one from asserting rights which are inconsistent with a previous position or representation.
Estoppel Certificate
Certificate of No Defense
Eviction
A legal proceeding by a landlord to recover possession of leased premises from a tenant due to some breach of the lease contract.
Exchange
A method of conveying real property by trading with another property.
Exclusive Agency Listing
A written instrument giving one agent the right to sell property for a specified time, but reserving the right of the owner to sell
Exclusive Right to Sell
A written agreement between owner and agent giving the agent the right to collect a commission if the property is sold by anyone during the term of his agreement.
Exculpatory Clause
A clause in a contract that relieves one party of liability for certain injuries or problems; such a provision is not always enforceable.
Execute
To complete, to perform, to make., to do, to follow out; to execute a deed, to make a deed, including especially signing; to execute a contract, to perform the contract, to follow out to the end, to complete
Executed Contract
A contract that is fully signed or performed.
Executor
A person named in a will to carry out its provisions as to the disposition of the estate of a deceased person.
Executory Contract
A contract not yet fully performed
Express Authority
Clearly stated duties of an agent as set forth by his principal.
External Obsolescence
See Economic Obsolescence
Federal Home Loan Mortgage Corporation (FHLMC)
A privately owned agency which buys mortgages in the secondary money market from commercial banks and federally insured savings and loan associations: "Freddie Mac"
Fee Simple
See: Fee Simple Absolute
Fee Simple Absolute
The highest and most complete form of ownership, which is of potentially infinite duration. Also called a fee or a fee simple.
Fee Simple Defeasible
A fee simple estate that is subject to termination of a certain condition is not met or if a specified fee, determinable fee, qualified fee, or fee simple subject to a condition subsequent.
Fiduciary
A person in a position of great trust anc confidence, as the relationship between principal and agent.
Finders Fee
A fee paid to a person for the services of putting together the two parties in a real estate transaction.
Fixture
An article of personal property which has been installed in or attached to land or a building thereon, in such a manner, that it is now considered to be a part of the real estate.
Foreclosure
Procedure whereby property pledged as security for a debt, is sold to pay the debt in event of default in payments or terms.
Forfeiture
Loss of money or anything of value, due to failure to perform, alright expressly given in an installment contract whereby the seller terminates the contract for non-payment, and retains all of the payments previously made by the buyer.
Fraud
The intentional and successful employment of deception in order to cheat or deceive another person and to thereby gain some dishonest advantage.
Freehold
An estate in real property for an indefinite and uncertain time. Front Foot: Property measurement of the front of the front foot on its street line or waterfront line with each front foot extending the depth of the lot.
Functional Obsolescence
See Obsolescence
General Lien
A lien which attaches to all property owned by the debtor.
General Partnership
A partnership in which each member has a right to manage the business and share in the profits, as well as responsibility for the partnership's debt. All of the partners aare general partners.
Good Will
An intangible asset arising from the reputation of a business.
Government National Mortgage Association (GNMA)
A federal agency which provided special assistance for federally aided housing programs; active in the secondary money market for government subsidizing housing programs; "Ginne Mae"
Graduated Lease
See Step-up lease.
Graduated Payment Mortgage
A loan that provides for lower payments in the first years of its term; the payments increase in steps, then level off, typically after three to seven years.
Grandfather Clause
See Nonconforming Use
Grant
A transfer of real property
Grantee
The purchaser; the person to whom an interest in realty in conveyed.
Granting Clause
Words in a deed that indicate the grantor's intent to transfer an interest in property. Also called the words of conveyance.
Grantor
One who grants an interest in real property to another.
Gross Income
Total income derived from a business or income property before expenses are deducted.
Gross Lease
A lease of property in which the lessor meets all property charges incurred through ownership.
Gross Rent Multiplier
A number which is used to determine approximate selling price for income property by mulitplying the gross income times this number: (income x multiplier=selling price).
Ground Lease
A lease for the use of land, usually providing for inprovements to be placed on the land by the user.
Ground Rent
The net rent paid for a period of unimproved land; that portion of the total rental is considered to represent a return upon the land only.
Habendum Clause
The "to have and to hold" clause that defines the ownership being transferred in a deed.
Highest and Best Use
That legal use, which at the time of an appraisal is most likely to produce the greatest net return over a given period of time.
