Real Estate Glossary
There is a lot of international real estate terminology used during the home buying and selling process, we is here to help you understand those terms. Our Team have created a glossary of the most commonly used real estate terms and their definitions in order to help you better understand terminology used along your property buying or selling process.
Failure to occupy and use property;
may result in loss of rights.
The act of ending or terminating a nuisance;
a type of legal action brought to end a nuisance.
A property holder who does not reside on the property and who usually relies on a
property manager to supervise the investment.
SEE: Fee Simple Estate
A brie f sum mary.
A person who, historically, searches out anything affecting the title to real property and summarizes the information in the findings.
A summary of money judgment. Th e summary is usually prepared s o that it may be recorded, thereby creating a (judgement) lien on real estate owned by the judgment debtor.
A summary of the instruments affecting title to a parcel of real property as shown by the public records.
A method of valuing land. The indicated value of the improvement is deducted from the s ale price.
Method of appraising vacant land; allocation of the appraised total value or sale price of the property between land and building either on a ratio basis or by subtracting a figure representing building value or price from the total appraised value or price of the property. Also called Allocation Method.
To make a note all due and payable at one time.
A professional designation awarded to qualified property management firms by the institute of Real Estate Management.
An individual who has completed IREM educational program for resident managers offres idential property.
The system for figuring de preciation (cost recovery) f or de preciable real property acquired and placed into service after January 1, 1981
A method of cost write-off in which depreciation allowances are greater in the first few years of ownership than in subsequent years. This permits an earlier recovery of capital an d a faster tax write-o ff of an as set.
A clause in a deed of trust or mortgage giving the lender the right to call all sums ow ing him or her to be immediately due and payable upon the occurrence of a certain event. It is also a clause that perm its a debtor to pay off a loan before the due date.
1. Agreeing to the terms of an offer to enter into a contract, thereby creating a binding contract.
2. Taking delivery of a deed. The act of agreeing or consenting to an offer.
After acceptance of an offer, a broker may not return the buyer s deposit without authorization from the seller. An essential element of every contract, it is the consent to be bound by the offer. In deeds, it is the consent to accept a grant of real property.
The acquisition of title to additional property by its annexation to real estate already owned . An addition to property through the efforts of man or by natural forces.
The right of an owner to go into and out of his or her property.
A person who, without receiving value, signs a promissory note to help another person borrow money or get credit.
An intermediary who holds funds in a delayed exchange.
A gradual addition to land from natural causes; for example, from gradual action of ocean or river waters.
To increase or accumulate; interest on loans is said to accrue daily.
The difference between the cos t of replacement of a new building, as of the date of the appraisal and the present appraised value. Depreciation that has accumulated over a period of time. (1) The difference between the cost of replacement new as of the date of the appraisal and the present appraised value. (2) The accumulated losses in value that has affected the improvements on re al property.
Those incurred expenses which are not yet payable. The seller s accrued expenses are credited to the purchaser in a closing statement
A written statement of rules violated, used in a property right healing.
When a person who has signed a document formally declares to an authorized public official (usually a notary public) that he or she sign ed voluntarily. Th e official at tests that the signature is voluntary and genuine. A formal declaration before a notary public or qualified officer that the person signing the document is doing so voluntarily and using his or her legal nam e and signature; called notarizing.
Blocks of fiber, mineral, or metal with small holes or a rough-textured surface to ab sorb sound, used as covering for interior walls and ceilings.
The act or process by which a person procures property.
Under FHA. A loan is based on acquisition cost, which is sale price or FHA value, whichever is lesser, plus nonrecurring closing costs the buyer is paying per FHA rules.
A measure of land equaling 160 square rods, 4840 square yards, 43,560 square feet, or a tract about 208.71 feet square.
Authority expressly given by the principal or given by the law an d not denied by the principal.
Forcible removal of a tenant from a property by an officer after a judgement decree of possession has been issued in favor of the owner.
An act intended to deceive another, e .g., making a false statement, making a promise without intending to perform it, suppressing the truth.
An individual may be conscious of the circumstance s in which the own er receive d title to the property and is at the same time is aware that the owner has not recorded the deed nor is he in possess ion of the property. There is no constructive notice, only actual notice as to the owner of the property.
An attachment to a purchase agreement or to escrow instructions. Used to modify or make changes.
Located next to or near an object or parcel of property.
A judicial or court decision.
The income tax cost basis of the property with certain additions, such as acquisition costs and the cost of improvements, and certain subtractions, such as depreciation in value.
The time between permitted changes in the interest rate or monthly payments, typically six months to one year, depending on the indexused.
In appraising , a means by which characteristics of a residential property are regulated by dollar amount of percentage to conform to similar characteristics of another residential property.
A mortgage or deed of trust with a variable interest rate (an interest rate that changes periodically. This mortgage tends to attract more people into the mortgage market.
The resolution of a dispute by mirroring the judicial process in that a third party decides the controversy much as a judge does in court.
The adjusted basis is equal to the purchase price plus buying.
A mortgage loan which bears interest at a rate subject to change during the term o f the loan, predetermined or otherwise.
A note whose interest rate is tied to a flexible index.
A government agency that administrates a complex area of law, adopting an enforcing detailed regulations that have the force of law.
A law judge that conducts hearings enforcing the detailed regulations that have the force of law, by a government agency. It is a complex area of law.
A person appointed by the probate court to manage and distribute the estate of a deceased person when no executor is named in the will or there is no will.
For tax purposes it is the cost of the property plus improvements and minus depreciation, amortization, and depletion.
A person appointed by the probate court to administer the estate of a deceased person. His or her duties include making an inventory of the assets, managing the property, paying the debts and expenses, filing necessary reports and tax returns, and distributing the assets as ordered by the probate court.
According to value
Refers to General real estate tax.
A property tax based upon value.
Transfer of funds from a lender to a borrower in advance on a loan. Money advanced by a beneficiary under a trust deed to pay real estate taxes or other items to protect the lender s interest under the trust deed. Also refers to additional funds loaned under an open -end trust deed or mortgage.
For DRE approval, an advance free agreement must state the total amount of advances fees to be paid. An advance fee agreement may not include a guarantee the transaction will be completed.
The institutional investors prior agreement to provide long-term financing upon the completion of construction; also known as a take-out loan commitment.
A fee paid in advance of any services rendered. Sometimes unlawfully charged in connection with that illegal practice of obtaining a fee in advance for the advertising of property or a business for sale., with no intent to obtain a buyer, by persons representing themselves as a real estate licensees, o r representative of a licensed real estate firm.
Opponent, a person or a group that opposes the other .
A purpose in opposition to the interest of another party(as for example, with a buyer and a seller).
A method of acquiring property based on open and notorious possession, under a claim of right, color of title, continuous use for five years, and the payment of taxes. A method of acquiring property through continuo us use of that property while paying taxes on it.
Purchased space in a newspaper, magazine or other medium used to attract public attention to a commodity for sale or lease. They should be based on projected vacancies, turnover market conditions. Where you advertise depends on w ho are the customers that you w ant to reach.
Purchased space in a newspaper, magazine or other medium used to attract public attention to a commodity for sale or lease. They should be based on projected vacancies, turnover market conditions. Where you advertise depends on w ho are the customers that you w ant to reach.
One who makes an affidavit or gives evidence.
A statement or declaration reduced to writing, sworn to or affirmed before some officer who has authority to administer an oath or affirmation, such as a notary public or a commanding officer in the service.
A statement in writing , made under oath by seller or grantor, acknowledged before a Nota ry Pub lic in which the affiant identifies hims elf or hers elf and affiant s marital status certifying that since the examination of title on the contract date there are no judgements, bankruptcies or divorces, no unrecorded deeds, contracts, unpaid repairs or improvements, or defects of title known to the affiant and that affiant is in possess ion of the property.
To confirm, swear, ratifying, verity.
A solemn declaration by an individual who is adverse to take an oath.
(See cash flow)
SEE: Straight-line Method of Depreciation.
A special relationship of trust by which one person (agent) is authorized to conduct business, sign papers, or otherwise act on behalf of another person (principal).
An agent must use reasonable care and skill in carrying out the tasks dictated b y the agency agreement.
The Agency Disclosure Addendum will always be used by the selling broker whenever Agency Confirmation Statement is required . An Agency Confirmation Statement is required in a transaction involving the lease of one-top four unit residential property for m ore than one year.
When the agent has a personal interest in the subject of the agency; as when one co-owner has been authorized by the other s to sell the property.
This required when a broker is involved in negotiating the sale of one to- four unit residential property. This defines and explains, in general terms, the words and phrases used to express the agency relationship of brokers to the parties of the residential sale transaction. Refusals to sign the Agency Disclosure Addendum could occur when: owners refuse to list with the broker FSBO sellers refusal to accept an offer and when buyers refuse to sign a deposit receipt offer presented for consideration.
One who represents another called a principal an d has authority to act for the principal in dealing with third parties . The relationship is referred to as an agency. Someone authorized to act for another (called the principal) in business matters.
An agent authorized to handle all of the principal s affairs in one area or in a specified area.
An agent authorized to do everything that can brlawfully delegated to a representative.
An agent authorized to do everything that can be lawfully be delegated to a representative.
Four factors that are combined to produce income; labor, coordination, capital, and land.
A mutual understanding or compact between parties. Altho ugh often used a synonymous with contract, technically it denotes mutual promises that fail as a contract for lack of consideration.
To receive this compensation you must be the procuring cause, must find a ready, willing and able buyer, and must be the one that initially brought the third party into the contract.
( See contract for deed)
1. A written contract between a buyer and seller setting out the terms of sale.
2. An installment sales contract covering real property, especially a long-term contract.
(FLORIDA) Defined in Chapter 475,F .S., to mean property zoned as such, consisting of more than 10 acres.
A parcel of property above the surface of the earth, not containing any land; for example, a condominium unit on the third floor.
The rights in real property to the reasonable use of the air space above the surface of the land.
Conv eys title to rea l property.
The transferring of property to another. Conveyance or transfer of title to real estate from one person to another person.
In a deed of trust or mortgage , a provision that if the secured property is sold or transferred, the lender has the option of accelerating the loan and declaring the entire unpaid balance immediately due and payable. Also called a “due-on-sale” clause.
Transfer of an interest in property against the will of the owner, or without the action of the owner, occurring through the operation of law, natural process, or adverse possession.
When an owner voluntarily transfers an interest to someone else.
A financing device whereby a lender makes payments on the existing trust deeds of a borrower and takes from the borrower a junior trust deed with a face value in an amount equal to the amount outstanding on the old trust deeds and the additional amount of money borrowed.
SEE: Abstraction Method.
A theory of land ownership that individuals may own land free of the rights of an overlord.
A real property ownership system where ownership may be complete except for those rights held by the government. Allodial is in contrast to feudal tenure.
Soil that has been deposited by accretion on the shore of a river or body of water and that increases the real property.
An owner s extended coverage policy that provides buyers and owners the sam e protection the ALTA policy gives to lenders.
(American Land Title Association) A type o f title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard type policy to include unrecorded mechanic s liens; unrecorded physical easements; facts a physical survey would show,; water and mineral rights; and rights of parties in possession , such as tenants and buyers under unrecorded instruments.
A doctrine which holds that a corporation is really owned by share holder s as their own property, and therefore it should not be considered as a separate entity. Usually used to try to hold shareholders liable for corporate debts.
The resolution of disputes by negotiation, mediation, and arbitration.
Nonstandardized financing loans .
Capable of being changed or revoked. In wills, it refers to the concept that a will may be revoked or modified at any tim e up to the testator’s death.
Improvements to property that, while not damaging the value of the property, technic ally qualify as waste. For example, an apartment building constructed on property designated only f or single-family structures is considered ameliorating waste.
As used in the real estate business, the features that make a piece of real property, especially a home, enjoyable.
A change made to correct an error or to alter or augment part of an agreement without changing its principle idea or essence.
A professional association of registered architects that publishes construction contract forms as one of its activities.
