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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.

A

ABANDONMENT

Failure to occupy and use property;
may result in loss of rights.

ABATEMENT OF NUISANCE

The act of ending or terminating a nuisance; 
 a type of legal action brought to end a nuisance.

ABSENTEE OWNER

A property holder who does not reside on the property and who usually relies on a
property manager to supervise the investment.

ABSOLUTE OWNERSHIP

SEE: Fee Simple Estate

ABSTRACT

A brie f sum mary.

ABSTRACTORS

A person who, historically, searches out anything affecting the title to real property and summarizes the information in the findings.

ABSTRACT OF JUDGMENT

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.

ABSTRACT OF TITLE

A summary of the instruments affecting title to a parcel of real property as shown by the public records.

ABSTRACTION

A method of valuing land. The indicated value of the improvement is deducted from the s ale price.

ABSTRACTION METHOD

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.

ACCELERATE

To make a note all due and payable at one time.

ACCREDITED MANAGEMENT ORGANIZATION (AMO)

A professional designation awarded to qualified property management firms by the institute of Real Estate Management.

ACCREDITED RESIDENT MANAGER (ARM)

An individual who has completed IREM educational program for resident managers offres idential property.

ACCELERATED COST RECOVERY SYSTEM (ACRS)

The system for figuring de preciation (cost recovery) f or de preciable real property acquired and placed into service after January 1, 1981

ACCELERATED DEPRECIATION

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.

ACCELERATION CLAUSE

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.

ACCEPTANCE

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.

ACCEPTANCE OF 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.

ACCESSION

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.

ACCESS RIGHT

The right of an owner to go into and out of his or her property.

ACCOMMODATION PARTY

A person who, without receiving value, signs a promissory note to help another person borrow money or get credit.

ACCOMMODATOR

An intermediary who holds funds in a delayed exchange.

ACCRETION

A gradual addition to land from natural causes; for example, from gradual action of ocean or river waters.

ACCRUE

To increase or accumulate; interest on loans is said to accrue daily.

ACCRUED DEPRECIATION

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.

ACCRUED ITEMS OF EXPENSE

Those incurred expenses which are not yet payable. The seller s accrued expenses are credited to the purchaser in a closing statement

ACCUSATION

A written statement of rules violated, used in a property right healing.

ACKNOWLEDGMENT

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.

ACOUSTICAL TILE

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.

ACQUISITION

The act or process by which a person procures property.

ACQUISITION COST

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.

ACRE

A measure of land equaling 160 square rods, 4840 square yards, 43,560 square feet, or a tract about 208.71 feet square.

ACT

A statute

ACTUAL AUTHORITY

Authority expressly given by the principal or given by the law an d not denied by the principal.

ACTUAL EVICTION

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.

ACTUAL FRAUD

An act intended to deceive another, e .g., making a false statement, making a promise without intending to perform it, suppressing the truth.

ACTUAL NOTICE

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.

ADDENDUM

An attachment to a purchase agreement or to escrow instructions. Used to modify or make changes.

ADJACENT

Located next to or near an object or parcel of property.

ADJUDICATION

A judicial or court decision.

ADJUSTED COST BASIS

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.

ADJUSTMENT INTERVAL

The time between permitted changes in the interest rate or monthly payments, typically six months to one year, depending on the indexused.

ADJUSTMENTS

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.

ADJUSTABLE-RATE-MORTGAGE

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.

ADJUDICATIVE METHODS

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.

ADJUSTED BASIS

The adjusted basis is equal to the purchase price plus buying.

ADJUSTABLE RATE MORTGAGE (ARM)

A mortgage loan which bears interest at a rate subject to change during the term o f the loan, predetermined or otherwise.

ADJUSTABLE RATE NOTE

A note whose interest rate is tied to a flexible index.

ADMINISTRATIVE AGENCY

A government agency that administrates a complex area of law, adopting an enforcing detailed regulations that have the force of law.

ADMINISTRATIVE LAW JUDGE

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.

ADMINISTRATOR

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.

ADJUSTED COST BASIS

For tax purposes it is the cost of the property plus improvements and minus depreciation, amortization, and depletion.

ADMINISTRATOR

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.

AD VALOREM

According to value

AD VALOREM LIEN

Refers to General real estate tax.

AD VALOREM TAX

A property tax based upon value.

ADVANCES

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.

ADVANCE FEE AGREEMENTS

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.

ADVANCE COMMITMENT

The institutional investors prior agreement to provide long-term financing upon the completion of construction; also known as a take-out  loan commitment.

ADVANCE FEES

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.

ADVERSARY

Opponent, a person or a group that opposes the other .

ADVERSE INTEREST

A purpose in opposition to the interest of another party(as for example, with a buyer and a seller).

ADVERSE POSSESSION

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.

ADVERTISING (COSTS)

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.

ADVERTISING (COSTS)

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.

AFFIANT

One who makes an affidavit or gives evidence.

AFFIDAVIT

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.

AFFIDAVIT OF TITLE

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.

AFFIRM

To confirm, swear, ratifying, verity.

AFFIRMATION

A solemn declaration by an individual who is adverse to take an oath.

AFTER-TAX CASH FLOW

(See cash flow)

AGE-LIFE METHOD OF DEPRECIATION

SEE: Straight-line Method of Depreciation.

AGENCY

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).

AGENCY AGREEMENT

An agent must use reasonable care and skill in carrying out the tasks dictated b y the agency agreement.

AGENCY CONFIRMATION STATEMENT

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.

AGENCY COUPLED W ITH AN INTEREST

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.

AGENCY DISCLOSURE ADDENDUM

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.

AGENT

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.

AGENT , GENERAL

An agent authorized to handle all of the principal  s affairs in one area or in a specified area.

AGENT, SPECIAL

An agent authorized to do everything that can brlawfully delegated to a representative.

AGENT, UNIVERSAL

An agent authorized to do everything that can be lawfully be delegated to a representative.

AGENTS OF PRODUCTION

Four factors that are combined to produce income; labor, coordination, capital, and land.

AGREEMENT

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.

AGREED -UPON-COMPENSATION

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.

AGREEMENT FOR DEED

( See contract for deed)

AGREEMENT OF SALE

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.

AGRICULTURE

(FLORIDA) Defined in Chapter 475,F .S., to mean property zoned as such, consisting of more than 10 acres.

AIR LOT

A parcel of property above the surface of the earth, not containing any land; for example, a condominium unit on the third floor.

AIR RIGHTS

The rights in real property to the reasonable use of the air space above the surface of the land.

ALIENATE

Conv eys title to rea l property.

ALIENATION

The transferring of property to another. Conveyance or transfer of title to real estate from one person to another person.

ALIENATION CLAUSE

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.

ALIENATION, INVOLUNTARY

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.

ALIENATION, VOLUNTARY

When an owner voluntarily transfers an interest to someone else.

ALL-INCLUSIVE DEED OF TRUST

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.

ALLOCATION METHOD

SEE: Abstraction Method.

ALLODIAL SYSTEM

A theory of land ownership that individuals may own land free of the rights of an overlord.

ALLODIAL TENURE

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.

ALLUVION (ALLUVIUM)

Soil that has been deposited by accretion on the shore of a river or body of water and that increases the real property.

ALTA OWNERS POLICY (A.L.T .A.)

An owner s extended coverage policy that provides buyers and owners the sam e protection the ALTA policy gives to lenders.

ALTA TITLE POLICY

(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.

ALTER EGO

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.

ALTERNATIVE DISPUTE RESOLUTION (ADR)

The resolution of disputes by negotiation, mediation, and arbitration.

ALTERNATIVE MORTGAGE INSTRUMENTS

Nonstandardized financing loans .

AMBULATORY

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.

AMELIORATING WASTE

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.

AMENITIES

As used in the real estate business, the features that make a piece of real property, especially a home, enjoyable.

AMENDMENT

A change made to correct an error or to alter or augment part of an agreement without changing its principle idea or essence.

AMERICAN INST ITUTE OF AR CHITE CTS (AIA)

A professional association of registered architects that publishes construction contract forms as one of its activities.

AMERICAN SOCIETY O INDUSTRIAL SECURITY

A professional association of industrial security personnel that provides training leading to the designation of Certified Protection Professional (CPP).

AMERICANS WITH DISABILITIES ACT

This is the act that set forth the requirement that landlords must make facilities accessible to the handicapped to the extent readily achievable.

AMORTIZATION

(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.

AMORTIZE

Pay off a debt in installments.

AMORTIZED LO AN (MORTGAGE)

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

AMOUNT IN CONTROVERSY

The amount of money at issue in a lawsuit; used as a limitation on the jurisdiction of some courts.

ANCHOR STORE

The most important store in a shopping center, the store that has the largest draw of customers.

ANNEXATION

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.

ANNEXATION, ACTUAL

A physical attachment of personal property to land.