Holdover Tenant
A tenant who remains in possession of a property after expiration of the lease term.
Holographic Will
An unwitnessed will written in hand by the person leaving the will.
Homestead
Real Estate That is occupied and used as the principal residence of the owner and the owner's family.
Homogenous
The same or similar kind of structure; similar; as used in appraising, homogeneity tends to stabilize value in an area.
Hypothecate
The pledge property as security; to mortgage.
Implied Authority
The authority an agent is assumed to have because of a course of conduct, or which is inferred from the fact that he has been authorized to perform certain acts.
Implied Contract
Not expressed in words, but understood form actions or circumstances. compare: Express
Impound Account
A bank account maintained by a lender for payment of property taxes and insurance premiums on the security property; the lender requires the borrower to make regular deposits, and pays the expenses out of the account. Also called a reserve account or escrow account.
Improvements
A man-made addition to real property.
Incapacity
The lack of legal qualifications making a person incapable of performing some act. Mental deficient, minors, etc. lack legal capacity to perform certain acts.
Inchoate
Incomplete, not perfected.
Indefeasible
Not capable of being annulled or voided.
Index Lease
A type of graduated lease in which the periodic rent increase are tied to increases in the consumer price index, or some other economic indicator.
Ingress
An entrance to property which does not trespass over the property rights of others.
Installment Contract
A contract which provides for payment of a purchase price in installments.
Inter Vivos
During one's life; between living persons; from one living person to another.
Interim Financing
A short term loan obtained to cover financing of the construction of a building.
Inestate
A person who dies without a will, or with one which is defective in form.
Involuntary Lien
a lien imposes against property without consent of an owner; e.g., taxes, special, assessments, federal income tax liens, etc.
Irrevocable
Incapable of being recalled or revoked; unchangeable.
Joint Tenancy
Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon the death of one of the owners, his share goes to the other owners by the "right of survivorship".
Joint Venture
A joining of two or more people in a specific business enterprise; similar to a partnership, and generally with no intention of a continuing relationship beyond the original purpose.
Judgement
The final determination of the rights and liabilities of the parties by a court in an action before it.
Junior Lien
A subordinate lien.
Junior Mortgage
A mortgage which is subordinate to a prior existing mortgage on the same realty.
Laches
Delay or negligence in asserting one's legal rights
Land
The earth's surface extending to the center of the earth and into space forever including all natural objects that are permanently attached.
Land Patent
An instrument conveying government owned lands to individuals.
Landmark
A monument or object used to establish the boundary line of a property.
Latent Defects
Defects that are not visible or apparent (as opposed to patent defects).
Lease
A contract whereby the lawful owner of the property transfers his rights of use and possessions to another for a specified time.
Leasehold
An estate or right in real property held under a lease.
Legacy
A gift of personal property, usually money, by will.
Legal Descripton
A description, recognized by law, that will definitely locate and identify the property.
Lessee
One who rents property under a lease contract.
Lessor
An owner who enters into a lease with a tenant.
Leverage
The use of borrowed funds in financing, with the anticipation that the property acquired will increase in return so that investor will realize a profit, not only in his own investment, but on the borrowed funds as well.
License
A personal privilege to perform some act on the land of another.
Lien
A right, given by law, whereby a creditor may satisfy a debt out of the proceeds of the sale of real or personal property belonging to the debtor; an encumbrance usually naming property as security for payment of a debt or for the discharge of an obligation.
Lien Theory
The theory holding that a mortgage does not involve a transfer of title to the lender, but merely creates a lien against the property in the lender's favor. Compare: Title Theory.
Life Estate
An estate or interest in real property held for the duration of the life of a certain person. Upon the expiration of that life, the estate will automatically be vested in a remainderman or reversioner.
Life Tenant
Someone who owns a life estate; the person entitled to possession of the property during the measuring life.
Limited common Element
In a condominium, those common elements reserved for the use of a certain apartment, or certain apartments, to the exclusion of other apartments.
Limited Partnership
A partnership composed of general and limited partners whose contribution and liability are limited and specifically defined.
Limited Damages
An amount predetermined by the parties to an agreement that will be forfeited as a compensation for breach of contract.
Lis Pendens
A legal document giving constructive notice that an action at law is pending.
Listing
A written employment agreement between a property owner and a broker authorizing the broker to sell, lease or exchange the realty.