A professional association of industrial security personnel that provides training leading to the designation of Certified Protection Professional (CPP).
This is the act that set forth the requirement that landlords must make facilities accessible to the handicapped to the extent readily achievable.
(1) The liquidation of a financial obligation on an installment basis, which includes both principal and interest.
(2) Recovery of cost or value over a period of time. The method or plan for the payment of a debt, bond, deed of trust, etc., by installments or sinking fund.
Pay off a debt in installments.
A loan to be repaid, interest and principal, by a series of regular payments that are equal or nearly equal, without any special balloon payment prior to maturity. Also called a Level Payment Loan
The amount of money at issue in a lawsuit; used as a limitation on the jurisdiction of some courts.
The most important store in a shopping center, the store that has the largest draw of customers.
Attaching personal property to land so that the law views it as part of the real property (a fixture). Annexation can be actual or constructive.
A physical attachment of personal property to land.
When personal property is associated with real property in such a way that the law treats it as a fixture, even though it is not physically at tach ed to the re al property.
Recurring every year; the date an insurance policy must be renewed to continue in effect.
The amount of money required each year for the payment of all mortgage interest and principal.
The cost of credit as determined in accordance with Regulation Z of the Board of Governors of the Federal Reserve System for implementing the Federal Truth in Lending Act.
A sum o f money receive d or paid yearly or at other fixed periods.
An income capitalization method providing for annuity recapture of invested capital; also referred to as yield capitalization. Discounts future income to an estimate of present value.
The document the defendant must file with the court in response to the plaintiffs s complaint.
Affirms that value is created by the anticipated benefits to be derived in the future.
Advance notice of intention to violate the term s of a contract.
When one party in a contract informs the other before the time set for performance that he or she does not intend to perform as agreed.
Laws that prevent a secured lender from suing the borrower for a deficiency judgement after foreclosure in certain circumstances.
Legislation that prohibits a lender from obtaining a judgement for money against a defaulting borrower under a deed of trust when the value o f property foreclosed upon is not adequate to satisfy the debt.
The following can sue in this matter, state attorney general, U.S. attorney general, and a tester.
Are considered business establishments subject to the Unruh Civil Rights Act.
The review or rehearing by a higher court of a
low (inferior) court’s decision.
The party appealing a court decision. Either
party may appeal; hence, the appellant could have been either the plaintiff or the defendant in the trial court.
In an appeal , the party who did not file the
appeal. Also known as the respondent.
A person who applies for something; a
An estimate and opinion of value. An opinion
or estimate of the fair mark t value of a property.
There are two types of certification, general and residential.
Copies of current statistics and
publications kept by appraisers in their library or record room.
Communication o f a formal appraisal.
Estimated worth of a property
determined by someone qualified invaliation.
One qualified by education, training, and
experience, who is hired to estimate the value of real and personal property on the basis of experience, judgment, facts, and use of formal appraisal processes.
Increase in the value of property.
SEE: Prior Appropriation
The taking, impounding or diversion of water flowing on the public domain from its natural course and the application of the water to some beneficial use personal and exclusive to the appropriators.
That which belongs to something, but not immemorially; all those rights , privileges and improvements which belong to and pass with the transfer of property, but which are not necessarily a part of the actual property. Appurtenances to real property pass with the real property to which the y are appurtenant, un less a contrary intention is manifested. Typical appurtenances are right- of way, easements, water rights, an d any property improvements.
Attached to or considered part of land, because of being considered necessary and incidental to the use o f that land. Commonly applied to easements that are considered part of property.
A right that belongs to the owners of one property that gives them the right to use
another property (which they do not own) in a specific way that benefits their property (e.g., an easement).
An appurtenant right
that does not involve ownership of physical objects; for
example, an easement (as opposed to mineral rights).
See: ANNUAL PERCENTAGE RATE
A neutral third party who listens to
each party’s position and makes a final binding decision.
A neutral third party who receives
evidence and resolves the dispute.
Generally the appearance
and character of a building s design and construction.
manager who works directly for the Federal Housing
Administration managing subsidized housing under
An adjustable rate mortgage.
A transaction, such
as the sale of property, in which all parties involved are
acting in their own self-interest and are under no undue
influence or pressure from the other parties.
That which is behind; used when describing
payment of past due interest and loan payments.
setting forth the basic rules and purposes under which a
a private corporation is formed.
A person created by law, as
distinguished from a natural person, a human being;
usually refers to a corporation.
May be used when the price paid for a comparable property is being used.
Accordion ContentA provision in a deposit receipt stating that
the buyer accepts the property in its present condition.
The process of combining two or more
contiguous parcels into one larger parcel which makes the one
parcel more valuable than the separate properties.
Value placed on property as a bas is
for taxation. A value used by the tax assessor before July
1978. It represented 25 percent of the assessor’s fair market
value. After deducting any exemptions from assessed value,
one applied the tax rate to the net figure to determine annual
The valuation of property for the purpose of levying a tax, or the amount of tax levied.
An obligation to pay for costs of local
improvements such as sidewalks, sewers, or street lighting.
In a real estate transaction a sale of real property would create a new assessment of real property.
A list of all taxable property showing
the assessed value of each parcel; establishes the tax base.
Anything of real value owned by an individual or
The official who has the responsibility of
determining the assessed values.
The assembly, management and disposition of a portfolio of investment properties.
To transfer a right or an interest in property to
One to whom property is assigned or
A transfer to another of any property or right.
The transfer of one’s entire interest in property. Generally, the
term is limited to intangible personal property (that is, stocks,
bonds, promissory notes) and to leasehold estates.
An assignment of future rents form property as security for a debt
A clause in a deed of trust or mortgage , providing that in the event of default,
all rents and income from the secured property will be paid to the lender to help reduce the outstanding loan balance.
An instrument hat transfers the beneficial interest under a deed of trust from one lender to another.
A clause in a trust deed that gives the beneficiary the right under limited circumstances to collect rents of the property if the borrower defaults.
One who assigns a right or an interest to
Those to whom property or interests
therein shall have been transferred
Person working for a broker
An organization of persons having a
Set of private condition s, co vena nts, and restrictions applying to all properties in a planned unit development, condominium,
or other community projects.
Acceptance of personal liability for
another’s debt or obligation. In the case of the sale of real estate , the buyer personally accepts and promises to pay off the existing deed of trust.
A lenders charge for changing over and processing new records for a new owner who is taking over an existing loan
A contract by which a person agrees to pay a debt or obligation owed by someone else.
The taking of title to property by a guarantee in which he or she assumes liability for payment of existing dnote secured by a mortgage or deed of trust against the property.
Shares one or more walls and often involves a party wall agreement
Seizure of property by court order before
judgment, usually done to have it available in the event a judgment is obtained in a pending lawsuit. The actual or constructive seizure of property by court order during a lawsuit. The usual purpose is to hold the assets as security for the atisfaction of a judgment
A lien on property arising because of
an attachment of that property
Things growing on a piece of
land, such as trees , shrubs or crops.
(1) To affirm to be true or genuine. (2) An
official act establishing authenticity.
The act of witnessing the execution of an
instrument (such as a deed or a will).
An agent authorized to perform certain
acts for another under a power of attorney. (See Power of Attorney)
A lease covenant
providing that a lease will be renewed indefinitely until one of
the parties gives notice of the intent to terminate at the end of
the lease term.
Authority actually given to an agent
by the principal, either expressly or by implication.
See: Agency, Apparent.
An agent’s authority to do everything
reasonably necessary to carry out the principals expressed orders.
A service that enables lenders to obtain a credit risk classification using applications software in the loan underwriting process.
The sudden tearing away or removal of land by the action of water flowing over or through it
The decision of the arbitrator.
The replacement of excavated earth in a
hole or against the side of a structure.
Personnel property is transferred in trust
for an accomplishment of a specific purpose. A possessory interest in personal property.
A financial statement showing a person’s assets, liabilities, and net worth.
When the final payment on a
note is greater than the preceding normal installments, the final installment is termed a balloon payment. An installment promissory note providing for the last payment to be much larger than any previous payment. By statute, any payment more than twice the smallest payment is a balloon payment, although in practice generally the term refers only to the last payment.
Method of estimating interest
and capitalization rates based on a weighted average of the mortgage interest rate (or other cost of borrowed funds) and the rate of return on equity required.
Any deed that recites a consideration and purports to convey real estate; a bargain and sale deed with a covenant against the
grantor s act is one in which the grantor warrants that the grantor has done nothing to harm or cloud title.
Average or typical costs of similar
buildings, usually obtained from published cost manuals; used in the comparative square foot method of estimating cost of construction.
Businesses that attract outside
money into the area , primary.
In the government survey system, a main
east-west line from which township lines are established. Each principal meridian has one base line associated with it.
See: Minimum Rent.
See: Value, Base
Imaginary lines used by surveyors from which they find, measure, and describe the location of lands.
A board that goes around the room against the wall and next to the floor.
Molding used at the top of the baseboard.
(1) Cost Basis
The dollar amount assigned to property at the time of acquisition under provisions of the
Internal Revenue Code for the purpose of determining gain, loss and depreciation in calculating the income tax to be paid
upon the sale or exchange of property.
2) Adjusted Cost Basis
The cost basis after the application of certain conditions for improvements, etc., and deductions for depreciation.
Molding used at junction of baseboard and
floor, sometimes called a carpet strip.
This consists of cash, coins, and checking accounts.
Best Alternative To a Negotiated Agreement.
Narrow strips of wood or metal used to cover joints on the interior or exterior of a building; they are also used for decorative effect.
A horizontal structural member supporting a load.
A wall or partition that
supports any vertical load, in addition to its own weight.
(Btcf; Cash Throw off; Gross
Spendable Income) The resulting amount when annual
debt service is subtracted from net operating income.
A location indicated on a permanent
marker by surveyors.
(1) One entitled to benefit from a
trust. (2) The lender on the security of a note and deed of trust. The creditor (lender) under a deed of trust.
To leave by will.
Personal property that is given by the terms of a will. A gift of personal property by will.
An improvement on real property that
increases the value and is considered a capital asset.
A contract in which the consideration given by each party is a promise: that is ,
a promise for a promise.
A single set of escrow instructions signed by both the buyer and the seller ; often signed at the opening of escrow, not at the end.
A contract between the seller of a home and a real estate broker, whereby the seller agrees to pay the broker a commission if he procures a buyer ready, willing and able to buy and the broker agrees to use due diligence.
When a broker contracts to perform certain services for a principal and in exchange the principal and in exchange the principal agrees to pay the broker a specific fee, their agreement would bilateral executory.
A proposed law, formally submitted to a
legislature for consideration.
A written instrument given by the seller
to the buyer to pass title to personal property.
A written statement that binds the
parties to an agreement until formal contracts can be drawn; an agreement to cover a down payment as evidence of good faith.
The decision of the arbitrator is final and not reviewable by the courts.
Real estate loan payments
made every two weeks. A monthly payment is divided by two and paid 26 times per year.
A period o f two tears .
An agreement wherein both parties are legally obligated to each other to perform An agreement wherein both parties are legally obligated to each other to perform
When using the sales comparison
approach, selection of market data so that the subject is contained within a range of data.
Asphalt paving used in streets and driveways.
A deed of trust binding more than one parcel of property a s security. It is frequently encountered in subdivisions, where every lot in the subdivision
is bound by the same deed of trust. As the lots are sold, they are released from the deed of trust by a partial release provision.
One mortgage or deed of trust that covers more than one piece of real property.
The average trust deed or mortgage covering more than one parcel of land.
An area in which real property is
declining in value because of destructive economic forces.
Rehabilitation of residential properties that have deteriorated significantly.
Advertisement that does not contain the name of the broker.
In reference to platted property, a group of lots surrounded with streets or unimproved land.
The practice on the part of unscrupulous
or real estate agents of inducing panic selling of homes at below market value, especially by exploiting the prejudices of property owners in neighborhoods in which the racial make-up is changing or appears to b e on the verge of change
A unit of measurement for lumber: one foot
wide, one foot long, one inch thick (144 cubic inches).