ANNEXATION, CONSTRUCTIVE

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.

ANNIVERSARY DATE

Recurring every year; the date an insurance policy must be renewed to continue in effect.

ANNUAL DEBT SERVICE

The amount of money required each year for the payment of all mortgage interest and principal.

ANNUAL PERCENTAGE RATE (APR)

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.

ANNUITY

A sum o f money receive d or paid yearly or at other fixed periods.

ANNUITY CAPITALIZATION

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.

ANSWER

The document the defendant must file with the court in response to the plaintiffs s complaint.

ANTICIPATION, PRINCIPLE OF

Affirms that value is created by the anticipated benefits to be derived in the future.

ANTICIPATORY BREACH

Advance notice of intention to violate the term s of a contract.

ANTICIPATORY REPUDIATION

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.

ANTI-DEFICIENCY RULES

Laws that prevent a secured lender from suing the borrower for a deficiency judgement after foreclosure in certain circumstances.

ANTIDEFICIENCY LEGISLATION

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.

ANTI-DISCRIMINATION VIOLATIONS

The following can sue in this matter, state attorney general, U.S. attorney general, and a tester.

APARTMENT OWNERS

Are considered business establishments subject to the Unruh Civil Rights Act.

APPEAL

The review or rehearing by a higher court of a
low (inferior) court’s decision.

APPELLANT

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.

APPELLEE

In an appeal , the party who did not file the
appeal. Also known as the respondent.

APPLICANT

A person who applies for something; a
candidate.

APPRAISAL

An estimate and opinion of value. An opinion
or estimate of the fair mark t value of a property.

APPRAISAL CERTIFICATION

There are two types of certification, general and residential.

APPRAISAL PLANT

Copies of current statistics and
publications kept by appraisers in their library or record room.

APPRAISAL REPORT

Communication o f a formal appraisal.

APPRAISED VALUE

Estimated worth of a property
determined by someone qualified invaliation.

APPRAISER

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.

APPRECIATION

Increase in the value of property.

APPROPRIATIVE RIGHT

SEE: Prior Appropriation

APPROPRIATION OF WATER

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.

APPURTENANCE

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.

APPURTENANT

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.

APPURTENANT RIGHT

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).

APPURTENANCE, INTANGIBLE

An appurtenant right
that does not involve ownership of physical objects; for
example, an easement (as opposed to mineral rights).

APR

See: ANNUAL PERCENTAGE RATE

ARBITRATION

A neutral third party who listens to
each party’s position and makes a final binding decision.

ARBITRATOR

A neutral third party who receives
evidence and resolves the dispute.

 

ARCHITECTURAL STYLE

Generally the appearance
and character of a building s design and construction.

AREA MANAGEMENT BROKER (AMB)

A property
manager who works directly for the Federal Housing
Administration managing subsidized housing under
contract.

ARM

An adjustable rate mortgage.

ARMS LENGTH TRANSACTION

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.

ARREARS

That which is behind; used when describing
payment of past due interest and loan payments.

ARTICLES OF INCORPORATION

An instrument
setting forth the basic rules and purposes under which a
a private corporation is formed.

ARTIFICIAL PERSON

A person created by law, as
distinguished from a natural person, a human being;
usually refers to a corporation.

ARM'S LENGTH TRANSACTION

May be used when the price paid for a comparable property is being used.

AS IS CLAUSE

Accordion ContentA provision in a deposit receipt stating that
the buyer accepts the property in its present condition.

ASSEMBLAGE

The process of combining two or more
contiguous parcels into one larger parcel which makes the one
parcel more valuable than the separate properties.

ASSESSED VALUE

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
property taxes.

ASSESSMENT

The valuation of property for the purpose of levying a tax, or the amount of tax levied.

ASSESSMENT BOND

An obligation to pay for costs of local
improvements such as sidewalks, sewers, or street lighting.

ASSESSMENT OF REAL PROPERTY

In a real estate transaction a sale of real property would create a new assessment of real property.

ASSESSMENT ROLL

A list of all taxable property showing
the assessed value of each parcel; establishes the tax base.

ASSETS

Anything of real value owned by an individual or
business.

ASSESSOR

The official who has the responsibility of
determining the assessed values.

ASSET MANAGEMENT

The assembly, management and disposition of a portfolio of investment properties.

ASSIGN

To transfer a right or an interest in property to
another.

ASSIGNEE

One to whom property is assigned or
transferred.

ASSIGNMENT

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.

ASSIGNMENT OF RENTS

An assignment of future rents form property as security for a debt

ASSIGNMENT FOR RENTS CLAUSE

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.

ASSIGNMENT OF A DEED OF TRUST

An instrument hat transfers the beneficial interest under a deed of trust from one lender to another.

ASSIGNMENT OF RENT CLAUSE

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.

ASSIGNOR

One who assigns a right or an interest to
another.

ASSIGNEES

Those to whom property or interests
therein shall have been transferred

ASSOCIATE

Person working for a broker

ASSOCIATION

An organization of persons having a
common interest.

ASSOCIATION AGREEMENT

 Set of private condition s, co vena nts, and restrictions applying to all properties in a planned unit development, condominium,
or other community projects.

ASSUMPTION

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.

ASSUMPTION FEE

A lenders charge for changing over and processing new records for a new owner who is taking over an existing loan

ASSUMPTION OF AGREEMENT

 A contract by which a person agrees to pay a debt or obligation owed by someone else.

ASSUMPTION OF MORTGAGE OR DEED OF TRUST

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.

ATTACHED HOUSE

Shares one or more walls and often involves a party wall agreement

ATTACHMENT

 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

ATTACHMENT LIEN

A lien on property arising because of
an attachment of that property

ATTACHMENTS, MAN MADE

 See: Fixture

ATTACHMENTS, NATURAL

Things growing on a piece of
land, such as trees , shrubs or crops.

ATTEST

(1) To affirm to be true or genuine. (2) An
official act establishing authenticity.

ATTESTATION

The act of witnessing the execution of an
instrument (such as a deed or a will).

ATTORNEY-IN-FACT

An agent authorized to perform certain
acts for another under a power of attorney. (See Power of Attorney) 

AUTOMATIC EXTENSION CLAUSE

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, ACTUAL

Authority actually given to an agent
by the principal, either expressly or by implication.

AUTHORITY, APPARENT

See: Agency, Apparent.

AUTHORITY, IMPLIED

An agent’s authority to do everything
reasonably necessary to carry out the principals expressed orders.

AUTOMATED UNDERWRITING

 A service that enables lenders to obtain a credit risk classification using applications software in the loan underwriting process.

AVULSION

The sudden tearing away or removal of land by the action of water flowing over or through it

AWARD

The decision of the arbitrator.

B

BACKFILL

The replacement of excavated earth in a
hole or against the side of a structure.

BAILMENT

Personnel property is transferred in trust
for an accomplishment of a specific purpose. A possessory interest in personal property.

BALANCE SHEET

A financial statement showing a person’s assets, liabilities, and net worth.

BALLOON PAYMENT

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.

BAND OF INVESTMENT

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.

BANKERS MONTH

30 Days

BANKERS MONTH

360 Days

BARGAIN AND SALE DEED

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.

BASE COSTS

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.

BASE INDUSTRIES

Businesses that attract outside
money into the area , primary.

BASE LINE

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.

BASE RENT

 See: Minimum Rent.

BASE VALUE

See: Value, Base

BASE AND MERIDIAN

Imaginary lines used by surveyors from which they find, measure, and describe the location of lands.

BASEBOARD

A board that goes around the room against the wall and next to the floor.

BASE MOLDING

Molding used at the top of the baseboard.

BASIS

(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.

BASE SHOW

Molding used at junction of baseboard and
floor, sometimes called a carpet strip.

BASIC MONEY SUPPLY

This consists of cash, coins, and checking accounts.

BATNA

Best Alternative To a Negotiated Agreement.

BATTEN

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.

BEAM

 A horizontal structural member supporting a load.

BEARING WALL OR PARTITION

A wall or partition that
supports any vertical load, in addition to its own weight.

BEFORE-TAX CASH FLOW

 (Btcf; Cash Throw off; Gross
Spendable Income) The resulting amount when annual
debt service is subtracted from net operating income.

BENCH MARKS

A location indicated on a permanent
marker by surveyors.

BENEFICIARY

(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.

BENEFICIARY STATEMENT

 See:Offset Statement

BEQUEATH

 To leave by will.

BEQUEST

Personal property that is given by the terms of a will. A gift of personal property by will.

BETTERMENT

An improvement on real property that
increases the value and is considered a capital asset.

BILATERAL CONTRACT

 A contract in which the consideration given by each party is a promise: that is ,
a promise for a promise.

BILATERAL ESCROW INSTRUCTIONS

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.