Littoral Rights
The water rights of an owner of littoral land, in regard to use of the water in the lake.
Loan Commitment
A commitment by a lender as to the amount he will loan to a qualified borrower on a particular piece of real estate.
Loan-to-Value Ratio (LTV)
The relationship between the loan amount and either the sales price or the appraised value of the property (whichever is less), expressed as a percentage.
M.I.P
The mortgage insurance premium collected by FHA for insuring the mortgage.
Market Price
1. The current price generally being charged for something in the marketplace. 2. The price actually paid for a property. Compare: Market Value
Marketable Value
The highest price a ready, willing and able buyer, not forced to buy, will pay to a ready, willing and able seller, not forced to sell, allowing a reasonable time for exposure in the open market.
Marketable Title
Title free and clear of objectionable liens or encumbrances; title which is free from reasonable doubts or defects, which can be readily sold or mortgaged.
Master Plan
A guide to the use of property within a community as established by a planning commission to project the desired future growth and nature of the area covered.
Mechanic's Lien
A lien which exists against real property in favor of persons who have performed work of furnished material for the impovement of the real estate.
Merger of Title
The absorption of one estate into another.
Meridian
See Base Line and Meridians
Metes and Bounds
A method of locating real property; metes are measures of length and bounds are boundaries; a description starting with a well-marked point of beginning and following the boundaries of the land until it returns once more to the point of beginning.
Mile
A linear measurement of distance equal to 1,760 yards, 5,280 feet, or 1,608 meters.
Mill
One-tents of one cent or $0.001. Used in some states to compute property taxes.
Minor
A person who is under the legal age of competence; one under 18 years of age.
Misdemeanor
A crime of lesser consequences than a felony which is subject to minor jail terms, fines, or both.
Monument
A fixed object and point established by surveyor to establish land locations; includes not only artificial objects such as posts and fences, but natural objects such as trees, mountains and water courses.
Mortgage
An instrument in writing which, when recorded, creates a lien upon property pledged as security for the repayment of a debt or obligation.
Mortgage Banker
A corporation or firm which makes, delivers and services mortgage loans.
Mortgage Broker
A person or firm which makes, delivers and services mortgage loans.
Mortgagee
The party who lends money and accepts a mortgage to secure the payment of the debt.
Mortgagor
The party who borrows money and gives a mortgage on the property as security for his obligation to repay the debt.
Multiple Listing Services (M.L.S.)
An arrangement among Brokers whereby they share their listing information.
Navigable River
Those bodies of water which are capable of being used for public transportation.
NAR
The National Association of Realtors. Only licensees who are members of local real estate boards are entitled to use the trademark name "REALTOR"
Negotiable Instrument
A written instrument sighed by its maker or drawer, containing an unconditional promise to pay a certain sum of maney; can be passed freely from one person to another.
Negotiate
To transact business; to arrange terms of a contract
Net Income
With reference to property, the sum derived after a vacancy allowance and expenses have been deducted from the gross income before depreciation, and usually defining the income a property will earn a normal year's operation.
Net Lease
A lease in which the tenant pays rent for occupancy; plus maintenance and operation expenses, and usually including taxes and insurance.
Net Listing
A listing which provides that the agent may retain all sums received over and above a net price to the owner as compensation for is services.
Nominal Consideration
One bearing no relation to the real value of the contract. an example is a property which is deeded for $10.00.
Nonconforming Use
A use which is contrary to zoning laws, but which is permitted because the use was allowed before the zoning law came into effect; a grandfather clause.
Note
A written instrument acknowledging a debt and promising payment.
Notice to Quit
Notice to a tenant to vacate
Novation
The substituting of a new obligation for an old one.
Nuncupative Will
An oral will
Obsolescence
Functional obsolescence or lack of desirability in terms of layout, style and design as compared with that of a new property serving the same function: economic obsolescence or loss in value from causes in the neighborhood, but outside the property itself.
Offer
A promise by one party to act in a certain manner provided the other party will act in the manner requested. In a real estate sales contract, the offer to purchase realty according to certain stipulated terms and conditions.
Open End Mortgage
A mortgage containing a clause which permits the mortgagor to borrow additional money up to the original amount of the loan after the loan has been reduced, without rewriting the mortgage.
