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ABSTRACT OF TITLE
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A concise history that summarizes the transfers of a particular parcel of real estate, including all claims that could be made against it. It determines that whether the seller of the property in fact owns the property and has a free-and-clear title.
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ACCELERATION CLAUSE
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The provision in a credit agreement, such as a mortgage or deed of trust that can be enforced to make the entire debt due immediately if certain conditions arise before the time that payment would otherwise be due. The agreement may call for acceleration whenever there is a default of any important obligation.
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ACCESSION
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The increase in value of property as a result of the annexation of fixtures or the accretion by means of natural growth and the right of a proprietor to ownership of subsequent addition or increase.
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ACCRETION
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An increase of land by gradual external addition, fusion, or inclusion.
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ACCRUED ITEMS
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Items for which the firm has been realizing revenue or expense without yet observing an actual transaction that would result in a journal entry. For instance interest on a mortgage loan or taxes on real property.
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ACKNOWLEDGEMENT
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A formal declaration made to authoritative witnesses to ensure legal validity. It could be a duly authorized officer, usually a notary public.
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ACRE
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A measure of land equal to 43,560 square feet, 4,840 square yards, 4,047 square meters, 160 square rods or 0.4047 hectares.
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ACTUAL EVICTION
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The physical expulsion of a tenant from the leased premises; the tenant is relieved of any further duty to pay rent.
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ACTUAL NOTICE
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Conveying facts to a person with the intention to explain that person of a proceeding in which his or her interests are involved. It is a direct knowledge of some fact that he or she has a right to know and which the informer has a legal duty to communicate.
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ADJUSTABLE-RATE MORTGAGE (ARM)
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A mortgage whose interest rate is starts fluctuating at periodic intervals according to the prevailing interest rates in the market, usually one tied to a bank or savings and loan association cost-of-funds index.
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AD VALOREM TAX
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A tax based on the assessed value of real estate or personal property. Ad Valorem taxes can be real estate tax or even duty on imported items.
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ADVERSE POSSESSION
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A method of gaining legal title to real property by the actual, open, hostile, and continuous possession of it to the exclusion of its true owner for the period prescribed by state law. Possession for a statutory period may be a means of acquiring title to real property by occupying it for a period of time.
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AFFIDAVIT OF TITLE
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A written statement, made under oath by a seller or grantor of real property and acknowledged by a notary public, in which the grantor
(1) identifies himself or herself and indicates marital status,
(2) certifies that since the examination of the title on the date of the contracts no defects have occurred in the title and
(3) certifies that he or she is in possession of the property (if applicable).
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AGENCY
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Agency separates and regulates the relationships between:
(1) Agents and Principals;
(2) Agents and the Third Parties with whom they deal on their Principals' behalf; and
(3) Principals and the Third Parties when the Agents purport to deal on their behalf.
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AGENCY COUPLED WITH AN INTEREST
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When agent has vested interest in the s/matter of the agency & authority to exercise power over it; irrevocable during life & doesn't authority doesn't end on death.
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AGENT
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An Agent is a person who is authorized to act on behalf of another (called the Principal) to create a legal relationship e.g. they may hold a power of attorney or have a professional relationship, say, as lawyer and client.
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AIR LOT
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A designated airspace over a piece of land. An air lot, like surface property, may be transferred.
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AIR RIGHTS
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Air rights are a kind of development right in real estate to use or develop the open space above a property. Generally speaking, owning or renting land or a building gives one the right to use the space above the property.
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ALIENATION
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The act of transferring property or title to it to another. It may be voluntary, such as by gift or sale, or involuntary, as through eminent domain or adverse possession.
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ALIENATION CLAUSE
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A provision in a document permitting or forbidding a person from transferring property that is the subject of the document. In effect this clause prevents the borrower from assigning the debt without the lender's approval.
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ALLODIAL SYSTEM
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A system allowing free and full ownership of land with all rights pertaining to it by individuals. US real property law is based on an allodial system where ownership of rights in land are vested in a sovereign.
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AMERICAN LAND TITLE ASSOCIATION (ALTA) POLICY
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A title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a new real estate loan.
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AMORTIZED LOAN
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The act of reducing a debt through installments, to reduce a financial obligation by making payments against the principal balance in installments or regular transfers over the term of the loan.
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ANNUAL PERCENTAGE RATE (APR)
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The relationship of the total finance charges associated with a loan. This must be disclosed to borrowers by lenders under the Truth-in-Lending Act.
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ANTICIPATION
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The use or assignment of funds, especially from a trust fund, before they are legitimately available for use.
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ANTITRUST LAWS
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Laws designed to preserve and maintain business competition by making illegal certain private conspiracies and combinations. Most violations of antitrust laws in the real estate business involve either price-fixing or allocation of customers or markets. Laws in the USA view economic competition as a condition in which fair prices can be determined through market forces without the interference from interests that would control them for private gain.
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APPRAISAL
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An examination that formulates and helps support an opinion about the quantity, quality or value of real property. Usually a professional appraiser is required to perform an examination and render an opinion using various methods like cost approach, income approach, market approach, arbitrage etc.
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APPRECIATION
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A rise in value or price, of a property due to economic or related causes, especially over time. It can be either temporary or permanent; opposite of depreciation.
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APPURTENANCE
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A right, privilege, or property that is considered incident to the principal property for purposes such as passage of title, conveyance, or inheritance.
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APPURTENANT EASEMENT
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An appurtenant easement is a right attached to the benefited property (dominant estate). Because an appurtenant easement is viewed as attached to the property, an appurtenant easement is unaffected by a change in ownership.
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ASSEMBLAGE
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The combining of two or more adjoining lots into one larger tract to increase their total value.
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ASSESSMENT
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An expert or official valuation of real property for tax purposes based on appraisal.
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ASSIGNMENT
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The transfer of a claim, right, interest, or property from one to another in writing of interest in a bond, mortgage, lease or other instrument.
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ASSUMPTION OF MORTGAGE
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An obligation undertaken by the purchaser of property to be personally liable for payment of an existing mortgage. "Assumption of Mortgage" may be used when a mortgagor is in financial difficulty and desires to sell the property to avoid foreclosure.
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ATTACHMENT
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Legal seizure of property. The document by which a court orders such a seizure may be called a writ of attachment or an order of attachment.
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ATTORNEY'S OPINION OF TITLE
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An abstract of title examined by an attorney and certified, in his or her opinion, to be an accurate statement of the facts concerning the property ownership. The attorney's opinion of title does not insure against undisclosed defects nor does it insure marketable title.
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AUTOMATIC EXTENSION
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A section in a listing agreement that states that the agreement will remain in existence automatically for a certain period of time after its expiration date. In many states, use of this clause is discouraged or prohibited.
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AVULSION
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The sudden and unexpected tearing away of land, due to a violent action of nature, such as a flood, earthquake, volcanic action or when a river redirects.
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BALANCE
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The assessment principle that confirms that the greatest value in a property will take place when the type and size of the improvements are proportional to each other as well as the land.
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BALLOON PAYMENT
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A large final payment of a mortgage loan that is significantly larger than the regular installment because the loan amount was not fully amortized. Some states restrict the use of balloon payments to loans involving consumers with irregular or seasonal incomes.
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BARGAIN AND SALE DEED
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Characteristically it is used in cases of title transfer. A grantor implies that they have or have had an interest in the property or other encumbrances. The grantor may add warranties to the deed at his or her discretion.
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BASE LINE
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An imaginary line serving as a basis, as for measurement, calculation, or location used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.
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BASIS
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The stated value of an asset used to resolve annual depreciation or cost recovery and gain or loss on when an asset is eventually sold.
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BENCH MARK
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A surveyor’s mark or point on a stationary object of previously determined position and elevation established for use in surveys.
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BENEFICIARY
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(1) The person for whom a trust is created and who thereby receives the benefits of the trust.
(2) A beneficiary can be a spouse, child, charity or any entity or person to whom the property owner leave his or her possessions and assets.
(3) A lender in a deed of trust loan transaction.
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BINDER OR "OFFER TO PURCHASE"
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A preliminary agreement that is formed by the receipt of earnest money (an advance payment that confirms a contract between a buyer and seller) for the purchase of real property as evidence of the purchaser's good faith and intention to complete the transaction. A binder secures the right to purchase real estate upon agreed terms for a limited period of time. If the buyer changes his mind or fails to purchase, the earnest money is forfeited unless the binder clearly provides that it is to be refunded.
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BLANKET LOAN
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A blanket loan, or blanket mortgage, covers more than one parcel of real estate, providing for each parcel's partial release from the mortgage lien upon repayment of a definite portion of the debt.
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BLOCKBUSTING
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The illegal practice of inducing panic selling among white homeowners to sell their assets at inflated prices by making representations that minority groups of a particular race or national origin will move into the neighborhood, causing property values to decline.
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BLUE-SKY LAWS
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Common name for state and federal statutes regulating and supervising the sale of investment securities and offerings to protect citizen-investors from investing in fraudulent organizations.
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BOOT
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Money or property received in a like-kind exchange to make up any difference in value or equity between two properties.
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BRANCH OFFICE
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Another venue of business apart from the main office from which real estate business is conducted. A branch office is usually operated by a licensed real estate broker working on behalf of the broker.
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BREACH OF CONTRACT
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Breach of contract is a legal concept in which a binding agreement is not followed by one or more of the parties by non-performance or interference or violation of any terms or conditions in a contract without legal excuse. It may provoke a lawsuit, in which an aggrieved party pleads for a financial compensation for the loss brought about by the breach.
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BROKER
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An intermediary to plan and organize sales or negotiate contracts, purchases, or sales on behalf of others for a fee or commission.
