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WARRANTY OF HABITABILITY - A legal doctrine
imposing on the landlord a duty to make the leased
premises acceptable to live in and ready for occupancy and
to continue to maintain them in a state of repair
throughout the entire term of the lease.
ACCOUNT - A trust account established to set
aside funds for future needs.
LAND - Real property whose value has been
enhanced by the addition of on-site and off-site
improvements such as roads, sewers, utilities, buildings,
etc.; as distinguished from raw land.
- Valuable additions made to property, amounting to more
than repairs, costing labor and capital and intended to
enhance the value of the property. Improvements of land
would include grading, sidewalks, sewers, streets,
utilities, etc. Improvements on land would include
buildings, fences, and the like.
INTEREST - Interest implied by the federal tax
APPROACH - An approach to the valuation or
appraisal of real property as determined by the amount of
net income the property will produce over its remaining
PROPERTY - Property purchased primarily for the
income to be derived plus certain tax benefits, such as
accelerated depreciation. Income property can be
commercial, industrial or residential.
RIGHTS - Intangible or non-possessory rights in
real property such as easements, licenses, profits and the
CONTRACTOR - One who is retained to perform a
certain act, but who is subject to the control and
direction of another only as to the end result and not as
how he performs the act. The critical feature, and what
distinguishes an independent contractor and an employee or
agent, is the right to control.
PARK - An area zoned industrial and containing
sites for many separate industries and developed and
managed as a unit, usually with provisions for common
services for the users.
- A legal action which forbids a party defendant from
doing some act; it requires a person to whom it is
directed to refrain from doing a particular thing.
- A visit to and review of the premises. A prudent
purchaser of property always inspects the premises before
LENDER - Financial institutions such as banks,
insurance companies, savings and loans or any lending
institution whose loans are regulated by law.
- The sum paid or accrued in return for the use of money.
FINANCING - A short-term loan usually made
during the construction phase of a building project; often
referred to as the "construction loan."
- To die without a valid will.
- An itemized list of property. Many brokers recommend
that their clients attach to the sales contract an
inventory of property to be included in the sale of a
residential property, including a condominium dwelling.
CONDEMNATION - An action for "just
compensation "brought by one whose property has been
effectively "taken" or substantially interfered
with or taken without just compensation
AND SEVERAL LIABILITY - A situation in which
more than one party is liable to repay a debt or
obligation and a creditor can obtain compensation from one
or more parties, either individually or jointly, whichever
TENANCY - A form of property ownership by two
or more persons in which the joint tenants have one and
the same interest, arising by one and the same conveyance,
commencing atone and the same time and held by one and the
same possession (the concept of "four unities").
VENTURE - The joining of two or more people in
a specific business enterprise such as the development of
a condominium project or a shopping center.
LIEN - A lien binding on all the real estate of
a judgment-debtor and giving the holder of the judgment a
right to levy (i.e. to seize) the land for satisfaction of
FORECLOSURE - A method of foreclosing upon real
property by means of a court supervised sale. After an
appraisal, the court determines an upset price below which
no bids to purchase will be accepted.
MORTGAGE - A mortgage which is subordinate in
right or lien priority to an existing mortgage on the same
realty, such as a second mortgage.
- The authority or power to act, such as the
authority of a court to hear and render a decision that
binds both parties.
COMPENSATION - An amount of compensation to be
received by a party for the taking of property under the
power of eminent domain.
- The surface of the earth extending down to the
center and upward to the sky, including all natural things
thereon such as trees, crops, or water; plus the minerals
below the surface and the air rights above.
CONTRACT - Another name for an installment
purchase contract, by which the buyer obtains equitable
title (the right to use the property) while the seller
retains legal title (recorded title) as security for
payment of the balance of the purchase price.
DESCRIPTION - A description of a particular
piece of real property.
LEASEBACK - A creative financing device often
used with raw land which a developer wants to improve, in
which the developer sells the land to an investor who
leases the land back to the developer under a long-term
net lease and subordinates his fee ownership to the lender
providing development financing.
TENEMENTS AND HEREDITAMENTS - A feudal phrase
used to describe all types of immovable realty including
the land, buildings and all appurtenant rights thereto.
TRUST - An association organized by common
owners of real property, which holds title to the real
property in the name of one or more trustees for the
benefit of the owners, whose beneficial interests may be
represented by trust certificates.
- Real property having no access to a public road or way.
- The lessor or the owner of leased premises. The
landlord retains a reversion interest in the property so
that when the lease ends the property will revert to the
- A stake, stream, cliff, monument or other object or
feature which is used to fix or define land boundaries;
also a prominent feature of a landscape or property that
is the symbol for the place.
- Shrubs, bushes, trees and the like, on the grounds
surrounding a structure.
