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- AbandonmentThe failure to occupy and use property, which may result in a loss of rights.
- Abstract of TitleA brief summary of the historyof title to a property, listing all recordeddocuments that affect the title.
- Abutting PropertyDirectly contiguous properties,sharing at least one common boundary.
- Acceleration ClauseContract clause giving the lender the right to declare the entire loan balance due immediately because of default, or other reasons stated in the contract.
- AcceptanceAgreeing to the terms of an offer,thereby creating a binding contract; takingdelivery of a deed.
- AccessionGives property owners the rightto everything produced by their land. See:Accretion; Annexation; Reliction.
- Accessory ApartmentAn apartment within asingle-family dwelling.
- Accessory UseThe use or occupancy incidental orsubordinate to the principal use or occupancyof a property.
- Accord and SatisfactionAn agreement to acceptsomething different (usually less) from what theoriginal contract required.
- AccountabilityIn an agency relationship, theagent’s fiduciary duty to account to theprincipal.
- AccretionThe gradual addition of land by theforces of nature.
- AcknowledgmentThe act of signing a documentbefore a notary public, stating it was signedvoluntarily.
- Act of WasteWhen a possessor who holds lessthan fee ownership (i.e., tenant, vendee, andmortgagor) misuses or abuses the property.
- Actionable FraudFraud meeting certain criteria,so a victim can successfully sue. Victim/plaintiffmust prove the defendant concealed materialfacts or made false statements (intentionallyor negligently) with intent to induce the victimto enter a transaction, and that the victim washarmed by relying on these(...)
- Active IncomeEarnings received from any ofthe following: wages, salaries, commissions,bonuses, and other payments for servicesrendered; profit from a trade or business wherethe taxpayer is an active participant; gain on sale or disposition of assets used in an activetrade or business; income from(...)
- Actual AnnexationPersonal property physicallyattached to land. See: Fixture.
- Actual AuthorityAuthority intentionally given toan agent by the principal, either expressed orimplied.
- Actual Cash Value (ACV)The cost to replacea property item at the time of loss, less anallowance for depreciation. Often used todetermine the amount of reimbursement for aloss (replacement cost minus depreciation).
- Actual EvictionPhysically forcing someone offproperty, preventing someone from re-enteringproperty, or using the legal process to makesomeone leave. Compare: ConstructiveEviction.
- Actual FraudIntentional misrepresentation orconcealment of a material fact; when a personactively conceals material information or makesstatements known to be false or misleading.Also called: Deceit.
- Actual NoticeActual knowledge; that which isknown.
- Ad Valorem TaxTax based on the assessed valueof property.
- Adequate ConsiderationConsiderationcomparable in value to that which the otherparty to the contract is giving.
- Adjustable Rate Mortgage (ARM)Mortgage thatpermits the lender to periodically adjust theinterest rate so it reflects fluctuations in the costof money.
- Adjusted BasisOriginal cost of property, plus gainsand minus losses.
- Administrative AgencyGovernment agency(federal, state, or local) that administers anarea of law, adopting and enforcing detailedregulations that have the force of law.
- Administrative DisciplineEnforcement of licenselaws through reprimand and denial as well asthe suspension and revocation of licenses.
- Administrative ReviewInitiated when a taxpayerfiles a grievance with his municipal assessingunit; prerequisite to judicial review.
- AdministratorPerson appointed by probate courtto manage and distribute a deceased person’s estate when no executor is named in the will, orwhen there is no will.
- Adverse PossessionAcquiring title to someoneelse’s real property by possession of it.Possession must be open and notorious, hostileand adverse, exclusive, and continuous for aprescribed number of years (e.g., in New York,10).
- AffiantA person who makes an affidavit.
- AffidavitA sworn statement that is written andacknowledged. It may be submitted as evidencein a trial.
- AffirmAn appeals court ruling that the lowercourt’s decision was correct, rejecting theappellant’s arguments.
- Affirmative ActionGovernment policiesthat collectively sought to redress pastdiscrimination.
- After Tax Cash FlowCash flow from incomeproducingproperty, less income taxes, if any,attributable to the property’s income. If a taxloss provides a tax savings from the shelterof income earned outside the property, thatsavings is added to the property’s earned cashflow.
- Age of MajorityAge at which a person gains legalcapacity. Compare: Minor
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Relationship of trust created when oneperson (principal) gives another person (agent)the right to represent him in dealings with thirdparties.
- Agency Coupled with an InterestSituation inwhich the agent has a personal interest in thesubject of the agency, as when one co-ownerhas been authorized by the other to sell herproperty.
- Agency Disclosure FormForm used to disclosethe agency relationships permitted, the agencyrelationships a brokerage practices, payment to/from brokers who do not represent the broker’sclient, and required fair housing language.
- Agency Disclosure StatementForm that stateswhether an agent is representing the seller,buyer, or both in a transaction.
- Agency RelationshipThe representation of a partyin a real estate transaction.
- AgentPerson licensed by the state torepresent another in a real estate transactionand a member of the National Association ofREALTORS®; a person authorized to representanother (principal) in dealings with third parties.
- Air RightsThe right to undisturbed use andcontrol of airspace over a parcel of land (within reasonable limits for air travel); may betransferred separately from the land.
- AlienationTransfer of ownership or an interest inproperty from one person to another, by anymeans.
- Alienation ClauseContract clause giving the lendercertain stated rights when there is a transfer ofownership in the property.
- Allodial SystemSystem of land ownership underwhich anyone can own land.
- AlluvionSolid material deposited along a shore byaccretion.
- Alteration AgreementWritten agreement, signedby co-op shareholder-tenants, before anyrenovations, modifications, repairs, or alterationscan begin.
- Alternative FinancingWhen real estate is financedwith terms and/or concessions other than thosetypical for conventional loans.
- Amenity PurchaserPerson who values a propertybased on its ability to fulfill his specific businessneeds, unlike investors who value a propertybased primarily on its investment return.
- Americans with Disabilities Act (ADA)Civil rightslaw that prohibits discrimination based ondisability; creates consistent and enforceablestandards regarding discrimination based ondisability.
- AmortizationWhen a loan balance decreasesbecause of periodic installments that pay downboth principal and interest.
- Amortized LoansWhen monthly payments retirethe debt over the life of the loan instead ofleaving the borrower with a large balloonpayment at the end of the loan term.
- Amount in ControversyAmount of money atissue in a lawsuit; used as a limitation on thejurisdiction of some courts.
- AmperageAmount of electricity going throughelectric wires, measured in amps.
- Anchor TenantMajor department or chain storestrategically located at shopping centers to givemaximum exposure to smaller satellite stores. Acenter may have several anchor tenants.
- Ancillary TrusteeA trustee appointed to concludethe business of a broker who has died.
- AnnexationAttaching personal property to land sothe law views it as part of the real property. See:Fixture.
- Annual Percentage Rate (APR)Total cost offinancing a loan in percentage terms, as arelationship of total finance charges to totalamount financed.
- Anticipatory RepudiationWhen one party to acontract informs the other before the time set forperformance that he does not intend to performas agreed. See: Tender.
- AntitrustA business activity that attempts tomonopolize, contract, or conspire (or any ofthese things together) in a way that negativelyaffects another’s ability to do business.
- Apparent Agency1. When someone acts as if sheis a person’s agent even though she has notbeen authorized to do so. 2. When an agent actsbeyond the scope of her authority, giving a third party the impression the acts are authorized.Also called: Ostensible Agency or ApparentAuthority.
- AppealProcess by which a higher court reviewsa lower court’s decision or an administrativetribunal.
- AppellantParty who files an appeal because ofdissatisfaction with the trial court’s decision. Alsocalled: Petitioner.
- Appellate JurisdictionAuthority to hear an appealas opposed to conducting a trial.
- AppelleeIn an appeal, the party who did not filethe appeal. Also called: Respondent.
- AppraisalAn opinion of the value of property, as ofa specified date, supported by objective data.
- Appraisal ReportThe primary means ofcommunicating appraisal results to the client.
- AppraiserA person who is specially trained to offeran unbiased value of real property.
- AppreciationThe increase in value of an asset overtime.
- Appropriation1. The authorization of theexpenditure of funds and the source of thosefunds. 2. Taking private property for public use,through the government’s power of eminentdomain. Also called: Condemnation.