Open Listing
A listing given to any number of agents without liability to compensate any except the one who first secures a buyer ready, willing and able to meet the terms of the listing.
Option
A right given for consideration to purchase or lease a property upon specified terms within a specified time.
Optionee
The one obtaining the option right
Optionor
The one granting the option to another
Ordinance
A legislative enactment of a city or county, such as zoning
Ownership, Sole
Similar to the common Law term ownership in severalty, it simply means the property is owned by one person or entity.
Package Mortgage
A mortgage commonly used in subdivision developments whereby chattels such as appliances are "packaged" into the mortgage along with the real property.
Parole
Oral; verbal
Parole Evidence
Verbal testimony of a witness.
Parole Evidence Rule
A rule of evidence that states that a written agreement in the final expression of that agreement and it can not be contradicted or modified by any prior oral or written negotiations. The contract says what the contract says; PERIOD.
Partial Taking
The taking of a portion of a piece of property through condemnation.
Partition
Court proceedings by which co-owners of commonly owned property seek to sever their common ownership.
Partition by Licitation
A judicial order to sell property at a cash sale to the highest bidder and divide the proceeds fractionally among co-owners.
Partition in Kind
A judicial order to divide the property physically and place each undivided owner in sole ownership of 100% of a portion of said property
Partnership
a contract between two or more persons to carry on as co-owners of a business, and to share the profits in certain proportions.
Party Wall
A wall erected on the line between adjoining properties which are under separate ownership, for the use of both owners.
Patent
A conveyance for the transfer of title to land owned by the government; land patent.
Percentage Lease
a lease of property in which the rental is based upon the volume of gross sales made on the leased premises.
Periodic Tenancy
Tenancy of property for an indefinite period which can be terminated by either party with proper notice.
Personal Property
Any property not real property; personalty
Physical Deterioration
Loss in value (depreciation) resulting from wear and tear or deferred maintenance.
Planned Unit Development
A development and zoning concept which is designed to produce a high density of dwelling units with maximum utilization of open spaces.
Plat
A plan or map of a certain piece or pieces of land.
Plottage
The land increment produced by combining smaller individually owned plots into a large tract under a single ownership; see assemblage.
Points
see Discounts Points
Police Power
The inherent right or a government to enact such legislation as may be deemed necessary to protect and promote the health, safety and general welfare of the public.
Power of Attorney
A written instrument authorizing a person to act as the agent on behalf of another to the extent indicated in the instrument.
Prepayment Clause
The clause in a mortgage or note stating the penalty, if any, for payment before it actually becomes due.
Prescription
Title obtained by possession for a prescribed period; prescriptive rights.
Primary Money Market
The source of loan funds available directly to borrowers, whether for first or second mortgages.
Princial
The employer of an agent or broker; a sum of money owned as a debt upon which interest is calculated.
Principal Meridian
A meridian which serves as reference for other meridians; a part of the rectangular method of survey.
Probate
An action of the court to determine the validity and legality of a last will and testament.
Procuring Cause
The cause of a series of events which leads to the consummation of a sale.
Promissory Note
A written promise to pay a certain sum of money at a definite date in the future.
Property Management Agreement
An employment contract between an income producing property owner and a real estate broker, appointing the broker as the owner's general agent for the purpose of leasing and managing the property.
Property manager
A person hired by a property owner to administer, market, and maintain property, especially rental property.
Property Taxation
See: Tax, Property
Proprietorship
A business held by a person who has legal title or exclusive right there to.
Prorate
To divide or distribute proportionately; to divide monies, usually at time of closing, proportionately between seller and buyer.
Prospectus
A printed statement distributed to describe and to advertise a new business venture, a real estate project or stock issue.
Puffing
Superlative statements about the quality of a property that should not be considered assertion of fact.
Pur Autre Vie
For the life of another. A life estate that is measured by the life of someone other than the grantor.
Purchase Money Mortgage
A mortgage on property given by a buyer, either to the seller or to a third party in order to secure a portion of the purchase price.
Quiet Enjoyment
The right of an owener or tenant legally in possession to the use of property without interference from the landlord, or grantor, or anyone claiming through him.
Quiet-Title Action
A lawsuit to determine who has title to a piece of property, or to remove a cloud from the title.