BILATERAL EXECUTORY CONTRACT

 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.

BILATERAL EXECUTORY

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.

BILL

A proposed law, formally submitted to a
legislature for consideration.

BILL OF SALE

A written instrument given by the seller
to the buyer to pass title to personal property.

BINDER

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.

BINDING ARBITRATION

The decision of the arbitrator is final and not reviewable by the courts.

BIWEEKLY PAYMENTS

Real estate loan payments
made every two weeks. A monthly payment is divided by two and paid 26 times per year.

BIENNIUM (biennial)

A period o f two tears .

BILATERAL CONTRACT

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

BRACKETING

When using the sales comparison
approach, selection of market data so that the subject is contained within a range of data. 

BLACKTOP

 Asphalt paving used in streets and driveways.

BLANKET DEED OF TRUST

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.

BLANKET MORTGAGE (LOAN)

One mortgage or deed of trust that covers more than one piece of real property.


BLENDED-RATE MORTGAGE

The average trust deed or mortgage covering more than one parcel of land.

BLIGHTED AREA

An area in which real property is
declining in value because of destructive economic forces.

BLIGHT CORRECTION

Rehabilitation of residential properties that have deteriorated significantly.

BLIND ADVERTISEMENT

Advertisement that does not contain the name of the broker.

BLOCK

In reference to platted property, a group of lots surrounded with streets or unimproved land.

BLOCKBUSTING

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

BOARD FOOT

A unit of measurement for lumber: one foot
wide, one foot long, one inch thick (144 cubic inches).

BOMA CHART OF ACCOUNTS

The standardized system of income and expenses accounting for office properties developed by the Building Owners and Managers Association International.

BONA FIDE

In good faith; genuine

BONA FIDE PURCHASER (BFP)

A purchaser who pays fair value for property in good faith, and without notice of adverse claims.

BOND

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.

BOND COVERAGE

Insurance protection individuals
or firms against default in the performance of their duties.

BOOK VALUE

An accounting term which is the difference between cost and the total amount of
depreciation that has been taken.

BOOK OF ABSTRACTS

 A key set of books maintained by a title company.

BOOT

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.

BORROWER (Debtor)

The mortgagor; one who gives
a mortgage as security for a debt.



BORROWER'S STATEMENT TO LENDER

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.

BOUNDARY

The perimeter or border of a piece of
land ; dividing line between one piece of property and another.

BOUNDS

 Boundaries

BRANCH OFFICE

A business location other than the real estate brokers principal place of business.

BRACING

Frame lumber nailed at an angle in order to provide stability to the structure.

BREACH

The breaking of or failure of duty, either by omission or commission. The violation of or failure to perform an obligation.

BREACH OF CONTRACT

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.

BREACH MATERIAL

A breach of contract important enough so that bit excuses the nonbreaching party from erforming his or her contractual obligations.

BREAK-EVEN POINT

Occupancy level at which gross income for a property equals the total fixed and variable operating costs.

BREEZEWAY

A covered porch or passage, open on two ends, that connects the house and garage, or two parts of the house.

BRIDGE LOAN

A loan that bridges the gap between two other loans, usually for a short time.

BRIDGING

Wood or metal pieces used to brace floor joists.

BROKER

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.

BROKER , ASSOCIATE

One who is licensed as a real estate broker but works for another broker.

BROKERAGE

A brokers business.

BROKER'S COMMISSION

Agreement between the client and the broker. This charged to the seller and not the buyer.

BROKER FEE

Mere payment of the buyer’s broker fee by the seller does not make the cooperating buyer’s broker a dual agent.

BROKERS LICENSE

When a person is granted a brokers license it is valid for four years, unless suspended or revoked.

BROKERS LOAN STATEMENT

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.

BROKERS PRINCIPAL

In a real estate transaction the brokers principal can be a: seller, buyer, or landlord.

BROKER-SALESPERSON RELATIONSHIP AGREEMENT

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.

BROWNFIELDS

Area where soil is contaminated.

B.T.U.

British thermal unit. The quantity of heat required to *raise the temperature of one pound of water one degree
Fahrenheit.

BUFFER ZONE

A strip of land separating one type of land use from another.

BUILDING CODE

A set of rules establishing minimum standards for construction methods and materials

BUILDING EXPENSES

A good source to find out abuildings expenses is the utility company.

BUILDING LINE

 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.

BUILDING OWNERS AND MANAGERS ASSOCIATION INTERNATIONAL (BOMA)

An international organization of office building owners and managers, which fosters professionalism through its educational programs, forums and publications.

BUILDING OWNERS AND MANAGERS INSTITUTE INTERNATIONAL (BOMI).

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)

BUILDING PAPER

A heavy waterproofed paper used as sheathing in exterior walls, or in roof construction as insulation and protection against moisture.

BUILDING RELATED ILLNESS

 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.

BUILDING RESIDUAL TECHNIQUE

 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.

BUILDING STANDARD

The specific set of amenities and alterations a landlord is willing to make free of charge for an incoming commercial tenant.

BULK PURCHASING

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.

BULK SALE

The sale by a business of a major portion of its stock-in-trade to someone other than ustomers. 

BUILT-INS

Cabinets and other features built in as a part of the house.

BUMP CLAUSE

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.

BUNDLE OF RIGHTS

The rights that accompany the ownership of real estate. Each stick is a right.

BURDEN OF PROOF

See:Proof, Burden of.

BUNDLE OF RIGHTS

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.

BUSINESS BROKER

Real estate licensees who engage in the sale, purchase or lease of a business.

BUSINESS BROKERAGE

The sale, purchase, or lease of businesses that provide goods and services. 

BUSINESS COMPULSION SEE

See: Duress

BUSINESS CYCLE

Accordion A wavelike movement of increasing and decreasing economic prosperity consisting of four phases; expansion, recession , contraction and revival.

BUSINESS OPPORTUNITY BROKERAGE

The real estate activity dealing in the sale, purchase or lease of a business.

BUSINESS PARK

A development or subdivision allocated to office-warehouse or similar use. Also known as an office park. An outgrowth of industrial parks.

BUSINESS AND PROFESSIONS CODE

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.

BUSINESS OPPORTUNITY

A term used to describe a business including its stock- in-trade, fixtures, and good will.

BUSINESS TRUST
See Syndicate
BUYDOWN

See Subsidy Buydown

BUYER

 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.

BUYER BROKERAGE AGREEMENT

An employment contract with a purchase.

BUYERS MARKET
The supply of available properties exceeds the demand.
BYLAWS

Rules for the conduct of the internal affairs of corporations and other organizations

C

CALL PROVISION

 SEE: Acceleration Clause

CAL-VET FINANCING

 The State of California holds the titles under Cal-Vet financing.

CANCEL ESCROW

To terminate escrow by mutual written instructions

CAL-VET LOAN PROGRAM (CALIFORNIA VETERANS LOAN)

A program administered by the State Department of Veterans Affairs for the direct financing of farms and homes for veterans who qualify.

CANCELED

A license ceases to exist, effective as of
the date approved by the Commission , and does not involve disciplinary action.

CANCELLATION

Termination of a contract without undoing acts that have already been performed under
contract.

CANCELLATION OPTION

 A lease clause granting the tenant the option to cancel at the end of a
predetermined term

CAP

A ceiling on interest rate increases.

CAPACITY

Legal ability to perform some act, such as enter into a contractor execute a deed or will.

CAPITAL

 An agent of production; construction and
equipment costs ; investment money.

CAPITAL ASSETS

 Assets of a permanent nature used in the production of income. Examples would include
land, buildings, and equipment.

CAPITAL-DEFICIT AREA

A region where the total amount of savings is not sufficient to finance economic development
already underway in that area.

CAPITAL GAIN

The gain recognized for federal and
state income tax purposes when a taxpayer disposes of a capital asset.

CAPITAL EXPENDITURE

Money expended on repairs and
improvements and repair or prolong its life; not deductible.

COMPARE

Deduction, Repair

CAPITALIZATION

In appraising, a method of determining
value of property by considering net income and a reasonable percentage of return on the investment.

CAPITALIZED INCOME APPROACH

SEE: Income Approach.

CAPITALIZED INCOME METHOD OF DEPRECIATION

Method for estimating depreciation by comparing the subjects capitalized value to its replacement cost new.

CAPITALIZATION RATE

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.

CAP RATE

See LIFE OF LOAN CAP

CARPET STRIP

See Base Shoe

CARRYBACK LOAN

SEE: Loan, Carryback

CARRYOVER CLAUSE

 SEE: Extender Clause

CASE LAW

Rules of law developed in court decisions, as
opposed to constitutional law, statutory law, or administrative regulations. Also called decisional law.

CASH-ON-CASH

Investment return based on actual cash
invested; cash flow as percentage or ratio to equity.


CASH RETURN TO EQUITY

 Equity dividend; cash flow.