AND SUBJACENT SUPPORT - The support received by
a parcel of real property from the land adjoining it is
called lateral support. Subjacent support is that support
which the surface of the earth receives from its
DAY - The date an obligation becomes due;
sometimes refers to the closing date.
- A lease is both a contract between lessor (landlord) and
lessee (tenant) and a conveyance or demise of the premises
by the lessor to the lessee. A lease is a contract in that
item bodies the agreement between the parties.
- A less-than-freehold estate which a tenant
possesses in real property.
DESCRIPTION - A description which is complete
enough that an independent surveyor could locate and
identify a specific piece of real property.
NOTICE - That notice which is either implied or
required by law. Constructive notice under the recording
laws is also referred to as legal notice.
RATE OF INTEREST - The maximum interest rate
permitted bylaw, with anything above that rate being
- The person to whom property is rented or leased;
called a "tenant" in most residential leases.
- The person who rents or leases property to another. In
residential leasing, the lessor is often referred to as a
ESTATE - An estate held by one who rents or
leases property. This classification includes an estate
for years, periodic tenancy, estate at will, and estate at
OF CREDIT - An agreement or commitment by a
bank ("issuer") made at the request of a
customer ("account party") that the bank will
honor drafts or other demands of payment from third
parties ("beneficiaries") upon compliance with
the conditions specified in the letter of credit.
OF INTENT - An expression of intent to invest,
develop or purchase without creating any firm legal
obligation to do so.
PAYMENT MORTGAGE - A mortgage which is
scheduled to be repaid in equal periodic payments which
include both principal and interest.
- The use of borrowed funds to purchase investment
property with the anticipation that the property acquired
will increase in return so that the investor will realize
a profit not only on his own investment, but also on the
borrowed funds; the employment of a smaller investment to
generate a larger rate of return through borrowing.
- A person who has a valid license. A real estate
licensee can be a salesperson or a broker, active or
inactive, an individual, a corporation, or a partnership.
- A charge or claim which one person (lienor) has upon the
property of another (lienee) as security for a debt or
obligation. Liens can be created by agreement of the
parties (mortgage) or by operation of law (tax liens).
ESTATE - Any estate in real or personal
property which is limited in duration to the life of its
owner or the life of some other designated person.
COMMON ELEMENTS - That special class of common
elements in a condominium reserved for the use of a
certain apartment(s) to the exclusion of other apartments.
PARTNERSHIP - A partnership formed by two or
more persons having as members one or more general
partners and one or more limited partners.
OF CREDIT - A maximum amount of money a bank
will lend one of its more reliable and credit worthy
customers without need for any formal loan submission.
DAMAGES - An amount predetermined by the
parties to an agreement as the total amount of
compensation an injured party should receive in the event
the other party breaches a specified part of the contract.
- The ability to sell an asset and convert it into
cash at a price close to its true value.
PENDENS - A legal document recorded in the
Bureau of Conveyances, which gives constructive notice
that an action has been filed in either a state or federal
court affecting a particular piece of property. "Lis
Pendens" is a Latin term which means "action
pending" and is in the nature of a quasi-lien.
- A written employment agreement between a property
owner and a broker authorizing the broker to find a buyer
or a tenant for a certain real property.
LAND - Land bordering on the shore of a sea or
ocean and thus affected by the tide currents.
COMMITMENT - A commitment by a lender of the
amount he will loan to a qualified borrower on a
particular piece of real estate for a specified amount of
time under specific terms.
RATIO - The ratio that the amount of the loan
bears to the appraised value of the property or the sales
price, whichever is lower.
SIGILLI - Latin for "under seal",
used in the abbreviated form, "L.S.," at the end
of signature line in some formal legal documents; used
instead of the actual seal.
PAYEE - The person designated on an insurance
policy to be paid in case the insured property is damaged
- The care and work put into a building to keep it in
operation and productive use; the general repair and
upkeep of a building. If maintenance is deferred, the
building will suffer a loss in value.
- A landscaped public area set aside for pedestrian
LAND - Land which is of little value because of
some deficiency, such as poor access, lack of adequate
rainfall, or steep terrain.
TITLE - Good or clear title reasonably free
from risk of litigation over possible defects; also
referred to as merchantable title. Marketable title need
not, however, be perfect title.
VALUE - The highest price, estimated in terms
of money, which a property will bring if exposed for sale
in the open market, allowing a reasonable time to find a
purchaser who buys with knowledge of all the uses to which
the property is adapted and for which it is capable of
PLAN - A comprehensive plan to guide the
long-term physical development of a particular area.
LINE - An artificial line used by the surveyors
to measure the natural, uneven, winding property line
formed by rivers, streams and other watercourses bordering
LIEN - A statutory lien created in favor of
material men and mechanics to secure payment for materials
supplied and services rendered in the improvement, repair
or maintenance of real property.
AND BOUNDS - A common method of land
description that identifies a property by specifying the
shape and boundary dimensions of the parcel, using
terminal points and angles.