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BROKERAGE
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The bringing together of parties interested in buying, selling, exchanging, or leasing real property for a commission or fee.
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BUFFER ZONE
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A strip of land that serves the purpose of keeping two or more other areas distant from one another (e.g., residential from commercial). They often result in large uninhabited regions (similar to nature parks).
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BUILDING CODE
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A decree that specifies minimum standards of how buildings should be constructed to ensure a level of safety in a jurisdiction.
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BUILDING PERMIT
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The written governmental approval that must be obtained for the construction, substantial repairing of an existing structure or demolition of any building. Building permits are obtained prior to the start of construction and should comply the building codes and zoning ordinances.
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BUNDLE OF LEGAL RIGHTS
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The concept of land ownership that includes ownership of all legal rights to the land--for example, when Real Property is purchased the bundle of rights; such as the right of occupancy, use and enjoyment, the right to sell in whole or in part, the right to control the use, the right to bequeath, the right to lease any or all of the rights, the right to the benefits derived by occupancy and use of the property, etc. actually are passed from the seller to the buyer.
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BUYDOWN
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A mortgage financing technique used to reduce the monthly payments for the first few years of a loan. The borrower "buys down" the interest rate on a mortgage by paying discount points up front to buy down or lower the effective interest rate paid by the buyer, thus reducing the monthly payments for a set time. The seller may increase the sales price to cover the cost of the buydown.
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BUYER-AGENCY AGREEMENT
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A principal-agent relationship in which the broker is the agent for the buyer and is financially obliged to the buyer. The broker represents the buyer under the law of agency.
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CAPITAL GAIN
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A profit earned from the sale of an asset such as stocks, bonds, mutual funds and real estate between the time the asset was purchased and the time the asset was sold.
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CAPITALIZATION
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An arithmetical process for ascertaining the value of a property using a proper investment rate of return and the net income expected to be produced by the property. Capitalizing the interest increases the monthly payment amount that you will eventually have to repay.
It is expressed as Income/Rate = Value Rate
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CAPITALIZATION RATE
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The rate of expected return from the net income that a property will produce on the owner's investment. It is a ratio of income to value and is expressed as a percentage.
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CASH FLOW
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Difference between cash in (income) vs. cash out (expenses). The amount of cash earned after, after deducting all operating and fixed expenses from the gross income. It is calculated by adding: net after-tax income plus any bookkeeping expenses (amounts charged off for depreciation, depletion, amortization, and charges to reserves) that result in items being deducted but not paid out in cash. When expenses exceed income, a negative cash flow results.
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CASH RENT
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In an agricultural lease, an arrangement in which a farm operator rents a piece of land from its owner for a set per-acre price as opposed to sharecropping.
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CAVEAT EMPTOR
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A Latin phrase meaning "Let the buyer beware," stating that the buyer alone is responsible for assessing the quality of a purchase before buying, unless protected by warranty. This puts the burden onto the buyer to be satisfied with the property before purchasing.
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CERTIFICATE OF REASONABLE VALUE (CRV)
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An appraisal of property for the purpose of insurance by the Veteran's Administration. Once the appraisal has been performed on a property being bought with a VA loan, the Veterans Administration issues a CRV.
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CERTIFICATE OF SALE
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Document issued by the court at a judicial sale, to the winning bidder at a foreclosure sale stating their privileges to the property once the borrowers redemption period has expired and that the holder paid the property taxes for that interim period.
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CERTIFICATE OF TITLE
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A statement of opinion on the status of the title to a parcel of real property, based on an examination of specified public records. It is considered a conclusive evidence of the present ownership and state of the title to the property described therein. Before the title is transferred at closing, it should be clear and free of all liens or other claims.
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CHAIN OF TITLE
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A chronological list of documents comprising the record history of the transfers of title to a piece of real property over the years. It starts with the earliest existing document and ends whereby the present holder of real property derives title.
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CHANGE
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The appraisal principle that holds that no physical or economic condition remains constant.
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CIVIL RIGHTS ACT OF 1866
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An act that prohibits racial discrimination in the sale and rental of housing.
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CLOSING STATEMENT
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A detailed statement made by a broker or an escrow company of cash accounting of a real estate transaction that reflects the financial position of the buyer or seller and the costs paid by each party.
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CLOUD ON TITLE
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A claim, lien or encumbrance that may affect or impair the title to real property or make the owner’s title to property doubtful because of their apparent or probable validity. Usually clouds on title cannot be removed except by a quitclaim deed, release, or court action. In that case property can be transferred but its market value may be reduced.
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CLUSTERING
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The grouping of homesites in a location within a subdivision on smaller lots than normal, with the remaining land used as common areas. Kind of relational grouping of buyers and suppliers.
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CODE OF ETHICS
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A written system of standards for ethical conduct.
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CODICIL
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A supplement or an addition to a will, executed with the same formalities as a will that normally does not modify, delete, qualify, or revoke provisions contained in it.
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COINSURANCE CLAUSE
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A clause in insurance policies or commercial property that requires the insured to carry at least 80 percent of the total’s property's actual replacement cost. 80-20 would mean that the insurer would pay 80% and the insured would pay 20% of all losses. Also known as Average or Contribution Clause.
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COMMINGLING
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The unauthorized and improper act by a real estate broker of mixing of money held in trust which are client customer monies with other funds which are personal or business monies. By law brokers are required to maintain a separate trust or escrow account for other parties' funds held temporarily by the broker.
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COMMISSION
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Payment to a broker for services rendered, such as arranging the purchase or sale of a security or real estate. It is usually a percentage of the selling price of the property and vary widely from broker to broker.
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COMMON ELEMENTS
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Parts of a property that are necessary or convenient to the existence, maintenance and safety of a condominium or are normally in common use by all of the condominium residents. A common area in a condominium project is owned by the condominium corporation for the use of all unit owners.
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COMMON LAW
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The system of laws based on custom, court decisions, on the doctrines implied in those decisions and usages.
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COMMUNITY PROPERTY
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A form of property ownership under which property acquired by a couple during marriage is presumed to be owned jointly even if it was originally acquired in the name of only one partner. A leftover of Spanish law is found largely in western states.
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COMPARABLES
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Properties in assessing or establishing the fair market value of a property under consideration. They are used in appraisal reports that are substantially equivalent in size, location and amenities.
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COMPETITION
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The appraisal principle that states that excess profits generate competition.
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COMPETITIVE MARKET ANALYSIS (CMA)
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A realistic estimate of a home’s current market value based on recent sales of comparative home with similar features. This is not an appraisal. It is an opinion of value.
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CONDEMNATION
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A judicial or administrative proceeding of taking private property for public use through the right of eminent domain with adequate compensation to the owner.
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CONDITIONAL-USE PERMIT
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A CONDITIONAL USE PERMIT (CUP) is a written governmental permission allowing a use inconsistent with zoning after considering special uses which may be essential or desirable to a particular community such as locating an emergency medical facility in a predominantly residential area. It also enables a municipality to control certain uses which could have disadvantageous effects on the community.
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CONDOMINIUM
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A form of housing-tenure where the absolute ownership of a unit in a multi-unit building is divided into individual units and sold with shared ownership of the common areas and sometimes the exclusive use of certain limited common areas. Ownership is controlled by the condominium management.
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CONFESSION OF JUDGEMENT CLAUSE
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Permits judgment to be entered against a debtor without the creditor's having to institute legal proceedings. If the debtor has a valid defense to the landlord's suit, the debtor cannot present that defense. This procedure may be unenforceable. A debtor should see an attorney if he/she receives a notice that judgement has been entered against him/her.
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CONFORMITY
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The appraisal principle that holds that the greater the compliance among properties in an area, the better they will hold their value.
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CONSIDERATION
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Consideration is a central concept and an essential element for the formation of a contract. It is given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.
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CONSTRUCTIVE EVICTION
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Any disturbance by the landlord which interfere with a tenant's use and enjoyment of the rented premises to such an extent that the tenant is, at law, considered to have been improperly forced out of the premises. Here the tenant can also be forced to leave leased premises whereby they are rendered unsuitable for occupancy and are uninhabitable. In such a case, the lease is terminated and the tenant is not liable for further payment of rent.
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CONSTRUCTIVE NOTICE
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Notice given to the world by recorded documents with a public official. It is a legal fiction used in the law of both common law and civil law systems to connote that a person or entity is legally presumed to have knowledge of such documents and their contents, even if they have no actual knowledge of it. Possession of property is also considered constructive notice that the person in possession has an interest in the property.
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CONTINGENCY
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A contractual provision stating that of all of the terms of the contract will be altered or voided before the contract becomes legally binding.
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CONTRACT
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A legally enforceable promise or set of promises to perform or to refrain from performing some specified act. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed. For a contract to be valid, both parties must indicate that they agree to its terms.
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CONTRIBUTION
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The appraisal principle that states that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from that value. It is an unconditional transfer of cash or other assets to an entity in a voluntary nonreciprocal transfer by another entity, acting other than as an owner.
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CONVENTIONAL LOAN
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A loan that requires no insurance or guarantee.
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CONVEYANCE
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A document that transfers title to real property from one person to another by deed. The term is also used in describing the act by which a property transfer is effected. It may also include most of the instruments by which an interest in real estate is created, mortgaged or assigned.
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COOPERATIVE
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A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property; each stockholder is then entitled to live in a specific unit of the structure and is responsible for paying a portion of the loan. It is controlled and operated on a nonprofit basis, a cooperative returns any margins or profits to members on the basis of patronage.
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CO-OWNERSHIP
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Title ownership held by two or more persons.
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CORPORATION
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A legal entity or organization that has powers and liabilities as defined by law. Its rights of doing business are essentially the same as those of an individual. It May be private (ownership held by specific individuals and not traded on a public stock exchange) or public (shares traded on stock exchange). It can own property, incur debts, sue, and be sued. The entity has continuous existence until it is dissolved according to legal procedures.