CASE OR CONTROVERSY REQUIREMENT

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.

CASEMENT WINDOW

Windows set in frames of wood
or metal that swings outward.

CASH FLOW

 (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.

CASH FLOW STATEMENT

A yearly financial report showing the bottom-line return after taxes.
CAUCUS Occurs when the mediator meets with each party separately.

CAUSE OF ACTION

A legal right; facts giving rise to
an enforceable claim.

CAVEAT EMPTOR

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.

CCIM

Certified Commercial Investment Member

C.C. & R s

Abbreviation for covenants, conditions,
and restrictions. Often used synonymously with general plan restrictions on a subdivision.

CEASE AND DESIST ORDER

An action by a government agency to require a person business to stop an illegal or unfair practice.

CENTRAL TOWN

A town that performs a variety of
services for the surrounding area.

CENSURE

An official act of disapproval.

CERTIFICATE OF CLEARANCE

The State Board of Equalization issues that the seller has paid sales tax.

CERTIFICATE OF ELIGIBILITY

Issued by the Department of Veterans Affairs – evidence of individuals eligibility to obtain a VA loan

CERTIFICATE OF OCCUPANCY

A statement issued by a local government verifying that a newly constructed building is in compliance with all codes and may be occupied.

CERTIFICATE OF SALE

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.

CERTIFICATE OF REASONABLE VALUE (CRV)

The Veterans Administration’s written appraisal of the value of a property.

CERTIFICATE OF TAXES DUE

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.

CERTIFICATE OF TITLE

A written opinion by an attorney  that ownership of the particular parcel of land is as stated in the certificate.

CERTIFICATE OF TITLE OPINION

(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 MANAGER (CAM);
CERTIFIED APARTMENT PROPERTY SUPERVISOR (CAPS); CERTIFIED APARTMENT MAINTENANCE TECHNICIAN (CAMT).

Designations awarded by the National Apartment Association (NA A) for appropriate courses of study.

CERTIFIED APPRAISER

(See State Certified appraiser)

CERTIFIED ASSOCIATION MANAGER (CAM)

A designation awarded by the Community Association Institute for courses of study in the professional management community associations.

CERTIFIED PLANT ENGINEER (CPE)

A designation awarded for qualification in plant engineering facilities management by the American Institute of Plant Engineers
(AIPE)

CERTIFIED PROPERTY MANAGER (CPM)

A property manager who has fulfilled the Institute of Real Estate Management s requirements for this professional designation.

CERTIFIED SHOPPING CENTER MANAGER (CSM );
CERTIFIED MARKETING DIRECTOR (CMD).

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.

CERTIORARI, WRIT OF

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.

CHAIN

A unit of measurement used by surveyors . A
chain consists of a hundred links equal to 66 feet.

CHAIN OF TITLE

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.

CHATTEL

The old name for personal property.

CHATTEL MORTGAGE

A personal-property mortgage. (See Security Agreement etc..)

CHATTEL REAL

In real estate, an estate less than a freehold estate, such as a lease.

CHATTELS

(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.

CHECK

A square measuring 24 miles on each side and representing the largest unit of measure in the government survey system.

CHOICE-OF AGENCY

After A broker has confirmed his
choice-of-agency, the choice cannot be corrected or modified at any time.

CHOSE IN ACTION

A personal right to something not presently in owners , but recoverable by a legal action for possession.

CHOSE IN POSSESSION

Something in possession rather than the right of possession.

CIRCUIT BREAKER

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.

CITATIONS

Statements of alleged violations and the
penalties imposed.

CITY GROWTH PATTERNS

The following people have done work on this subject, Von Thunen, Burgess, Babcock and
Hoyt.

CIVIL CODE

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.

CIVIL LAW

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.

CIVIL RIGHTS

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.

CIVIL RIGHTS ACT OF 1866

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.

CIVIL RIGHTS ACT OF 1968

Violations of this act should be reported to HUD .

CLAPBOARD

Boards that are used for siding and that are
usually thicker at one edge.

CLAUSE

A distinct provision in a written document.

CLIENT

A person represented by a broker or an
attorney.

CLOSE OF ESCROW (COE)

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.

CLOSING

(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.

CLOSING COSTS

The miscellaneous expenses buyers and sellers normally incur in the transfer of ownership of real property over and above the cost of the property.

CLOSING STATEMENT

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.

CLOUD ON TITLE

A claim or document that affects title to real estate. The actual cloud may ultimately prove invalid, but its existence mars the title.

CLTA POLICY

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.

CODE OF CIVIL PROCEDURE

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.

CODE OF ETHICS

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.

CODIFICATION

Collection and organization of piecemeal laws into a comprehensive code.

COINSURANCE CLAUSE

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.

COLLAR BEAM

A beam that connects the pairs of opposite roof rafters above the attic floor.

COLLATERAL

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.

COLLATERALLY

Refers to liens secured by other
liens.

COLLATERALIZATION

The hypothecating of property, usually personal, as security for a loan.

COLLATERAL SECURITY

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.

COLLECTIBLE INCOME

 Gross income from property minus the vacancy and other types of rent loss. Also called gross adjusted income.

COLLUSION

A secret agreement between two or more
persons wishing to defraud another for a wrongful purpose or to obtain an object forbidden by law.

COLOR OF TITLE

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.

COMBED PLYWOOD

A grooved building material used primarily for interior finish.

COMMERCIAL ACRE

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.

COMMERCIAL BANK

 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.

COMMERCIAL LOAN

A personal loan from a commercial
bank, usually unsecured and short term, for other than mortgage purposes.

COMMERCIAL PAPER

Negotiable instruments used in business.

COMMERCIAL PROPERTY

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.

COMMERCIAL TENANT

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.

COMMINGLING

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.

COMMISSION

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.

COMMISSION SPLIT

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.

COMMISSIONER S FINAL REPORT

May Be used in its entirety by a subdivider in his advertisement of his subdivision.

COMMITMENT

A pledge or a promise; a firm agreement.

Accordion Title
Accordion Content
COMMITMENT OF TITLE

Similar to a preliminary title report; guarantees that the title company will issue title insurance.

COMMON AREA

An entire common interest subdivision except the separate interests therein.

COMMON ELEMENTS

The parts of multiple owners hip property not included in the units ; those parts in which each individual owner holds an undivided
interest.

COMMON GRANTOR

A person who owned two or more adjacent properties and then sold them to different
buyers.

COMMON INTEREST SUBDIVISION

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.

COMMON LAW

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.

COMMON LAW REMEDY

Money awarded to a plaintiff in a civil lawsuit; damages. COMPARE: Equitable Remedy

COMMON STOCK

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.

COMMUNITY ASSOCIATIONS INSTITUTE (CAI).

A professional organization offering educational programs for persons involved in homeowners , condominium, and cooperative associations

COMMUNITY CENTER

A shopping center of about 100,000
to 250,000 square feet (20to70 retail spaces) supported by more than 5,000 families.

COMMUNITY LAND-USE

Political factors should be incorporated into the management plan because of this.

COMMUNITY PROPERTY

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.

COMMUNITY REINVESTMENT ACT

Federal law requiring financial institutions to lend in communities served, including
low and moderate -income areas, consistent with considerations of safety and soundness.

CO-MORTGAGOR

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.

COMBINATION LOAN

A combined construction loan and permanent take-out loan after construction is completed.

COMPACTION

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
cracking.

COMPARABLE PROPERTY SALES

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.

COMPARATIVE INCOME AND EXPENSE ANALYSIS

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.

COMPARATIVE MARKET ANALYSIS (C MA)

One of three methods in the appraisal process. A means of comparing similar type properties , which have recently sold, to the subject property.

COMPARATIVE SQUARE FOOT METHOD

Method of estimating construction costs using typical square foot costs for the type of construction being estimated.

COMPARISON APPROACH

A real estate comparison method which compares a given property with a similar
or comparable surrounding properties; also called market comparison.

COMPENSATION

Anything of value or a valuable consideration, directly or indirectly paid, promised or expected to be paid or received.

COMPENSATING FACTORS

Positive factors that are considered by lenders to approve loans to otherwise marginal borrowers.

COMPETENT

Legally qualified or capable.

COMPETITION, PRINCIPLE OF

Holds that profits tend to breed competition and excess profits tend to breed ruinous completion.

COMPETITIVE BIDS

Work estimates submitted to the property manager by service contractors, suppliers, trades people or construction contractors.

COMPLAINT

A document a plaintiff files with the court
to start a lawsuit. A formal allegation or charge.

COMPOUND INTEREST

Interest paid on the original principal and also on the accrued and unpaid interest that has accumulated as the debt matures.

COMPREHENSIVE PLAN

(Master Plan) A statement of policies for the future physical development of an area (e.g ., city, county, region).

COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT (CERCLA)

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.