CLAUSE - A clause inserted in some residential
leases to allow the military tenant to terminate the lease
in case of transfer, discharge or other circumstances
making termination appropriate.
RIGHTS - Rights to subsurface land and profits.
Normally, when real property is conveyed, the grantee
receives all right and title to the land including
everything above and below the surface, unless excepted by
- A false statement or concealment of a material fact made
with the intent to induce some action by another party.
- The cash deposit (including initial and
additional deposits) paid by the prospective buyer of real
property as evidence of his good faith intention to
complete the transaction; called hand money or a binder in
TENANCY - A periodic tenancy where the tenant
rents for one month at a time. In the absence of rental
agreement (oral or written), a tenancy is deemed to be
month-to-month, or in the case of boarders, week-to-week.
- Visible markers, both natural and artificial objects,
which are used to establish the lines and boundaries of a
- A legal document used to secure the performance
of an obligation. In effect, the mortgage states that the
lender can look to the property in the event the borrower
defaults in payment of the note.
BANKER - A corporation or firm which normally
provides its own funds for mortgage financing.
BROKER - A person or firm which acts as an
intermediary between borrower and lender; one who, for
compensation or gain, negotiates, sells or arranges loans
and sometimes continues to service the loans.
- The one who receives and holds a mortgage as security
for a debt; the lender; a lender or creditor who holds a
mortgage as security for payment of an obligation.
- The one who gives a mortgage as security for a debt; the
borrower; usually the landowner; the borrower or debtor
who hypothecates or puts up his property as security for
LISTING SERVICE (MLS) - An organization created
by Realtors to facilitate the sharing of listings among
ASSOCIATION OF REALTORS - Formerly known as the
National Association of Real Estate Boards (NAREB), it is
the largest and most prestigious real estate organization
in the world.
CASH FLOW - The investment situation where cash
expenditures to maintain an investment (taxes, mortgage
payments, maintenance, etc.) exceed the cash income
received from the investment.
INSTRUMENT - Any written instrument which may
be transferred by endorsement or delivery so as to vest
legal title in the transferee.
- The transaction of business aimed at reaching a
meeting of minds among the parties; bargaining.
INCOME - The sum arrived at after deducting
from gross income the expenses of a business or
investment, including taxes and insurance, and allowances
for vacancy and bad debts; what the property will earn in
a given year's operation.
LEASE - A lease, usually commercial, whereby
the lessee pays not only the rent for occupancy, but also
pays maintenance and operating expenses such as tax,
insurance, utilities and repairs. Thus the rent paid is
"net" to the lessor.
WORTH - The value remaining after deducting
liabilities from assets.
CONSIDERATION - A consideration bearing no
relation to the real value of the contract. A deed often
recites a nominal consideration, such as "ten dollars
and other valuable consideration."
CLAUSE - A provision in a contract or lease
prohibiting a person from operating or controlling a
nearby business which would compete with one of the
parties to the contract.
USE - A permitted use which was lawfully
established and maintained but which no longer conforms to
the current use regulations because of a change in the
CLAUSE - A clause inserted in a mortgage
whereby the mortgagee agrees not to terminate the
tenancies of lessees who pay their rent if the mortgagee
forecloses on the mortgagor-lessor's building.
WEAR AND TEAR - That physical deterioration
which occurs in the normal course of the use for which a
property is intended, without negligence, carelessness,
accident or abuse of the premises (or equipment or
chattels) by the occupant, members of household, or their
invitees or guests.
- A document signed by the borrower of a loan,
stating the loan amount, the interest rate, the time and
method of repayment and the obligation to repay. The note
is the evidence of the debt. When secured by a mortgage,
it is called a mortgage note.
- (1) Legal notice is notice which is required to be made
by law, or notice which is imparted by operation of law as
a result of the possession of property or the recording of
documents. (2) Notice which is required by contract, for
example, when the parties agree to terminate a contract by
the written notice of either party 30 days prior to
OF COMPLETION - Document filed to give public
notice that a construction job has been completed and that
mechanics' liens must be filed within ,say, 45 days to be
OF DEFAULT - A notice to a defaulting party
that there has been a default, usually providing a grace
period in which to cure the default.
OF NONRESPONSIBILITY - A legal notice designed
to relieve a property owner from responsibility for the
cost of improvements ordered by another person.
TO QUIT - A written notice given by a landlord
to his tenant, stating that the landlord intends to regain
possession of the leased premises and that the tenant is
required to quit and remove himself from the premises
either at the end of the lease term or immediately if
there is a breach of lease or if the tenancy is at will or
by sufferance; sometimes refers to the notice given by the
tenant to the landlord that he intends to give up
possession on a stated day.
- The substitution of a new obligation for an old
one; substitution of new parties to an existing
obligation, as where the parties to an agreement accept a
new debtor in place of an old one.