The standardized system of income and expenses accounting for office properties developed by the Building Owners and Managers Association International.
In good faith; genuine
A purchaser who pays fair value for property in good faith, and without notice of adverse claims.
An obligation under seal. Real estate bonds are issued o n the security of a mortgage or deed of trust. A certificate representing a contract for the payment of money, often used to repay certain loans or held as security to ensure
the performance of a stated act. The type of investment made by people looking for fixed returns and a little risk.
Insurance protection individuals
or firms against default in the performance of their duties.
An accounting term which is the difference between cost and the total amount of
depreciation that has been taken.
A key set of books maintained by a title company.
In an exchange, any property that isn’t treated
as a like-kind for income tax purposes; for example, if a building is trade for r a vacant lot and a yacht, the yacht is boot.
The mortgagor; one who gives
a mortgage as security for a debt.
Document prepared by the lender and signed by the borrower authorize the lender to perform certain acts (complete a loan; etc.) Usually included in the loan package.
The perimeter or border of a piece of
land ; dividing line between one piece of property and another.
A business location other than the real estate brokers principal place of business.
Frame lumber nailed at an angle in order to provide stability to the structure.
The breaking of or failure of duty, either by omission or commission. The violation of or failure to perform an obligation.
A violation of the terms of a legal agreement; default. Breach of contract allows the non-breaching party to rescind the contract, sue for damages, or sue for performance of the contract.
A breach of contract important enough so that bit excuses the nonbreaching party from erforming his or her contractual obligations.
Occupancy level at which gross income for a property equals the total fixed and variable operating costs.
A covered porch or passage, open on two ends, that connects the house and garage, or two parts of the house.
A loan that bridges the gap between two other loans, usually for a short time.
Wood or metal pieces used to brace floor joists.
An agent who earns income by arranging sales and other contracts. A real estate broker is an individual licensed by the state of California to arrange the sale or transfer of interests in real property for compensation.
One who is licensed as a real estate broker but works for another broker.
A brokers business.
Agreement between the client and the broker. This charged to the seller and not the buyer.
Mere payment of the buyer’s broker fee by the seller does not make the cooperating buyer’s broker a dual agent.
When a person is granted a brokers license it is valid for four years, unless suspended or revoked.
A statement signed and received by the borrower at the time of a loan transaction, indicating the costs, deductions, including commissions, of a loan negotiated by a real estate licensee.
In a real estate transaction the brokers principal can be a: seller, buyer, or landlord.
A written agreement required by regulations of the Real Estate Commissioner setting forth the material aspects of the relationship between a real estate broker and each salesperson and broker performing licensed activities in the name of the supervising broker.
Area where soil is contaminated.
British thermal unit. The quantity of heat required to *raise the temperature of one pound of water one degree
A strip of land separating one type of land use from another.
A set of rules establishing minimum standards for construction methods and materials
A good source to find out abuildings expenses is the utility company.
Often called a setback line, a building line is a line running a certain distance from the street, in front of which an owner cannot build. These lines are set by law.
An international organization of office building owners and managers, which fosters professionalism through its educational programs, forums and publications.
An independent educational organization supported by BOMA. Its course s lead to the designations Real Property Administrator (RPA), Systems Maintenance Technician (SMT), Systems Maintenance Administrator (SMA), and Facilities management Administrator (FMA)
A heavy waterproofed paper used as sheathing in exterior walls, or in roof construction as insulation and protection against moisture.
A clinically diagnosed condition that is caused by toxic substances or pathogens, that persists when an occupant leaves the building. Symptoms include hypersensitivity, pneumonitis, asthma and certain allergic reactions.
Technique of income capitalization; the net income to the building (after deducting the income required for the land ) is capitalized into an estimated value for the building.
The specific set of amenities and alterations a landlord is willing to make free of charge for an incoming commercial tenant.
A method of cutting operating costs for a property in which supplies are purchased inlarge quantities and stored for later use. Also called volume buying.
The sale by a business of a major portion of its stock-in-trade to someone other than ustomers.
Cabinets and other features built in as a part of the house.
A provision in a deposit receipt that allows the seller to keep the property on the market until a condition in the contract is fulfilled.
The rights that accompany the ownership of real estate. Each stick is a right.
See:Proof, Burden of.
An ownership concept that describes real property by the legal rights associated with owning the property. It specifies right such as the rights to sell, lease, use, occupy, mortgage, and trade the property, among others. These rights are typically purchased by the buyer in a sales transaction unless specifically noted or limited in the sale.
Real estate licensees who engage in the sale, purchase or lease of a business.
The sale, purchase, or lease of businesses that provide goods and services.
Accordion A wavelike movement of increasing and decreasing economic prosperity consisting of four phases; expansion, recession , contraction and revival.
The real estate activity dealing in the sale, purchase or lease of a business.
A development or subdivision allocated to office-warehouse or similar use. Also known as an office park. An outgrowth of industrial parks.
One of the 25 California codes containing the laws passed by the state legislature. It contains the statutes regulating the conduct of real estate brokers and establishes the Department of Real Estate.
A term used to describe a business including its stock- in-trade, fixtures, and good will.
See Subsidy Buydown
If the buyer in a real estate transaction, (such
as lease contract) needs assistance in deciding how to take option, he should consult his attorney.
An employment contract with a purchase.
Rules for the conduct of the internal affairs of corporations and other organizations
SEE: Acceleration Clause
The State of California holds the titles under Cal-Vet financing.
To terminate escrow by mutual written instructions
A program administered by the State Department of Veterans Affairs for the direct financing of farms and homes for veterans who qualify.
A license ceases to exist, effective as of
the date approved by the Commission , and does not involve disciplinary action.
Termination of a contract without undoing acts that have already been performed under
A lease clause granting the tenant the option to cancel at the end of a
A ceiling on interest rate increases.
Legal ability to perform some act, such as enter into a contractor execute a deed or will.
An agent of production; construction and
equipment costs ; investment money.
Assets of a permanent nature used in the production of income. Examples would include
land, buildings, and equipment.
A region where the total amount of savings is not sufficient to finance economic development
already underway in that area.
The gain recognized for federal and
state income tax purposes when a taxpayer disposes of a capital asset.
Money expended on repairs and
improvements and repair or prolong its life; not deductible.
In appraising, a method of determining
value of property by considering net income and a reasonable percentage of return on the investment.
SEE: Income Approach.
Method for estimating depreciation by comparing the subjects capitalized value to its replacement cost new.
The percentage rate or rate of
interest considered a reasonable return on the investment. It is used in the capitalization method of determining value based
upon net return.
See LIFE OF LOAN CAP
See Base Shoe
SEE: Loan, Carryback
SEE: Extender Clause
Rules of law developed in court decisions, as
opposed to constitutional law, statutory law, or administrative regulations. Also called decisional law.
Investment return based on actual cash
invested; cash flow as percentage or ratio to equity.
Equity dividend; cash flow.
A provision in the U.S. Constitution That limits judicial power to deciding actual, active conflict (as opposed to hypothetical questions) . Declaratory relief is an exception to this rule.
Windows set in frames of wood
or metal that swings outward.
(After tax cash flow) The new amount of cash a property produces when all cash in come and other cash generated are added together and all cash expenses and other cash payments are deducted.
A yearly financial report showing the bottom-line return after taxes.
CAUCUS Occurs when the mediator meets with each party separately.
A legal right; facts giving rise to
an enforceable claim.
A Latin phrase meaning ” let the
buyer beware”; the legal maxim stating that the buyer must examine the goods or property and buy at his or her own risk.
Certified Commercial Investment Member
Abbreviation for covenants, conditions,
and restrictions. Often used synonymously with general plan restrictions on a subdivision.
An action by a government agency to require a person business to stop an illegal or unfair practice.
A town that performs a variety of
services for the surrounding area.
An official act of disapproval.
The State Board of Equalization issues that the seller has paid sales tax.
Issued by the Department of Veterans Affairs – evidence of individuals eligibility to obtain a VA loan
A statement issued by a local government verifying that a newly constructed building is in compliance with all codes and may be occupied.
The document given to the purchaser of a mortgage foreclosure sale, instead of the deed; replaced with a sheriff’s deed only after the redemption period expires.
The Veterans Administration’s written appraisal of the value of a property.
A written statement of guaranty of the condition of the taxes on a certain property
made by the County Treasurer of the county wherein the property is located. Any loss resulting to any person from an error in a tax certificate shall be paid by the county which such treasurer represents.
A written opinion by an attorney that ownership of the particular parcel of land is as stated in the certificate.
(Opinion of Title) A document signed by a title examiner (attorney or title company
agent) stating the judgement that, based on an examination of the public records, the seller has good title to the property being conveyed to the buyer (not to be confused with title insurance)
CERTIFIED APARTMENT PROPERTY SUPERVISOR (CAPS); CERTIFIED APARTMENT MAINTENANCE TECHNICIAN (CAMT).
Designations awarded by the National Apartment Association (NA A) for appropriate courses of study.
(See State Certified appraiser)
A designation awarded by the Community Association Institute for courses of study in the professional management community associations.
A designation awarded for qualification in plant engineering facilities management by the American Institute of Plant Engineers
A property manager who has fulfilled the Institute of Real Estate Management s requirements for this professional designation.
Designations granted to qualified shopping center managers and marketing directors who have satisfied the requirements and educational programs of the International Council of Shopping Centers.
The Supreme Court order indicating that the court has decided to exercise its discretion and accept a case offered on appeal. The
court reviews only those select cases that it deems worthy of review.
A unit of measurement used by surveyors . A
chain consists of a hundred links equal to 66 feet.
A series of conveyances, encumbrances , and other instruments affecting the title from the time original patent was granted, or as far back as records are available. A history of the recorded ownership of real estate and claims against title to real estate.
The old name for personal property.
A personal-property mortgage. (See Security Agreement etc..)
In real estate, an estate less than a freehold estate, such as a lease.
(1) Personal property. (2) This term is
sometimes used in a law to describe any interest in real or personal property other than a freehold.
A square measuring 24 miles on each side and representing the largest unit of measure in the government survey system.
After A broker has confirmed his
choice-of-agency, the choice cannot be corrected or modified at any time.
A personal right to something not presently in owners , but recoverable by a legal action for possession.
Something in possession rather than the right of possession.
An electrical device that automatically interrupts an electrical circuit when an
overload occurs. Circuit breakers can be reset and today are used instead of fuses.
Statements of alleged violations and the
The following people have done work on this subject, Von Thunen, Burgess, Babcock and
One of the 25 California codes containing the
statutes passed by the state legislature. The most important code relating to contracts and real estate, the Civil Code defines the nature and requirements for contracts and real
estate transactions, among its many other provisions.
A system of jurisprudence, sometimes called Roman law, where in all the laws are set forth in advance to regulate conduct (as opposed to common law, where the principles o f law develop on a case-by-case basis). In California the term also refers to the law relating to and between individuals, as opposed to criminal law.
Fundamental rights guaranteed to all persons
by the law. The term is primarily used in reference to constitutional and statutory protections against discrimination based on race, religion, sex, or national origin.
A federal law that guarantees that citizens of all races have the same rights as white citizens to inherit, purchase, lease, sell, hold and convey real and personal property.
Violations of this act should be reported to HUD .
Boards that are used for siding and that are
usually thicker at one edge.
A distinct provision in a written document.
A person represented by a broker or an
The date when documents are recorded and title passes from seller to buyer; on this date
buyer becomes legal owner and title insurance becomes effective.
(1) Process by which all the parties to a real estate transaction conclude the details to a sale or mortgage. The process includes the signing and transfer of documents and
distribution of funds. (2) Condition in description of real property by courses and distances at the boundary lines where the lines meet to include all the tract of land.
The miscellaneous expenses buyers and sellers normally incur in the transfer of ownership of real property over and above the cost of the property.
An accounting of funds made to the buyer and seller separately. Required by law to be
made at the completion of every real estate transaction.
A claim or document that affects title to real estate. The actual cloud may ultimately prove invalid, but its existence mars the title.