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CORRECTION LINES
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A rectangular survey system (government survey) for surveying land that uses latitude and longitude lines as references. Correction lines used to correct for the earth's curvature. Every fourth township line (at 24-mile intervals) is used as a correction line on which the intervals between the north and south range lines are remeasured and corrected to a full six miles.
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COST APPROACH
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Cost approach is one of the classical methods of appraisal. The process of estimating the value of a property based on current construction costs, less depreciation, plus land value. The land value is most frequently determined by the sales comparison approach.
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COST RECOVERY
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An Internal Revenue Service term for depreciation.
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COUNTEROFFER
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A response to an offer by one who rejects an unsatisfactory offer. It has the legal effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror. A counteroffer normally terminates the original offer.
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COVENANT
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A solemn contract between two or more parties in which a party or parties pledge to perform or not perform specified acts with regard to property. This written agreement affects the use of land or property written into the title. It is usually found in such real estate documents as deeds, mortgages, leases and contracts for deed. For example, a covenant can impose the obligation on a borrower to make mortgage payments in certain amounts on certain dates.
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COVENANT OF QUIET ENJOYMENT
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The covenant implied by decree by which a landlord guarantees that a tenant may take possession of leased premises and that the landlord will not interfere in the tenant's possession and enjoyment of the demised premises.
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CREDIT
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On a closing statement, an amount entered in a person's favor--either an amount the party has paid or an amount for which the party must be reimbursed. A credit records the increases in liabilities, owners' equity, and revenues as well as the decreases in assets and expenses.
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CURTEST
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A life estate, usually a fractional interest, given by some states to the surviving husband in real estate owned by his deceased wife. A few states still recognize this anachronism.
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DATUM
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A horizontal plane from which heights and depths are measured.
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DEBIT
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On a closing statement, an amount charged; that is, an amount that the debited party must pay.
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DECEDENT
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A person who has died.
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DEDICATION
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The voluntary transfer of private property by its owner to the public for some public use, such as for streets or schools. The owner of the land does not retain any rights that are inconsistent with the complete exercise and enjoyment of the public uses to which the property has been committed.
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DEED
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A legal instrument used to grant a privilege. In real estate it is the method of transferring title to real estate from one person to another.
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DEED IN LIEU OF FORECLOSURE
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A deed given by the mortgagor to the mortgagee to prevent the mortgagee from bringing foreclosure proceedings. The validity of the deed depends to some degree on "fairness" under the circumstances, and adequacy of consideration will be considered. Its main advantage to the borrower is that it immediately releases him from most or all of the personal indebtedness associated with the defaulted loan.
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DEED IN TRUST
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A security instrument whereby real property is given as security for a debt. It grants a trustee under a land trust full power to sell, mortgage and subdivide a parcel of real estate. The beneficiary controls the trustee's use of these powers under the provisions of the trust agreement.
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DEED RESTRICTION
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A clause in a deed which limits the use of the property in certain respects. It carries with it the right to use property in any legal manner, for example, they may limit the density of buildings, dictate the types of structures that can be erected or prevent buildings from being used for specific purposes or even impose limits on the use or occupancy of the real estate. Deed restrictions are often imposed by developers to protect the value of the yet undeveloped property.
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DEFAULT
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Failure to meet the terms of a credit agreement. In mortgage it is the failure to make mortgage payments as agreed to in a commitment based on the terms & conditions and at the designated time set forth in the mortgage or deed of trust. Generally, thirty days after the due date if payment is not received, the mortgage is in default. In this case of nonperformance of duty, the mortgage may give the lender the right to speed up the payments, take possession and receive rents, and start foreclosure.
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DEFEASANCE CLAUSE
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A clause used in leases and mortgages that gives the mortgager the right to redeem his property upon the payment of his entire principle and interest borrowed to the mortgagee. It nullifies a particular right upon the occurrence of a certain condition, such as cancellation of a mortgage upon repayment of the mortgage loan.
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DEFEASIBLE FEE ESTATE
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An estate in which the holder has a fee simple title that may be dissociated from, upon the occurrence or nonoccurrence of a specified event. There are two categories of defeasible fee estates:
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• Fee simple on condition precedent (fee simple determinable) and
• Fee simple on condition subsequent.
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DEFICIENCY JUDGEMENT
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A money judgement against a borrower when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full. The borrower is personally liable for the difference.
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DEMAND
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The amount of goods people are willing and able to buy at a given price; often coupled with supply.
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DENSITY ZONING
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Zoning ordinances by controlling the number of structures per acre to control population density.
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DEPRECIATION
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(1) In appraisal, a loss of value in property due to any cause, including physical deterioration, functional obsolescence and external obsolescence.
(2) In real estate investment, an expense deduction for tax purposes taken over the period of ownership of income property.
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DESCENT
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The conveyance of an estate by inheritance in which an heir succeeds to the property as dictated by the laws of the jurisdiction when no will is left behind.
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DEVELOPER
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A person or company who improves vacant or underused parcels of land into new housing shopping centers or commercial buildings for a profit. A developer organizes and plans the development, supervise its construction and administer all the business elements of the project.
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DEVISE
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Real estate left by will. The donor is the devisor, and the recipient is the devisee.
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DISCOUNT POINT
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A unit of measurement used for various loan charges; normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to permanently lower or acquire down an interest rate.
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DOMINANT TENEMENT
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A property that includes in its ownership the appurtenant right to enjoy the benefit of an easement over a servient tenement for a specific purpose.
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DOWER
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The legal right or interest, recognized in some states, that a wife acquires in the property her husband held or acquired during their marriage. The right becomes exercisable upon the death of the husband; upon his death it can become an interest in land. Dower has been abandoned in most jurisdictions.
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DUAL AGENCY
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Representing both parties by the same real estate agent or broker. In virtually all states it is unethical and illegal for a broker to represent buyer and seller in a real estate transaction without written consent of both.
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DUE-ON-SALE CLAUSE
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An acceleration clause in the mortgage or deed of trust that states that the entire balance to be paid immediately in full if borrower sells or transfers interest in the property.
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DURESS
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Unlawful constraint, threat or action exercised upon a person to enter into an agreement or to perform an act against his or her will. A contract entered into under duress is voidable.
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EARNEST MONEY
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A sum of money deposited by a buyer under the terms of a contract, if he or she is serious about purchasing a home or property. Earnest money is forfeited by the donor if he or she fails to carry out the terms of the contract or agreement.
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EASEMENT
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A right to make limited use of another's real property for a specific purpose, such as for a right-of-way or utilities; an incorporeal interest in land. An easement is granted by the owner of the property for the convenience, or ease, of the person using the property. Common easements include the right maintain a roadway across the property, the right to construct a pipeline under the land, or a power line over the land etc.
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EASEMENT BY CONDEMNATION
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An easement created by the government or government agency that has exercised its right under eminent domain.
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EASEMENT BY NECESSITY
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An easement allowed by law to a land owner to make use of a parcel of real estate of another for a specific purpose; for example, a right of entrance and way out over a grantor's land. Such an easement allow the land owner to enjoy his own land.
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EASEMENT BY PRESCRIPTION
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An easement acquired by continuous, unchallenged use of all or part of a property by the owner of a neighboring or nearby property for a special purpose for the period of time prescribed by state law. It can develop into permanent use if certain conditions are met giving the using owner a legal right to continue that use.
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EASEMENT IN GROSS
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An easement for benefit of an individual apart from ownership of land. An easement that does not benefit a particular tract of land. There is no dominant estate, as the easement attaches personally to the owner, not to the land. For example public utility easements that runs through all parcels of land in an area.
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ECONOMIC LIFE
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The number of years during which an asset will have economic value than its operating or upkeep costs. At the end of this period, the improvements are normally demolished and replaced. Also referred to, seen as Economic Years.
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EMBLEMENTS
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Growing crops such as corn, wheat, rye, potatoes, garden vegetables and other crops that are produced annually, not spontaneously through labor and industry; also called fructus industriales. Even if the lease expires before the crop has matured, the tenant has the right to them. They are deemed to be personal property.
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EMINENT DOMAIN
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The authority of a government or municipal quasi-public body to take property for public use with just compensation to be paid to the owner through a court action called condemnation. A public use is virtually anything that is sanctioned by a federal or state legislative body. Such uses may include roads, parks, reservoirs, schools, hospitals or other public buildings.
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EMPLOYEE
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A person who works for another and receives remuneration in wages, salary, commission, tips, piece-rates or pay-in-kind. S/he works as a direct employee of an employer and has employee status. The employer is obligated to withhold income taxes and social security taxes from the compensation of employees.
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EMPLOYMENT CONTRACT
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An agreement evidencing formal employment between employer and employee or between principal and agent at the commencement of the period of employment. It ascertains the exact nature of their business relationship. In the real estate business this generally takes the form of a listing agreement or management agreement.
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ENABLING ACTS
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State legislation that confers zoning powers on municipal governments.
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ENCROACHMENT
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A building--or some portion of it--a wall or fence for instance, that extends beyond the land of the owner and illegally intrudes on some land of an adjoining owner or a street or alley.
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ENCUMBRANCE
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Anything, such as a mortgage, tax, or judgment lien, an easement, a restriction or liability attached to and binding real property held by someone other than the real estate owner that may diminish the value or use and enjoyment of a property.
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EQUAL CREDIT OPPORTUNITY ACT (ECOA)
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The federal law that prohibits discrimination in the extension of credit because of race, color, religion, national origin, sex, age or marital status.