- Conduct or activity which results in an actual
physical interference with another person's reasonable use
or enjoyment of his property for any lawful purpose.
& VOID - Having no legal force or
effect; of no worth; unenforceable; not binding.
- A type of depreciation of property.
- A promise by one party to act or perform in a
specified manner provided the other party will act or
perform in the manner requested.
AND ACCEPTANCE - The two components of a valid
contract; a "meeting of the minds."
EXCLUSIVE - A listing in which the seller
refuses to submit the listing to Multiple Listing Service,
even after being informed of the advantages of MLS, and
signs a certification to that effect.
COSTS - Costs such as for sewers, streets,
utilities, etc., which are incurred in the development of
raw land, but are not connected with the actual
construction of the buildings (onsite costs).
MORTGAGE - A mortgage in which the borrower is
given a limit up to which he may borrow, with any
incremental advances of money up to but not exceeding the
original borrowing limit to be secured by the same
HOUSE - The common real estate practice of
showing a listed home to the public during established
hours, frequently on Sunday afternoons.
LISTING - A listing given to any number of
brokers. The first broker who secures a buyer ready,
willing and able to purchase at the terms of the listing
is the one who earns the commission.
SPACE - Certain portion of the landscape which
has not been built upon and which is sought either to be
reserved in its natural state or used for agricultural or
recreational purposes (such as parks, squares, and the
EXPENSES - Those periodic and necessary
expenses which are essential to the continuous operation
and maintenance of a property.
OF TITLE - An opinion by a person competent in
examining titles, usually a title attorney, as to the
status of the title of a property.
- An agreement to keep open, over a set period, an
offer to sell or purchase property.
FEE - The finance fee charged by a lender for
placing a mortgage, which covers initial costs such as
preparation of documents and credit, inspection and
- An improvement which by reason of excess size or
cost is not the highest and best use for the site on which
it is placed.
- A commission paid to managerial personnel (e.g.
principal broker) on sales made by their subordinates,
usually calculated as a percentage of the gross sales
commissions earned by the salesperson.
MORTGAGE - A method of financing in which the
loan that finances the purchase of a home also finances
the purchase of personal items such as a washer and dryer,
refrigerator, stove and other specified appliances.
- A specific portion of a larger tract; a lot.
RELEASE - A clause found in a mortgage which
directs the mortgagee to release certain parcels from the
lien of the blanket mortgage upon the payment of a certain
sum of money.
MORTGAGE - A mortgage in which the lender
participates in the income of the mortgaged venture beyond
a fixed return, or receives a yield on the loan in
addition to the straight interest rate.
- The dividing of common interests in real property owned
jointly by two or more persons.
- "An association of two or more persons to carry on
as co-owners a business for profit," as defined in
the Uniform Partnership Act, which is in force in a
majority of the states.
WALL - A wall which is located on or at a
boundary line between two adjoining parcels and is used or
is intended to be used by the owners of both properties in
the construction or maintenance of improvements on their
- An apartment located on the roof of a building, or more
commonly, an apartment on the top floor of a building.
LEASE - A lease whose rental is based on a
percentage of the monthly or annual gross sales made on
TEST - A hydraulic engineer's test of soil to
determine the ability of the ground to absorb and drain
BOND - A bond, usually posted by one who is to
perform work for another, which assures that a project or
undertaking will be completed as per agreement or
TENANCY - A leasehold estate which continues
from period to period, such as month to month, year to
year. All conditions and terms of the tenancy are carried
over from period to period, and continue for an uncertain
time until proper notice of termination is given.
FINANCING - A long-term loan, as opposed to an
PROPERTY - Things which are tangible and
moveable; property which is not classified as real
property; chattels; personalty.
LOAN - A joint loan with two lenders sharing a
UNIT DEVELOPMENT (PUD) - A modern concept in
housing designed to produce a high density of dwellings
and maximum utilization of open spaces.
- A map or a town, section, or subdivision indicating the
location and boundaries of individual properties.
- The merging or consolidating of adjacent lots
into one larger lot, with the consequent result of
improved usability and increased value; also called
LISTING - A listing which is retained by the
listing broker or salesperson, who does not make it
available to other brokers in the office or to other
Multiple Listing Service members.
OF BEGINNING - The starting point in a metes
and bounds description of property, which is usually a
street intersection or a specific monument.
- A generic term for a percentage of the principal
loan amount which the lender charges for making the loan;
each point is equal to one percent of the loan amount.
POWER - The constitutional authority and
inherent power of a state to adopt and enforce laws and
regulations to promote and support the public health,
safety, morals and general welfare.
COCHERE - A roofed structure extending from the
entrance of a building over an adjacent driveway to
shelter those getting into or out of vehicles.
- The act of either actually or constructively
possessing or occupying property.