COMPUTERIZED LOAN OR ORIGINATIONS (CLOs)

Accessing lender loan programs via computer.

CONCEALMENT

The act of keeping from site or keeping
secret.

CONCESSION

A negotiable point in a lease, decide in the
prospective tenant s favor.

CONCIERGE SERVICES

A trend in the property management field that provides personal , secretarial, catering
or other services to the occupants of office or residential buildings.

CONCLUSION

The final estimate of value, realized from the
facts , data , experience and judgement, set out in an appraisal. Appraisers certified conclusion.

CONCLUSIVE PRESUMPTION

A legal assumption that cannot be rebutted, and is therefore accepted as true and binding on the courts.

CONCURRENT ESCROW

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
another property.

CONCURRENTLY

Occurring simultaneously, at the same time; real estate exchanges often must be recorded concurrently.

CONCURRENT OWNERSHIP

Any form of ownership in which two or more people share title to piece of property, holding undivided interests . Also called cotenancy.

CONDEMNATION

 (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.

CONDITION

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.

CONDITIONS, COVENANTS, AND RESTRICTIONS

Recorded deed restrictions that run with the land, usually initiated by the original subdivider.

CONDITION PRECEDENT

A condition that must occur before an estate is created or enlarged, or before some other right or obligation occurs.

CONDITION SUBSEQUENT

A condition that, upon its failure or nonperformance, causes the defeat or extinguishment of an estate, right, or obligation.

CONDITIONAL COMMITMENT

A loan commitment for a definite amount under certain terms and conditions. It is subject to an unknown purchaser’s satisfactory credit rating.

CONDITIONAL ESTATE

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.

CONDITIONAL FEE

SEE: Fee Conditional

CONDITIONAL SALE CONTRACT

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.

CONDITIONAL USE PERMIT

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.

CONDOMINIUM

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.

CONDOMINIUM DECLARATION

The document which establishes a condominium and describes the property rights of the unit owners.

CONDUIT

Usually a metal pipe in which electrical wiring is installed.

CONFESSION OF JUDGMENT

Any entry of judgment upon the debtor’s voluntary admission or confession.

CONFIRMATION OF SALE

A court approval of the sale of property by an executor, administrator, guardian, or conservator.

CONFLICTING DEMANDS

When different parties each make claims that are inconsistent with one another.

CONFORMING LOAN

A loan that does not exceed Fannie Mae/Freddie Mac limits. This limit changes annually.

CONSERVATION

Minor repair, renovation and restoration of residential buildings that have substantial economic use remaining. Also called blight prevention.

CONSIDERATION

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, ADEQUATE

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.

CONSTANT

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.

 

CONSTITUTION

A fundamental document that establishes a governments structure and sets limits on power.

CONSTITUTIONAL

1. Pertaining to or based on a constitution.
2. Not in violation of the U.S. constitution or a state constitution.

CONSTRUCTION

The interpretation of an ambiguous term or provision in a statute or agreement.

CONSTRUCTION CLASSIFICATION

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).

CONSTRUCTION LOAN

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.

CONSTRUCTIVE

A fiction imputed by law.

CONSTRUCTIVE EVICTION

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.

CONSTRUCTIVE NOTICE

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.

CONSTRUCTIVE RECEIPT

Control of the cash proceeds in a delayed exchange without the actual physical possession by the exchanger or his or her agent.

CONSUMMATE

To complete.

CONSUMER CREDIT PROTECTION ACT

A federal law that includes the truth-in-Lending Law.

CONSUMER GOODS

Goods sold or purchased primarily for personal, family, or household purposes.

CONTIGUOUS

Adjoining or touching upon , such as properties touching each other.

CONTEMPLATING AUCTIONING HOMES

A homebuilder should consider the ability to quickly liquidate developments after the initial sales momentum has worn off.

CONTINGENT

Conditional, uncertain, conditioned upon the occurrence or nonoccurrence of some uncertain future event.

CONTINGENCY

A condition that must be met or an event that must happen before a purchase contract becomes binding between the parties.

CONTINGENCY CLAUSE

SEE: Condition

CONTINUATION STATEMENT

A statement filed to extend the time limit on a financing statement that had been filed earlier.

CONTRACT

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.

CONTRACT, BILATERAL

A contract in which each party promises to do something. COMPARE: Contract, Unilateral.

CONTRACT, EXECUTED

A contract in which both parties have completely performed their contractual obligations.

CONTRACT, EXECUTORY

A contract in which one or both parties have not yet completed performance of their
obligations.

CONTRACT, EXPRESS

A contract that has been put into words, either spoken or written.

CONTRACT, INSTALLMENT LAND

SEE: Contract, Land

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.

CONTRACT, ORAL

A spoken agreement, as opposed to a written one.

CONTRACT OF SALE

(See Conditional Sale Contract.)

CONTRACT RATE

Average rate charged on ARM loans or fixed -rate loans by savings institutions nationally.

CONTRACT RENT

Amount of rent being paid under contractual commitments binding owners and tenants.

 

CONTRACT SERVICES

Maintenance tasks performed by outside laborers on a regular basis for a specified fee.

CONTRACT, UNENFORCEABLE

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.

CONTRACT, UNILATERAL

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.

CONTRACT, VALID

A bind ing, legally enforceable contract.

CONTRACT, VOID

An agreement that isn’t an enforceable contract because it lacks a required element or is defensive in some other prospect.

CONTRACTION

A phase of the business cycle characterized by decreasing production.

CONTRACT, VOIDABLE

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.

CONVENTIONAL MORTGAGE LOAN

A loan that is made that is not federally insured or guaranteed.

CONVERSION

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.

COOPERATIVE

The main difference in this type of ownership and a condominium is that a cooperative has a blanket mortgage over the whole building.

CONVERTIBLE- RATE LOAN

(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.

CONVEYANCE

(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.

 

COOPERATIVE

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.

COORDINATOR

An agent of production; management.

CO-OWNERSHIP

(Concurrent or multiple ownership) Title to real property held by two or more persons at the same time.

CORRESPONDENT

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.

CORNER LOT

Lot with frontage on two intersecting streets.

CORNER INFLUENCE

The increase in value of a property because it is located on a corner lot.

CORPORATE COOPERATIVE

Cooperative in which legal ownership of a building is being held by a corporation created for that purpose

CORPORATION

An association organized under strict rules, in which individuals purchase ownership shares; regarded by law as an artificial person, separate from individual shareholders.

CORPORATION NOT FOR PROFIT

An artificial or fictitious person formed to conduct specified types of business activities.

CORPORATION, DOMESTIC

A corporation doing business in the state where it was created.

CORPORATION, FOREIGN

A corporation doing business in one state, but created in another state.

CORPORATION SOLE

An artificial or fictitious person formed by an ecclesiastical body.

CORRECTIVE MAINTENANCE

Actual repairs necessary to keep a property in good condition and operating smoothly.

CORRECTION LINES

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.

CORRELATION

SEE: Reconciliation

COST

The expenditure of monies necessary for the creation of improvements on a property.

COST APPROACH TO VALUE

(Cost-depreciation Approach)
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

COST OF FUNDS

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.

CO-TENANT

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.

CO-TENANCY

Any form of joint ownership.

COUNTER OFFER

Rejection of an offer to buy or sell, with a simultaneous substitute offer.

COUNTY RECORDS

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

COUNTY TAX RATECOUNTY TAX RATE

The county tax rate is set annually by the County Treasurer.

COURSE

A direction, stated in terms of a compass bearing, in metres and bounds description of property.

COURT-ANNEXED

A court mandated arbitration.

COOPERATIVE APARTMENT

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.

CORPORATION

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.

COST

SEE: Replacement Cost, Reproduction Cost.

COST APPROACH

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.

COST BASIS

See Adjusted Cost Basis.

COST MULTIPLIER

Factor used in adjusting published construction cost figures to estimate current and local costs.

COST-PLUS

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.

COST-TO CURE METHOD OF DEPRECIATION

Method of estimating accrued depreciation (loss in value) based on the cost to cure or repair observed building defects.

COUNTER FLASHING

Flashing used on chimneys at roof-line to cover shingle flashing and prevent moisture entry.

COUNTER-OFFER

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.

COURT-ANNEXED ARBITRATION

This may be ordered by the superior court when the sum at stake is less than $50,000 dollars.

COURT PAPERS

These papers cannot be served by the property owner or manager.

COURTYARD HOME

SEE Zero-Lot-Line Home.

COVENANT

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.

COVENANT OF QUIET ENJOYMENT

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.

CPI (CERTIFIED PROPERTY INDEX)

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.

CRAWL HOLE

Exterior or interior opening permitting access underneath a building, as building codes may require

CREATIVE FINANCING

Any financing out of the ordinary, such as seller carrybacks and wrap -around s.