- Appropriative RightsWater rights allocatedby government permit according to anappropriation system. It is not necessary to ownproperty beside the body of water in order toapply for an appropriation permit. Also called:Prior Appropriation. Compare: Littoral Rights,Riparian Rights.
- Approved Assessing UnitAn assessing unitcertified by the New York State Board as havingcompleted a revaluation program implementinga system of real property tax administration,which was or would be eligible for stateassistance, based upon the latest completedassessment roll.
- AppurtenanceA right that goes with real propertyownership; usually transferred with the property,but may be sold separately.
- Appurtenant EasementAn easement that benefitsa particular piece of property (dominanttenement). Compare: Easement in Gross.
- ArbitrationAn alternative to a court proceedingwhere parties agree to submit facts andevidence to an impartial third party.
- Architectural Review BoardDetermines theeffects a proposed building or other structure,or alteration of an existing structure, willhave on the desirability, property values, anddevelopment of surrounding areas.
- Area VariancePermission to use land in a waytypically not allowed by current zoning laws.
- Arm’s Length TransactionA transaction that occursunder typical conditions in the marketplace, witheach party acting in his or her own best interest.
- Article 12-AArticle of New York Real Property Law,which contains most of the laws relevant to realestate brokers and salespeople.
- Article 78 ProceedingRefers to an article ofthe Civil Practice Law and Rules that allows aggrieved persons to bring an action against agovernment body or officer.
- “As Is” ClauseProvision in a purchase agreementstating the buyer accepts the property in itspresent condition.
- As of Right ZoningProhibits discrimination amonglandowners in a particular zone.
- AsbestosFibrous material derived from a naturallyoccurring group of minerals commonly used ininsulation. Asbestos fibers released into the airare carcinogenic.
- AsbestosisA lung disease caused by extendedexposure to asbestos.
- Assessed ValueValue placed on property to whicha local tax rate is applied to calculate the amountof real property tax.
- Assessing UnitCity, town, or county departmentof assessment with the power to assess realproperty.
- AssessmentA percentage of a property’s marketvalue.
- Assessment Review BoardLocal board that hearscomplaints regarding property assessments andproperty exemption determinations.
- Assessment Roll PublicListing of the assessedvalue for all real property in a municipality.
- AssessorElected or appointed local officialswho independently estimate the value of realproperty.
- Assign1. To transfer a right or interest to another;2. A tenant transferring his right of possessionor other interest in leased property to anotherfor the remainder of the lease term. Compare:Sublease.
- AssigneePerson to whom a right or interest hasbeen assigned.
- Assigning a ContractAssigning the purchase rightsto property or a condominium unit to anotherbuyer before that property or unit is closed.
- AssignmentOne party (assignor) transferringrights or interests under a contract to anotherperson (assignee). In New York, all contracts areassignable unless the contract states otherwise.
- AssignorPerson who assigns a right or interest toanother.
- Associate BrokerA real estate broker who works foranother broker.
- AssumptionOne party taking over responsibilityfor the loan of another party; usually lenderapproval is needed.
- AttachmentCourt-ordered seizure of propertybelonging to a defendant in a lawsuit tosatisfy a judgment. In the case of real property,attachment creates a lien. Also called: Order ofAttachment. See: Attachment Lien.
- Attachment LienA lien intended to preventproperty transfer pending the outcome oflitigation.
- AttestationWitnesses signing a legal documentto affirm the parties’ signatures are real; theact of witnessing the execution of a legaldocument (such as a deed or will). Compare:Acknowledgment.
- Attorney-in-FactAny person authorized to act foranother by a power of attorney (not necessarilyan attorney-at-law).
- AvulsionWhen real property is lost due to suddenacts of nature like tornadoes or earthquakes.
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- Balloon ConstructionType of framing with longstuds going up the entire length of the house,from the foundation to the roof. No longerpermitted as a construction method by mostbuilding codes. Also called: Balloon Framing.
- Balloon MortgageLoan repaid with small, periodicpayments until a specified date, then either thebalance comes due in a single, lump payment orthe payment amount rises significantly.
- Balloon PaymentFinal payment at the end ofa loan term to pay off the entire remainingbalance of principal and interest not covered bypayments during the loan term.
- Bargain and Sale DeedDeed without anywarranties against liens or other encumbrancesbut does imply grantor has the right convey title.
- BasementPart of a house or building partially orentirely below grade (ground level) and used tosupport the rest of the structure.
- BasisAccounting procedure used to determinethe capital gain or loss after the sale of property.It is equal to purchase price, plus capitalimprovements, less depreciation.
- Bearing WallA wall that carries the load for theroof, ceiling, and/or floors.
- Before Tax Cash FlowGross amount of incomeavailable before considering taxes.
- BeneficiaryPerson designated to receive benefitsfrom a certain act.
- BequeathThe act of giving personal property toanother by will.
- BequestA gift of personal property by a will.
- Bi-weekly MortgageA fixed rate mortgage, similarto a standard mortgage, but with payments dueevery two weeks instead of every month.
- Bilateral ContractA contract in which each partypromises to do something. Compare: UnilateralContract.
- BillA proposed law, formally submitted to alegislature for consideration.
- Bill of SaleDocument used to transfer title topersonal property from one person to another.
- Binding PrecedentA precedent that a particularcourt is required to follow because it wasdecided by a higher court in the samejurisdiction.
- Blanket Mortgage1. Mortgage that covers morethan one parcel of real estate. 2. Mortgage thatcovers an entire building or development, ratherthan an individual unit or lot.
- Blind AdAn ad in which a broker attempts to advertise a property for sale without disclosing the fact she is a licensed real estate broker, or when a broker attempts to mislead the public into believing a property is for sale by owner. Blind ads are illegal in New York.
- BlockbustingIllegal practice of inducing ownersto sell their homes (often at a deflated price)by suggesting the ethnic or racial compositionof the neighborhood is changing, with theimplication that property values will declineas a result. Also called: Panic Selling or PanicPeddling.
- BlueprintDetailed building plans used to evaluatedesign, determine feasibility, and guide astructure’s construction.
- Board PackageA package presented to theco-op (or sometimes condominium) board ofmanagers/directors from a potential shareholderor buyer. It often includes financial qualifications,employment verification, letters of reference,and other material requested by the board.
- Bona FideIn good faith; genuine.
- Bond-type SecuritiesMortgage-backed securitiesissued by Ginnie Mae, which are long term,pay interest semi-annually, and provide forrepayment at a specified date.
- BootExtra, non-like-kind property that can bea part of a like-kind exchange to make up forpricing disparity between like-kind properties.
- BoundaryPerimeter or border of a parcel of land;the dividing line between one property andanother.
- BreachViolation of a contract obligation, duty, orlaw.
- Breach of ContractFailure to perform according tothe terms of a contract.
- Bridge LoanShort-term mortgage loan that coversthe gap between selling one property andbuying another.
- British Thermal Unit (BTU)Amount of heat neededto raise the temperature of one pound of waterby one degree Fahrenheit. Used as a measure offurnace or air conditioner capacity.
- BrokerOne who is licensed to represent one of theparties in a real estate transaction.
- Broker Protection ClauseProvides the brokeris still entitled to commission if the propertyis sold during a certain time under certaincircumstances.
- BrokerageThe business of bringing togetherbuyers and sellers of real property and assistingin negotiating such transactions.
- Broker’s AgentEngaged and works directly for thebroker—a broker’s agent is not a subagent of theseller or buyer. Still owes the same fiduciary dutyto the broker’s seller or buyer the broker does.
- Budget MortgageA mortgage agreement wherepayments include principal and interest on theloan, plus 1/12 of the year’s property taxes andhazard insurance premiums.
- Building CodeThe Uniform Fire Preventionand Building Code, as modified by localamendments. Governs the construction detailsof buildings and other structures in the interestof the safety of the occupants and public.
- Building DepartmentProtects a municipality’sresidents by seeing that code restrictions arefollowed, and construction and renovation aredone by licensed professionals.
- Building EnvelopeSometimes called a buildingshell, the building envelope refers to theexterior elements—walls, windows, floor, roof,etc.—which enclose the interior.
- Building InspectionThe process wherebygovernment authorities, usually state or local,are charged with ensuring compliance withprevailing building codes.
- Building ManagerOversees the management ofone building for a property owner.
- Building PermitOfficial documents from a localgovernment or other authority that allow thebeginning of a construction or remodelingproject.
- Bump ClauseProvision in a purchase agreementthat allows the seller to keep the property onthe market until a condition in the contract isfulfilled.