OF ATTORNEY - A written instrument authorizing
a person (the attorney-in-fact) to act as the agent on
behalf of another to the extent indicated in the
OF SALE - A clause written into a mortgage
authorizing the mortgagee to sell the property in the
event of default.
- The subject property, such as the property which is
deeded or the unit that is leased.
INTEREST - The paying of interest before it is
PENALTY - The amount set by the creditor as a
penalty to the debtor for paying off the debt prior to its
maturity. The prepayment penalty is charged by the lender
to recoup a portion of interest that he had planned to
earn when he made the loan.
PRIVILEGE - The right of the debtor to pay off
part or all of the debt without penalty prior to maturity,
such as in a mortgage or agreement of sale.
- A pre-construction sale program by a condominium
developer who is required to sell a certain percentage of
units before a lender will commit to finance construction
of the project.
- The acquiring of a right in property, usually in the
form of an intangible property right such as an easement
or right-of-way, by means of adverse use of property that
is continuous and uninterrupted for the prescriptive
VALUE OF ONE DOLLAR - A doctrine which is based
on the fact that money has a time value. The present worth
of a payment to be received at some time in the future is
the amount of the payment less the loss of interest.
RATE - The minimum interest rate charged by a
commercial bank on short-term loans to its largest and
strongest clients(those with the highest credit
- The capital sum; interest is paid on the principal. NOT
BROKER - The licensed broker directly in charge
of and responsible for the real estate operations
conducted by a brokerage company.
MORTGAGE INSURANCE - A special form of
insurance designed to permit lenders to increase their
loan-to-market-value ratio, often up to 95 percent of the
market value of the property.
- The formal judicial proceeding to prove or
confirm the validity of a will. The will is presented to
the probate court, and creditors and interested parties
are notified to present their claims or to show cause why
the provisions of the will should not be enforced by the
CAUSE - That effort which brings about the
desired result, as in producing the buyer for the listed
FORMA STATEMENT - A projection of future income
NOTE - An unconditional written promise of one
person to pay a certain sum of money to another, or order,
or bearer, at a future specified time.
- The rights or interests a person has in the thing owned;
not, in the technical sense, the thing itself. These
rights include the right to possess, to use, to encumber,
to transfer and to exclude, commonly called the
"bundle of rights."
MANAGEMENT - That aspect of real estate devoted
to the leasing, managing, marketing and overall
maintenance of the property of others.
REPORT - A disclosure document required under
the federal interstate land sales act where applicable to
the interstate sale of subdivided lots.
LEASE - A written lease in a cooperative
apartment building, between the owner-corporation and the
tenant-stockholder, in which the tenant is given the right
to occupy a particular unit.
- To divide or distribute proportionately.
- A person or corporation who may be interested in buying
or selling real property. The prospect does not become a
client until the parties establish a fiduciary
relationship, such as upon signing a listing contract or
upon executing a DROA.
- A printed statement distributed to describe, advertise
and give advance information on a business, venture,
project or stock issue.
- Exaggerated or superlative comments or opinions
not made as representations of fact and thus not a grounds
for misrepresentation. A statement such as "the
apartment has a fantastic view," is puffing because
the prospective buyer can clearly assess the view in each
LIST - A discrepancy list showing defects in
construction which need some corrective work to bring the
building up to standards set by the plans and
MONEY MORTGAGE - A mortgage given to the seller
as part of the buyer's consideration for the purchase of
real property, and delivered at the same time that the
real property is transferred as a simultaneous part of the
FEE - An estate in fee which is subject to
certain limitations imposed by the owner.
SURVEY - A method of estimating construction
cost or reproduction cost; a highly technical process used
in arriving at the cost estimate of new construction and
sometimes referred to in the building trade as the price
ENJOYMENT - The right of a new owner or a
lessee legally in possession to uninterrupted use of the
property without interference from the former owner,
lessor or any third party claiming superior title.
TITLE ACTION - A circuit court action intended
to establish or settle the title to a particular property,
especially where there is a cloud on the title.
DEED - A deed of conveyance which operates, in
effect, as a release of whatever interest the grantor has
in the property; sometimes called a release deed.
- A measurement, used in the government survey
system, consisting of a strip of land six miles wide,
running in a north-south direction.
OF RETURN - The relationship (expressed as a
percentage) between the annual net income generated by a
business and the invested capital, or the appraised value,
or the gross income, etc., of the business.
LAND - Unimproved land; land in its unused
natural state prior to the construction of improvements
such as streets, lighting, sewers, and the like.
ESTATE - The physical land and appurtenances,
including any structures; for all practical purposes
synonymous with real property.
PROPERTY - All land and appurtenances to land,
including buildings, structures, fixtures, fences, and
improvements erected upon or affixed to the same;
excluding, however, growing crops.