CREDIT

A payment receivable as opposed to a de bi, which is a payment due.

CREDIT APPLICATION

A statement provided by the borrower for a prospective lender in order to establish or
exhibit financial stability.

CREDIT B ID

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 REPORT

Credit history of a person or business issued by a company in the credit reporting business, used to help determine creditworthiness.

CREDITOR

One who is owed a debt.

CREDITOR, SECURED

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.

CRIMINAL LAW

The body of law concerned with crimes, an individual’s action against society.

CUL-DE-SAC

A dead end street.

CUL-DE-SAC LOT

Lot located at or near the end of a dead-end street.

CURABLE DEPRECIATION

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.

CURE

To remedy a default, by paying money that is overdue or fulfilling other obligations.

CURB APPEAL

The impression gained, good or poor, of a property when it is first seen, usually from the street while driving, hence curb appeal.

CURBSTONE APPRAISAL

A slang phrase, implying an informal valuation of a property based on observation and experience.

CURTAIL SCHEDULE

A list of the due dates and amounts by which the principal sum of an obligation will be reduced by partial payments.

CUSTOMER

A prospective property buyer.

CYCLICAL FLUCTUATION

See business cycle

D

DAMAGES

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, ACTUAL

Compensatory damages.

 

DAMAGES, COMPENSATORY

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, CONSEQUENTIAL

Damages compensating for loses that where not the direct result of the defendant’s wrongful act, but which were foreseeable consequence of it.

 

DAMAGES, EXEMPLARY

Punitive damages

DAMAGES, LIQUIDATED

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.

 

DAMAGES, PUNITIVE

An award added to compensatory damages , to punish the defendant for malicious or outrageous conduct and discourage others from similar acts.

 

DATA PLANT

An appraiser s file of information on real estate.

DATUM

An artificial horizontal plane of elevation, established in reference to sea level, used by surveyors as a reference point in determining elevation.

DEALER

A person who holds property primarily for sale to his or her customers in the ordinary course of his or her business.

DEALER PROPERTY

Property held for sale to customers rather than as a long-term investment; a developers inventory of subdivision lots, for example.

DEATH OCCURRING ON THE PROPERTY

A broker listing a property for sale must disclose a death accruing on the property within three years before the sale.

DEBENTURE

Bonds issued without security, an obligation not secured by as specific lien on property.

DEBIT

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.

DEBT COVERAGE RATIO (DCR)

Net operating income divided by annual debt service. Used by lenders when analyzing income property loans.

DEBT-TO -INCOME RATIO

Borrower’s monthly payment obligations as a percentage of their income.

DEBTOR

(1) A party who “owns” the property that is subject to a security interest.
(2) A person who owes a debt.

DEBT SERVICE

The sum of money needed each payment period to amortize the loan or loans.

 

DECEDENT

A person who has died.

DECIDUOUS

Trees which shed their leaves at seasonal intervals.

DECISIONAL LAW

SEE: Case Law

DECK

Usually an open porch on the roof or another part of the structure.

DECLARATION

The legal document that the developer of a condominium must file and record in order to create a condominium under state law.

DECLARATION OF ABANDONMENT

A document recorded by an owner that voluntarily release a property from homestead protection.

DECLARATION OF RESTRICTIONS

 SEE: CC&Rs

DECLARATION OF HOMESTEAD

A single-family dwelling; a house situated on a two-acre parcel; a fourplex.

 

DECLARATION OF TRUST

A formal instrument filed by a business trust with the Department of State as a prerequisite for creating the trust.

DECLARATORY JUDGEMENT

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.

 

DECLARATORY RELIEF

A court’s decision on the rights of the parties in a question of law, without ordering anything to be done.

 

DECLINE PHASE

Third phase in the cycle of a neighborhood, generally marked by delayed repairs and deterioration of buildings.

DECLINING BALANCE DEPRECIATION

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 OF FORECLOSURE

Decree by a court ordering the sale of mortgaged property and the payment of debt owing to the lender out of the proceeds.

DEDICATION

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.

 

DEDICATION, IMPLIED

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.

DEDICATION, STATUTORY

A dedication required by law; for example , dedication of property for streets and sidewalks as a prerequisite to subdivision approval.

DEDUCTION

An amount a taxpayer is allowed to subtract from his or her income before calculating the tax on the income.

DEDUCTION, COST RECOVERY

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.

DEDUCTION, REPAIR

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.

DEED

A written instrument that when properly executed and delivered conveys title.

DEED CORRECTION

A deed used to correct minor mistakes in an earlier deed, such as misspelled names or errors in the legal description.

DEED, GENERAL WARRANTY

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.

DEED, GIFT

A deed that is not supported by a valuable consideration; often lists love and affection as the consideration.

DEED, GRANT

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

DEED, QUIT CLAIM

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.

DEED IN LIEU OF A FORECLOSURE

 To prevent a foreclosure from happening an owner may give the mortgagor the deed to the property to stop the foreclosure proceedings.

DEED OF RECONVEYANCE

A legal instrument that conveys title from a trustee back to the borrower under a mortgage once the mortgage has been paid out

DEED OF TRUST

A security instrument transferring title to property to a third person (trustee) as security for a debt or other obligation.

DEED OF TRUST, BLANKET

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.

DEED OF TRUST, FICTITIOUS

A blank trust deed form filed for record to save recording costs on real deeds of trust.

DEED OF TRUST, JUNIOR

A second ( or third, etc.) Deed of trust , with lower lien priority than the first trust deed.

DEED OF TRUST, SENIOR

A deed of trust with higher priority than another deed of trust on a property.

DEED RESTRICTION

A restrictive covenant in a deed.

DEEMER PERIOD

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.

DEFAULT

(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.

DEFAULT JUDGMENT

A judgment obtained because the defendant failed to appear and defend his case.

 

DEFEASIBLE FEE

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.

 

DEFEASANCE CLAUSE

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.

DEFEASIBLE

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.

DEFECT

(See Cloud on Title)

DEFENDANT

The party being sued in a lawsuit; the party against whom an action is filed.

DEFERMENT

A right to defer payment of an obligation (such as paying taxes) until a later date.

DEFERRED INTEREST

See Negative amortization

DEFERRED MAINTENANCE

Maintenance and accumulated repairs that have been postponed to later dates

DEFERRED PAYMENT OPTIONS

The privilege of deferred income payments to take advantage of statutes affording tax benefits.

DEFICIENCY JUDGEMENT (Decree)

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.

DEFINE THE PROBLEM

 The first step in the appraisal process.

DELAYED SELLING

Most inventories o f real estate are held back because the owners expect the interest rates to drop.

 

DELEGATION OF POWERS

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.

DELINQUENCY

Failure to make timely payments on aloan.

DELIVERY (OF A DEED)

The unconditional,irrevocable intent of a grantor immediately to divest (give up) an interest in real estate by a deed or other instrument.

DEMAND

The desire to possess, plus the ability to buy; an essential element of value.

DEMAND DEPOSIT

Checking accounts or transaction deposit with drawable upon demand, as opposed to time deposit.

DE MINIMIS VALUE

Transactions with a value less than a certain minimum amount.

DEMISE

A transfer of an estate to another person for a specified period of years, for life, or at will.

DENIAL

A refusal or rejection.

DENSITY

The number of homes or lots per acre.

DEPARTMENT O F HOUSING AND URBAN
DEVELOPMENT (HUD)

A government agency authorized to construct and provide financial assistance to housing development for low income tenants.

DEPARTMENT O F VETERANS AFFAIRS (D VA)

A government agency that guarantees approved lenders against foreclosure loss o n loans made to eligible veteran s.

DEPOSIT (MONEY)

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.

DEPOSITION

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.

DEPOSIT RECEIPT

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.

DEPRECIATE

To decline in value.

DEPRECIATED COST METHOD

Method for adjusting comparable sales; adjustments are calculated from an analysis of the depreciated replacement cost for each differentiating feature.

DEPRECIATION

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.

DEPRECIABLE PROPERTY

Property that is eligible for depreciation (cost recovery) deduction because it will wear out and have to be replaced.

DEPTH

Distance from the frontage of a lot to the rear lot line.

DEPTH TABLES

Depth tables are used by appraisers when determining value o f business property that varies in depth.

DESCENT

The passage of title to real property upon the death of the owner to his or her legal descendants.

DESCRIPTION

A reference to certain maps, plats, and other instruments that are recorded with the county and serve to make a positive property identification.

DESK COST

The total of rent, telephone, utilities, advertising and other expenses divided by the number of desks found in a real estate office.

DESIGN TYPE

Classification of buildings based on the use for which a structure is designed.

DEREGULATION

An easing and relaxing of rules and regulations for lenders.

DESIGNATED SALES ASSOCIATES(FL)

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.