- Bundle of RightsAll real property rights conferredwith ownership, including right of use, right ofenjoyment, and right of disposal.
- Burden of ProofResponsibility for proving ordisproving a particular issue in a lawsuit. Theplaintiff usually has the burden of proof.
- Business CyclesGeneral swings in business activity,resulting in expanding and contracting activityduring different phases of the cycle.
- Business Name CertificatePartnership documentlisting the names and addresses of all partners,which must be filed in the county where thepartnership office is located before property canbe held in a partnership’s name.
- BuydownAdditional funds in the form of pointspaid to a lender at the beginning of a loanto lower the loan’s interest rate and monthlypayments.
- Buyer Broker ContractA written agency contractbetween a buyer and a real estate brokerstipulating the broker will be paid a commissionwhen the buyer purchases real estate.
- Buyer’s AgentRepresents and owes all loyalty tothe buyer in a real estate transaction.
- Buyer’s BrokerWhen an agency relationship with abuyer is exclusive.
- Buyer’s MarketA situation in the housing marketgiving buyers a large selection of properties atfavorable prices from which to choose. Compare:Seller’s Market.
- BylawsRules and regulations that govern theactivities of condominium and cooperativeassociations, including the purpose of thebuilding, rules for elections and voting, andfrequency of board of directors or shareholdersmeetings.
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- Call ProvisionClause that lets the lender demandfull payment of a loan immediately (verb: call anote).
- CancellationTermination of a contract withoutundoing the acts already performed under it.Compare: Rescission.
- CapacityLegal ability to perform some act, such asenter into a contract or execute a deed or will.
- Capital AssetAny asset not specifically excluded bythe Internal Revenue Code.
- Capital ExpenseAn expense incurred to improveproperty.
- Capital GainProfit made from an investment.
- Capital LossMonetary loss resulting from aninvestment’s decrease in value.
- Capital Reserve BudgetA budget for expenses thatare not fixed (variable).
- Capitalization RateRate of interest considered areasonable return on investment; commonlyused in the process of determining value basedon net income. Also called: Rate.
- Carbon Monoxide (CO)Colorless, odorless gas thatis a natural byproduct of fuel combustion.
- Case LawRules of law developed in court decisions,as opposed to constitutional law, statutory law,or administrative regulations.
- Cash FlowMoney available after subtracting allexpenses. Positive cash flow means more moneyis coming in than going out. Negative cash flowis the converse.
- Cash on Cash ReturnThe bottom line of anyinvestment expressed as a percentage bydividing the investment’s cash flow by thedeposit and settlement costs.
- Caveat EmptorLatin phrase meaning, “let the buyerbeware.” The rule that says a buyer is expected toexamine property carefully instead of relying onthe seller to point out problems.
- Cease and Desist ListList on which propertyowners in a cease and desist zone can registerand once they do, brokers and salespersons areprohibited from soliciting them.
- Cease and Desist ZoneCertain areas designatedby the New York Department of State in whichproperty owners can file notice indicating theydo not want to sell, lease, or list their property.
- Census TractRelatively small areas used by the U.S.Census Bureau to track the population of theUnited States.
- Certificate of EligibilityCertificate issued by theVeterans Administration to establish the statusand amount of a veteran’s eligibility to qualify fora guaranteed loan.
- Certificate of JudgmentSummary of the provisionsof a court judgment; when recorded, it createsa lien on all the debtor’s real property in thecounty where recorded.
- Certificate of OccupancyPermit issued to a builderafter all inspections have been made and theproperty is deemed fit for occupancy.
- Certificate of TitleDocument prepared by anattorney after performing a title search andreviewing public records stating the status of thetitle to a property.
- Certificate of TransferDocument issued by aprobate court showing transfer of title from adeceased person to her heirs or devisees.
- Chain of TitleChain of deeds and other documentstransferring title to land from one owner to thenext, as disclosed in public records.
- ChattelPersonal property.
- Chattel RealPersonal property closely associatedwith real property, such as a lease.
- CheckerPerson who poses as a customer or clientattempting to secure real estate services toensure fair housing is practiced. Also called:Tester.
- Chlorofluorocarbons (CFCs)Chemical compoundscontaining chlorine, fluorine, and carbon atoms.Sold under the trademarked name of Freon formany years and used as a coolant in refrigerators,air conditioners, and dehumidifiers. Now knownto contribute to the depletion of the ozone.
- Circuit BreakerA device, usually located insidethe electrical breaker panel or circuit breakerbox, designed to break its electrical connectionshould an overload occur.
- City CouncilMunicipal legislative body responsiblefor public policy including approving budgets,and passing laws, ordinances, and resolutions.
- Civil LawBody of law concerned with the rightsand liabilities of one individual in relation toanother; includes contract, tort, and propertylaw. Compare: Criminal Law.
- Civil LitigationLawsuit in which one person suesanother for compensation.
- Civil PenaltiesWhen a government body seeksfinancial compensation for damages. These arenot considered punishment but restitution.
- Civil RightsFundamental rights guaranteed toall persons by law. The term is primarily usedin reference to constitutional and statutoryprotections against discrimination.
- Civil Rights Act of 1866The first major legislationto directly affect equal rights to ownership ofreal property.
- Clean Air Act (CAA)Government Act requiring theEPA to develop air quality standards for existingpollutants, along with establishing air standardsfor new sources of pollution. Also regulates airpollutant emissions, determines acceptablelevels for emissions, and sets deadlines forcompliance.
- Clear TitleTitle free of encumbrances or defects;marketable title.
- ClearspanOpen distance between inside faces ofsupport members.
- ClientPerson who employs a broker, lawyer, orother professional. Real estate clients can besellers, buyers, or both. See: Fiduciary.
- ClosingTransfer of real property ownershipfrom seller to buyer, according to the termsand conditions in a sales contract or escrowagreement; final stage in a real estatetransaction.
- Closing CostsExpenses incurred in the transfer ofreal estate in addition to the purchase price (i.e.,appraisal fee, title insurance premiums, broker’scommission, or transfer tax).
- Closing StatementDocument prepared by theclosing agent itemizing all expenses and costspaid by the buyer and seller to close the realestate transaction. Also called: SettlementStatement or HUD-1.
- Cloud on TitleClaim, encumbrance, or defectthat makes title to real property unmarketable.Compare: Marketable Title.
- Cluster ZoningA varied selection of lot sizes andhousing choices within a single area.
- Co-OwnershipAny form of ownership in which twoor more people share title to a property, holdingundivided interests. Also called: Co-tenancyor Concurrent ownership. See: CommunityProperty; Joint Tenancy; Statutory SurvivorshipTenancy; Tenancy by the Entireties; Tenancy inCommon; Tenancy in Partnership.
- Co-tenantAnyone who shares ownership of aproperty with another. Forms of co-ownershipinclude joint tenancy, statutory survivorshiptenancy, tenants in common, tenant by theentireties, or tenant in partnership.
- Code of Ethics and Standards of PracticeReferredto simply as the Code of Ethics; a standard ofconduct required by New York State license lawand the National Association of REALTORS®.
- CodicilAddition to or revision of a will. It must beexecuted with the same formalities as a will.
- CodificationCollection and organization of variouslaws into a comprehensive statutory code.
- CoercionAn act of force used to get a person tocomply.
- CollusionAgreement between two or morepersons to defraud someone.
- Color of TitleTitle that appears to be good but that,in fact, is not.
- Commercial BanksFinancial institutions thatprovide a variety of financial services.
- Commercial PropertyLand zoned and usedfor business purposes, such as warehouses,restaurants, and office buildings (asdistinguished from residential, industrial, oragricultural property).
- ComminglingIllegally mixing money held in trust on behalf of a client with personal funds.See: Conversion.{"@context": "https://schema.org","@type": "FAQPage","mainEntity": [{"@type": "Question","name": "What is commingling?","acceptedAnswer": {"@type": "Answer","text": "Illegally mixing money held in(...)
- CommissionCompensation paid to a broker forservices provided in a real estate transaction.
- Common AreasLand and improvements in acondominium, planned unit development, orcooperative all residents use and own as tenantsin common, such as the parking lot, hallways,and recreational facilities; individual apartmentunits or homes are not included. Also called:Common Elements.
- Common GrantorPerson who owned two ormore neighboring properties then sold them todifferent buyers.