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EQUALIZATION
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The process for making adjustments to assessed values after considering the fair cash values, for tax purposes in a particular county or taxing district to make them equal to assessments in other counties or districts.
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EQUALIZATION FACTOR
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A factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in line with statewide tax assessments. The multiplication either increases or decreases the locally-assessed value of each parcel. This new value is the equalized assessed value. It adjusts average assessment levels in various counties to the same percentage of full value. The ad valorem tax would be based on this adjusted value.
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EQUITABLE RIGHT OF REDEMPTION
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The right under state law of a defaulted borrower that allows a certain amount of time before the foreclosure sale to pay the outstanding mortgage debt and recover the property.
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EQUITABLE TITLE
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The interest held by a vendee under a contract for deed or an installment contract; to acquire legal title for which she has entered an Agreement to Purchase prior to the completion of the transaction.
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EQUITY
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The difference between the market value of a property and the claims held against it. Equity is computed by subtracting from the property's fair market value the total of the unpaid mortgage balance and any outstanding liens or other debts against the property.
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EROSION
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The gradual wearing away of land or soil by water, wind and general weather conditions; intensified by land-clearing practices related to farming, residential or industrial development, road building, or logging.
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ESCHEAT
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The reversion of property to the state or county, in the event the owner thereof dies without leaving a will (intestate) indicating who is to inherit his or her property, and without relatives to whom the property may pass by lawful descent.
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ESCROW
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The closing of a transaction through a neutral third party called an escrow agent, or escrowee, who receives certain funds and documents to be delivered upon the performance of certain conditions outlined in the escrow instructions. When the transaction is completed, the escrow agent releases the entrusted property.
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ESCROW ACCOUNT
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The trust account established by a broker under the provisions of the license law for the purpose of holding money safely while a sale is in progress. It is often used by lenders to save for property taxes, hazard insurance, mortgage insurance, homeowner's dues, etc.
The funds are held until the consummation or termination of a transaction. Each month a certain portion, called the escrow payment, of your monthly mortgage payment goes into this account. When the taxes and insurance bills are due on your home, the lender pays the bills with funds from this account.
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ESCROW INSTRUCTIONS
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A document that outlines the duties of the escrow agent. These are the instructions signed by both buyer and seller, and which enable an escrow agent to proceed with the payoff of existing liens, title clearance, determining whether the terms and conditions of the Purchase and Sale Agreement have been met, and other functions as required to close the transaction by a specified date.
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ESTATE (TENANCY) AT SUFFERANCE
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The tenancy of a lessee who lawfully comes into possession of a landlord's real estate but who continues to occupy the premises improperly after his or her lease rights have expired.
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ESTATE (TENANCY) AT WILL
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An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite.
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ESTATE (TENANCY) FOR YEARS
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An interest for certain, exact period of time in property leased for a specified consideration.
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ESTATE (TENANCY) FROM PERIOD TO PERIOD
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An interest in leased property that continues from period to period, week to week, month to month or year to year.
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ESTATE IN LAND
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The degree, quantity, nature and extent of interest a person has in real property. It has four basic categories; Freehold estates: rights of ownership; Leasehold estates: rights of possession and use but not ownership; Statutory estates: created by law; Equitable Estates: neither ownership nor possession.
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ESTATE TAXES
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Federal taxes on a decedent's real and personal property. It is assessed on the net value of a decedent's estate before distribution to the heirs. The estate tax is mostly imposed on assets left to heirs if the estate exceeds the exclusion limit. Because the estate tax can be quite high, it requires careful estate planning.
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ESTOPPEL
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Method of creating a legal doctrine blocks a person from taking a position on any fact, which is contrary to a position that same person previously took on that same fact. It prevents a party from denying or alleging a certain fact. The underlying principle behind estoppel is to prevent injustice owing to inconsistency or fraud.
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ESTOPPEL CERTIFICATE
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A signed document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest. It also certifies that certain statements of fact are correct as of the date of the statement and can be relied upon by a third party, a prospective lender or purchaser. Its purpose is to stop a future claim that the amount owed is different from the actual unpaid balance, or that the interest rate is other than the contracted rate.
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ETHICS
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The system of moral principles and rules that becomes standards for professional conduct.
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EVICTION
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A legal process to oust a person from possession of real estate.
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EVIDENCE OF TITLE
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Proof of property ownership; commonly a document such as deed, certificate of title, an abstract of title with lawyer's opinion, title insurance or a Torrens registration certificate.
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EXCHANGE
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A transaction in which all or part of the consideration is the reciprocal transfer of like-kind property (such as real estate for real estate) which has certain tax advantages over a sale.
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EXCLUSIVE-AGENCY LISTING
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A listing contract under which the owner appoints a real estate broker for a designated period of time to sell the property, on the owner's stated terms, for a commission. The owner reserves the right to sell without paying anyone a commission to a prospect who has not been introduced by the broker.
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EXCLUSIVE RIGHT-TO-SELL LISTING
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A listing contract between the owner and the real estate broker in which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time, and gives rights to sell the property on the owner's stated terms, and agrees to pay the broker a commission when the property is sold; even if the owner makes the sale himself or even if the property is sold by anyone during the term of the agreement the broker is paid a commission.
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EXECUTED CONTRACT
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A contract in which all parties have fulfilled their promises and thus performed the contract.
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EXECUTION
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A legal order directing an official to enforce a judgment against the property of a debtor, usually carried out by the seizing and selling of the judgment debtor’s property. Also, an act of signing a legal document.
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EXECUTORY CONTRACT
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A contract in which some or all of the obligations have not yet been completed and something remains to be done by one or more of the parties. For example an unexpired lease.
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EXPRESS AGREEMENT
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An oral or written contract, which state the contract's terms and intentions of the involved parties in words.
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EXTERNAL DEPRECIATION
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Reduction in a property's value caused by outside factors (those that are off the property).
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FAIR HOUSING ACT
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The federal law that prohibits discrimination in all facets of housing based on race, color, religion, sex, handicap, familial status and national origin.
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FARMER'S HOME ADMINISTRATION (FmHA)
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An agency of the federal government that provides credit assistance to farmers and other individuals who live in rural areas.
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FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
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An independent federal agency that insures the deposits in commercial banks.
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FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC)
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A corporation established to purchase primarily conventional mortgage loans in the secondary mortgage market.
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FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA)
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A quasi-government agency established to purchase any kind of mortgage loans in the secondary mortgage market from the primary lenders.
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FEDERAL RESERVE SYSTEM
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United States central banking system, comprising 12 Federal Reserve Banks controlling 12 districts under the Federal Reserve Board, which is responsible for the nation's monetary policy by regulating the supply of money and interest rates.
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FEE SIMPLE ABSOLUTE
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The maximum possible estate in real property that gives the owner the greatest power over the title, continuing forever, subject only to governmental powers. A term now used synonymously with fee simple.
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FEUDAL SYSTEM
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A system of ownership usually associated with precolonial legal and military obligations among the warrior nobility of Europe during the Middle Ages, revolving around the three key concepts of lords, vassals and fiefs.under this system the king or other sovereign is the source of all rights. The right to possess real property was granted by the sovereign to an individual in fief or fee characterized by homage, legal and military service of tenants, and forfeiture.
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FHA LOAN
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A loan insured by the Federal Housing Administration and made by an approved lender in accordance with the FHA's regulations.
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FIDUCIARY
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One in whom trust and confidence is placed; as the relationship between principal and broker (for example, in handling or supervising the affairs or funds of another party). The fiduciary has the responsibility of managing the money for the benefit of the beneficiary (another party) and is responsible for investing the assets until they are turned over to the beneficiary.
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FIDUCIARY RELATIONSHIP
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A relationship of trust and confidence, as between trustee and beneficiary, attorney and client or principal and agent.
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FINANCIAL INSTITUTIONS REFORM, RECOVERY AND ENFORCEMENT ACT (FIRREA)
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This act restructured the savings and loan association regulatory system; enacted in response to the savings and loan crisis of the 1980s.
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FISCAL POLICY
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The federal government's policy in regard to taxation and spending programs to achieve full employment and non-inflationary economy. The balance between taxation and spending programs determines the amount of money the government will withdraw from or feed into the economy to counter economic peaks and slumps.
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FIXTURE
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An item of personal property that has been converted to real property by being permanently affixed to the realty.
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FORECLOSURE
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A legal procedure whereby a mortgagor of real property is deprived of his interest in that property due to failure to comply with terms and conditions of the mortgage. The foreclosure procedure brings the rights of all parties to a conclusion and passes the title in the mortgaged property to either the holder of the mortgage or a third party who may purchase the realty at the foreclosure sale, free of all encumbrances affecting the property subsequent to the mortgage.
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FRACTIONAL SECTION
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A parcel of land less than 160 acres, usually found at the edge of a rectangular survey.
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GAP
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A fault in the chain of title of a particular parcel of real estate; a missing document or conveyance that raises doubt as to the present ownership of the land.
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JOINT VENTURE
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An agreement between two or more businesses to mutually invest in a specific single business or property for a limited duration. Joint venture is similar to a partnership in that it must be created by agreement between the parties to share in the losses and profits of the venture.
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LEASE OPTION
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An alternative financing option under which the tenant has the right to purchase the property either during the lease term or upon the expiration of the initial lease for a specific price within a certain time frame.
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LEASE PURCHASE
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The purchase of real property. Typically done for tax or financing purposes. It assists low- to moderate-income homebuyers to buy the house at the end of the lease period for a price established in advance, with the incremental rent increase being used to form a down payment. Buyers should be cautious of this type of contract since they may lose their extra rent/down payment money if the owners suffer financial setbacks before the purchase has been completed. Often referred to as dollar buy-out or buck-out leases.
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LEGACY
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A disposition of money or personal property bequeath to someone by will.