The title insurance policy issued to
homeowners and non institutional lenders. The initials stand for the California Land Title Association, an organization that regulates and standardizes the provisions within title policies.
One of the 25 California codes that contain the statutes passed by the state legislature. It contains most of the procedural requirements for enforcing rights granted by other codes,
including the procedures for evictions, foreclosures, and lawsuits.
A set of rules and principles expressing a standard of accepted conduct for a professional group and governing the relationship of members to each other and to the organization CODICIL And amendment to a will.
Collection and organization of piecemeal laws into a comprehensive code.
A common provision in property insurance policies that limits the liability of the insurance company to that proportion of the loss that amount of insurance bears to a percentage of the value of the property.
A beam that connects the pairs of opposite roof rafters above the attic floor.
Property subject to a security interest;
property used as security for a debt. (See Security Agreement.) Another word for security. This held until the money has been paid back.
Refers to liens secured by other
The hypothecating of property, usually personal, as security for a loan.
The transfer of property of other valuables to ensure the performance of a principal
agreement; an obligation attached to a contract to guarantee its performance.
Gross income from property minus the vacancy and other types of rent loss. Also called gross adjusted income.
A secret agreement between two or more
persons wishing to defraud another for a wrongful purpose or to obtain an object forbidden by law.
That which appears to be a good title but, in fact, is not; for example, a forged deed. A document that appears to convey title, but in fact is ineffective, conveying no title at all. It is one of the requirements for adverse possession and easement by prescription.
A grooved building material used primarily for interior finish.
A term applied to the remainder of an acre of land after the area devoted to streets, sidewalks, curbs, and so on has been deducted from the acre.
A financial institution chartered by the
state or federal government to receive, lend and safeguard money and other items of value. They tend to loan money for construction loans, home improvement loans, and consumer loans.
A personal loan from a commercial
bank, usually unsecured and short term, for other than mortgage purposes.
Negotiable instruments used in business.
A classification of real estate that includes income producing properties. When appraising a commercial property, the appraiser is most concerned with the
sale price of comparable properties . Commercial property usually must be zoned for business purposes.
Reasons for rejecting a commercial tenant may be any one of the following; insufficient
profit margin to maintain long-term rent, incompatible mix with existing tenants, and a large amount of physical alteration would be required to accommodate the tenant.
The mixing of different funds so that they can no longer be distinguished. In domestic
law it refers to the combination of separate property and community property, so that the separate property and community funds can no longer be distinguished; in such case all property is considered community property.
For brokers it refers to the mixing of clients money with the broker’s separate bank accounts.
An agent’s compensation for performing
the duties of his or her agency agreement. In the real estate business, it is usually a percentage of the selling price or a percentage of the lease or rents, for example.
Demanding a commission or a discount based on your status as a licensee after the terms of an agreement have been struck are unethical.
The previously agreed upon division of money between a broker and a sales associate
when the broker has been paid a commission
from a sale made by the associate.
May Be used in its entirety by a subdivider in his advertisement of his subdivision.
A pledge or a promise; a firm agreement.
Similar to a preliminary title report; guarantees that the title company will issue title insurance.
An entire common interest subdivision except the separate interests therein.
The parts of multiple owners hip property not included in the units ; those parts in which each individual owner holds an undivided
A person who owned two or more adjacent properties and then sold them to different
Subdivided lands which include a separate interest in real property combined with an interest in common with other owners.
The interest in common may be through a membership in an association. Examples are condominiums and stock cooperatives.
The body of law that grew from customs and practices developed and used in England.
A body of unwritten law that developed in England from the general customs and usage. It was adopted in the United States and exercised by court decisions following the ancient English principles and the recodified law of a state.
Money awarded to a plaintiff in a civil lawsuit; damages. COMPARE: Equitable Remedy
That class of corporate stock to which
there is ordinarily attached no preference with respect to the receipt of dividends or the distribution of assets on corporate dissolution.
A professional organization offering educational programs for persons involved in homeowners , condominium, and cooperative associations
A shopping center of about 100,000
to 250,000 square feet (20to70 retail spaces) supported by more than 5,000 families.
Political factors should be incorporated into the management plan because of this.
All property acquired by a husband and wife living together, except separate property.
(See Separate Property etc..) Property owned in common by a husband and wife as a kind of marital partnership.
Federal law requiring financial institutions to lend in communities served, including
low and moderate -income areas, consistent with considerations of safety and soundness.
a person who signs a note or trust deed
in addition to the borrower to give extra security to the loan.
The co-mortgagor is jointly liable for the repayment of the loan.
A combined construction loan and permanent take-out loan after construction is completed.
Packing or consolidation of soil. When soil is
added to a lot to fill in low place s or to raise the level of the lot, it is often too loose to sustain the weight of buildings.
The refo re, it is necessary to compact the added soil so that it will carry the weight of the building without danger of settling or
Sales which have similar characteristics as the subject property and are used for analysis in the appraisal process. Commonly called
Comparables , they are recent selling prices of properties similarly situated in a similar market.
A financial study of the projected income from a property in as-is condition versus financial returns from that property if suggested capital improvements were
implemented. Property managers use the analysis to demonstrate to owners the return on proposed capital expenditures.
One of three methods in the appraisal process. A means of comparing similar type properties , which have recently sold, to the subject property.
Method of estimating construction costs using typical square foot costs for the type of construction being estimated.
A real estate comparison method which compares a given property with a similar
or comparable surrounding properties; also called market comparison.
Anything of value or a valuable consideration, directly or indirectly paid, promised or expected to be paid or received.
Positive factors that are considered by lenders to approve loans to otherwise marginal borrowers.
Legally qualified or capable.
Holds that profits tend to breed competition and excess profits tend to breed ruinous completion.
Work estimates submitted to the property manager by service contractors, suppliers, trades people or construction contractors.
A document a plaintiff files with the court
to start a lawsuit. A formal allegation or charge.
Interest paid on the original principal and also on the accrued and unpaid interest that has accumulated as the debt matures.
(Master Plan) A statement of policies for the future physical development of an area (e.g ., city, county, region).
A 1980 federal law created to impose liability on people or organizations responsible for environmental damage and to facilitate the financing of asbestos cleanup projects and
property damage claims.
Accessing lender loan programs via computer.
The act of keeping from site or keeping
A negotiable point in a lease, decide in the
prospective tenant s favor.
A trend in the property management field that provides personal , secretarial, catering
or other services to the occupants of office or residential buildings.
The final estimate of value, realized from the
facts , data , experience and judgement, set out in an appraisal. Appraisers certified conclusion.
A legal assumption that cannot be rebutted, and is therefore accepted as true and binding on the courts.
A real estate transaction procedure in which the closing of one escrow is dependent upon the closing of another one; also called a double escrow; commonly used in exchanges and in instances where the buyer depends on funds he expects to get from the sale of
Occurring simultaneously, at the same time; real estate exchanges often must be recorded concurrently.
Any form of ownership in which two or more people share title to piece of property, holding undivided interests . Also called cotenancy.
(1) The act of taking private property for public use by a political subdivision.
(2) A declaration by proper governmental authorities that a structure is unfit for use .
The taking of private property for public use through the exercise of the power of eminent domain.
A provision in a contract stating that the contract will not go into effect or that it will terminate upon the occurrence of some specified future event.
(1) A restriction added to a conveyance that, upon the occurrence or non occurrence of a some act or event,
causes the estate to be defeated.
(2) A contractual provision that upon the occurrence or nonoccurrence of a stated act or event, an obligation is created , destroyed, or defeated.
Recorded deed restrictions that run with the land, usually initiated by the original subdivider.
A condition that must occur before an estate is created or enlarged, or before some other right or obligation occurs.
A condition that, upon its failure or nonperformance, causes the defeat or extinguishment of an estate, right, or obligation.
A loan commitment for a definite amount under certain terms and conditions. It is subject to an unknown purchaser’s satisfactory credit rating.
Usually called, in California, Fee Simple defeasible. An estate that is granted subject to a condition subsequent. The estate is terminable on happening of the condition.
SEE: Fee Conditional
A contract for the sale of property where by the seller retains legal title until the conditions of the contract have been fulfilled. The buyer has an equitable interest in the property. (See Security Agreement.) A contract for the sale of property by which possession is delivered to the buyer, but title remains with the seller until full payment or the satisfaction of other stated conditions.
An exception to or relief from the application of a zoning ordinance, because of special authorization granted by the zoning authorities. The issuance rests on public policy benefits and prior authorization in the zoning ordinance.
A system of individual ownership of units in a multifamily structure, combined with joint ownership of common areas of the structure and the land. The ownership of a n individual unit in a multi-unit structure, combined with joint ownership of common walkways, land, and other portions of the property. Each condominium is owned separately in a fee simple estate. They generally offer more amenities than other types of residential rentals or ownership. Owners can obtain secondary financing and cash out his or her equity, can sell at a higher price than paid, getting benefit from increased value or can obtain financing.
The document which establishes a condominium and describes the property rights of the unit owners.
Usually a metal pipe in which electrical wiring is installed.
Any entry of judgment upon the debtor’s voluntary admission or confession.
A court approval of the sale of property by an executor, administrator, guardian, or conservator.
When different parties each make claims that are inconsistent with one another.
A loan that does not exceed Fannie Mae/Freddie Mac limits. This limit changes annually.
Minor repair, renovation and restoration of residential buildings that have substantial economic use remaining. Also called blight prevention.
Anything of value, or that is legally sufficient, given to induce someone to enter into a contract. The inducement for reentering into a contract; usually money, services, or a promise, although it may consist of a legal benefit to the promisor or any legal detriment to the promisee.
Consideration that is comparable in value to the consideration of the other party to the contract is giving. A contract is enforceable even if the consideration is inadequate, but a court can not order specific performance in that case.
A factor representing twelve times the monthly payment expressed as a percentage of the original loan amount. A short-cut to providing annual debt service.
A fundamental document that establishes a governments structure and sets limits on power.
1. Pertaining to or based on a constitution.
2. Not in violation of the U.S. constitution or a state constitution.
The interpretation of an ambiguous term or provision in a statute or agreement.
Type of construction; a system that rates the basic frame, walls, and roof of a structure as to their relative fire resistance (e.g., Class A, B, C, or D construction, Class A being the most fireproof).
A temporary loan to a home buyer by the lender to pay the building contractor, either in installments or in one lump sum at the end of construction.
A fiction imputed by law.
A breach of the landlord’s warranty of quiet enjoyment. Any acts by the landlord that substantially interfere with the tenant’s use and enjoyment of the premises.
Notice given by the public records; that which is considered equivalent to actual notice even though there is not actual notice.
(1) Notice given by a recorded document.
(2) Notice imputed by a law because a person could have discovered certain facts upon reasonable investigation, and a “reasonable man” in the same situation would have conducted such an investigation.
Control of the cash proceeds in a delayed exchange without the actual physical possession by the exchanger or his or her agent.
A federal law that includes the truth-in-Lending Law.
Goods sold or purchased primarily for personal, family, or household purposes.
Adjoining or touching upon , such as properties touching each other.
A homebuilder should consider the ability to quickly liquidate developments after the initial sales momentum has worn off.
Conditional, uncertain, conditioned upon the occurrence or nonoccurrence of some uncertain future event.
A condition that must be met or an event that must happen before a purchase contract becomes binding between the parties.
A statement filed to extend the time limit on a financing statement that had been filed earlier.
An agreement to do or not to do a certain thing. It must have four essential elements: capable parties, mutual consent, a lawful object, and consideration. A contract of real estate must also be in writing and signed by the party or parties to be charged with performance.
A contract in which each party promises to do something. COMPARE: Contract, Unilateral.
A contract in which both parties have completely performed their contractual obligations.
A contract in which one or both parties have not yet completed performance of their
A contract that has been put into words, either spoken or written.
SEE: Contract, Land
A contract for the sale of property in which the buyer pays in property immediately, but not taking title until the purchase price has been paid in full. Also called an installment land contract, installment sales contract, land sales contract, real estate contract, and other names.