- Common Law1. Early English law. 2. Longestablishedrules based on English law, stillfollowed in many states. 3. Case law.
- Common Law DedicationDedication resultingfrom the owner’s intention to donate landfor public use, along with the government’sacceptance of the donation. Common lawdedication is actually involuntary in some cases;if an owner acquiesces to public use of hisproperty, intention to dedicate the property maybe implied.
- Community PropertyCo-ownership limited tohusband and wife; not acknowledged in NewYork State. Compare: Separate Property.
- ComparablesOther similar, recently sold propertiesin the same market area as the subject property.
- Comparative Market Analysis (CMA)A methodof determining the approximate market valueof a home by comparing the subject propertyto other homes that have sold, are presently forsale, or did not sell in a given area. Also called:Competitive Market Analysis and ComparableMarket Analysis.
- Comparative Negligence RuleWhen parties shareliability based on partial fault or negligence incausing the injury or tort.
- Compensatory DamagesAward, usually money,intended to compensate the plaintiff for harmcaused by the defendant’s act or failure to act.Also called: Actual Damages.
- Competent1. Of sound mind, for the purposeof entering a contract or executing a will; notsuffering from mental illness, retardation, orsenility. 2. Of sound mind and having reachedthe age of majority.
- ComplainantParty that files a formal charge in acourt of law.
- ComplaintDocument a plaintiff files with the courtto begin a lawsuit.
- Comprehensive PlanWritten document preparedby a city’s planning board that identifies thegoals, objectives, principles, guidelines, policies,standards, and strategies for growth anddevelopment of a community. Also called: MasterPlan.
- Concrete SlabA foundation made from a layer ofpoured concrete reinforced with steel rods.
- Concurrent JurisdictionWhen more than onecourt has jurisdiction over a case and a plaintiffmay choose in which court to file suit. Compare:Exclusive Jurisdiction.
- Concurrent OwnershipOwnership by more thanone person; co-ownership.
- CondemnationThe act of taking property forpublic use through the government’s power ofeminent domain.
- Conditional FeeA type of defeasible fee; title maybe terminated by the former owner if conditionsstated in deed are not met. Former owner hasa power of termination. Also called: Fee SimpleSubject to a Condition Subsequent. Compare:Fee Simple Determinable.
- Conditional UseLand use that does not complywith the general zoning rules for the zone inwhich it is located, but is permitted because itbenefits the public; for example, a hospital in aresidential neighborhood. Also called: SpecialException.
- CondominiumProperty developed for coownership,with each co-owner having aseparate interest in an individual unit, combinedwith an undivided interest in the common areasof the property. Compare: Cooperative.
- Condominium ActNew York State law governingthe establishment of condominiums.
- Condominium DeclarationDocument filed forrecord when property is developed as, orconverted to, a condominium.
- CondopA building that has been divided into atleast two condominiums. The first is the co-opresidential units considered one condominiumunit. The second unit is the professional andcommercial units. Compare: Condominium orCooperative.
- Confirmation of SaleDocument filed by the courtto finalize the sale of property at foreclosure,and after which time the equitable right ofredemption is no longer available to the originaldefaulting borrower.
- Conforming LoansLoans that meet Fannie Mae/Freddie Mac standards and, thus, can be sold onthe secondary market.
- ConformityTheory that a particular home (orneighborhood) achieves maximum value whenit is surrounded by homes similar in style andfunction.
- Consensual Dual AgencyOccurs when 1. thebroker and all licensees are dual agents for bothparties in the transaction, or 2. the buyer andseller each appoint a designated agent, whofully represents them. The broker, however,would (with consent) act as a dual agent in thetransaction.
- Conservation Advisory CouncilStudies mattersaffecting the environment, preservation,development, and use of a city’s natural andphysical features and conditions regardingecologic integrity, aesthetic appeal, and quality.
- ConsiderationAnything of value such as money,goods, services, or promises, given to induceanother person to enter into a contract. Alsocalled: Valuable Consideration.
- ConstitutionFundamental document establishinga government’s structure and setting limits onits power.
- Constitutional1. Pertaining to or based on aconstitution. 2. Not in violation of the U.S.Constitution or a state constitution.
- Constitutional LawLaw derived from theConstitution.
- Construction MortgageTemporary loan used tofinance a construction project.
- Constructive AnnexationPersonal propertyassociated with real property in such a way thatthe law treats it as a fixture, even though it is notphysically attached to the real property.
- Constructive EvictionWhen a landlord’s act(or failure to act) interferes with the tenant’squiet enjoyment of the property, or makes theproperty unfit for its intended use, to such anextent the tenant is forced to move out.
- Constructive FraudA negligent misrepresentationor concealment of a material fact; when a personcarelessly fails to disclose material information,or makes false or misleading statements. Alsocalled: Negligent Misrepresentation.
- Constructive NoticeProvides protection to alandowner against all unrecorded titles.
- Consumer Price Index (CPI)An index publishedmonthly by the United States Bureau of LaborStandards (BLS) considered by many to be thebasic indicator of inflation in the U.S.
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Provision in a contract or deedthat makes the parties’ rights and obligationsdepend on the occurrence (or nonoccurrence) ofa particular event. Also called: Condition.
- ContractAgreement between two or moreparties to do, or not do, a certain thing. Therequirements for an enforceable contract arecapacity, mutual consent, lawful objective, andconsideration.
- ContributionTheory that a particular item orfeature of a home is worth only what it actuallycontributes in value to that property.
- Conventional LoanMortgage loan not insured orguaranteed by a government entity.
- Conversion1. Misappropriating property or fundsbelonging to another. 2. Changing an existingrental apartment building into a condominium.
- Conversion OptionBorrower’s right to convertfrom an adjustable rate mortgage to a fixedrate mortgage one time during the loan term,provided certain conditions are met.
- ConveyanceInstrument that conveys a grantor’sinterest, if any, in real property. Also called: Deed.
- Cooperating BrokerA broker from another company who brings the other party (the buyer or the seller) to a transaction.
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A building owned by a corporation,where residents are shareholders in thecorporation; each shareholder receives aproprietary lease on an individual unit and theright to use the common areas. Also called: Co-opor Stock Cooperative. Compare: Condominium.
- Cooperative Policy Statement #1 (CPS-1)Applicable to cooperatives, condominiums, andhomeowners associations and is used to test themarket, explore the venture, and determine theneeds to meet a variety of conditions.
- Corporate ResolutionAction passed by acorporation authorizing the sale or purchase ofreal estate.
- CorporationAn association organized according tostrict regulations in which individuals purchaseownership shares; regarded by the law as anartificial person, separate from the individualshareholders. Compare: Partnership.
- Correction DeedDeed used to correct minormistakes in an earlier deed, such as misspellednames or errors in the property’s legaldescription.
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Repairing or restoringbroken or failed equipment to a specifiedcondition. Compare: Cosmetic Maintenance,Preventive Maintenance.
- Cosmetic MaintenanceMaintenance that increasesa property’s appeal. Compare: CorrectiveMaintenance, Preventive Maintenance.
- CostMoney needed to develop, produce, buy, orbuild something.
- Cost ApproachAppraisal method that estimatesthe value of real estate by figuring the cost ofbuilding the house or other improvement on theland, minus depreciation, plus the value of thevacant land.
- Cost InflationAn increase in the cost of goods orservices. Compare: Demand Inflation.
- Cost ManualsBooks that give estimatedconstruction costs for various types of buildings/structures in different regions of the country.
- Cost Manuals MethodCost approach appraisalmethod that uses cost manuals to arrive at anestimate of value for property.
- Cost of MoneyThe interest rate people orbusinesses pay to use another’s money for theirown purposes.
- CounterofferA response to an offer to enter intoa contract, changing some of the terms of theoriginal offer; a rejection of the original offer (nota form of acceptance).
- County Health DepartmentA human service andregulatory agency responsible for public healthprograms.
- Covenant1. A contract. 2. A promise. 3. A guarantee(express or implied) in a document such as adeed or lease.
- Covenants, Conditions, and Restrictions (CC&Rs.)Guarantee thata buyer or tenant has the right to exclusive,undisturbed possession of a leasehold estateand will not be disturbed by the previous owner,lessor, or anyone else claiming interest in theproperty.
- Crawl SpaceUnfinished space below the first floorof a house or other structure that is less than afull story in height.
- CreditMoney received for an obligation given.