- A registered word which may only be used by an active
real estate broker who is a member of the state and local
real estate board affiliated with the National Association
of Realtors. The use of the name REALTOR and the
distinctive seal in advertising is strictly governed by
the rules and regulations of the National Association.
- Land and everything permanently affixed thereto.
- A reduction or kickback of a stipulated charge.
CLAUSE - A clause usually found in percentage
leases, especially in shopping center leases, giving the
landlord the right to terminate the lease (and thus
"recapture" the premises) if the tenant does not
maintain a specified minimum amount of business.
- An independent party appointed by a court to
impartially receive, preserve and manage property which is
involved in litigation, pending final disposition of the
matter before the court.
- The act of entering into the book of public records the
written instruments affecting the title to real property,
such as deeds, mortgages, contracts of sale, options,
assignments, and the like. Proper recordation imparts
constructive notice to all the world of the existence of
the recorded document and its contents.
EQUITABLE RIGHT OF - The right of a mortgagor
who has defaulted on the mortgage note to redeem or get
back his title to the property by paying off the entire
mortgage note prior to the foreclosure sale.
CERTIFICATE - An instrument which shows the
amount of the unpaid balance of a mortgage, the rate of
interest and the date of maturity.
- The act of obtaining a new loan to pay off an existing
loan; the process of paying off one loan with the proceeds
- A legal action to correct or modify a contract or deed
which has not accurately reflected the intentions of the
parties due to some mechanical error, such as a typo
graphical error in the legal description.
- The discharge or relinquishment of a right, claim or
privilege. Releases involving real property transactions
should be acknowledged and recorded.
CLAUSE - A provision found in many blanket
mortgages enabling the mortgagor to obtain partial
releases of specific parcels from the mortgage upon the
payment of, typically, a larger-than-pro-rata portion of
ESTATE - A future interest in real estate
created at the same time and by the same instrument as
another estate, and limited to arise immediately upon the
termination of the prior estate.
OPTION - A covenant in some leases which gives
the lessee the right to extend the lease term for a
certain period, on specified terms.
- Fixed periodic payment made by a tenant or occupant of
property to the owner for the possession and use thereof,
usually by prior agreement of the parties.
CONTROL - Regulation by state or local
governmental agencies restricting the amount of rent
landlords can charge their tenants; such regulation is a
valid exercise of the state's police power.
AGREEMENT - An agreement, written or oral,
which establishes or modifies the terms, conditions,
rules, regulations, or any other provisions concerning the
use and occupancy of a dwelling unit and premises; a lease
on residential property.
POOL - A rental arrangement whereby
participating owners of rental apartments agree to have
their apartment units available for rental as determined
by the rental agent, and then share in the profits and
losses of all the rental apartments in the pool according
to an agreed formula.
COST - The cost, on the basis of current
prices, of reproducing a new replica property with the
same or fairly similar material.
- The legal remedy of canceling, terminating or annulling
a contract and restoring the parties to their original
positions; a return to the status quo.
FUND - Monies set aside as a cushion of capital
for future payment of items such as taxes, insurance,
furniture replacement, deferred maintenance, etc.;
sometimes referred to as an impound account.
PROCESS - An appraisal process used in the
income approach to estimate the value of the land and/or
the building, as indicated by the capitalization of the
residual net income attributable to it.
- Limitations on the use of property. Private restrictions
are created by means of restrictive covenants written into
real property instruments, such as deeds and leases.
COVENANT - A private agreement, usually
contained in a deed, which restricts the use and occupancy
of real property.
EVICTION - An act whereby a landlord evicts the
tenant in response to some complaint made by the tenant.
- A future estate in real property created by
operation of law when a grantor conveys a lesser estate
than he has. The residue left in the grantor is called a
reversion which commences in possession in the future upon
the end of a particular estate granted or devised, whether
it be freehold or less-than-freehold.
OF SURVIVORSHIP - The distinctive
characteristic of a joint tenancy (also tenancy by
entirety) by which the surviving joint tenant (s) succeeds
to all right, title and interest of the deceased joint
tenant without the need for probate proceedings.
- The right or privilege, acquired through accepted
usage or by contract, to pass over a designated portion of
the property of another.
- Those rights and obligations which are incidental to
ownership of land adjacent to or abutting on watercourses
such as streams and lakes.
OF LOSS - Responsibility for damages caused to
improvements. The risk of loss passes to the vendee when
either title or possession passes, and he should protect
himself by securing proper insurance.
WITH THE LAND - Rights or covenants which bind
or benefit successive owners of a property are said to run
with the land, such as restrictive building covenants in a
recorded deed which would affect all future owners of the
AND LEASEBACK - A transaction in which,
typically, an owner sells his improved property and as
part of the same transaction signs a long-term lease and
remains in possession.
- Preliminary architectural drawings and sketches; basic
layouts not containing the final details of design.