DESIST AND REFRAIN ORDER

An order that the Real Estate Commissioner is empowered by law and refrain from committing an act in violation of the Real Estate Law.

DETERIORATION

The process of gradual worsening or depreciation.

DETERMINABLE FEE

An estate which may end on the happening of an event that may or may not occur.

DETRIMENTAL RELIANCE SEE :

Estoppel, Promissory

DEVELOPMENT PHASE

First phase in the life cycle of a neighborhood, consisting of the initial construction of improvements on vacant land.

DEVELOPMENT STAGE

The first stage in a development cycle.

DEVELOPMENT METHOD (LAND DEVELOPMENT METHOD)

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.

DEVELOPMENT O F REGIONAL IMPACT(DR I)

A large project affecting more than one county.

DEVELOPER WHO PLANS WELL

To be one of these a developer must anticipate risks and profits, survey the market and measure present needs.

DEVISE

A gift of real property by deed.

DEVISEE

One who receives real property under a will.

DEVISOR

One who disposes of real property by will.

DICTU

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.

DIMINISHED UTILITY SEE:

Accrued Depreciation.

DIRECT CAPITALIZATION METHOD

 Income capitalization technique; value is estimated by dividing net operating income by the overall capitalization rate.

DIRECT COSTS

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.

DIRECT MANAGEMENT COURSE

Expenses that can be attributed directly to the operation of a management firm or department.

DIRECT MARKET COMPARISON APPROACH SEE:

Sale Comparison Approach.

DIRECT MARKET METHOD

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.)

DIRECTIONAL GROWTH

The direction in which the residential sections of a city seem destined or determined to grow.

DISABLED PERSONS

A hotel or lodging house need not be designed to accommodate disabled persons if it contains fewer than 25 rooms.

DISABLED TENANT

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.

DISABILITY

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.

DISAFFIRM

To ask a court to terminate a voidable contract.

DISBURSEMENT

The release of monies held in an escrow account; usually on the day that escrow closes.

DISCLOSURE REQUIREMENT

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.

DISCLOSURE STATEMENT

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.

DISCOUNT

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.

DISCOUNT DEPARTMENT STORES

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.

DISCOUNT POINTS

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.

DISCOUNT RATE

The interest rate that is charged on money borrowed by banks from the Federal Reserve System.

DISCOUNT TABLES

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.

DISCRETIONARY POWERS OF AGENCY

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.

DISCRIMINATION

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.

DISCOUNTED CASH FLOW (DCF)

Technique of income capitalization; estimated future investment returns are discounted to a present value.

DISCRIMINATORY BUSINESS PRACTICES

A broker engaging in discriminatory business practices is subject to

DRE

discipline.

DISCRIMINATORY PREFERENCE

Use of the words Restricted, Exclusive and Private, in real estate advertising should be avoided as they indicate discriminatory preferences.

DISINTERMEDIATION

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.

DISPOSABLE INCOME

The after -tax income a household receives to spend on personal consumption.

DISPOSSESS

To deprive one of the use of real estate.

DISPOSSESS PROCEEDINGS

A suit brought by a landlord to evict a tenant for defaulting in the terms of the lease. Also known as unlawful detainer actions.

DISSOLUTION OF MARRIAGE

A divorce. District A neighborhood that contains only one kind of land use.

DISTRICT COURT

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.

DIVESTMENT

The elimination or removal of a right or title, usually applied to the cancellation of an estate in land.

DIVIDED AGENCY

When a broker or an agent acts on behalf of both parties he is considered a divided agent See dual agent

DOCTRINE OF CORRELATIVE USERS

An owner may use only a reasonable amount of the total underground water supply for his or her beneficial use .

DOCUMENTARY TRANSFER TAX

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.

DOCUMENTARY (DOC) STAMPS

Tax applicable to property transfers and affixed to the grant deed; varies from county to county, city to city; sometimes called a transfer tax

DOCUMENTARY STAMP TAX ON DEEDS, STATE

Tax required on all deeds or other documents used as conveyances. The charge is based on the total purchase price.

DOCUMENTARY STAMP TAX ON NOTES, STATE

Tax required on all promissory notes. The cost is based on the face value of the note.

DEVELOPMENT PHASE

First phase in the life cycle of a neighborhood, consisting of the initial construction of improvements on vacant land.

DOCUMENTS

Legal instruments such as mortgages, contracts, deeds, options, wills, bills of sale, etc.

DOMICILE

A person’s permanent residence.

DOMINANT TENEMENT

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).

DONEE

The person to whom a gift is made.

DONOR

The person who makes a gift.

DORMER

A projection built out over the slope of a roof, used to house windows on the upper floor to provide additional light and ventilation.

DOUBLE DECLINING BALANCE DEPRECIATION (See DECLINING BALANCE DEPRECIATION) DOUBLE ESCROW

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.

DOUBLE-HUNG

A window consisting of two sashes that move up and down in a pair of channels and are held open by tension springs.

DOWER

The right that a wife has in her husband’s estate at his death. Dower has been abolished in California.

DOWN PAYMENT

The difference between the sale price of the property and the loan amount.

DRE

Ethics Regulations Do not compel a broker to cooperate with other brokers by sharing property information.

DRAW

Usually applies to construction loans when disbursement of a portion of the mortgage is made in advance, as improvements to the property are made.

DUAL AGENCY

Representing both principals in a transaction. (Not a legal agency relationship in the state of Florida)

DUAL AGENT

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.

DUE-ON-ENCUMBRANCE CLAUSE

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.

DUE-ON-SALE CLAUSE

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.

DUN & BRADSTREET

A credit-reporting agency that publishes credit ratings for many corporations and businesses.

DUE PROCESS OF LAW

A constitutional guarantee that the government will not interfe re with a person’s private property rights without following procedural safeguards prescribed by law.

DURESS

Unlawful constraint by force or fear.

DURESS, ECONOMIC

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.

DUTIES OF AN AGENT

A special relationship of trust by which one person (agent) is authorized to conduct business, sign papers o r otherwise act.

DVA

Department of Veteran Affairs, established on March 15, 1989 to succeed the Veterans Administration.

Ε

EARNEST MONEY DEPOSIT

A deposit of money paid by a buyer for real property as evidence of good faith.

EARNEST MONEY AGREEMENT

SEE : Deposit Receipt

EASEMENT

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).

EASEMENT APPURTENANT

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, IMPLIED

Easement by Implication.

EASEMENT, NEGATIVE

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.

EASEMENT, POSITIVE

An easement that allows the dominant tenant to use the servient tenement in a particular way.

EASEMENT BY PRESCRIPTION

This brought about by open and notorious use over a long period of time.

EASEMENT, PRESCRIPTIVE

An easement acquired by prescription.

EASEMENT BY EXPRESS GRANT

An easement granted to another in a deed or other document.

EASEMENT BY EXPRESS RESERVATION

An easement created in a deed when a landowner is dividing the property, transferring the servient tenement but retaining the dominant tenement.

EASEMENT BY IMPLICATION

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.

EASEMENT BY NECESSITY

A special type of implied easement; when the dominant tenement would be completely useless without an easement, an easement

EASEMENT IN GROSS

An easement that benefits a particular individual, not a parcel of property. Involves only a servient estate. A public utility easement is an example.

EASY MONEY

Loose money policy of the federal reserve board.

EAVES

The lower projecting edge of a roof over the wall.

ECONOMIC BASE STUDIES

An analysis of employment in the primary industries of the region.

ECONOMIC LIFE

The remaining useful life of an improvement or structure; that period during which an improvement will yield a return on the investment.

ECONOMIC OBSOLESCENCE

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.

 

ECONOMIC OVERSUPPLY

A market condition in which available rental space is priced beyond the financial capabilities of potential tenants.

ECONOMIC RENT

The reasonable rental expectancy if the property were available for renting at the time of its valuation.

ECONOMIC TREND

Pattern of related changes in some aspect o f the economy.

EER

Energy Efficient Ratio

EFFECT A SALE

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.

EFFECTIVE AGE OF IMPROVEMENT

The number of years of age that is indicated by the condition of the structure, distinct from chronological age.

EFFECTIVE DATE OF VALUE (APPRAISAL)

The specific day the conclusion of value applies.

EFFECTIVE GROSS RENT

Gross rent, minus an allowance for vacancy and credit losses.

EFFECTIVE INTEREST RATE

The percentage of interest that is actually being paid by the borrower for the use of the money, distinct from chronological age.

EFFECTIVE GROSS INCOME

The amount of net income that remains after the deduction from gross income of bad debt vacancy factor and credit losses.

EGRESS

Exit; the act or avenue or leaving property.

EIGHTEEN YEARS

The legal age for getting a real estate license

E.I.R.

 Abbreviation for Environmental Impact Report.

ELECTIVE SHARE

An estate defined as consisting of 30 percent of the decedent’s personal property and Florida real property, except homestead exempt property claims.