- Credit ScoringA means by which the lender makesa determination regarding the creditworthinessof potential borrowers; involves a lenderassigning a numerical value to different aspectsrelating to a borrower’s financial situation.
- Credit UnionA non-profit financial institutionowned and operated entirely by its members.By depositing money in a credit union, thedepositor becomes a member and has partialownership in the institution.
- CreditorPerson or other entity, such as a bank, whois owed a debt.
- Criminal LitigationLawsuit in which thegovernment sues someone to punish thewrongdoer and protect society.
- CureTo remedy a default by paying overdue moneyor by fulfilling other obligations.
- CurtesyA husband’s interest in his wife’s property;in many states, curtesy has been abolished andreplaced by dower rights. Note: New York doesnot recognize either curtesy or dower rights.
- CustomerA party in a transaction to whoman agent does not have a fiduciary duty orrelationship, but to whom an agent must still befair and honest.
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An expense or money applied against acredit.
- DebtRecurring monetary obligation that cannot becancelled.
- Debt ServiceAmount of money needed to meetthe periodic payments of principal and intereston an amortized loan or debt. If the periodicpayments are constant and equal, then a portionwill pay off accrued interest with the remainderreducing principal.
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A person or other entity, such as a company,who owes money to another.
- DecedentA person who has died.
- DedicationGift of land from a landowner to thegovernment. Also called: Dedication by Deed.
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A dollar amount the insured must payon each loss. The insurance company pays theremainder of each covered loss up to the policylimits
- DeedAn instrument that conveys a grantor’sinterest, if any, in real property. Also called:Conveyance.
- Deed in Lieu of ForeclosureA deed given bya borrower to the lender to satisfy the debtand avoid foreclosure. Also called: VoluntaryConveyance.
- Deed of TrustAn instrument creating a voluntarylien on real property held by a third party assecurity for the payment of a note. Also called:Trust Deed. Compare: Mortgage.
- Deed RestrictionsLimitations on real propertyuse imposed by an owner through languageincluded in the deed.
- DefaultFailure to fulfill an obligation, duty, orpromise, as when a borrower fails to makepayments, a tenant fails to pay rent, or a party toa contract fails to perform.
- Defeasance Clause1. Clause used to defeat orcancel a certain right upon the occurrence of aspecific event (e.g., on final payment, words ofgrant in a mortgage are void and the mortgageis thereby cancelled and title is revested tomortgagor). 2. Clause used to give a borrowerthe right to redeem real estate after(...)
- Defendant1. Person being sued in a civil lawsuit. 2.Accused person in criminal lawsuit.Deferment Permission to delay fulfillment of anobligation (e.g., paying taxes) until a later date.
- DefermentPermission to delay fulfillment of anobligation (e.g., paying taxes) until a later date.
- Deficiency JudgmentA court order stating thedebtor owes money to the creditor when thecollateral property does not bring enough at theforeclosure sale to cover the entire loan amount,accrued interest, and other administrative costs.
- DeliveryThe legal transfer of a deed (or otherinstrument). A valid deed does not convey titleuntil it has been delivered to the grantee. See:Donative Intent.
- Delivery and AcceptanceDelivery of the deed bythe grantor with the intention of transferringtitle and acceptance by the grantee receiving theland. When a deed has been properly executed,both have occurred.
- Demand InflationToo much money chasing toofew goods. Compare: Cost Inflation.
- DemographyStudy of the social and economicstatus of a given area or population.
- Department of Housing and Urban Development (HUD)The government agency chargedwith overseeing housing related issues andprojects. Among other things, HUD setsminimum building standards for housing andis responsible for enforcing the federal FairHousing Act.
- Deposit1. Money offered as an indication of goodfaith regarding the future performance of apurchase agreement. Also called: Earnest Money.2. A tenant’s security deposit.
- DepositionIn a lawsuit, the formal, out-of-courttestimony of a witness or a party taken beforethe trial; used as part of the discovery processto determine facts of a case, or if the witnessis not able to attend the trial. A transcript of adeposition can be introduced as evidence in thetrial.
- DepreciateTo decline in value.
- DepreciationA loss in value for any reason.
- Designated AgencyWhen a supervising brokerassumes the role of dual agent and eachaffiliated licensee represents his client asvigorously as possible.
- Designated HeirChosen heir. By filing a documentwith probate court, a person can choose anyoneto be his heir in the eyes of the law.
- Devise1. Real property transferred in a will. 2. Totransfer real property by will. Compare: Bequest;Bequeath; Legacy.
- DeviseeRecipient of real property by will. Compare:Legatee.
- Direct CostThe cost in labor and materials.
- Direct IndexAn index kept by the countyrecorder, with each recorded document listedin alphabetical order according to grantor’s lastname. Also called: Grantor/Grantee Index.
- Direct LossReferring to homeowner’s insurance, asudden loss due to a covered peril—such as fire,lightening, wind, hail, etc.
- DisabilityA physical or mental impairment thatsubstantially limits or curtails one or more majorlife activity.
- DisaffirmThe act of asking a court to terminate avoidable contract.
- Disclosure StatementA detailed accounting of allfinancials associated with a residential mortgageloan.
- DisclosuresPoints or facts in a real estatetransaction that must be revealed.
- Discount PointsAmount paid to a lender when aloan is made to make up the difference betweenthe current market interest rate and the ratea lender gives a borrower on a note. Discountpoints increase a lender’s yield on a note,allowing the lender to give a borrower a lowerinterest rate. See: Points.
- DiscriminationTreating people unequally becauseof their race, religion, sex, national origin, age, orsome other characteristic of a protected class.
- Disparate ImpactWhen a law that is notdiscriminatory on its face but has a greaterimpact on a minority group than other groups.
- Doctrine of EmblementsRule that allows anagricultural tenant to re-enter the land to harvestcrops if the lease ends, through no fault of thetenant, before the crop can be harvested (appliesonly to the first crop).
- Doctrine of LachesLoss of legal rights because offailure to assert those rights in a timely manner.
- Domestic CorporationA corporation doingbusiness in the state in which it was created.
- DomicileThe state in which a person has apermanent home.
- Dominant TenantA person with easement rightson another’s property; either the owner of adominant tenement, or someone who has aneasement in gross.
- Dominant TenementProperty that receives thebenefit of an appurtenant easement.
- Donative IntentIntent to immediately andunconditionally transfer title to real property.
- Double Declining BalanceAn accelerated methodof deprecation.
- DowerThe interest held by a married person in thereal property owned by a spouse. Note: dower isnot recognized in New York.
- Down PaymentA lump sum cash payment paid bya buyer.
- DrywallGypsum plaster sandwiched between twolayers of coarse paper. Also called: Plasterboard,Wall Board, or Sheetrock.
- Dual AgencyOccurs when a broker or salespersonrepresents both parties (buyer and seller) in atransaction; written consent from both parties isrequired before this can occur.
- Dual AgentA licensee who represents both theseller and buyer in the same transaction.
- Dual LicensureWhen real estate licensees holdmore than one license at a time (e.g., when abroker wishes to also be an associate broker withanother firm; or, when a salesperson wishes towork with more than one broker.)
- Due DiligenceInvestigation to discover facts orliabilities about a property prior to its purchase.
- Due on Sale ClauseMortgage clause that prohibitsassignment by making the entire mortgagebalance due when property is sold.
- DuressThreatening violence against or unlawfullyconfining someone and forcing him to sign adocument; or, threatening or confining a signer’sspouse, child, or other close relative.
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- Earnest Money Deposit1. Money offered as anindication of good faith regarding the futureperformance of a purchase agreement. 2. Atenant’s security deposit. Compare: Deposit.
- EasementA right to use some part of anotherperson’s real property. An easement isirrevocable and creates an interest in theproperty.
- Easement AppurtenantAn easement that grantsaccess. Compare: Right of Way.
- Easement by Condemnation1. Takingprivate property for public use through thegovernment’s power of eminent domain. 2. Adeclaration that a structure is unfit for occupancyand must be closed or demolished.
- Easement by Express ReservationAn easementcreated in a deed when a landowner dividesproperty, transferring the servient tenement, butretaining the dominant tenement.
- Easement by GrantAn easement granted toanother in a deed or other document.
- Easement by ImplicationAn easement createdby operation of law (not express grant orreservation) when land is divided, if there is alongstanding, apparent use that is reasonablynecessary for enjoyment of the dominanttenement. Compare: Implied Easement.