MORTGAGE - A mortgage which is junior or
subordinate to a first mortgage; typically, an additional
loan imposed on top of the first mortgage, which is taken
out when the borrower needs more money.
MORTGAGE MARKET - A market for the purchase and
sale of existing mortgages, designed to provide greater
liquidity for mortgages; also called secondary money
AGREEMENT - A security document which creates a
lien upon chattels, including chattels intended to be
affixed to land as fixtures; known as a chattel mortgage
prior to the adoption of the Uniform Commercial Code.
DEPOSIT - Money deposited by or for the tenant
with the landlord, to be held by the landlord for the
following purposes: to remedy tenant defaults for damage
to the premises (be it accidental or intentional), for
failure to pay rent due, or for failure to return all keys
at the end of the tenancy.
TANK - A sewage settling tank in which part of
the sewage is converted into gas and liquids before the
remaining waste is discharged by gravity into a leaching
- Zoning restrictions on the amount of land required
surrounding improvements; the amount of space required
between the lot line and the building line.
- The act of adjusting and prorating the various credits,
charges and settlement costs to conclude a real estate
- Sole ownership of real property.
LEASE - A lease wherein a tenant leases the
unfinished shell of a building, as in a new shopping
center, and agrees to complete construction himself by
installing ceilings, plumbing, heating and air
conditioning systems, and electrical wiring.
- The dividing line between private land and public beach
on beachfront property.
INTEREST - Interest computed on the principal
ASSESSMENT - A tax or levy customarily imposed
against only those specific parcels of realty which will
benefit from a proposed public improvement, as opposed to
a general tax on the entire community.
WARRANTY DEED - A deed in which the grantor
warrants or guarantees the title only against defects
arising during the period of his tenure and ownership of
the property and not against defects existing before the
time of his ownership.
PERFORMANCE - A legal action brought in a court
of equity to compel a party to carry out the terms of a
LOAN - A loan on a particular property, usually
a condominium unit, by a lender who has not previously
financed that particular condominium building.
LOAN - A commitment by the interim or
construction lender to keep the money already funded in
the project for a specified period of time after the
expiration of the interim loan, usually until permanent
take-out financing is secured.
OF FRAUDS - That law which requires certain
contracts to be in writing and signed by the party to be
charged therewith in order to be legally enforceable.
OF LIMITATIONS - That law pertaining to the
period of time within which certain actions must be
brought to court.
LEASE - A lease with fixed rent for an initial
term and provision for pre-determined rent increases at
specified intervals and/or increases based upon periodic
appraisals; sometimes called a graduated lease.
NOTE - A promissory note evidencing a loan in
which "interest only" payments are made
periodically during the term of the note, with the
principal payment due in one lump sum upon maturity.
TO MORTGAGE - A grantee taking title to real
property "subject to mortgage" is not personally
liable to the mortgagee for payment of the mortgage note.
In the event the grantor-mortgagor defaults in paying the
note, the grantee could, however, lose property, and thus
his equity, in a foreclosure sale.
AGREEMENT - An agreement whereby a prior
mortgagee agrees to subordinate or give up their priority
position to an existing or anticipated future lien.
POSSESSION - A legal process used by a landlord
to regain possession of the leased premises if the tenant
has breached the lease or is holding over after the
termination of tenancy.
- A premature conveyance of a possessory estate to a
person having a future interest, as when a lessee
surrenders the leasehold interest to the owner of the
reversion interest, the lessor, before the normal
expiration of the lease.
- The process by which boundaries are measured and land
areas are determined; the on-site measurement of lot
lines, dimensions, and position of houses in a lot
including the determination of any existing encroachments
- The right of survivorship is that special feature of a
joint tenancy whereby all title, right and interest of a
decedent joint tenant in certain property passes to the
surviving joint tenants by operation of law, free from
claims of heirs and creditors of the decedent.
FINANCING - Long-term permanent financing.
LIEN - A general statutory lien imposed against
real property for failure to pay taxes. There are federal
tax liens and state tax liens.
SHELTER - A phrase often used to describe some
of the tax advantages of real estate investment, such as
deductions for depreciation, interest, taxes, etc., which
may offset the investor's other ordinary income to reduce
the investor's overall tax payment.
AT SUFFERANCE - A tenancy which exists when a
tenant wrongfully holds over after the expiration of a
lease, without the landlord's consent, as where the tenant
fails to surrender possession after termination of the
AT WILL - A tenancy in which a person is in
possession of real estate with the permission of the
owner, for a term of unspecified or uncertain duration, as
when an owner permits a tenant to occupy a property until
it is sold.
BY THE ENTIRETY - A special joint tenancy
between a lawfully married husband and wife, which places
all title to the property into the marital unit, with both
spouses having an equal, undivided interest in the whole
FOR YEARS - A less-than-freehold estate in
which the property is leased for a definite, fixed period
of time, be it for 60 days or any fraction of a year, a
year, ten years, etc.