ELEMENTS OF COMPARISON

Four categories of information about sales: terms of sale, time of sale, location elements, and physical elements.

ELEMENTS OF VALUE

Four prerequisites that must be present for an object to have value : utility, scarcity, demand, and transferability.

ELECTRONIC DATA PROCESSING

The use of a computer to compile and process information.

ELLWOOD TECHNIQUE

A mortgage/equity method of capitalization.

ELEVATION SHEET

Drawings of the front and side views of the finished homes.

EMBEZZLED FUNDS

Are reportable as income for tax purposes.

EMBLEMENTS

Things that grow on the land require annual planting and cultivation.

EMINENT DOMAIN

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.

EMPLOYEE

Someone who works under the direction and control of another.

COMPARE: Independent Contractor.

EMPLOYMENT AGREEMENT

An agreement between broker and salesman must be kept by both broker and salesman for three years from date of termination.

EMPLOYER

The individual who hires the services of another.

EMPTY NESTER

Older parents whose housing needs change after their children have moved away.

ENCROACHMENT

The projection of a structure onto the land of an adjoining owner. A structure or natural object that unlawfully extends into another’s property.

ENCUMBRANCE (CLAUSE)

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.

ENDORSEMENT

See Indorsement.

ENJOIN

To prohibit an an, or command performance of an, by court order; to issue an injunction.

EQA

The California Environmental Quality Act.

ENVIRONMENTAL IMPACT REPORT

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.

ENVIRONMENTAL PROTECTION AGENCY (EPA)

A federal organization created by The National Environmental Policy Act. The EPA’s purpose is to centralize governments environmental responsibilities.

EQUAL CREDIT OPPORTUNITY

Federal law prohibiting discrimination in the extension of credit.

EQUAL PROTECTION

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.)

EQUILIBRIUM

When supply equals demand.

EQUITABLE REMEDY

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.

EQUITABLE TITLE

SEE: Title, Equitable.

EQUITY

(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.

EQUITY BUILD-UP

The increase of the owner’s equity due to mortgage principal reduction and value appreciation.

EQUITY CAPITALIZATION RATE

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.

EQUITY FINANCING

Lender finances high-ratio loan in exchange for a percentage of ownership and the right to share in the property’s cash flow.

EQUITY PARTICIPATION

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.

EQUITY OF REDEMPTION

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.

EQUITY RESIDUAL TECHNIQUE

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.

EROSION

The wearing away of the surface of the land by the action of wind, water, and glaciers, for example.

ERROR, HARMLESS

A mistake by a trial judge that did not affect the final judgment in the case.

ERROR, PREJUDICIAL

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).

ESCALATION

The right reserved by the lender to increase the amount of the payments and/or interest upon the happening of a certain event.

ESCALATION CLAUSE

A lease clause providing that rental rate will increase or decrease according to selected index of economic conditions, such as the consumer price index.

ESCALATOR CLAUSE

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.

ESCHEAT

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.

ESCROW (ACCOUNT)

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.

ESCROW AGENT

The neutral third party holding funds or something of value in trust for another or others.

ESCROW COMPANY

When an escrow company acts as escrow, it must be licensed by the Commissioner of Corporations.

ESCROW DISBURSEMENT ORDER (EDO)

 A course of action for determining the disposition of a contested deposit.

ESCROW HOLDERS

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.

ESCROW INSTRUCTIONS

The document that authorizes an escrow agent to deliver items deposited in escrow once the parties have complied with specified conditions.

ESCROW MEMO

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.

ESCROW NUMBER

The file number assigned to an escrow by the escrow officer for identification purposes.

ESCROW OFFICER

Also known as an escrow agent, someone qualified to perform all the steps necessary to prepare and carry out escrow instructions.

ESTATE

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.

ESTATE AT SUFFERANCE

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.

ESTATE AT WILL

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.

ESTATE BY THE ENTIRETIES

A tenancy created by the husband and wife jointly owning real property with instant and complete right of survivorship.

ESTATE FOR LIFE

A freehold estate whose duration is measured by and limited to the life or lives of one or more persons.

ESTATE FROM PERIOD TO PERIOD

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.

ESTATE TAXES

These are a form of taxes that are paid off by the estate of the deceased.

ESTATE FOR YEARS

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.

ESTATE IN FEE SIMPLE

SEE: Fee Simple.

ESTATE IN REMAINDER

SEE: Remainder.

ESTATE IN REVERSION

SEE: Reversion.

ESTATE IN SOLE

Real property owned by a corporation.

ESTATE OF INHERITANCE

An estate that may go to the heirs of the deceased. All freehold estates are estates of inheritance, except life estates.

ESTIMATE

A preliminary opinion of value. Appraise, set a value.

ESTIMATED REMAINING LIFE

The period of time (years) it takes for the improvements to become useless.

ESTOP

To ban, stop, or impede.

ESTOP NOTICE

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.

ESTOPPEL

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.

ESTOPPEL CERTIFICATE

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).

ESTOPPEL, PROMISSORY

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.

ET AL

Abbreviation meaning and others (other person).

ETHICS

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

ET UX

Abbreviation meaning and wife.

EVICTION

Dispossession by legal process, as in the termination of a tenant’s right to possession through re-entry or other legal proceedings.

EVICTION, ACTUAL

Physically forcing someone off of property (or preventing them from reentering), or using the legal process to make someone leave.

COMPARE: Eviction, Constructive.

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.

EVICTION NOTICE

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.

EVICTION, RETALIATORY

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.

EVICTION, SELF-HELP

When a landlord uses physical force, a lockout, or a utility shutoff to get rid of a tenant, instead of using the legal process.

EVICTION, WRONGFUL

When a landlord evicts a tenant in violation of the tenant’s rights.

EVIDENCE

All relevant information, facts, and exhibits admissible in a trial.

EXCEPTIONS

Conditional items listed on a preliminary title report and effecting the title,; would be excluded from coverage by the title insurance company.

EXCESS RENT

The amount by which the total contract rent exceeds market rent.

EXCESS LAND

Land above and beyond what is needed for the highest and best use of the site.

 

EXCHANGE

A reciprocal transfer of properties between two or more parties.

EXCLUSION

General affecting title to real property excluded from coverage of a title insurance policy.

EXCLUSIVE AGENCY

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.

EXCLUSIVE AGENCY LISTING

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.

EXCLUSIVE-RIGHT-TO-SELL LISTING

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.

EXCLUSIVE AGENCY AGREEMENT

When a broker receives an exclusive agency agreement from the seller, he owes a fiduciary relationship to the seller.

EXCLUSIVE RIGHT TO SELL AGENCY

A contract hiring the broker as the only person authorized to sell property. If anyone, including the seller, finds a buyer, the broker earns
the commissions.

EXCULPATORY CLAUSE

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.

EXECUTE

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.

EXECUTED CONTRACT

Completed and fully performed by both parties.

EXECUTION

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

EXECUTION LIEN

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.

EXECUTIVE

The head of a government, such as president, governor, or mayor.

EXECUTIVE POWER (FREC)(FL)

 Duties related to the education of the licensees, the regulating of professional practices, and the publishing of materials.

EXECUTOR

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.

EXECUTOR / EXECUTRIX

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.

EXECUTORY CONTRACT

A contract that is yet to be performed.

EXEMPT PROPERTY

Property that has been decreed to be excluded from taxation or claim by others.

EXEMPTION

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.

EXHIBIT

1. Documentary or physical evidence submitted in a trial.

2. An attachment to a document.

EX PARTE

By only one party or side. For example, an injunction obtained by evidence presented by only one side, without notice to the other parties.

EXPANDIBLE HOUSE

A home designed for expansion and additions in the future.

EXPANSION

A phase of the business cycle characterized by increasing production.

EXPANSION JOINT

A fiber strip used to separate units of concrete to prevent cracking due to expansion as a result of temperature changes.

EXPANSION OPTION

A lease clause granting a tenant an option to lease additional adjacent space after a specified period of time.

EXPEDIENTES

The right to use another’s land for a specific purpose , sometimes known as the right -of-way.

EXPENSES

Certain items which appear on a closing statement in connection with a real estate sale.

EXPERIENCE EXCHANGE REPORT

An annual BOMA publication containing income and expense statistics for office properties classified by type of building, area and such.

EXPORT PRODUCTION

Goods and services produced for sale or use outside the town or area in which they are produced.

EXPRESS

Stated in words, spoken or written.

COMPARE: Implied.

EXPRESS CONTRACT

A contract whose elements are stated either orally or in writing.

EXPROPRIATION

To take by public authority through the power of eminent domain.

EXTENDED POLICY

An extended insurance policy.

EXTENDER CLAUSE

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.

F

FACADE

The face of a building, especially the front face.

FACILITY MANAGEMENT ADMINISTRATOR (FMA)