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LEGAL DESCRIPTION
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A formal description of a specific parcel of real estate which is acceptable to the courts in that state and allows an independent surveyor to locate and identify it. Legal descriptions usually refer to recorded maps, surveys, and bounds or recorded plat (lot and block number) or other public documents.
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LEGALLY COMPETENT PARTIES
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People who are recognized by law as being able to contract with others; those of legal age and sound mind. At least two parties are essential for every valid contract.
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LEVERAGE
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The use of borrowed money to finance an investment that controls property of greater value than the cash invested. High leverage means the rate of return on the investment must be higher than the cost of the borrowed money.
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LEVY
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To assess a property and impose the rate of taxation on a person or property. The amount of taxes to be imposed in a given district. A levy on real property is generally accomplished by giving the defendant and the general public notice that the defendant's property has been encumbered by the court order.
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LICENSE
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(1) A privilege or right granted to a person by a state to operate as a real estate broker or salesperson.
(2) The revocable permission for a temporary use of land--a personal right that cannot be sold.
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LIEN
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A right given by law to certain creditors, to take and hold or sell the property of a defaulting debtor as security or payment for a debt or duty by means of a court sale. A lien affects the ability to transfer ownership.
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LIEN THEORY
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Some states interpret a mortgage as being purely a lien on real property. An assumption of real estate law that gives the mortgagor title to the property and the mortgagee a lien on the property as security for debt repayment. Such claims may include obligations not met or satisfied, judgments, unpaid taxes, materials, or labor.
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LIFE
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Cycle costing In property management, comparing one type of equipment to another based on both purchase cost and operating cost over its expected useful lifetime, as determined by governmental or other appraisal documents.
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LIFE ESTATE
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An estate whose duration is limited to the life of the party holding it, or some other designated person or persons. The estate then reverts back to the grantor or on to a third party. Although it is officially a contract (the holder is called a life tenant), it is treated the same as a fee simple with respect to the limitations upon its use for the duration of the estate.
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LIFE TENANT
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A person in possession of a life estate. Oddly enough, this is a freehold estate because no date can be given for its termination.
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LIQUIDATED DAMAGES
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A sum of money set out in the purchase contract in that event. It is the total compensation to an injured party should the other party infringe the contract. When a real estate deal goes wrong, one party often is entitled to liquidated damages.
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LIQUIDITY
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The ease with which an asset can be turned into cash at a price close to its true value, in a short period of time.
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LIS PENDENS
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A recorded legal document of pending lawsuit giving constructive notice that the title or right of possession of certain real property is in litigation.
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LISTING AGREEMENT
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A contract between an owner (as principal) and a real estate broker (as agent) by which the broker is employed as agent to find a buyer for the owner's real estate to facilitate the sale or lease of a property on the owner's terms. This agreement states the address, list price, other conditions for the sale, term of the listing agreement. A commission is generally payable to the broker upon closing.
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LISTING BROKER
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The broker in a multiple-listing situation from whose office a listing agreement is initiated, as opposed to the cooperating broker, from whose office negotiations leading up to a sale are initiated.
The real estate broker who is responsible for the listing of a property and cooperates with the auction company by allowing the auction agreement to supersede his/her listing agreement. The listing broker and the cooperating broker may be the same person.
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LITTORAL RIGHTS
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(1) A landowner's claim to use water in large navigable lakes and oceans adjacent to his or her property.
(2) The ownership rights to land bordering these bodies of water up to the highwater mark.
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LOAN ORIGINATION FEE
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A fee charged to the borrower by the lender for making a mortgage loan. The fee is usually computed as a percentage of the loan amount.
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LOAN-TO-VALUE RATIO
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The ratio of the mortgage loan to the appraised value of the real estate, usually expressed as a percentage. For purchase loans the value of the property is the appraised value or the purchase price, whichever is less. For refinance loans the value is the appraised value. Loan-to-value ratios can effect interest rates, loan qualifying criteria, and lender requirements for PMI and escrow accounts.
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LOT-AND-BLOCK (RECORDED PLAT) SYSTEM
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A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision. as specified on a recorded subdivision plat.
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MANAGEMENT AGREEMENT
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A contract between the owner of income property and a management firm or individual property manager with an interest in the land to secure its protection or enhancement after accepting periodic payments for acting as supervisor of the affairs of the property.
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MARKET
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The world of commercial activity where goods and services are bought and sold and a price established. Without competition there can’t be any market.
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MARKETABLE TITLE
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Good or clear title is free of objectionable liens that enables an owner to sell his property freely to others and that others will accept without objection. Also known as a merchantable title.
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MARKET VALUE
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The highest price that a buyer would pay and the lowest price a seller would accept on sale of property. It forms most probable sale price of a property in terms of money in a competitive and open market and may be different from the price a property could actually be sold for at a given time.
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MASTER PLAN
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A comprehensive plan to guide the long-term physical development of a particular area.
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MECHANIC'S LIEN
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A statutory lien created by law in favor of contractors, laborers and material men for the purpose of securing priority of payment of the price or value of work performed and materials furnished in building or repairing a structure or personal property.
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MERIDIAN
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One of a set of imaginary lines running north and south and crossing a base line at a definite point, used in the rectangular (government) survey system of property description.
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METES-AND-BOUNDS DESCRIPTION
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A legal description of a parcel of land using distance (metes) and angles/compass directions (bounds), beginning and ending at the same point. It is often used in connection with the Government Survey System.
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MILL
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One-tenth of one cent. In many jurisdictions mill rate is used to assess real estate taxes. For example, a rate of 52 mills would be $0.052 tax for each dollar of assessed valuation of a property.
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MINOR
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Someone who has not reached the age of majority and therefore does not have legal capacity to transfer title to real property.
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MONETARY POLICY
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Actions by the Federal Reserve System to influence the economy by affecting interest rates with the goals of stimulating economic growth, full employment, price stability and balanced trade with other countries. Tools of monetary policy include open market operations, discount policy and reserve requirements.
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MONTH-TO-MONTH TENANCY
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A periodic tenancy in which no written lease is involved, rent being paid monthly. It is automatically renewed each month on the same terms unless either tenant or landlord gives the other the proper amount of notice (usually 30 days) to terminate the agreement. Such a lease may be written or oral.
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MONUMENT
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A permanently placed survey marker such as a stone shaft sunk into the ground to establish real estate boundaries for a metes-and-bounds description.
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MORTGAGE
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A conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien.
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MORTGAGE BANKER
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Mortgage loan companies that directly funds home loans, sells them to investors, arranges monthly payments and handles escrow. It also originate mortgages exclusively for resale in the secondary market.
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MORTGAGE BROKER
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An intermediary between the lender and borrower. The intermediary is a broker or an agent of the lender and receives a fee for this service. A broker arranges financing for borrowers with a variety of lenders.
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MORTGAGEE
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A lender in a mortgage loan transaction.
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MORTGAGE LIEN
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A lien or charge on the property of a mortgagor that secures the underlying debt obligations. It is the unpaid balance on the mortgage loan.
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MORTGAGOR
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A borrower in a mortgage loan transaction.
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MULTIPERIL POLICIES
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Insurance policies that that provides coverage against several potential perils, such as those of a fire, hazard, public liability and casualty.
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MULTIPLE-LISTING CLAUSE
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A provision in an exclusive listing for the authority and obligation on the part of the listing broker to invite participation of members of multiple-listing organization. It is found in most residential listing agreements. It is commonly a two-way contract, in that the listing agent is both authorized and required to post the listed property in the multiple listing service.
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MULTIPLE LISTING SERVICE (MLS)
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A marketing organization run by real estate professionals who agree to share their listing agreements with one another in the hope of procuring ready, willing and able buyers for their properties more quickly than they could on their own. The MLS also deals with commission splitting and other relations between brokers and agents. Most multiple-listing services accept exclusive-right-to-sell or exclusive agency listings from their member brokers.
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NEGOTIABLE INSTRUMENT
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A written promise or order to pay a specific sum of money that may be transferred by endorsement or delivery. The transferee then has the original payee's right to payment.
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NET LEASE
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A lease requiring the tenant to pay not only rent but also operating expenses such as taxes, insurance, maintenance and other costs of the leased property.
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NET LISTING
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A listing based on the net price where the broker's commission is an amount above a net price set by the owner. If that price is not met, a commission is not earned. Under a net listing the broker can offer the property for sale at the highest price obtainable to increase the commission. This type of listing is illegal in many states.
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NET OPERATING INCOME (NOI)
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The income projected for an income-producing property after deducting operating expenses from gross income.
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NONCONFORMING USE
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A use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area. Most nonconforming uses are allowed to continue but may not be expanded or enlarged.
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NON-HOMOGENEITY
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A lack of uniformity; dissimilarity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogeneous.
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NOVATION
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Substituting a new debt or obligation for an old one or substituting new parties to an existing obligation on consent of all people involved.
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NUNCUPATIVE WILL
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An oral will declared in the presence of witnesses by the testator in his or her final illness, made before witnesses and transcribed by another.
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OBSOLESCENCE
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The loss of value due to being out of date (obsolete) as a result of changes in design and use or because of wear, changing technology or user preference. Obsolescence may be functional or economic.
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OCCUPANCY PERMIT
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A permit issued by the appropriate local governing body after the final inspection of a new home by meeting certain safety and health standards to establish that the property is suitable for habitation and there are not any potential threats to the safety of occupants.
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OFFER AND ACCEPTANCE
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Two essential components of a valid contract; a "meeting of the minds."
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OFFICE OF THRIFT SUPERVISION (OTS)
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A bureau of the Treasury Department that monitors and regulates the savings and loan industry. OTS was created by FIRREA - Financial Institutions Reform, Recovery and Enforcement Act of 1989, to charter, regulate, examine and supervise savings institutions.