A spoken agreement, as opposed to a written one.
(See Conditional Sale Contract.)
Average rate charged on ARM loans or fixed -rate loans by savings institutions nationally.
Amount of rent being paid under contractual commitments binding owners and tenants.
Maintenance tasks performed by outside laborers on a regular basis for a specified fee.
an agreement that a court would refuse to enforce; for example, it may be unenforceable because it isn t in writing, or because the statute of limitations has run out.
When one party promises to do something if the other party performs a certain an, but the other party does not promise to perform it; the contract if formed only if the other party does perform the requested act.
COMPARE: Contract , Bilateral.
A bind ing, legally enforceable contract.
An agreement that isn’t an enforceable contract because it lacks a required element or is defensive in some other prospect.
A phase of the business cycle characterized by decreasing production.
A contract that one of the parties can disaffirm without liability, because of lake of capacity or a negative factor such as fraud or duress.
A loan that is made that is not federally insured or guaranteed.
The wrongful appropriation of another’s goods to one’s own use; to change from one character or use to another.
(1) In tort, an unauthorized claim of ownership over another’s personal property.
(2) In property, the change of character of property from real to personal , or vice versa.
The main difference in this type of ownership and a condominium is that a cooperative has a blanket mortgage over the whole building.
(Mortgage) A loan that starts out as a adjustable-rate loan, then, at the option of the borrower during a designated period , is switched to a fixed-rate loan.
(1) The transfer of the title of real property from one to another.
(2) An instrument that transfers an interest in real property from one person to another. The transfer of title to real estate from one person to another.
A building owned by a corporation, where the residents are shareholders in the corporation; each shareholder receives a proprietary lease on an individual unit and the right to use the common areas.
An agent of production; management.
(Concurrent or multiple ownership) Title to real property held by two or more persons at the same time.
An abbreviated term meaning mortgage loan correspondent. A mortgage banker who services loans as an agent for the owner of the mortgage. Also applies when a mortgage company originates a loan.
Lot with frontage on two intersecting streets.
The increase in value of a property because it is located on a corner lot.
Cooperative in which legal ownership of a building is being held by a corporation created for that purpose
An association organized under strict rules, in which individuals purchase ownership shares; regarded by law as an artificial person, separate from individual shareholders.
An artificial or fictitious person formed to conduct specified types of business activities.
A corporation doing business in the state where it was created.
A corporation doing business in one state, but created in another state.
An artificial or fictitious person formed by an ecclesiastical body.
Actual repairs necessary to keep a property in good condition and operating smoothly.
Adjustment lines used in the government survey system to compensate for the curvature of the earth. They occur at 24 -mile intervals (every fourth township line), where the distance between range lines is corrected to 6 miles.
The expenditure of monies necessary for the creation of improvements on a property.
A method in which the value of the property is derived by estimating the replacement cost of the improvements, then deducting the estimated depreciation, then adding the market value of the land. This is most efficient when used estimating the cost of a new building. The information used in this approach is called Cost Data
The cost to the lender, expressed as a percentage, to obtain funds for lending,. Includes interest paid to depositors, cost of borrowing, advertising, giveaways and other sales costs, administrative and overhead costs, reserves, etc.
Anyone who shares ownership of a piece of property with another; may be a joint tenant, a tenant in common, a tenant in partnership, or a spouse owning community property.
Any form of joint ownership.
Rejection of an offer to buy or sell, with a simultaneous substitute offer.
A system for recording documents in permanent books at the county court house; maintained by each county and provided for by law; open to public examination
The county tax rate is set annually by the County Treasurer.
A direction, stated in terms of a compass bearing, in metres and bounds description of property.
A court mandated arbitration.
A form of ownership in which each individual apartment owner shares in a cooperative venture that entitles the owner to use , rent, or sell a specific apartment unit.
A group or a body of persons recognized by law as an individual person with rights and liabilities distinct from those of the persons comprising it. Since the corporation is created by law, it may continue for any length of time that the law prescribes. An artificial entity given authority to conduct business and possess many of the rights of natural persons. One of the key, characteristics is that of perpetual existence.
SEE: Replacement Cost, Reproduction Cost.
One of the three classic approaches to value. It involves estimating the replacement cost new of the improvements, deducting the estimated accrued depreciation, and then adding the market value of the land. This is called the Summation Method.
See Adjusted Cost Basis.
Factor used in adjusting published construction cost figures to estimate current and local costs.
A method of paying construction contractors in which the contractor furnishes a preliminary estimate for the proposed job and is paid the actual cost of the work plus a percentage of profit.
Method of estimating accrued depreciation (loss in value) based on the cost to cure or repair observed building defects.
Flashing used on chimneys at roof-line to cover shingle flashing and prevent moisture entry.
The rejection of an offer by the submission of another offer, different in terms from the original offer. Any purported acceptance of an offer that introduces new terms is a rejection of that offer, and amounts to a counter-offer.
This may be ordered by the superior court when the sum at stake is less than $50,000 dollars.
These papers cannot be served by the property owner or manager.
SEE Zero-Lot-Line Home.
An agreement or a promise to do or not to do a particular act. Covenant: A contractual agreement whereby one of the parties promises to perform or to refrain from doing certain acts.
A promise that buyer or tenant s possession will not be disturbed by the previous owner, the lessor, or anyone else claiming an interest in the property.
This index is commonly used for rent increases in office buildings CPM Certified Property Manager; a member of the Institute of Real Estate Property management of the National Association of Realtors.
Exterior or interior opening permitting access underneath a building, as building codes may require
Any financing out of the ordinary, such as seller carrybacks and wrap -around s.
A payment receivable as opposed to a de bi, which is a payment due.
A statement provided by the borrower for a prospective lender in order to establish or
exhibit financial stability.
When a lien holder purchasing the security property at a f orec losu resale is allowed to apply the amount the borrower owes him or her to the purchase, rather than having to pay the full amount of the bid in cash
Credit history of a person or business issued by a company in the credit reporting business, used to help determine creditworthiness.
One who is owed a debt.
A creditor with a lien on specific property, which enables him or her to foreclose or collect the debt from the sale proceeds if it is not otherwise paid.
The body of law concerned with crimes, an individual’s action against society.
A dead end street.
Lot located at or near the end of a dead-end street.
Items of physical deterioration or functional obsolescence that if repaired would add at least as much of the market value of the property as the cost of repairs.
To remedy a default, by paying money that is overdue or fulfilling other obligations.
The impression gained, good or poor, of a property when it is first seen, usually from the street while driving, hence curb appeal.
A slang phrase, implying an informal valuation of a property based on observation and experience.
A list of the due dates and amounts by which the principal sum of an obligation will be reduced by partial payments.
A prospective property buyer.
See business cycle
The indemnity recoverable by a person who has sustained an injury to either his or her person, property, or rights through the act or default of another. Compensation ordered by the courts for the loss of or injury to one’s person or property.
Damages intended to compensate the plaintiff for harm caused by the defendant s an or failure to, including personal injuries (physical and mental), property damage and financial loss.
Damages compensating for loses that where not the direct result of the defendant’s wrongful act, but which were foreseeable consequence of it.
A sum that the parties to a contract agree in advance (at the time of entering into the contract) will serve as compensation in the event of a breach.
An award added to compensatory damages , to punish the defendant for malicious or outrageous conduct and discourage others from similar acts.
An appraiser s file of information on real estate.
An artificial horizontal plane of elevation, established in reference to sea level, used by surveyors as a reference point in determining elevation.
A person who holds property primarily for sale to his or her customers in the ordinary course of his or her business.
Property held for sale to customers rather than as a long-term investment; a developers inventory of subdivision lots, for example.
A broker listing a property for sale must disclose a death accruing on the property within three years before the sale.
Bonds issued without security, an obligation not secured by as specific lien on property.
A bookkeeping entry on the left side of an account, recording the creation of or addition to an asset or expense, or reduction or elimination of a liability or item of equity or revenue.
Net operating income divided by annual debt service. Used by lenders when analyzing income property loans.
Borrower’s monthly payment obligations as a percentage of their income.
(1) A party who “owns” the property that is subject to a security interest.
(2) A person who owes a debt.
The sum of money needed each payment period to amortize the loan or loans.
A person who has died.
Trees which shed their leaves at seasonal intervals.
SEE: Case Law
Usually an open porch on the roof or another part of the structure.
The legal document that the developer of a condominium must file and record in order to create a condominium under state law.
A document recorded by an owner that voluntarily release a property from homestead protection.
A single-family dwelling; a house situated on a two-acre parcel; a fourplex.
A formal instrument filed by a business trust with the Department of State as a prerequisite for creating the trust.
A course of action declaring rights claimed under a contract or statute intended to prevent loss or guide performance by the party or parties affected.
A court’s decision on the rights of the parties in a question of law, without ordering anything to be done.
Third phase in the cycle of a neighborhood, generally marked by delayed repairs and deterioration of buildings.
A method of accelerated depreciation allowed by the IR S in certain circumstances. Double Declining Balance Depreciation is its most common form and is computed by using the rate used for straight line depreciation
Decree by a court ordering the sale of mortgaged property and the payment of debt owing to the lender out of the proceeds.
An appropriation of land by its owner for some public use and accepted for such use by au authorized public officials on behalf of the public. A gift of privately owned land to the public or for public use. It may be voluntary or involuntary.
Involuntary dedication, resulting from an owners acquiescence to public use of his or her property for at least 5 years. Also called common law dedication.
A dedication required by law; for example , dedication of property for streets and sidewalks as a prerequisite to subdivision approval.
An amount a taxpayer is allowed to subtract from his or her income before calculating the tax on the income.
An income tax reduction that allows the taxpayer to recover the cost of depreciable property used for the production of income or used in trade or business. Formerly called a depreciation deduction.
An income tax deduction allowed for expenditure made to keep property in ordinary, efficient operating condition, not allowed for a principal residence or personal use property.
A written instrument that when properly executed and delivered conveys title.
A deed used to correct minor mistakes in an earlier deed, such as misspelled names or errors in the legal description.
A deed in which the grantor warrants the title against defects that might have arisen before or during his or her period of ownership.
COMPARE: Dee d, Special Warranty.
A deed that is not supported by a valuable consideration; often lists love and affection as the consideration.
Any deed that uses the word grant in its words of conveyance; carries two implied warranties and conveys after-acquired title. The most commonly used deed in California. COMPARE: Deed, Quitclaim
A deed that conveys any interest in a piece of real property the grantor has at the time deed is executed. Often used to clear up a cloud o n the title. It contains no warranties of any kind, and does not convey after-acquired title. COMPARE Deed. Grant.
To prevent a foreclosure from happening an owner may give the mortgagor the deed to the property to stop the foreclosure proceedings.
A legal instrument that conveys title from a trustee back to the borrower under a mortgage once the mortgage has been paid out
A security instrument transferring title to property to a third person (trustee) as security for a debt or other obligation.
1. A trust deed that covers more than one parcel of real estate.
2. A trust deed that covers an entire building or development, rather than an individual building or lot.
A blank trust deed form filed for record to save recording costs on real deeds of trust.
A second ( or third, etc.) Deed of trust , with lower lien priority than the first trust deed.
A deed of trust with higher priority than another deed of trust on a property.
A restrictive covenant in a deed.
Refers to the way this state regulates rate filings by title companies, in other words, how approval is obtained for rate filings by the regulatory authorities.
(1) Failure to fulfill a duty or promise or to discharge an obligation.
(2) Omission or failure to perform any act. Failure to perform a legal duty or to discharge a promise.
A judgment obtained because the defendant failed to appear and defend his case.
Sometimes called a base fee or qualified fee; a fee simple absolute interest in land that is capable of being defeated or terminated upon the happening if a specified event.
The clause in a mortgage or deed of trust that gives the borrower the right to redeem his or her property upon the payment of his or her property upon the payment of his or her obligations to the lender.
Capable o f being defeated. A defeasible estate is one that has a condition attached to the title, which if broken causes the termination of that estate.