- Easement by NecessityA special kind ofeasement by implication that occurs when thedominant tenement would be useless withoutan easement, even without a longstanding,apparent use.
- Easement by PrescriptionAn easement acquiredby prescription. See: Prescription.
- Easement for Light and AirA view easement;considered a negative easement. In the case ofnegative easement, the dominant tenement canprevent the subservient tenement from doingsomething on the land because it could affectthe dominant land.
- Easement in GrossAn easement that benefitsa person instead of land; there is a dominanttenant, but no dominant tenement. Compare:Appurtenant Easement.
- EaveThe lowest sections of the roof, which projectbeyond the sidewalls.
- Economic BaseMain business or industrysupporting and sustaining a community. A goodeconomic base is critical for strong home values.Economic Duress Threatening to financially harm aperson to coerce him into signing a contract.
- Effective AgeAge of a structure based on actualwear and tear, not necessarily its actual age.
- Effective Gross IncomePotential gross incomeminus vacancy and collection losses.
- Electromagnetic Fields (EMFs)Invisible fieldsproduced by electrically charged objects.
- Eminent DomainGovernment’s constitutionalpower to appropriate or condemn privateproperty for public use as long as the owner ispaid just compensation.
- EmployeeSomeone who works under the directionand control of another. Compare: IndependentContractor.
- EncroachmentPhysical object intruding ontoneighboring property often due to a mistakeregarding boundary lines.
- Encumbered PropertyProperty with mortgages,liens, or other restrictions against it, whichprevent or restrict its transfer.
- EncumbranceNon-possessory interest in property;a lien, easement, or restrictive covenantburdening the title.
- Environmental HazardA situation that existswith potential for harm to persons or propertyfrom conditions that exist outside or within aproperty. See: Internal Environmental Hazard,External Environmental Hazard.
- Environmental Impact Statement (EIS)Studyrequired by the National Environmental PolicyAct for all federal and federally related projects,which details a development project’s impacton energy use, sewage systems, drainage, waterfacilities, schools, and other environmental,economic, and social areas.
- Equal Credit Opportunity Act (ECOA)Federal lawthat prohibits discrimination in granting creditto people based on sex, age, marital status,race, color, religion, national origin, or receipt ofpublic assistance.
- Equal ProtectionRequirement under the fifth andfourteenth amendments to the U.S. Constitution,all citizens are entitled to equal protection ofthe laws; no law may arbitrarily discriminatebetween different groups, or be applied togroups in a discriminatory manner.
- EqualizationAttempts to measure the relationshipof locally assessed values to a fluid real estatemarket.
- Equitable RemedyA judgment granted to aplaintiff that is something other than an awardof money (damages); for example, an injunction,quiet title, rescission, and specific performance.Compare: Legal Remedy.
- Equitable Right of RedemptionThe right ofa debtor to save (redeem) property fromforeclosure proceedings prior to confirmation ofsale. Compare: Statutory Redemption.
- Equitable TitleEquitable Title An interest created in property uponthe execution of a valid sales contract, wherebyactual title will be transferred by deed at afuture date (closing). Also, the vendee’s (buyer’s)interest in property under a land contract. Alsocalled: Equitable Interest.
- Equity1. An owner’s unencumbered interest inproperty; the difference between the value ofthe property and the liens against it. 2. A judge’spower to soften or set aside strict legal rules, tobring about a fair and just result in a particularcase.
- ErosionGradual loss of soil due to wind or water.
- Errors and Omissions Insurance (E&O)Professionalliability insurance that protects real estateprofessionals from mistakes or negligence.
- Escalation ClauseLease clause that allows anincrease in rent for increases in expenses paid bythe landlord, such as real estate taxes, operatingcosts, and cost of living expenses.
- EscheatWhen property reverts to the state aftera person dies without leaving a valid will andwithout heirs, or when property is abandoned.
- EscrowSystem in which things of value (e.g., moneyor documents) are held on behalf of parties to atransaction by a disinterested third party (escrowagent) until specific conditions have beensatisfied. Also called: In Escrow.
- Escrow Account1. An account maintained by abroker for the deposit of client’s money (i.e.,good faith deposits). Also called: Trust Account.2. An account maintained by a lender for thedeposit of borrowers’ extra 1/12 monthly deposits to cover next year’s insurance and tax payments. Also called: Reserve Account.
- Escrow ClosingA closing by a disinterested thirdparty, often an escrow agent.
- Escrow InstructionsContract that authorizes anescrow agent to deliver items deposited inescrow once the parties have complied withspecified conditions; can be the real estatepurchase contract or a separate document.
- Estate1. Possessory interest in real property; eithera freehold estate or leasehold estate. 2. The realand personal property left by someone who hasdied.
- Estate at SufferancePossession of property by atenant who came into possession of the propertyunder a valid lease, but stays on after the leaseexpires without the landlord’s permission.
- Estate at WillA leasehold estate with no specifiedtermination date and with no regular rentalperiod.
- Estate for YearsLeasehold estate set to last for adefinite period (e.g., one week, three years), afterwhich it automatically terminates. Also called:Term Tenancy. Compare: Periodic Tenancy;Tenancy at Will.
- Estate of InheritanceEstate that can be willed ordescend to heirs, such as a fee simple estate.
- EstoppelLegal doctrine that prevents a personfrom asserting rights or facts inconsistent withearlier actions or statements.
- EvaluationDetermining the usefulness or utility ofproperty without specifying an estimate of value.
- EvictionDispossessing or expelling someone fromreal property.
- Exclusionary ZoningZoning law that effectivelyprevents certain groups from living in acommunity.
- Exclusive AgencyListing agreement between abroker and seller that provides the broker theexclusive right to represent the seller in the saleof the seller’s property and the broker will becompensated if he or any other person or entity(excluding the seller) produces a purchaser inaccordance with the listing(...)
- Exclusive JurisdictionWhen there is only one courtin which a particular type of case can be filed,that court has exclusive jurisdiction. Compare:Concurrent Jurisdiction
- Exclusive Right to SellListing agreement thatentitles the broker to a commission if anyone,including the seller, finds a buyer for theproperty during the listing term.
- Execute1. To sign. 2. To perform or complete. See:Executed Contract
- Executed ContractContract under which bothparties have completely performed theircontractual obligations.
- Executor/ExecutrixPerson named in a will to carryout its provisions, including disbursement ofland.
- Executory ContractA contract under whichone or more parties have not yet completedperformance of their obligations.
- ExemptionProvision holding that a law or rule doesnot apply to a particular person, entity, or group(e.g., a company with a property tax exemptiondoes not have to pay property taxes).
- ExpressStated in words (spoken or written).
- Express ContractContract that has been put intowords, either spoken or written.
- Expressed AgencyAgency relationship based onan expressed agreement, either written or oral.
- Extension ClauseListing agreement clauseproviding for a specified time after a listingexpires when a broker is still entitled to acommission if the property is sold to someonethe broker dealt with during the listing term. Alsocalled: Carryover Clause, Safety Clause.
- External Environmental HazardConcerns that existoutside the boundaries of a property, which canhave a significant impact on its value.
- External ObsolescenceAny influence that fallsoutside the actual property site and negativelyaffects a property’s value. Compare: FunctionalObsolescence.
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- Failure of PurposeWhen the intended purpose ofan agreement or arrangement can no longer beachieved, and in most cases, releases the partiesfrom their obligations.
- Fair Housing ActCommon name for Title VIII of theCivil Rights Act of 1968.
- Fair Market ValueThe price a buyer and seller agreeupon in a competitive market and under normalcircumstances. Also called: Market Value.
- Familial StatusA protected group under the federalFair Housing Act and New York State law, makingit illegal to discriminate against a person becauseshe is the parent or guardian of a child less than18 years of age.
- FamilyAn individual, or two or more people relatedby blood, marriage, or adoption living togetherin one dwelling; or a group of up to three peoplenot related by blood, marriage, or adoptionliving together as a single housekeeping unit; orone or more people living together in a singlehousekeeping(...)
- FasciaA panel or board facing the outer edgeof the soffit.
- Federal Discount RateInterest rate charged byFederal Reserve banks on loans to membercommercial banks.
- Federal Funds RateThe Federal Reserve’s target forshort-term interest rates.
- Federal Home Loan Mortgage Corporation (Freddie Mac)Non-profit federally charteredinstitution that functions as a buyer and seller ofsavings and loan residential mortgages.