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OPEN-END LOAN
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A loan where the borrower may add to the principal without renegotiating the terms of the loan. It is expandable by increments up to a maximum dollar amount, the full loan being secured by the same original mortgage. A home equity loan is often open ended.
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OPEN LISTING
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A listing contract under which in which more than one real estate agent may be employed to sell the property. The broker's commission is contingent upon the broker producing a buyer before the property is sold by the owner or another broker. The owner pays a commission only to the agent who finds the buyer. This listing is also known as a simple listing or a general listing and the owner is not obligated to pay anyone a commission if the owner personally sells the property. Such a listing is often used by builders and developers.
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OPTION
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An agreement to keep open for a set period an offer to sell or purchase property. There is no obligation to purchase, but the seller is obligated to sell if the option holder exercises the right to purchase. For the option to be valid, it must include consideration.
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OPTION LISTING
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Listing with a clause that gives the listing broker the right to purchase the listed property.
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OSTENSIBLE AGENCY
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A form of implied agency relationship created by the actions of the parties involved rather than by written agreement or document.
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PACKAGE LOAN
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A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings, major appliances and other fixtures. The borrower benefits by only having to negotiate with a single lender and only having to pay a single set of closing costs.
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PAROL EVIDENCE RULE
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A rule of evidence providing that a written agreement is the final expression of the agreement of the parties, not to be varied or contradicted by prior or contemporaneous oral or written negotiations. It preserves the reliability of written documents or agreements by prohibiting the parties from attempting to modify the meaning of the written document through the use of prior and simultaneous oral or written declarations that are not referenced in the document.
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PARTICIPATION MORTGAGE
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A mortgage loan wherein the lender or mortgagee has a partial equity interest in the property owned by the borrower/mortgagor or receives a portion of the income from the property in annual net cash flow, gain on sale, or proceeds from refinancing the property. It may or may not require principal and interest payments, and may or may not contain a balloon payment.
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PARTITION
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The court-ordered division of concurrent estate into separate portions representing the proportionate interests of the tenants when the parties do not all voluntarily agree to terminate the co-ownership. A partition suit may even ask to sell the land and divide the proceeds.
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PARTNERSHIP
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A business entity of two or more individuals who carry on a continuing business as co-owners. A partnership is a typical form of joint venture in which each general partner shares in the administration, risks, profits and losses of business undertaking in which they have all invested.
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PARTY WALL
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A wall that is located on or at a boundary line partly on the land of one owner and partly on the land of another and is used or is intended to be used by the owners of both properties. The wall is subject to cross-easements—reciprocal rights of use over the property of another—in favor of each owner for the support of their building or for the maintenance of the wall.
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PATENT
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A grant or franchise of land from the United States government.
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PAYMENT CAP
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The limit on the maximum monthly payment of an adjustable-rate mortgage or other variable rate loan. A payment cap does not limit the amount of interest the lender is earning, so it may cause negative paying off of the mortgage.
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PERCENTAGE LEASE
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A lease, commonly used for commercial property, whereby a percentage of the gross sales or net sales of the tenant is used to determine the rent. There is generally a provision in a percentage lease that calls for a minimum or base rental. Used primarily in retail leases.
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PERCOLATION TEST
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A test of the soil to determine the absorption rate of soil when the use of a septic tank or "leach field" is contemplated. To gain the permits necessary to build a house, the surrounding land must be tested to determine if the land is suitable to be built on.
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PERSONAL PROPERTY
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Items, called chattels, that do not fit into the definition of real property; movable objects.
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PHYSICAL DETERIORATION
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Depreciation in a property's value resulting from disintegration, wear and tear from regular use and the impact of the elements and time. The common perception in the market is that newer is better.
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PLANNED UNIT DEVELOPMENT (PUD)
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A comprehensive development plan for a large land area that are owned by an association of which the owners of all the parcels are members. It usually includes residences, roads, schools, recreational facilities and service areas, plus commercial, office and industrial areas.
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PLAT MAP
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A map of a town, section or subdivision within a specific area indicating the location and boundaries of individual properties.
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PLOTTAGE
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The increase in value or utility value of two or more contiguous lots when they are joined under single ownership and available for use as a larger single lot to make it more useful with a valuable price.
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POINT OF BEGINNING (POB)
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In a metes-and-bounds legal description, the starting point of the survey.
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POLICE POWER
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The government's right to impose laws, statutes and ordinances, including zoning ordinances and building codes, to protect the public health, safety and welfare.
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POWER OF ATTORNEY
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A written instrument which authorizes one person to act as another's agent or attorney. thus conferring authority on the agent to perform certain acts or functions on behalf of the principal. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies.
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PREPAID ITEMS
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On a closing statement, expenses paid by buyer-borrower such as interim interest or prepaid interest, insurance premiums and some real estate taxes, for which he or she must be reimbursed by the buyer.
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PREPAYMENT PENALTY
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A lender’s charge imposed on a borrower who pays off the loan principal before it is due. This penalty compensates the lender for interest and other charges that would otherwise be lost. Prepayment penalties are allowed in some form in many states.
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PRIMARY MORTGAGE MARKET
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The mortgage market in which loans are made directly to the borrowers such as commercial banks, savings and loan associations and mutual savings banks.
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PRINCIPAL
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(1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits.
(2) The original amount (as in a loan) of the total due and payable at a certain date.
(3) A main party to a transaction--the person for whom the agent works.
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PRINCIPAL MERIDIAN
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The main imaginary line running north and south and crossing a base line at a definite point, used by surveyors for mapping grid systems under the rectangular (government) survey system of legal description. Townships Range East or West of a Principal Meridian.
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PRIOR APPROPRIATION
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A doctrine of water ownership in which the landowner's right to use available water is based on a government-administered permit system. The first person to take a quantity of water and put it to beneficial use has a higher priority of right than a subsequent user. These rights can be lost if not used; they can also be sold or transferred apart from the land. Under modern statutes, appraisal must usually be secured from some state agency before acquiring a new water right or making a change in use of water.
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PRIORITY
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The order of position or time. The priority of liens is generally determined by the chronological order in which the lien documents are recorded; tax liens, however, have priority even over previously recorded liens.
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PRIVATE MORTGAGE INSURANCE (PMI)
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Insurance provided by private carrier that protects a lender against a loss in the event of a foreclosure and deficiency.
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PROBATE
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A legal process by which a court validates or invalidates the will after administering the estate of a descendant. It also confirms the appointment of the personal representative of the estate.
Probate also means the process by which assets are gathered; applied to pay debts, taxes, and expenses of administration; and distributed to those designated as beneficiaries in the will.
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PROCURING CAUSE
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The effort that brings about the desired result. Under an open listing the broker who is the procuring cause of the sale receives the commission. A broker will be regarded as the 'procuring cause' of a sale, so as to be entitled to commission, if his efforts are the foundation on which the negotiations resulting in a sale are begun. For example under an open listing, the broker who brings in the buyer who actually purchases the property.
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PROGRESSION
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An appraisal principle that states that, between dissimilar properties. The worth of a lesser valued residence tends to be enhanced by association with higher valued residences in the same area.
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PROMISSORY NOTE
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The binding legal contract a lender and a borrower. The promissory note states the terms and conditions of the loan, including how and when the loan must be repaid, grace period interest rate, deferment policy and cancellations. The student should keep this document until the loan has been repaid.
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PROPERTY MANAGER
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A property manager manages real estate for another person for compensation, where the owner is unable to personally attend to such details, or is not interested in doing so. Duties include dealing with tenants, maintaining the property and keeping up all accounting in co-ordination with the owner’s wishes.
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PROPERTY REPORTS
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The mandatory federal and state documents compiled by subdividers and developers to provide potential purchasers with facts about a property prior to their purchase. Report includes sales history, Current value, Lot size, property details, owners information, current mortgage, legal description & more.
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PROPRIETARY LEASE
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A rental agreement between a cooperative housing corporation and a share holder allowing use of an exclusive possessory interest in a unit under the conditions specified.
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PRORATIONS
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Expenses, either prepaid or paid in arrears, that are divided or distributed between buyer and seller for such items as loan interest, taxes, rents and utility bills.
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PROTECTED CLASS
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Any group of people designated as such by the Department of Housing and Urban Development (HUD) in consideration of federal and state civil rights legislation. Currently includes ethnic minorities, women, religious groups, the handicapped and others.
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PUR AUTRE VIE "FOR THE LIFE OF ANOTHER."
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A life estate pur autre vie is a life estate that is measured by the life of a person other than the grantee.
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PURCHASE-MONEY MORTGAGE (PMM)
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A home loan that a borrower obtains to buy property, using the property as collateral for the loan. Such a mortgage is used when the seller is also the lender. Most purchase-money mortgages are one or two years in length or, in some cases, up to five years.
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PYRAMIDING
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The process of acquiring additional properties by refinancing properties already owned and investing the loan proceeds in additional properties. This is generally a slow method as the margin increases will permit successively smaller purchases.
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QUANTITY-SURVEY METHOD
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The appraisal method of estimating building costs by calculating the cost of detailed inventory of every item of material, equipment, labor, overhead, and fees involved in the construction of a property and then including the indirect costs associated with such construction. This method is not routinely used by appraisers because it is extremely time consuming.
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QUITCLAIM DEED
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A deed by which the grantor transfers whatever interest he or she has in the real estate, without warranties or obligations. It is often used to clear up doubtful claims such as possible dower rights or disputed liens.
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RANGE
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In the US public land surveying system, a strip of land six miles wide, extending north and south and numbered east and west according to its distance from the principal meridian in the rectangular (government) survey system of legal description.