(See Cloud on Title)
The party being sued in a lawsuit; the party against whom an action is filed.
A right to defer payment of an obligation (such as paying taxes) until a later date.
See Negative amortization
Maintenance and accumulated repairs that have been postponed to later dates
The privilege of deferred income payments to take advantage of statutes affording tax benefits.
A judgment given for the unpaid balance of a debt remaining after the surety is sold . A court decree holdin g a debtor personally liable for the shortage or insufficiency realized on the sale of secured property. The debtor owes the difference between the sale price of the property and the amount of the secured debt.
The first step in the appraisal process.
Most inventories o f real estate are held back because the owners expect the interest rates to drop.
The conferring upon by an agent upon another of all or certain of the powers that have been conferred upon the agent by the principal.
Failure to make timely payments on aloan.
The unconditional,irrevocable intent of a grantor immediately to divest (give up) an interest in real estate by a deed or other instrument.
The desire to possess, plus the ability to buy; an essential element of value.
Checking accounts or transaction deposit with drawable upon demand, as opposed to time deposit.
Transactions with a value less than a certain minimum amount.
A transfer of an estate to another person for a specified period of years, for life, or at will.
A refusal or rejection.
The number of homes or lots per acre.
A government agency authorized to construct and provide financial assistance to housing development for low income tenants.
A government agency that guarantees approved lenders against foreclosure loss o n loans made to eligible veteran s.
Money given to another as security to ensure the performance of a contract. The money is usually intended to be applied toward the purchase price of property, or forfeited on failure to complete the contract. The claim of the tenant to this money comes before any creditors of the landlord. The landlord must furnish a written statement showing the amount received and the amount disbursed to the tenant. All unused deposit money must be returned to the tenant with proper accounting within two weeks after vacating premises.
The formal, out of court testimony of a winess in a lawsuit, taken before the trial; used as part of the discovery process , to determine the fans of the case, or if or if the witness will not be able to attend the trial. A transcript of a deposition can be introduced as evidence in a trial.
The document used for a prospective real estate buyers offer to a seller, which also serves as the buyer’s receipt for deposit. If the seller a cce pts the receipt it becomes their contract; also called an earnest money agreement or purchase and sale agreement.
To decline in value.
Method for adjusting comparable sales; adjustments are calculated from an analysis of the depreciated replacement cost for each differentiating feature.
A loss in value for any cause. This loss in value to real property may be caused by age or physical deterioration, or by functional or economic obsolescence.
Property that is eligible for depreciation (cost recovery) deduction because it will wear out and have to be replaced.
Distance from the frontage of a lot to the rear lot line.
Depth tables are used by appraisers when determining value o f business property that varies in depth.
The passage of title to real property upon the death of the owner to his or her legal descendants.
A reference to certain maps, plats, and other instruments that are recorded with the county and serve to make a positive property identification.
The total of rent, telephone, utilities, advertising and other expenses divided by the number of desks found in a real estate office.
Classification of buildings based on the use for which a structure is designed.
An easing and relaxing of rules and regulations for lenders.
Two real estate licensees designated to represent the buyer and the seller as single agents in a nonresidential transaction. The buyer and seller must have assets of more than $1 million or more and sign disclosures stating their assets meet the required threshold.
An order that the Real Estate Commissioner is empowered by law and refrain from committing an act in violation of the Real Estate Law.
The process of gradual worsening or depreciation.
An estate which may end on the happening of an event that may or may not occur.
First phase in the life cycle of a neighborhood, consisting of the initial construction of improvements on vacant land.
The first stage in a development cycle.
Method of vacant land valuation; development costs are subtracted from estimated gross sales, and finally, developer s profits are accounted for. The results are an estimate of raw land value.
A large project affecting more than one county.
To be one of these a developer must anticipate risks and profits, survey the market and measure present needs.
A gift of real property by deed.
One who receives real property under a will.
One who disposes of real property by will.
A written observation, remark, or opinion by a judge to illustrate or suggest an argument or rule of law not incidental to the case at hand, and which, therefore, although persuasive, is not binding on the judge.
Income capitalization technique; value is estimated by dividing net operating income by the overall capitalization rate.
All of the costs that are directly involved with the physical construction of the structure, including labor, materials and equipment, design and engineering, and subcontractors fees.
Expenses that can be attributed directly to the operation of a management firm or department.
Sale Comparison Approach.
Method of adjusting comparable sales; two or more comparable properties with one differing feature are used to estimate the amount of the adjustment for that feature. (Also called the matched pair method.)
The direction in which the residential sections of a city seem destined or determined to grow.
A hotel or lodging house need not be designed to accommodate disabled persons if it contains fewer than 25 rooms.
A landlord may not charge an additional security deposit for a dis abled tenants guide dog. A landlord may modify residential rental property to accommodate the needs of disabled tenants.
Any physical or mental impairment that substantially limits one or more of an individual s major life activities, including caring for oneself, performing manual tasks, walking, seeing, hearing, speaking and working.
To ask a court to terminate a voidable contract.
The release of monies held in an escrow account; usually on the day that escrow closes.
If a real estate licensee or seller willfully o r negligently fails to comply with the disclosure requirements he or she will be liable for any actual damages suffered by a buyer.
A statement that the Truth-in-Lending Law requires a creditor to give a debtor showing the finance charge, annual percentage rate, and other required information.
To sell a promissory note before maturity at a price less than the outstanding principal balance of the note at the time of sale. It may also be the amount deducted in advance by the lender from the face of the note.
A specialized type of shopping center or a large single store with emphasis on lower prices as a merchandising technique. The closed door discount house is open only to qualifying members; the open discount house is open to the general public.
A fee charged by the lender when making an FHA or VA loan to offset the lower interest rate the lender will receive compared with conventional loan interest rates. One point is equal to 1 percent.
The interest rate that is charged on money borrowed by banks from the Federal Reserve System.
Tables used by lenders and investors to show how much a given value is, called the discounted value, based upon various interest rates and terms of maturity.
Those powers conferred upon an agent by the principal which empower the agent in certain circumstances to make decisions based on the agent’s own judgement.
Failure to advertise real estate for sale in n on-English pub lications do es not c onstitute unlawful discrimination if the property offered is in an area with a significant non-English speaking population.
Technique of income capitalization; estimated future investment returns are discounted to a present value.
A broker engaging in discriminatory business practices is subject to
Use of the words Restricted, Exclusive and Private, in real estate advertising should be avoided as they indicate discriminatory preferences.
The sudden withdrawal of substantial sums of money savers have deposited with savings and loan associations, commercial banks, and mutual savings banks. This term can also be considered to include life insurance policy purchasers borrowing against the value of their policies. The essence of this phenomenon is financial intermediaries losing within a short period of time billions of dollars as owners of funds held by those institutional lenders exercise their prerogative of taking them out of the hands of these financial institutions.
The after -tax income a household receives to spend on personal consumption.
To deprive one of the use of real estate.
A suit brought by a landlord to evict a tenant for defaulting in the terms of the lease. Also known as unlawful detainer actions.
A divorce. District A neighborhood that contains only one kind of land use.
The main trial court in the federal court system and the lowest federal court. It has jurisdiction in civil cases where the plaintiffs and defendants are from different
state s (diversity o f citizenship) and the amount in controversy is over $10,000, and in cases involving a federal question.
The elimination or removal of a right or title, usually applied to the cancellation of an estate in land.
When a broker or an agent acts on behalf of both parties he is considered a divided agent See dual agent
An owner may use only a reasonable amount of the total underground water supply for his or her beneficial use .
A state enabling act allows county to adopt a documentary transfer tax to apply to all transfers of real property located in the county. Notice of payment is entered on the face of the deed or on a separate paper filed with the deed.
Tax applicable to property transfers and affixed to the grant deed; varies from county to county, city to city; sometimes called a transfer tax
Tax required on all deeds or other documents used as conveyances. The charge is based on the total purchase price.
Tax required on all promissory notes. The cost is based on the face value of the note.
First phase in the life cycle of a neighborhood, consisting of the initial construction of improvements on vacant land.
Legal instruments such as mortgages, contracts, deeds, options, wills, bills of sale, etc.
A person’s permanent residence.
The tenement obtaining the benefit of an easement appurtenant. That parcel of land that benefits from an easement across another parcel of property (servient tenement).
The person to whom a gift is made.
The person who makes a gift.
A projection built out over the slope of a roof, used to house windows on the upper floor to provide additional light and ventilation.
An escrow that will close only upon the condition that a prior escrow is consummated. The second escrow is contingent upon and tied to the first escrow. While double escrow is not illegal, unless there is full and fair disclosure of the second escrow, there may be a possibility of fraud or other actionable conduct by the parties.
A window consisting of two sashes that move up and down in a pair of channels and are held open by tension springs.
The right that a wife has in her husband’s estate at his death. Dower has been abolished in California.
The difference between the sale price of the property and the loan amount.
Ethics Regulations Do not compel a broker to cooperate with other brokers by sharing property information.
Usually applies to construction loans when disbursement of a portion of the mortgage is made in advance, as improvements to the property are made.
Representing both principals in a transaction. (Not a legal agency relationship in the state of Florida)
Even if the buyer’s broker does not intend to be a dual agent by of his conduct, the seller s deposit receipt agreement to employ him makes the seller his principal and client in addition to the buyer. Before a broker acting as a dual agent on the sale of one-to-four unit residential property may relay confidential pricing information to the party, the broker must have written authority to release it.
A clause in a deed of trust or mortgage that provides that upon the execution of additional deeds o f trust or other encumbrances against a secured parcel of property, the lender may declare the entire unpaid balance of principal and interest due and owing.
An acceleration clause that grants the lender the right to demand full payment of the mortgage or deed of trust upon sale of the property. A clause in a deed of trust or mortgage that provides that if the secured property is sold or transferred, the lender may declare the entire unpaid balance immediately due and payable. Its use has been severely limited by recent court decisions. Also called an alienation clause.
A credit-reporting agency that publishes credit ratings for many corporations and businesses.
A constitutional guarantee that the government will not interfe re with a person’s private property rights without following procedural safeguards prescribed by law.
Unlawful constraint by force or fear.
Threatening to take some action that will be financially harmful to a person, to force him or her to sign a document; for example, threatening to breach a contract. Also called business compulsion.
A special relationship of trust by which one person (agent) is authorized to conduct business, sign papers o r otherwise act.
Department of Veteran Affairs, established on March 15, 1989 to succeed the Veterans Administration.
A deposit of money paid by a buyer for real property as evidence of good faith.
SEE : Deposit Receipt
A right, privilege, or interest that one party has to use the land of another. Example: A right of way. A legal right to use a noth er’s land for one’s benefit or the benefit of one’s property (right-of-way).
An easement created for the benefit of a particular parcel of property. There is both a dominant and a servient estate . The easement is annexed to and part of the dominant property.
Easement by Implication.
An easement that prevents the servient tenant from using his or her own land in certain way (instead of allowing the dominant tenant to use it). Essentially the same thing as a restrictive covenant.
An easement that allows the dominant tenant to use the servient tenement in a particular way.
This brought about by open and notorious use over a long period of time.
An easement acquired by prescription.
An easement granted to another in a deed or other document.
An easement created in a deed when a landowner is dividing the property, transferring the servient tenement but retaining the dominant tenement.
An easement created by law (not by express grant) when a parcel of land is divided, it there is a long-standing , apparent use that is reasonably necessary for the enjoyment of implied easement. COMPARE: Easement by Necessity.
A special type of implied easement; when the dominant tenement would be completely useless without an easement, an easement
An easement that benefits a particular individual, not a parcel of property. Involves only a servient estate. A public utility easement is an example.
Loose money policy of the federal reserve board.
The lower projecting edge of a roof over the wall.
An analysis of employment in the primary industries of the region.
The remaining useful life of an improvement or structure; that period during which an improvement will yield a return on the investment.
The loss in value to property due to external causes such a zoning or a deteriorating neighborhood. It is also referred to as social obsolescence.
A market condition in which available rental space is priced beyond the financial capabilities of potential tenants.