Quitclaim Deed
A deed containing no warranties or covenants which relinquishes any interest, title or claim in proerty the grantor may have, if any.
Range
A strip of land six miles wide, determined by government survey, running north and south.
Ready, Willing, Able
A person who is prepared, financially able, and willing to enter into a binding contract.
Real Estate
The land and everything permanently attached to it whether natural or artificial.
Receiver
A court appointed custodian who holds property for the court, pending final disposition of the matter before the court.
Rescission
The annulling, revocation, or repealing of a contract by mutual consent of the parties, or for cause by either party to the contract, and returning the parties to their original position.
Rescission Clause
A clause occasionally found in an agreement of sale which requires the seller to return all of the buyer's payments less costs and fair rental value in the event the buyer defaults.
Reconciliation
The final step in an appraisal, when the appraiser assembles and interprets the data in order to arrive at a final value estimate. Also called correlation.
Reconveyance
A conveyance to the land owner of the title held by a trustee under a deed of trust.
Recording
The act of writing or entering into a book of public records, which constitutes notice to all persons of the rights or claims contained in the instrument; often called constructive notice or legal notice.
Rectangular Survey
The government system of land survey noted for accuracy, adapted to the measurement of extensive territory.
Redlining
Refusal by a lender to make loans secured by property in a certain neighborhood because of the racial or ethnic composition of the neighborhood, in violation of fair lending laws.
Regression
An appraisal principle which holds that a property of noticeably lower quality than those around it will tend to decrease the value of those neighboring properties; the opposite of the principle of progression.
Regulation Z
The Federal Reserve Board's regulation that implements the Truth in Lending Act.
Release
The relinquishment or surrender of a right, claim, or interest.
Release Clause
A clause in a blanket mortgage which gives the property owner the right to pay off a portion of the indebtedness, thereby freeing a portion of his property from the mortgage.
Release of Mortgage
The instrument given by the mortgagee to the mortgagor indication discharge of the martgage, stating that the obligation has been fulfilled and the debt is paid off.
Reliction
Gradual recession of water from the usual watermark.
Remainder
A future interest that becomes possessory when a life estate terminates, and that is held by someone other than the grantor of the life estate; as opposed to a reversion, which is a future interest held by the grantor (or his or her successors in interest). Often called an estate in remainder.
Remainderman
The person who has an estate in remainder.
Replacement Cost
In appraisal, the current cost of constructing a building with the same utility as the subject property with modern materials and construction methods.
Reproduction Cost
In appraisal, the cost of constructing a replica (an exact duplicate) materials and construction methods that were origianlly used, but at current prices.
Rescind
To annul; cancel
Reservation
A right retained by a vendor on conveying property.
Restriction
A clause in a deed or other written instrument limiting the use to which the proerty may be put.
Restrictive Covenants
A promise to do or not do an act relating to real property, especially a promise that runs with the land; usually an owner's promise not to use property in a specified manner.
Reversion
The residue of an estate left to the grantor or his heirs after termination of all prior estates and interests; the right of a lessor to recover possession of leased proerty upon the tremination of the lease, with all subsequent right to use and enjoy the property.
Reversionary Ineterest
A present right to future possession of an estate.
Revocation
The act of recalling some agreement, power or interest previously given.
Right of Way
An easement or right of passage over another's land.
Riparian Rights
The right of a landowner to the use of water on or adjacent to his land.
Running with the Land
A covenant which extends beyond the original parties to an agreement and binds all subsequent paries; such as an easement appurtenant.
Sale and Leaseback
The sale and subsequent leasing back by the seller-lessee.
Sandwich Leaseback
A leasehold interest of a sub-lessor which lies between the primary lease (owner) and he operating lease (user).
Satisfaction of Mortgage
An instrument used when a lien is paid off and satisfied on the records; also called martgage satisfaction.
Scarcity
A limited or inadequate supply of something; this is one of the four elements of value (along with utility,demand, and transferability).
Secondary Money Market
The marketplace for the sale and purchase of existing mortgages.
Section
A section of land established by government survey containing 640 acres, or 1 square mile. Also, a portion of a tax map description.
Security Deposit
A deposit made to assure performance of an obligation, usually by a lessee.
Seisin
Actual possession of a freehold estate; ownership. Sometimes spelled seisin or seizen.