- Federal Housing Administration (FHA)Government agency that insures mortgageloans.
- Federal National Mortgage Association (Fannie Mae)Nation’s largest, and privately owned,investor in residential mortgages.
- Federal Open Market Committee (FOMC)Body that controls the Fed’s sale and purchase ofgovernment securities, and that is made upof the seven members of the Federal ReserveBoard, plus the President of the Federal ReserveBank of New York, and four other Federal ReserveBank presidents.
- Federal Reserve Board (the Fed)Body responsiblefor U.S. monetary policy, maintaining economicstability and regulating commercial banks.
- FeeAn estate of inheritance; title to real propertythat can be willed or descend to heirs.
- Fee on ConditionDefeasible fee that may beassigned and terminated by the grantor uponthe occurrence of an event.
- Fee Simple DefeasibleA fee estate in real propertythat may be defeated or undone if certain eventsoccur or conditions are not met. Also called:Defeasible Fee. See: Conditional Fee, Fee SimpleDeterminable.
- Fee Simple DeterminableA defeasible fee thatautomatically terminated if certain conditionsoccur. Also called: Determinable Fee. Compare:Fee, Conditional.
- Fee Simple EstateThe greatest estate one canhave in real property; freely transferable andinheritable, and of indefinite duration, with noconditions on title. Also called: Fee Simple, FeeTitle, or Fee Simple Absolute.
- Feudal SystemSystem of land ownership underwhich a king or queen owns all land and allothers are merely tenants.
- FiduciaryPerson in a position of trust held by lawto high standards of good faith and loyalty.
- Fiduciary DeedDeed executed by a trustee,executor, or other fiduciary, conveying propertythe fiduciary does not own but is authorized tomanage.
- Fiduciary DutiesWhat is owed to all clients inan agency relationship—obedience, loyalty,disclosure, confidentiality, accountability, andreasonable care.
- Fiduciary RelationshipA relationship of trust andconfidence, in which one party owes the other(or both parties owe each other) loyalty and ahigher standard of good faith than is owed tothird parties. See: Client.
- Filtering DownWhen one practice has negativeresidual effects. See: Redlining, Blockbusting.
- Finance CompanyFinancial institution that usuallyspecializes in making higher risk loans at higherinterest rates.
- Finance InstrumentLegal documents that establishthe rights and duties of all parties involved intransaction.
- Financing StatementA brief document that, whenrecorded, gives constructive notice of a creditor’ssecurity interest in an item of personal property.
- Finder’s FeeReferral fee paid for directing a buyeror seller to a real estate agent.
- First Lien PositionThe lien with highest prioritywhen there is more than one mortgage or otherdebt or obligation secured by the property.
- First MortgageSecurity instrument with a first lienposition, meaning the first mortgage holder ispaid first from a foreclosure sale’s proceeds.
- First Substantive ContactAn event triggeringagency disclosure (e.g., prior to entering into alisting agreement, prior to showing a property,at an open house when a buyer displays seriousinterest, etc.).
- Fiscal PolicyGovernment’s plan for spending,taxation, and debt management.
- Fixed ExpensesOccur on a regular basis and haveregular payment amounts; occur whether theproperty is vacant or fully leased, and generallydo not vary in response to changing levels ofoccupancy. Compare: Variable Expenses.
- Fixed Rate LoanLoan with an interest rate thatremains constant for the duration of the loan.
- FixtureA man-made attachment; an item ofpersonal property attached to or closelyassociated with real property in such a way thatit has legally become part of the real property.
- FlashingMaterial used to cover joints where twoor more types of materials join together for thepurpose of preventing water from penetratingthe joint (e.g., metal over the seam between abrick chimney and a shingle roof).
- Flip TaxA fee, imposed by the co-op board, for thetransfer of ownership during the sale of the unit.
- Flipping1. Purchasing a property and immediatelyreselling it for a profit. 2. When a condominiumowner assigns his purchase rights to anotherbuyer before the sale of that property or unithas closed. Also called: Assigning a Contract.
- Flitch BeamsTwo or more timbers cut lengthwiseand bundled together to provide additionalsupport for the ceiling and roof.
- FooterThe underground base, usually concrete,that supports a foundation.
- ForbearanceA legally binding promise to refrainfrom doing a particular act.
- ForeclosureWhen real property is involuntarilytransferred because the owner defaulted ondebts secured by the property.
- Foreclosure ActionA lawsuit filed by a creditor tobegin foreclosure proceedings.
- Foreign CorporationA corporation doing businessin one state, but created (incorporated) inanother state.
- ForfeitureLoss of a right or something of valuebecause of failure to perform an obligation orcondition.
- Formal WillA written, witnessed will.
- FoundationThe basic structure on which a housewill sit. A foundation can be concrete slab, pierand beams, crawl space, or basement.
- Foundation WallsThe sidewalls that support astructure, typically made of poured concrete,concrete block, or brick.
- FramingThe basic load-bearing skeleton of astructure to which the interior walls, exteriorwalls, and roof system are attached.
- FraudIntentional or negligent misrepresentationor concealment of a material fact; makingstatements that a person knows, or shouldrealize, are false or misleading.
- FreeholdA possessory interest in real property ofuncertain (and often unlimited) duration; anownership estate in real property; either a feesimple or a life estate. Holder of freehold estatehas title. Compare: Leasehold Estate.
- FreonThe brand name for the chemical compoundCFC used as a coolant in refrigerators, airconditioners, and dehumidifiers; now known as acontributor to the depletion of the ozone.
- FriableCharacteristic of asbestos in which it cancrumble easily or become powdery whenmanipulated by hand, releasing particles intothe air.
- Full Covenant and Warranty DeedContains thestrongest and broadest form of guaranteeof title of any type of deed, and provides thegreatest protection of any deed to the grantee.In this type of deed, the grantor makes variouscovenants, or warranties.
- Fully Amortized LoansLoans for which the totalpayments over the life of the loan pay off theentire balance of principal and interest due atthe end of the loan term.
- Functional ObsolescenceLoss in property valueresulting from changes in tastes, preferences, ormarket standards.
- FuseA protective device for a wiring system thatcontains a wire designed to melt and open thecircuit when overheating occurs.
- Future InterestAn interest in real property that maybecome or will become a possessory interestat some point in the future. See: RemainderInterest; Reversionary Interest.
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- General AgentA person authorized to handle aprincipal’s affairs in one area or in specified areas.
- General LienA lien against all property of a debtor,instead of just one particular property.
- General PartnerA partner who has the authorityto manage and contract for a general or limitedpartnership and who is personally liable for thepartnership’s debts.
- General PartnershipA partnership in which eachmember has an equal right to manage thebusiness and share in the profits, as well as equalresponsibility for the partnership’s debts. Allpartners are considered general partners.
- General Warranty DeedA deed in which thegrantor warrants title against defects thatmight have arisen before or during his period ofownership. Compare: Limited Warranty Deed.
- GirderThe main support beam of a structurespanning the foundation walls.
- Government National Mortgage Association (Ginnie Mae)Government-owned corporationthat guarantees payment of principal andinterest to investors who buy its mortgagebackedsecurities on the secondary market.
- Government Survey SystemLegal description forland referencing principal meridians and baselines designated throughout the country.
- Grace PeriodThe time a borrower has after apayment is due to make the payment withoutincurring penalties.
- Graduated LeaseA lease in which the rent changesthroughout the lease term. The contract specifieshow much as well as when the rent will change.
- Graduated MortgageMortgage that allows aborrower to make smaller payments in the earlyyears of the loan term with payments increasingover time.
- Graduated PaymentA buydown plan for whichpayment subsidies in the early years keeppayments low, but payments increase each yearuntil they are sufficient to fully amortize the loan.
- GrantTo transfer or convey an interest in realproperty by means of a written instrument.
- GranteeThe person who receives a conveyance ofreal property in a real estate transaction.
- Granting ClauseDeed clause stating a grantor’sintent to transfer an interest in real property. Alsocalled: Words of Conveyance.
- GrantorThe person who transfers title to realproperty in a real estate transaction.
- Gross IncomeTotal income, both cash and noncash,received from an investment or business,before expenses are paid.
- Gross Income Multiplier (GIM)A number derivedusing annual income figures from comparablecommercial properties in an area, which is usedto estimate the value of real estate. Compare:Gross Rent Multiplier.