The reasonable rental expectancy if the property were available for renting at the time of its valuation.
Pattern of related changes in some aspect o f the economy.
Energy Efficient Ratio
A provision in a listing contract requiring the broker to obtain a signed contract from a ready; willing and able buyer on the terms specified.
The number of years of age that is indicated by the condition of the structure, distinct from chronological age.
The specific day the conclusion of value applies.
Gross rent, minus an allowance for vacancy and credit losses.
The percentage of interest that is actually being paid by the borrower for the use of the money, distinct from chronological age.
The amount of net income that remains after the deduction from gross income of bad debt vacancy factor and credit losses.
Exit; the act or avenue or leaving property.
The legal age for getting a real estate license
Abbreviation for Environmental Impact Report.
An estate defined as consisting of 30 percent of the decedent’s personal property and Florida real property, except homestead exempt property claims.
Four categories of information about sales: terms of sale, time of sale, location elements, and physical elements.
Four prerequisites that must be present for an object to have value : utility, scarcity, demand, and transferability.
The use of a computer to compile and process information.
A mortgage/equity method of capitalization.
Drawings of the front and side views of the finished homes.
Are reportable as income for tax purposes.
Things that grow on the land require annual planting and cultivation.
The right of the government and certain others, such as public utilities, to acquire property for public or quasi-public use by condemnation, upon payment of just compensation to the owner. The constitutional or inherent right of a government to take private property for public good upon the payment of just compensation.
Someone who works under the direction and control of another.
COMPARE: Independent Contractor.
An agreement between broker and salesman must be kept by both broker and salesman for three years from date of termination.
The individual who hires the services of another.
Older parents whose housing needs change after their children have moved away.
The projection of a structure onto the land of an adjoining owner. A structure or natural object that unlawfully extends into another’s property.
Any claim, interest, or right in property possessed by another that may diminish the true owner’s rights or value in the estate. Examples include mortgages, easements, or restrictions of any kind. A claim, lien, or charge on property.
To prohibit an an, or command performance of an, by court order; to issue an injunction.
The California Environmental Quality Act.
A report that must be prepared whenever any agency or individual considers a project that may have a significant impact on the environment, as directed by the California Environmental Quality Act.
A federal organization created by The National Environmental Policy Act. The EPA’s purpose is to centralize governments environmental responsibilities.
Federal law prohibiting discrimination in the extension of credit.
The Fourteenth Amendment to the U.S. Constitution and similar provisions in the California Constitution require each citizen to receive equal protection of
the laws. There are no minimum standards of protection; all equally situated individuals must simply be treated equally. (The due process clause of the Constitution imposes certain minimum standards of protection.)
When supply equals demand.
A judgment granted to a plaintiff that is something other than an award of money (damage s); an injunction, quiet title , rescission, and specific performance are examples.
COMPARE: common Law Remedy.
SEE: Title, Equitable.
(1) The interest or value that one owner has in real property over and above the lines against it.
(2) A part of our justice system by which courts seek to supplement the strict terms of the law to fairness under the circumstances, rather than on fixed legal principles or statutes.
(3) Ownership in property, determined by calculating the fair market value less the amount of liens and encumbrances.
The increase of the owner’s equity due to mortgage principal reduction and value appreciation.
Factor used to estimate the value of the equity in the equity-residual technique of capitalization and other mortgage and equity techniques; the equity cash flow divided by the equity value.
Lender finances high-ratio loan in exchange for a percentage of ownership and the right to share in the property’s cash flow.
A mortgage transaction in which the lender, in addition to receiving a fixed rate of on the loan acquires an interest in the borrowers real property, and shares in the profits derived from the property.
The right to redeem property during the foreclosure period. In California the mortgagor has the right to redeem within 12 months after the foreclosure sale.
Technique of income capitalization; The net income remaining to the equity position (after mortgage payments) is capitalized into an estimate of the value of the equity.
The wearing away of the surface of the land by the action of wind, water, and glaciers, for example.
A mistake by a trial judge that did not affect the final judgment in the case.
A mistake by a trial judge that may have affected the final judgment in the case. Also called reversible error (because it’s grounds for reversing the trial court’s decision).
The right reserved by the lender to increase the amount of the payments and/or interest upon the happening of a certain event.
A lease clause providing that rental rate will increase or decrease according to selected index of economic conditions, such as the consumer price index.
A clause in a contract that provides for the upward or downward adjustment of certain items to cover the specific contingencies set forth. A clause in a promissory note, lease, or other document that provides that upon the passage of a specified time or the happening of a stated event, the interest rate shall increase.
The reversion of property to the state when there are no devisees or heirs capable of inheritance. Reversion of property to the state upon the death of an owner
who has no heirs able to inherit.
The deposit of instruments and funds with a third neutral party with instructions to carry out the provisions of an agreement or contract. A complete or perfect escrow is one in which everything has been deposited to enable carrying out the instruction s. The neutral third party (stakeholder) who holds deeds or other documents pursuant to
instructions for delivery upon completion or occurrence of certain conditions.
The neutral third party holding funds or something of value in trust for another or others.
When an escrow company acts as escrow, it must be licensed by the Commissioner of Corporations.
A course of action for determining the disposition of a contested deposit.
Lending institutions and attorneys can act as escrow, as can brokers. Brokers can act only as escrow holders in a transaction if he charges the fees provided by law.
The document that authorizes an escrow agent to deliver items deposited in escrow once the parties have complied with specified conditions.
The escrow memo contains the names of the buyer and the seller. It also contains information , is a form, and helps with the escrow instructions.
The file number assigned to an escrow by the escrow officer for identification purposes.
Also known as an escrow agent, someone qualified to perform all the steps necessary to prepare and carry out escrow instructions.
The degree, quantity, nature, and extent of the interest that a person has in real property. (1) Ownership interest in real estate. (2) The quality and quantity of rights in property.
An estate arising when the tenant wrongfully holds over after expiration of the term. The landlord has the choice of evicting the tenant as a trespasser or accepting such tenant for a similar term and under the condition of the tenants previous holding. Also called a tenancy at sufferance.
The occupation of real property by a tenant for an indefinite period. It may be terminated at will by one or both parties. A leasehold tenancy, which at common law could be terminated by either party at any time, without advance notice. Thirty days’ notice are now required to terminate this type of estate in California.
A tenancy created by the husband and wife jointly owning real property with instant and complete right of survivorship.
A freehold estate whose duration is measured by and limited to the life or lives of one or more persons.
A leasehold tenancy that continues indefinitely for successive periods of time, until terminated by proper notice. When the periods are one month in duration, it is often called a month-to-month tenancy.
These are a form of taxes that are paid off by the estate of the deceased.
A lease that will expire at a definite time or date. A leasehold tenancy of a fixed duration, being a definite and ascertainable period of a year or any fraction of multiple theory. It has a definite beginning and ending date , and hence known and definite duration.
SEE: Fee Simple.
Real property owned by a corporation.
An estate that may go to the heirs of the deceased. All freehold estates are estates of inheritance, except life estates.
A preliminary opinion of value. Appraise, set a value.
The period of time (years) it takes for the improvements to become useless.
To ban, stop, or impede.
a notice served on the owner of property or custodian of funds. It requests , with certain penalties for noncompliance, that any funds due to a general contractor be paid to the claimant, laborer, or materialman.
A doctrine where by one is forbidden to contradict or deny his or her own previous statement, act, or position. The doctrine that prevents a person from exercising a legal right, because that person previously acted in an inconsistent manner, so that a third person detrimentally relied on the earlier acts.
A written statement that bars the signer from making a claim inconsistent with the instrument (commonly used with a mortgage assumption).A written statement that bars the signer from making a claim inconsistent with the instrument (commonly used with a mortgage assumption).
A doctrine applied when someone has made a technically unenforceable promise to another, and the other person has acted in reasonable reliance
on the promise. If the person who relied on the promise will suffer harm unless it is enforced, a court may enforce it. Also called the doctrine of detrimental reliance.
Abbreviation meaning and others (other person).
A standard of conduct that all members of a given profession owe to the public, clients or patrons, and to other members of that profession
Abbreviation meaning and wife.
Dispossession by legal process, as in the termination of a tenant’s right to possession through re-entry or other legal proceedings.
Physically forcing someone off of property (or preventing them from reentering), or using the legal process to make someone leave.
COMPARE: Eviction, Constructive.
When a landlords an (or failure to an) interferes with the tenant’s quiet enjoyment of the property, or makes the property unfit for its intended use , to such an extent that the tenant is forced to move out.
A landlord s legal notice to a tenant explaining the tenant s default under the terms of the lease and informing him or her of a pending eviction suit.
When a landlord evicts a tenant in retaliation for requesting repairs, filing a complaint against the landlord, or organizing or participating in a tenants rights group.
When a landlord uses physical force, a lockout, or a utility shutoff to get rid of a tenant, instead of using the legal process.
When a landlord evicts a tenant in violation of the tenant’s rights.
All relevant information, facts, and exhibits admissible in a trial.
Conditional items listed on a preliminary title report and effecting the title,; would be excluded from coverage by the title insurance company.
The amount by which the total contract rent exceeds market rent.
Land above and beyond what is needed for the highest and best use of the site.
A reciprocal transfer of properties between two or more parties.
General affecting title to real property excluded from coverage of a title insurance policy.
A contract hiring the broker as the exclusive agent for the seller. If anyone, except the seller, finds a buyer, the broker has earned the commission.
A written agreement giving one agent the exclusive right to sell property for a specified period of time, but reserving the right of the owner to sell the property himself or herself without liability for the payment of a commission.
A written agreement giving one agent the exclusive right to sell property for a specified period of time. The agent may collect a commission if the property is sold by anyone, including the owner, during the term of the listing agreement. An exclusive right to sell listing can best be identified as an Executory Unilateral Contract.
When a broker receives an exclusive agency agreement from the seller, he owes a fiduciary relationship to the seller.
A contract hiring the broker as the only person authorized to sell property. If anyone, including the seller, finds a buyer, the broker earns
A provision in leases and other instruments seeking to relieve one party of liability for his negligence and other acts. In residential leases such clauses are invalid, and in other leases the courts have limited the landlord’s ability to escape liability for intentional acts, and for acts of affirmative negligence.
To complete, make, perform, do or to follow out. To sign a document, intending to make it a binding instrument. The term is also used to indicate the performance of a contract.
Completed and fully performed by both parties.
The legal process in which a court orders an official (such as a sheriff) to seize and sell the property of a judgment debtor to satisfy a judgment line
A lien arising because of an execution on property. A judgment is not self-executing; however, when a writ of execution has been obtained, the sheriff will levy
(seize ) property, which creates a line on the property.
The head of a government, such as president, governor, or mayor.
Duties related to the education of the licensees, the regulating of professional practices, and the publishing of materials.
A person named by the testator of a will to carry out its provisions as to the disposition of the estate. A personal representative appointed in a will to administer a decedent’s estate.
A person named in a will to carry out its provisions . If it’s a man, he’s an executor; if it’s a woman, she’s an executrix. COMPARE: administrator.
A contract that is yet to be performed.
Property that has been decreed to be excluded from taxation or claim by others.
A provision holding that law or rule doesn’t apply to a particular person or group. For example, a person entitled to a property tax exemption is not required to pay property taxes. An exemption can be full or partial.
1. Documentary or physical evidence submitted in a trial.
2. An attachment to a document.
By only one party or side. For example, an injunction obtained by evidence presented by only one side, without notice to the other parties.
A home designed for expansion and additions in the future.
A phase of the business cycle characterized by increasing production.
A fiber strip used to separate units of concrete to prevent cracking due to expansion as a result of temperature changes.
A lease clause granting a tenant an option to lease additional adjacent space after a specified period of time.
The right to use another’s land for a specific purpose , sometimes known as the right -of-way.
Certain items which appear on a closing statement in connection with a real estate sale.
An annual BOMA publication containing income and expense statistics for office properties classified by type of building, area and such.
Goods and services produced for sale or use outside the town or area in which they are produced.