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RATE CAP
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The limit on the amount the interest rate can be increased at each adjustment period or over the life of the loan. The cap may also set the maximum interest rate that can be charged during the life of the loan.
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RATIFICATION
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Method of creating an agency relationship in which the principal accepts the conduct of someone who performed on behalf of a person without previous authorization.
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READY, WILLING AND ABLE BUYER
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One who is prepared to buy property on the seller's terms and is ready to take positive steps to consummate the transaction.
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REAL ESTATE LAND
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A portion of the earth's surface extending downward to the center of the earth and upward infinitely into space, plus anything permanently fixed to it, including buildings, sheds, and other items whether naturally attached to the structure. With the exception of a global recession, real estate is affected primarily by local factors.
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REAL ESTATE INVESTMENT TRUST (REIT)
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Trust ownership of real estate established for the benefit of a group of real estate investors who purchase certificates of ownership in the trust, which in turn invests the money in real property and distributes the profits back to the investors free of corporate income tax. The yield is generally liberal since REITs are required to distribute as much as 90% of their income. Real estate investments commonly include office buildings, apartment houses and shopping centers.
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REAL ESTATE LICENSE LAW
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State law enacted to protect the public from fraud, dishonesty and incompetence in the purchase and sale of real estate.
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REAL ESTATE MORTGAGE INVESTMENT CONDUIT (REMIC)
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A tax entity through which an issuer can sell multiple class securities with call protection to investors. In order to qualify, REMIC must confine its investments to mortgages, cash, government securities, foreclosure property acquired in connection with imminent default of a mortgage, or other REMICs.
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REAL ESTATE RECOVERY FUND
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A fund established in some states from real estate license revenues to cover claims of victims of fraud, misrepresentation and deceit committed by a real estate licensee, where the aggrieved parties are otherwise unable to recover on a court judgement.
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REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)
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The consumer protection law that requires certain disclosures to consumers to examine information on known or estimated settlement cost once after application and once prior to or at a settlement. The law requires lenders to furnish the information after application only. The law also prohibits the payment or receipt of kickbacks and certain kinds of referral fees
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REAL PROPERTY
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The interests, benefits and rights inherent in real estate ownership
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REALTOR(R)
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A registered trade name reserved for the sole use of active members of local REALTOR(r) boards affiliated with the National Association of REALTORS(r) or with the National Association of Real Estate Boards. REALTORS® subscribe to a strict Code of Ethics which governs their conduct.
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RECONCILIATION
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The final step in the appraisal process of adjusting comparables to arrive at a final estimate of market value for the subject property.
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RECONVEYANCE DEED
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A deed used by a trustee under a deed of trust to return title to the trustor.
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RECORDING
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The act of entering or recording documents affecting or conveying interests in real estate in the recorder's office established in each county. Until it is recorded, a deed or mortgage ordinarily is not effective against subsequent purchasers or mortgagees.
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RECTANGULAR (GOVERNMENT) SURVEY SYSTEM
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A system established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines.
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REDEMPTION
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The right of a defaulted property owner to recover his or her property by curing the default
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REDEMPTION PERIOD
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A period of time established by state law during which a property owner has to pay the Tax Lien by paying the sales price, interest and costs before the property is foreclosed upon. Many states do not have mortgage redemption laws. If the property owner doesn't pay within the redemption period, the Tax Lien Certificate holder may be issued a deed to the property.
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REDLINING
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The illegal practice of a lending institution denying credit or insurance to people based on ethnic background or neighborhood. Redlining also refers to setting prohibitively high fees for financial services in a high-risk area.
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REDUCTION CERTIFICATE (PAYOFF STATEMENT)
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The document signed by a lender indicating the remaining balance, date of maturity and interest rate to pay in full and satisfy the debt. It is used in the settlement process to protect both the seller's and the buyer's interests.
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REGRESSION
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An appraisal principle that explains that, between dissimilar properties, the value of the better quality property is affected negatively by the presence of the lesser-quality property.
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REGULATION Z
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Enforcing the Truth-in-Lending Act Regulation Z states that a borrower be advised in writing of all costs associated with the credit portion of a financial transaction.
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RELEASE DEED
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A document, also known as a deed of reconveyance, that transfers all rights given a trustee under a deed of trust loan back to the grantor after the loan has been fully repaid.
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REMAINDER INTEREST
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The residual ownership of an estate that has been conveyed to take effect and be enjoyed after the interest of a previous beneficiary or the life tenant has terminated. This means that the landowner still has the primary claim to the land and the trust holds the remainder. Full ownership is not transferred to the trust until after the donor's death.
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RENT
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A fixed, periodic payment made by a tenant of a property to the owner for possession and use, usually by prior agreement of the parties.
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RENT SCHEDULE
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A statement of proposed rental rates, determined by the owner or the property manager or both, based on a building's estimated expenses, market supply and demand and the owner's long-range goals for the property.
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REPLACEMENT COST
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The construction cost at current prices of a property damaged or lost with similar property, that is not essentially an exact duplicate of the subject property but serves the same purpose or function as the original. It is done without deduction for depreciation.
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REPRODUCTION COST
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The construction cost at current prices of an exact duplicate of the subject property using the same materials, construction standards, design, layout, and quality of workmanship.
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RESOLUTION TRUST CORPORATION
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The organization created by FIRREA in 1989 to sell assets (primarily real estate) that had been held as collateral against most of the bad loans of savings and loan associations.
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RESTRICTIVE COVENANTS
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A clause in a deed that limits the way the real estate ownership may be used.
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REVERSE-ANNUITY MORTGAGE (RAM)
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An alternative mortgage loan program under which the homeowner receives monthly payments based on his or her accumulated equity rather than a lump sum. This type of loan is usually taken out by an older, retired person who has substantially paid for a home, and now needs additional income to live on. The loan must be repaid at a prearranged date or upon the death of the owner or the sale of the property.
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REVERSIONARY INTEREST
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The remnant of an estate that the grantor holds after granting a life estate to another person. Upon termination of that possession, the property will revert back to the grantor. A reversionary interest is not the same as a contingent interest because people with a reversionary interest already have an interest in the trust.
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REVERSIONARY RIGHT
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The return of the rights of possession and quiet enjoyment to the lessor (landlord) at the expiration of a lease.
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RIGHT OF FIRST REFUSAL
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Clause in a lease which gives the lesee (tenant) the right to buy a property at the same price and on the same terms and conditions as those contained in a third party offer that the owner has expressed a willingness to accept. Usually the lessee must purchase on the terms and conditions of the buyer's offer.
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RIGHT-OF-WAY
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An easement given by one landowner to another to pass over the property, land, or interest therein without actually transferring ownership.
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RIPARIAN RIGHTS
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A principle of common law under which a land owner is entitled to use the water on or bordering his property and diversion or misuse that will enable his neighbor to utilize the same waters undiminished in quantity and undefiled in quality.
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RISK MANAGEMENT
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Evaluation and selection of appropriate property and other insurance.
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RULES AND REGULATIONS
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Real estate licensing authority orders that govern licensees' activities; they usually have the same force and effect as statutory law.
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SALE AND LEASEBACK
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A transaction in which an owner sells his or her asset, equipment or real estate, and agreement to lease it back from the purchaser on a long-term basis. This type of financing arrangement fortifies the sellers balance sheet, because a capital asset is sold and converted into cash or a receivable.
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SALES COMPARISON APPROACH
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The procedure of estimating the value of a property by examining and comparing the property being appraised to similar properties that have been sold recently. The sales comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant and making adjustments to the sales prices of the comparables based on the elements of comparison.
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SALESPERSON
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A person who performs real estate activities while employed by or associated with a licensed real estate broker.
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SATISFACTION OF MORTGAGE
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A document from the lender acknowledging, that the borrower completely paid off the mortgage debt. Sometimes called a release deed.
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SECONDARY MORTGAGE MARKET
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A market for the purchase and sale of existing mortgages or mortgage-backed securities designed to provide greater availability of funds for additional mortgage lending by banks, mortgage bankers, and savings and loan associations. Also called the secondary money market.
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SECTION
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A portion of township under the rectangular (government) survey system. A township is divided into 36 sections, numbered one through 36. A section is a square with mile-long sides and an area of one square mile, or 640 acres.
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SECURITY DEPOSIT
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A payment by a tenant, held by the landlord as security against the terms of the lease and any damage to the property.
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SEPARATE PROPERTY
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Under community property law, property owned solely by either spouse before the marriage, acquired by gift or inheritance after the marriage or purchased with separate funds after the marriage. At divorce, separate property is not divided under the state's property division laws, but is kept by the spouse who owns it. Also called nonmarital property.
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SERVIENT TENEMENT
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Land on which an easement exists in favor of dominant tenement. For example, a beachfront house that has a public walkway to the beach is a servient tenement.
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SETBACK
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The amount of space local zoning regulations require between a lot line and a building line.
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SEVERALTY
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Ownership of real property by one person only, also called sole ownership.
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SEVERANCE
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In regard to real property, changing an item of real estate to personal property by detaching it from the land such as standing timber or crops.
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SHARECROPPING
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In an agricultural lease, the agreement between the landowner and the tenant farmer in which the tenant pays for use of the land with a predetermined share of his crop rather than with a cash rent.
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SHARED-APPRECIATION MORTGAGE (SAM)
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A mortgage loan in which the lender or other party, in exchange for a loan with a favorable interest rate, participates in the profits (if any) generated from the sale of the home.
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SITUS
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The personal preference of people for one area over another because of the physical location of the property, not necessarily based on objective facts and knowledge. This may be important when determining which laws apply to the property, since the situs of an object determines the law applicable in the jurisdiction where the object is located, which may differ from the the law applicable in the jurisdiction where a legal action is brought.