IN COMMON - A form of concurrent ownership of
property between two or more persons, in which each has an
undivided interest in the whole property; frequently found
when the parties acquire title by descent or by will.
IN SEVERALTY - Ownership of property vested in
one person alone, and not held jointly with another; also
called Several Tenancy or Sole Tenancy.
- In general, one who holds or possesses property, such as
a life tenant or a tenant for years; commonly used to
refer to a lessee under a lease.
IS OF THE ESSENCE - The clause in a contract
which emphasizes that punctual performance is an essential
requirement of the contract.
SHARING - A modern approach to communal
ownership and use of real estate which permits multiple
purchasers to buy undivided interests in real property
(which is usually in a resort condominium or hotel) with a
right to use the facility for a fixed or variable time
INSURANCE - A comprehensive contract of
indemnity under which the title company agrees to
reimburse the insured for any loss if title is not as
represented in the policy.
SEARCH - An examination of the public records
to determine what, if any, defects there are in the chain
- A type of dwelling unit normally having two floors, with
the living area and kitchen on the base floor and the
bedrooms located on the second floor.
- A piece of property, used in the government
survey system of land description, which is 6 miles
square, and contains36 sections, each 1 mile square; and
consists of 23,040 acres.
FIXTURES - Articles of personal property
annexed to leased premises by the tenant, as a necessary
part of the tenant's trade or business.
NET LEASE - A net, net, net lease, where in
addition to the stipulated rent, the lessee assumes
payment of all expenses associated with the operation of
DEED - A real property security device (also
called a deed of trust) very similar to a mortgage, except
that there are three parties, the trustor, the trustee,
and the beneficiary (the lender).
FUND ACCOUNT - An account set up by a broker at
a bank or other recognized depository, into which the
broker deposits all funds entrusted to him by his
principal or others.
PROJECT - A development term meaning the
complete construction package from ground breaking to the
completion of the building. All that is left undone is to
turn over the keys to the buyer.
CONTRACT - A contract in which one party makes
an obligation to perform without receiving in return any
express promise of performance from the other party, such
as an open listing contract, where the seller agrees to
pay a commission to the first broker who brings in a
ready, willing and able buyer.
PRICE - A minimum price set by a court in a
judicial foreclosure, below which the property may not be
sold by a court appointed commissioner at public auction;
the minimum price which can be accepted for the property
after the court has had the property appraised.
LIFE - That period of time over which an asset,
such as a building, is expected to remain economically
feasible to the owner.
- Charging a rate of interest in excess of that permitted
FACTOR - An allowance or discount for estimated
vacancies (unrented units) in a rental project. The
vacancy rate is the ratio between the number of vacant
units and the total number of units in a specified project
- The power of a good or service to command other goods in
exchange for the present worth of future rights to income
or amenities; the present worth to typical users and
investors of future benefits arising out of ownership of a
- Permission obtained from governmental zoning authorities
to build a structure or conduct a use which is expressly
prohibited by the current zoning laws; an exception from
the zoning laws.
- The purchaser of realty; the buyer. The buyer under an
agreement of sale.
- The seller of realty. The seller under an agreement of
- Having no legal force or binding effect; a
nullity; not enforceable. A contract for an illegal
purpose (i.e. gambling) is void.
- A contract which appears valid and enforceable on its
face, but is subject to rescission by one of the parties
who acted under a disability, such as being a minor or
being under duress or undue influence; that which may be
avoided or adjudged void but which is not, in itself,
- To voluntarily give up or surrender a right.
- A building used to store merchandise and other materials
- A term used in financing to describe the process
which loan correspondents employ, assembling into one
package a number of mortgage loans which the correspondent
has originated and selling them in the secondary mortgage
- A guaranty by the seller, covering the title as well as
the physical condition of the property.
DEED - A deed in which the grantor fully
warrants good clear title to the premises. Also called a
general warranty deed.
- An improper use or abuse of property by one in
possession of land, who holds less than the fee ownership,
such as a tenant, life tenant, mortgagor, or vendee.
AND TEAR - The gradual physical deterioration
of property, resulting from use, passage of time and
weather. Only property subject to wear and tear is
MORTGAGE - A method of refinancing in which the
new mortgage is placed in a secondary or subordinate
position. In essence, it is an additional mortgage in
which another lender refinances a borrower by lending an
amount over the existing first mortgage amount, without
cashing out or distributing the existence of the first
TENANCY - A periodic tenancy in which the rent
is reserved from year to year.
- The return on an investment or the amount of profit,
stated as a percentage of the amount invested.
- The regulation of structures and uses of property within
designated districts or zones. Zoning regulates and
affects such things as use of the land, types of structure
permitted, building heights, setbacks, and density (the
ratio of land area to improvement area).
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