Stated in words, spoken or written.
A contract whose elements are stated either orally or in writing.
To take by public authority through the power of eminent domain.
An extended insurance policy.
A clause in a listing agreement providing that for a specified period after the listing expires, the broker will still be entitled to a commission if the property is sold to someone the broker dealt with during the listing term. Also called a carryover clause or safety clause.
The face of a building, especially the front face.
A designation awarded by BOMI based on the curriculum for commercial property specialists who are responsible for real property as a corporate as set.
An exact copy.
A resource pool representing the four major elements of production that are bought and sold.
The least important factor in figuring present value is the original cost.
When the intended purpose of an agreement or arrangement can no longer be achieved; in most cases, this releases the parties from their obligations.
A federal law that prohibits discrimination in the sale, rental or financing of housing based on race, color, religion, sex, handicap, familial status or national origin. One of the regulations of this act is that hallways, doorways and common areas are accessible for the width of wheelchairs.
The amount of money that would be paid for a property offered on the open market for a reasonable length of time with both the buyer and the seller knowing all uses to which the property could be put and with neither party being under pressure to buy or sell. See market Value.
For the purposes of fair housing laws is not synonymous with marital status.
The Federal National Mortgage Association (FNMA). Does conforming loans.
A selected and limited geographical area to which a sales associate devotes special attention and study; to farm an area neighborhood.
An agency of the Department of Agriculture. Primary responsibility is to provide financial assistance for farmers and others living in rural areas where financing is not available on reasonable terms from private sources.
A method under which construction of a building begins under a negotiated contract before all plans and specifications have become final. Construction proceeds as plans come off the drawing board.
A report on the potential profitability of a proposed real estate project. It includes considerations such as land area, physical features of the land, requirements of the project and estimated cost.
A federal corporation that insures deposits in commercial banks (FDIC).
Are not enforced by the Department of Justice
A district bank of the Federal Home Loan Bank System that lends only to savings and loan associations who are members.
A federal corporation that provides savings and loan associations with a secondary mortgage money market for loans. It is also known as Freddy Mac.
An agency of the federal government that insures mortgage loans.
Federal agency that regulates the 12 Federal Home Loan Banks.
A federal regulation requiring employers to pay retirement fund taxes (social security) for employees.
Federal government agency making long term loans to farmers.
A federal corporation that provides lenders with a secondary mortgage money market.
A legal issue involving the U.S. constitution, a treaty, or a federal statute. Federal courts have jurisdiction to hear federal question cases, but they may also
be decided in state court.
The federal banking system of the United States under the control of a central board of governors (Federal Reserve Board). It involves a central bank in each of 1 2 geographical districts, with broad powers in controlling credit and the amount of money in circulation. They are the primary government regulator in monetary policy activities.
A federal corporation that insures deposits in savings and loan associations.
Bankruptcy proceedings are initiated under Federal statutes.
A federal agency that investigates and eliminates unfair deceptive trade practices.
A regulation requiring employers to file federal unemployment tax returns for employees.
Any sale transaction that ultimately involves a federal agency in either the primary or secondary mortgage market. Under FIRREA, state certified or state licensed appraisers must be used for certain loans in federally related transactions.
An estate of inheritance in real property for life.
SEE: Fee Simple.
Title that may be terminated by a former owner if conditions stated in the deed are not met.The only type of defeasible fee that’s recognized in California now. Also called fee simple subject to a condition subsequent. SEE: Power of termination.
An estate in real property by which the owner has the greatest possible power over the title. In modern use it expressly establishes the title of real property with the owner without limitation or end. He or she may dispose of it by sale, trade, or will, as he or she chooses. In modern estates the terms “Fee” and “Fee Simple” are substantially synonymous.
The highest estate known at law. A freehold estate of indefinite duration, incapable of being defeated by conditions or limitations. Sometimes simply called fee or fee estate.
A fee simple estate to which certain conditions or limitations attach, such that the estate may be defeated or terminated upon the happening of an act or event. Also called a fee simple subject to a condition subsequent estates.
A defeasible fee that is terminated automatically if certain conditions occur. No longer recognized in California; now treated as a conditional fee.
The greatest interest that one can have in real property. An estate is unqualified of indefinite duration, freely transferable and inheritable.
A fee simple defeasible estate that requires the holder of the future interest to act promptly to terminate the present interest, in order for that interest to be terminated.
A real property ownership system in which ownership rests with a sovereign who may grant lesser interests in return for service or loyalty. This is in contrast to allodial tenure.
Federal Housing Administration.
Federal Home Loan Mortgage Corporation; also known as Freddie Mac. SEE: Secondary Marketing.
A recorded deed of trust that discloses all the terms of the trust deed but does not relate to a specific transaction and is used for reference only.
A security posted for the discharge of an obligation of personal services.
A person in a position of trust and confidence, as between principal and broker. A fiduciary may not make a profit from his or her position without first disclosing it to the beneficiary.
That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.
a relationship of trust and confidence, where one party owes the other (or both parties owe each other) loyalty and a higher standard of good faith than they owe to third parties. For example, an agent is a fiduciary in relation to the principal; husband and wife are fiduciaries in relation to each other.
Title insurers in most states file rate schedules, policy forms, and endorsement forms with the state insurance department; they may then use those rates and
forms after a specified waiting interval; rates so filed are mandatory.
The process whereby higher-priced properties become available to lower income buyers.
A decision made by FREC.
Federal legislation to liquidate, consolidate, and recover the assets of troubled savings and loan organizations.
Financial institutions such as banks, savings and loan associations, mutual savings banks and life insurance companies which receive relatively small sums of money from the public and invest them in the form of large sums. A considerable portion of these funds are loaned on real estate.
The systematic 5 step procedure followed by major institutional lenders in analyzing a proposed loan, which includes —- filing of application by a borrower
;lender s analysis of borrower and property; processing of loan documentation; closing (paying) the loan; and servicing (collection and record keeping).
The buyer must use reasonably diligent efforts to secure financing.
The instrument filed to perfect the security agreement and give constructive notice of the security interest, thereby protecting the interest of the secured parties . (See Security Agreement; Security Interest; and Secured Party.) The security interest in personal property. It is analogous to a mortgage on real property, except that it secures personal property. Under the UCC, it may be filed in Sacramento with the secretary of state.
Securing a loan by giving real property as collateral for payment of the debt.
A provision in a listing contract requiring a broker to produce are ready, willing and able buyer or offer on the terms specified.
Money paid to a person for finding someone interested in selling or buying property. To conduct any negotiations of sale terms, the finder must be a licensed broker or he violates the law.
The final covering on the floor, such a s wood , linoleum, cork, or carpet.
A form included in loan papers that a borrower must sign, in which the borrower agrees to obtain fire insurance coverage to protect the property and insure the lender.
Anybody may bid on a piece of property, there are no priorities.
Smoke detectors and fire extinguishers are required by law, but most insurance companies also require them.
A solid, tight closure of a concealed space placed to prevent the spread of fire and smoke through the space.
The loan of first priority; it takes precedence over junior loans and encumbrances. Also called senior primary line.
Generally buy homes with two or less bedrooms.
The amount lenders agree to lend on a specified property to a specified borrower for a certain length of time.
The constitutional amendment guaranteeing freedom of speech, press, assembly, and religion.
The spot held by the deed of trust with highest lien priority, when there more than one deed of trust on the property. SEE: Deed of Trust, First.
A legal document pledging collateral for a loan (See mortgage ) that has first priority over all other claims against the property except taxes and bonded
indebtedness. That mortgage is superior to any other.
The deed with the highest position of being collected first.
Programs by the federal government that are intended to influence economic activity by making changes in government expenditures and taxation implemented by the U.S. Treasury.
Commissioner s Final Public Report Expiration date.
A long-term. projection of estimated income and expense for a property based on predictable changes.
An expense item in a properties operating budget that does not fluctuate with rental income.
A mortgage with an interest rate that does not change over the life of the loan.
A period of time with a definite ending date.
Programs by the federal government that are intended to influence economic activity by making changes in government expenditures and taxation.
Operating costs that are more or less permanent and that vary little from year to year.
The physical characteristic of real estate that subjects it to the influence of its surroundings.
An item of personal property that has been so attached to real property as to be considered part of that real property.
Items that were originally personal property but that have become part of the real property, usually because they are attached to the real property more or less permanently. Examples: Store fixtures built into the property and plumbing fixtures.
Rear lot, behind other houses or lots, with a long, narrow access road (like a flagpole).
Sheet metal or similar material used to protect a building from water seepage.
A property management fee expressed as a dollar amount per year or month.
SEE: Straight Lease.
A large building or open area in which space is sold to individuals for the sale of merchandise, usually used or of a collectible nature.
A Flexible method of limiting the size of a building in relation to the size of a lot; used in some zoning ordinances as an alternative to strict size and coverage limits.
Federal National Mortgage association; also known as Fannie Mae. SEE: Secondary Marketing.
The base or bottom of a foundation wall,pier. or column.
A term describing industries that are capable of being located almost anywhere.
What a sales associate does after a sale to maintain customer contact and good will.
Wrongful retention of property by actual or constructive force.
Entry into property without the consent of the owner, by acts that constitute more than mere trespass.
Any arrangement that delays foreclosure action.
Taking the past as a guide to the future, together with judgements from the projections of the future.
A legal proceeding to enforce a lien on such as a mortgage or deed of trust. The process by which secured property is seized and sold to satisfy a debt. A mortgage or involuntary lien must be sold by a court-ordered sale; a sale under a deed of trust may be either by court action or through a private trustee’s sale.
A lawsuit filed by a mortgagee or deed of trust beneficiary to foreclose on the security property when the borrower has defaulted.
Foreclosure by a trustee under the power of sale clause in a deed of trust.
An area designated under federal law that permits manufacturing, shipping or storage of goods duty-free.
Loss of a legal right, interest, or title by default.
Written appraisal report presented on a standardized form or checklist.
An estimate of value that is reached by the collection and analysis of relevant data. A formal appraisal is usually reported in writing.
An outline of charges against a licensee that must be answered within the statu tory time limit.
Any agreement that contains all the essentials of a contract, including that it is in writing and under seal; a contract dependent on a particular form .
A will be signed by the testator in the presence of two or more witnesses, who must themselves sign the will.
SEE: Unities, Four.
That part of a structure or wall wholly or partly below the surface of the ground that is the base of support, including the footings.
The constitutional amendment that directs that no state can deprive a person of life, liberty ,or property without due process or equal protection of the law.
A specified privilege awarded by a government or business firm which awards an exclusive dealership.
Deception that deprives another person of his her rights or injures him or her. False representation or concealment of material facts that induces another justifiably to rely on it to his detriment.
Fraud that meets certain criteria, so that the victim can successfully sue. The victim/plaintiff usually must prove that the defendant concealed a material fan or made a false statement (intentionally negligently) with the intent to induce the victim to enter a transaction, and that the victim was harmed because he or she relied on the misrepresentation.
Intentional misrepresentation or concealment, or negligent misrepresentation, which is making a false statement without reasonable grounds for
believing it is true.
A breach of duty that misleads the person the duty was owed to, without an intention to deceive.
( See FEDERAL HOME LOAN MORTGAGE CORPORATION .)
Title to property that is absolute and unencumbered.
An estate of fee. An estate in real property that is either a life estate or an estate in fee.
An estate of indeterminable duration, e.g., fee simple or life estate.
The ratio used by lenders to qualify a borrower for a loan, determined by adding the principal, interest, taxes, insurance, and mortgage insurance on the new loan and by dividing by the borrower’s gross monthly income.
Property measurement for sale or valuation purposes. The property measurement is along the street line, and each front foot extends to the depth of the lot. It is usually used in connection with commercial property.
A term used to describe or identify that part of a parcel of land or an improvement on the land that faces the street or a body of water. The term is also
used to refer to the lineal extent of the land or the improvement that is parallel to and facing the street, e.g., a 75 foot frontage.
The minimum amount of money necessary to initiate a real estate venture, to get the transaction underway.