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SPECIAL AGENT
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One who is authorized by a principal to perform a single act or transaction; a real estate broker is usually a special agent authorized to find a ready, willing and able buyer for a particular property.
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SPECIAL ASSESSMENT
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A special tax customarily imposed against real property for public improvements that benefit the assessed property such as: street lights, sidewalks, street improvements, etc.
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SPECIAL WARRANTY DEED
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An instrument of conveyance in which the seller warrants, or guarantees the property title is clear for all of his tenure (not before then) and that he has done nothing during this time that might in the future affect the title.
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SPECIFIC LIEN
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A lien affecting or attaching only to a certain, specific parcel of land or piece of property.
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SPECIFIC PERFORMANCE
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A legal action to compel a party to carry out the terms of a contract.
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SQUARE-FOOT METHOD
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The appraisal method of estimating building costs by multiplying the number of square feet in the improvements being appraised by the cost per square foot for recently constructed similar improvements.
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STATUTE OF FRAUDS
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That part of a state law that requires certain classes of contracts, engagements and/or transfers of interest in real estate to be made in writing, such as deeds, real estate sales contracts and certain leases, to be enforceable in a court of law.
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STATUTE OF LIMITATIONS
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That law pertaining to the period of time within which a lawsuit must be filed. The deadline can vary, depending on the type of lawsuit. In criminal cases, prosecution is barred if not brought within the statute of limitations.
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STATUTORY LIEN
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An involuntary lien imposed on property by statute, a tax lien, judgement liens, mechanic liens, etc. for example - A real estate tax lien.
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STATUTORY REDEMPTION
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State laws that permit a mortgagor to reclaim the mortgaged property after its foreclosure by paying off the debt.
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STEERING
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The illegal practice of channeling home seekers to areas according to their race, either to maintain the homogeneity of an area or to change the character of an area, which limits their choices of where they can live.
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STRAIGHT-LINE METHOD
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A method of calculating depreciation for tax purposes, taking an equal amount of the asset's cost as an expense for each year of the asset's useful life. This method is most appropriate when usage of the asset is fairly uniform year to year.
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STRAIGHT (TERM) LOAN
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A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment.
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SUBAGENT
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One who is employed by a person already acting as an agent. Typically a reference to a salesperson licensed under a broker (agent) who is employed under the terms of a listing agreement.
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SUBDIVIDER
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One who buys undeveloped land, divides it into a subdivision and sells the lots to potential users.
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SUBDIVISION
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A tract of land divided into smaller pieces by the the subdivider, into blocks, building lots and streets via a plat, which must comply with local ordinances and regulations. In the United States, the creation of a subdivision was often the first step toward the creation of a new incorporated township or city.
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SUBDIVISION AND DEVELOPMENT ORDINANCES
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Municipal ordinances that establish requirements for sub- divisions and development.
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SUBORDINATION
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Relegation to a lesser position, usually in respect to a right or security. For example, a second mortgagee's rights are subordinate to those of the first mortgagee.
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SUBORDINATION AGREEMENT
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A written agreement between holders of liens on a property that changes the priority of mortgage, judgment and other liens under certain circumstances.
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SUBROGATION
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The substitution of one creditor for another, giving the substitute the same legal rights as the original party. Subrogation is used by title insurers to acquire from the injured party rights to sue in order to re- cover any claims they have paid.
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SUBSTITUTION
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An appraisal principle that states that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property, assuming that replacement will not encounter any costly delay.
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SUBSURFACE RIGHTS
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Ownership rights in a parcel of real estate to the water, minerals, gas, oil and so forth that lie beneath the surface of the property. Subsurface rights do not automatically transfer with the property at sale. Usually, this is because some owners believe their subsurface rights are worth a large sum of money, which may not be consistent with true market values.
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SUIT FOR POSSESSION
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A court suit initiated by a landlord for possession of a rented property because of unpaid rent or breaching of one of the terms of the lease after the lease's expiration. Before the action may be filed by a landlord, notice in writing must be given or sent to the Tenant by the landlord. This notice must state that the tenant as at least five days to pay the rent or at least seven days to correct the abuse or misuse (ten days, if a mobile home) and that if the tenant does not do so as instructed, a suit for possession may be filed with the Court.
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SUIT TO QUIET TITLE
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A lawsuit intended to establish or settle the title to a particular property and thus "quiet" any challenges or claims to the title. Such a suit usually arises when there is some question about clear title, there exists an old lease or failure to clear title after payment of a mortgage, an error in description which clouds the amount of property owned, or an easement used for years without a recorded description.
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SURETY BOND
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A legal document issued to assure the completion of an act by another person. It provides monetary compensation in the event of a failure to perform specified acts within a stated period.
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SURFACE RIGHTS
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A legal interest in the use or occupation of the surface of a parcel of land as opposed to subsurface or mineral rights
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SURVEY
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A pictorial depiction of land and the improvements on it and shows boundary lines with measurements and bearings, buildings, easements, etc
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TACKING
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Adding an extra period of time to the term of a contract. Tacking is allowed only when no time lapses between the end of one occupant's possession and the beginning of another's occupancy.
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TAXATION
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To levy an assessment against, usually by government powers. Unpaid taxes usually form a special lien on property owned by the taxpayer, ahead of registered mortgages.
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TAX DEED
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The deed of conveyance when a property is sold by a government unit for non-payment of taxes. Sometimes called the sheriff s deed.
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TAX LIEN
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A claim registered on a title by a government authority when the owner has not paid property or assessment taxes or other state and federal taxes.
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TAX SALE
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Public sale of property by a government body (taxing authority or an officer) for non-payment of taxes, either by tender or auction
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TENANCY IN COMMON
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Ownership of property when two or more people are legally granted interest in the same property without right of survivorship. Each individual owner has the right to partition (giving it away, mortgaging it, bequeathing it, etc.). If one of them dies, the others do not automatically own his interest, as they would in a joint tenancy. His interest passes to his heirs.
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TESTATE
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To die leaving a valid will, specifying the distribution of the estate: opposite meaning is to die intestate.
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TESTATOR (TESTATRIX)
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The person who makes a will.
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TIME IS OF THE ESSENCE
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A legal phrase in a contract which ensures that all specific dates and times noted in the contract are important & interpreted exactly and cannot be ignored by any of the parties without the consent of the others except in breach of the contract
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TIME SHARE
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A form of joint ownership of property where numerous owners occupy the property individually and enjoy use or occupation of the property for set periods of time. Time sharing is used mostly for vacation properties. Some timeshares are sold as fractional ownership in a trust that owns one or several resorts.
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TITLE
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The legal term for one's ownership interest in land.
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TITLE INSURANCE
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A form of insurance which indemnifies an owner or mortgagee of property for any loss sustained by reason of defects or claims in the title of the property that were not uncovered in the title search.
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TITLE SEARCH
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A review of all public records in detail to ensure that the current owner has no unsettled liens, clear title, claims, mortgage or competing and adverse interests against the property.
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TITLE THEORY
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Jurisdictions in which ownership of land is divided into two interests--legal title and equitable title. When an owner registers title to mortgaged real property in favor of a lender, legal title is transferred to the lender while the owner retains equitable (or beneficial) title. Once the mortgage is paid out, legal title is transferred back to the owner. Some states give greater protection to mortgage lenders and assume lenders have title interest
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TORRENS SYSTEM
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Developed in Australia in 1858, a system of land title where a register of land holdings maintained by the state guarantees indefeasible title to those included in the register to ensure that they are correct and that title is transferred without flaw. Property may not be transferred if uncorrected title defects exist. Also known as the Land Titles System.
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TRUST DEED
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An instrument of conveyance of title given by a borrower (trustor) to third party called a Trustee for the Beneficiary.
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TRUSTEE
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A person who holds title to property on behalf of another.
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UNILATERAL CONTRACT
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An agreement to exchange payment for services, where payment becomes due only once the service has been successfully performed such as an insurance policy or a listing agreement for the sale of real property.
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USURY
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The illegal act of charging extremely high interest rates on a loan
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VALID CONTACT
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Legally binding
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VARIANCE
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Variance is an administrative exception by a local zoning commission or authority to allow a non-conforming use of a property to continue in order to compensate for a deficiency in a real property which would prevent the property from complying with the zoning regulation. Variances are required in the United States in order to prevent a regulatory taking.
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VOIDABLE CONTRACT
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A contract that may be treated as legally unenforceable at the option of a party but remains enforceable until that party exercises her option. It may be rejected by either of the parties.
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VOLUNTARY ALIENATION
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The conveyance of title to an asset by use of a deed with the consent of the owner.
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VOLUNTARY LIEN
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A lien that is recorded/registered with the consent of, or as a result of, the voluntary act of the owner. Most commonly, a mortgage or deed of trust.
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WASTE
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Allowing or causing a property to suffer damage or change in condition of real property brought about by a current tenant that harms the value of that property. A lawsuit for waste can be brought against a life tenant or lessee of a leasehold estate, either by a current landlord or by the owner of a vested future interest.
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WILL
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A written statement of a person's wishes for the disposition of that person's estate after their death
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WRAPAROUND LOAN
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A secondary financing option in which new money borrowed is blended with the remaining balance on an underlying first loan. A second mortgage is registered as security for the new money but the old mortgage remains in existence and the rate of interest is a blend of the rate chargeable on the old mortgage and the rate chargeable on the newly borrowed money.
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ZONING ORDINANCE
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Land regulations passed by local government that establishes the type and amount of development that is permissible in specific zoning districts and which also establishes other development controls according to type, density, height, lot size, placement, building bulk, and other development standards. The ordinances include procedures for changing the status of land use and the physical development standards too.
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