Servient Tenement
Property burden by an easement. In other words, the owner of the servient tenement (the servient tenant) must allow someone who has an easement (the dominant tenement) to use the property.
Servitude
A right in, on, over, an through the property of another
Setback
An ordinance prohibiting the erection of a building or structure between the curb or other established line and the setback line; the distance a house must be set back from the street in accordance with local zoning rules.
Severalty
Sole or independent ownership, (common law term).
Severance
1. Termination of joint tenancy. 2. The permanent removal of a natural attachement, fixture, or appurtenance from real property, which transforms the item into personal property.
Severance Damages
Damages paid to an owner when his property has been partially taken by condemnation, thus reducing the highest and best use of the remaining land.
Sheriff's Deed Sale
A judicial sale ordered to finalize the decision of a court of justice wherein the property in question must be sold to the highest bidder for a cash at auction to satisfy the rights of one court has deemed injured. A Sheriff's deed is a document given a purchaser at a Sheriff's Sale which conveys title.
Special agent
A person who is authorized to perform only certain specified functions on behalf of his principal.
Special Assessment
An assessment generally made against only those specific parcels of realty directly benefiting there from.
Special Warranty Deeds
A warranty in which the grantor warrants title only against defects that may have arisen during his or her period of ownership. Also called a special warranty deed.
Specific Lien
A lien which is applicable to one property in particular versus a general lien which applies to all property of the individual involved.
Specific Performance
A remedy which the court will grant in certain cases, compelling the defendant to perform or carry out the terms of a valid, existing agreement or contract.
Spot Zoning
A rezone of one property or a small area within a neighborhood.
Square Foot Method
In appraisal, a method of estimating the replacement cost of a structure; it involves multiplying the cost per square foot of a recently built comparable structure by the number of square feet in the subject structure.
Statue
A law established by an act of the legislature.
Statute of Frauds
State law requires among other things that certain contracts relating to real estate must be in writing to be enforceable at law.
Statue of Limitations
Laws setting forth the period of time in which suit can be brought for a particular suit.
Steering
Directing prospective buyers or tenants into or away from certain areas on illegal discrimination grounds.
Step-up Lease
A lease with fixed increases at stated intervals, or increases based upon periodic appraisals at stated times; graduated lease; graded lease.
Straight Line Depreciation
Setting aside or allowing a fixed sum of money each year to offset replacement of improvements when needed.
Subdivision
A tract of land divided into lots suitable for home building purpose.
Subdivision Regulation
State and local laws that must be complied with before land can be subdivided.
Subject to
When a purchaser takes property subject to mortgage, he or she is not personally liable for paying off the loan; in case of default, however, the property can still be foreclosed on.
Sublease
A lease given by a lessee for a portion of the unexpired balance of his term, or one given for a portion of the leased premises.
Subordination Clause
A clause in a mortgage or lease stating that the rights of the holder shall be secondary or subordinate to a subsequent encumbrance.
Subrogation
The substitution of one person in place of another with reference to a lawful claim, demand or right, so that the succeeds to such rights of the other.
Substitution
A principle of appraisal holding that the maximum value of a property is set by how much it would cost to obtain another property that is equally desirable, assuming that there would not be a long delay or signigicant incidental expenses involved in obtaining the substitute.
Surety
One who becomes a guarantor for another
Surplus Productivity
A principal of appraisal which holds that the net income that remains after paying the proper costs of labor, organization, and capital is credited to the land and tends to set its value.
Surrender
The cancellation of a lease by an act of mutual consent of lessor and lessee.
Survey
The process by which a parcel of land is measured and is't area ascertained.
Syndication
Multiple ownership of an investment. Usually in the form of a limited partnership.
Take-out Financing
Permanent of long-term financing of individual condominium units for their respective buyer.
Tax, Property
1. The general real estate tax. 2. Any ad valorem tax levied on real or personal property. Tax
Tax Deed
A deed of property sold by a government unit for non-payment of taxes.
Tax Sale
A sale of property, usually at auction, for non-payment of assessed taxes.
Tenancy at Sufferance
A holdover tenant.
Tenancy at Will
The right to use and possess until right is terminated by either party.
Tenancy by the Entirety
Joint ownership by husband and wife. Upon the death of one, the other inherits the entire estate.
Tenancy in Common
See "ownership in with a conveyance of the land"
Tenement
The written declaration of one's last will.
Testate
Leaving a will upon death
Time is of the Essence
In a contract, a requirement of punctual performance
Timeshare
An ownership arrangement in which co-owners each have an exclusive right to use a condominium unit (or other property) for a specified time period each year.
Title
Ownership rights to real estate. Evidenced by the conveyance document.
Title Insurance
A policy of insurance which indemnifies the holder for loss sustained by reason of a defect in the title provided the loss does not result from a defect excluded by the policy provisions.
Title Theory
The theory holding that a mortage gives the lender legal title to the security property while the debt is being repaid. Most states follow lien theory instead. Compare: lien theory.
Tort
A negligent or intentional wrong; a wrongful act; violation of a legal right.
Township
A section of land established by government survey that is six miles long, six miles wide and containing 36 sections each one mile square.
Trade Fixture
Articles of personal property annexed to real property, but which are necessary to the carrying on of a trade and are movable by the owner or tenant when he leaves.
Transferability
If an item is transferable, then ownership and possession of that item can be conveyed from one person to another, In appraisal, transferability is one of the four elements of value, along with utility, scarcity and demand.
Trespass
Wrongful invasion of land by one having no lawful right to enter.
Trust Deed
A deed given by borrower to trustee to be held pending fulfullment of an obligation.
Trustee
One who holds property in trust for another to secure the performance of an obligation.
Trustor
The borrower on a deed or trust. Also called the grantor.
Truth in Lending
A federal law designed to let borrowers know the exact cost of obtaining credit; a disclosure device.
Undivided Interest
Title to property owned by two or more persons, none of whom are entitled to claim or possess any specific part.
Undue Influence
Taking any advantage of another by playing on his weakness or distress
Unilateral Contact
A contract whereby only one party is obligated to perform his obligation to another.
Unimproved Land
Land upon which no buildings have been constructed.
United States Government Survey System
A method of describing or locating real property by reference to the governmental survey; rectangular survey system.
Unmarketable Title
A title containing substantial defects which might cause a prospective purchaser to suffer title litigation and possible loss.
Usury
Charging a rate on interest on a loan grater than that permitted by law.
Utility
The ability of an item to satisfy some need and/or arouse a desire from possession. In appraisal, one of the four elements of value, with scarcity, demand, and transferablility.
Valid
Having binding force; legally sufficient and authorized by law.
Value
Generally, how much something is worth; the present worth of future benefits. In real estate, the term is most often used to refer to market value.
Valuation
The estimated worth of property
Variance
Permission obtained from zoning authorities permitting the construction of a building or structure that is forbidden by present zoning ordinances; a departure from the general rule.
Vendee
The purchaser; buyer
Vendor
The seller.
Verify
To confirm or substantiate by oath.
Veterans Admininstration
An agency of the Federal Government, whose activities include guaranteed repayment of certain loans in the event of default.
Void
To have no force or effect; that which is unenforceable.
Voidable
That which is capable of being adjudged void, but is not void unless action is taken to maek it so. Able to be made void.
Voluntary Lien
Any lien placed on property with consent of, or as a result of, the voluntary act of the owner, e.g. a mortgage.
Waive
To relinquish, or abandon; the abandonment of some claim or right.
Warranty Deed
A deed in which the grantor full warrants a good clear title to the property; a deed that contains convenants of title. (Sale with warranty in LA)
Waste
The right to use water from a body of water. See: Appropriation, Prior, Littoral Rights; Riparian Rights.
Wrap Around Mortgage
A wrap around mortgage is a sometimes used vehicle to provide secondary or additional financing. It is a mortgage which includes within its lien an existing or prior mortgage (it wraps around the existing obligation). The wrap around mortgage assumes the existing or prior mortgage, includes it with any additional financing being provided, creates a new mortgage for the total amount and, therefore, advances to a primary position. The mortgagor then makes one payment for the total amount to the wrap around mortgage, who in turn maintains the debt service on the prior obligation.
Writ of Execution
A writ or court authorizing and directing an officer of the court to carry out the judgment or decree of the court.
Zone
An area set aside for specific use subject to certain restrictions or restraints; aslo part of tax map discription.
Zoning
An act of the city or country authorities by exercise of police power in regulating, controlling or specifying the type of use to which property may be put in specific areas.
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