- Gross LeaseA lease in which the lessor pays alloperating and maintenance costs associatedwith the property.
- Gross Rent Multiplier (GRM)A number derivedfrom comparable rental properties in an area,which is then used to estimate the value of realestate. The GRM is only used for one- to four-unitresidential properties. Compare: Gross IncomeMultiplier.
- Ground LeaseA lease in which a tenant leasesunimproved land on a long-term basis andtypically include a provision that provides thetenant will construct a building on the property,which he will own upon completion. Thelessor retains the rights to the land. Essentially,ownership of the land and(...)
- GroundwaterNaturally occurring water found insubterranean crevices or spaces.
- Group HomeA residential facility in a residentialzone for three or more unrelated people (i.e.,foster homes, rehabilitation centers, and halfwayhouses).
- GuardianCourt-appointed person who administersthe affairs of a minor or someone who isincompetent.
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- Habendum ClauseClause within a deed thatdescribes the type of estate granted; it mustalways agree with the granting clause.
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Any type of product with toxic,corrosive, flammable, or reactive qualities.Headers In construction, reinforcements madeof wood for door and window placement. Alsocalled: Lintels.
- HeirSomeone entitled to inherit another person’sreal or personal property under the laws ofintestate succession.
- High-tension Power LinesLarge transmissioncables carrying electrical energy.
- Highest and Best UseThe most profitable, legallypermitted, feasible, and physically possible useof a property.
- Historic Preservation OfficeIdentifies, evaluates,preserves, and revitalizes any given city’s historic,archaeological, and cultural resources.
- Holder in Due CourseOne who acquires anegotiable instrument in good faith and forconsideration and, thus, has certain rights abovethe original payee.
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A lessee who remains inpossession of property after the lease hasexpired; a tenant who refuses to surrenderpossession of property at the tenancy’s end.
- Home Acquisition DebtA mortgage a taxpayertakes out to buy, build, or substantially improve aqualified home.
- Home Equity DebtA loan that does not qualifyas home acquisition debt but is secured by aqualified home.
- Home Equity Line of CreditA credit line securedby a second mortgage on the homeowner’sprinciple residence. Home equity lines of creditare available to the homeowner as expensesarise and payments are made according to thecredit terms. Interest is usually tax deductible.Compare: Home Equity Loan.
- Home Equity LoanA loan secured by a secondmortgage on the homeowner’s principleresidence. Home equity loans are usuallyone-time loans for a specific amount of moneyobtained for a specific, and often non-housingrelated,expenditure. Payments are madeaccording to the loan terms and interest isusually tax(...)
- Home OccupationSmall business or otheroccupation conducted in a residence.
- Homebuyer Assistance ProgramsAlternativefinancing programs through which lenders mayoffer borrowers as tools to help them qualifymore easily, get a larger loan, or pay less of adown payment.
- Homeowners AssociationNonprofit associationcomprised of homeowners, responsible forenforcing the subdivision’s CC&Rs and managingother community affairs.
- HomesteadDwellings of four or fewer units,owner-occupied mobile homes, residentialcondominiums, farms, and vacant land suitablefor qualified buildings that may be eligible for aseparate tax rate.
- Homestead LawsLaws that protect propertyowners from lien foreclosure by exemptingsome their equity in real estate. In New York,homestead protection is limited to $10,000individually and $20,000 for land co-owned by amarried couple.
- Homestead ProtectionLimited protection for adebtor against claims of judgment creditors;applies to property of the debtor’s residence.
- Horizontal Property ActsLaws that create the legalframework for creating a condominium form ofownership and make it possible to define actualownership rights.
- Hostile and AdversePossession or use of landwithout the owner’s permission and againstthe owner’s interests; one condition necessaryfor an easement by prescription and adversepossession.
- House RulesThe rules and requirementsestablished for condominium and/or co-optenants. These could include rules for commonareas, parking, noise, pets, use of recreationroom, etc.
- Housing Expense RatioThe relationship of totalmonthly housing expense to income, expressedas a percentage: Total Housing Expense ÷Income = Ratio %.
- HUD-1 Settlement StatementAn accurateaccounting of all expenses buyers and sellers payin a real estate transaction; required by RESPA.
- HypothecateTo make property the security for aloan without giving up possession of it (as with amortgage). Compare: Pledge.
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- Identifiable GranteeThe person, to whom realproperty interest is to be conveyed, identifiedin such a way so as to reasonably separate thatperson from all others in the world.
- IlliquidityAssets that cannot easily be convertedto cash.
- Immediate Delivery ProgramProgram givingsellers up to 60 days to deliver mortgagesFreddie Mac has agreed to buy on the secondarymarket.
- ImmobilityPhysical characteristic of real estatereferring to the fact that it cannot move fromone place to another.
- Implied AgencyAgency relationship createdthrough the behavior (actions or words) of oneor both parties. Compare: Expressed Agency.
- Implied by LawRequired by law to be part of anagreement and treated by a court as part of anagreement even if it contradicts the expressterms agreed to by the parties.
- Implied ContractA contract not put into words, butimplied by the actions of the parties.
- Implied WarrantyGuarantee created by operationof law, whether or not the seller intended tooffer it.
- Implied Warranty of HabitabilityAn impliedguarantee that the property is safe and fit forhuman habitation; treated by law as an implicitprovision in every residential lease, regardless ofthe express terms of the lease.
- ImprovementsManmade additions to realproperty; substantial fixtures, such as buildings.
- In RemA lawsuit or legal action directed towardproperty, rather than toward a particular person.Judgments are binding to all persons who claimtitle to the property.
- Incentive ZoningA system by which developersreceive zoning incentives on the condition thatspecific physical, social, or cultural benefits areprovided to the community.
- Income ApproachAppraisal method that estimatesthe value of real estate by analyzing the amountof revenue, or income, the property currentlygenerates or could generate, often comparingthe subject property to other similar properties.
- IncompetentNot legally competent; not of soundmind; mentally ill, senile, or feebleminded.
- Independent Contractorndividual who is selfemployed.Compare: Employee.
- IndexStatistical report that is a generally reliableindicator of the approximate change in the costof money, and is thus often used to adjust theinterest rate for ARMs.
- Index LeaseMethod used to determine rent forlong-term leases.
- Indirect CostCosts associated with a constructionproject, other than labor and materials.
- Indirect LossA loss that occurs as a consequence ofthe direct loss. For example, regarding propertyinsurance, on a dwelling policy, fire is coveredas a direct loss. Also called: Consequential Loss.Compare: Direct Loss.
- InflationIncrease in the cost of goods or services;or, too much money chasing too few goods.
- Informed ConsentWritten evidence that a client isaware of and has given permission to an agentto perform a specific action or take on a specificrole in the client agent relationship.
- InfrastructureThe support facilities and services fora community, such as roads, parks, sewers, water,schools, trash collection, etc.
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1. Entering and exiting; usuallyrefers to a road or other means of access toa property. 2. An easement that gives thedominant tenant access to the dominanttenement.
- InheritIn strict legal usage, to acquire property byintestate succession; commonly used to meanacquiring property either by intestate successionor by will.
- InjunctionCourt order prohibiting or compellingan act. See: Equitable Remedy.
- Inquiry NoticeWhen circumstances indicatea possible problem prompting furtherinvestigation, a person may be held to have hadnotice of the problem even if he does not haveactual knowledge of it.
- Installment NoteA note that calls for payments ofprincipal only during the term of the note, with aballoon payment to pay off the balance.
- Installment Sales ContractAgreement for whichthe buyer makes payments to the seller inexchange for the right to occupy and use theproperty, but no deed or title is transferred untilall, or a specified portion of, payments have beenmade. Also called: Land Contract.
- InstrumentAny document that transfers title (suchas a deed), creates a lien (such as a mortgage), orgives a right to payment (such as a contract).
- Insured ValueThe amount for which propertycan be insured, usually representing onlythe replacement cost of the structure anddisregarding any value for land.
- Intangible AppurtenanceAn appurtenant rightthat does not involve ownership of physicalobjects, for example, easements as opposed tomineral rights, which involve tangibles.
- Integration ClauseContract provision statingthe document contains the entire agreementbetween the parties.
- Interest1. A right or share in something. 2. A chargea borrower pays to a lender for the use of thelender’s money.
- Interest Rate CapA limit on the amount of interestrate increase that can occur with an adjustablerate mortgage.
- Internal Environmental HazardAn environmentalhazard that occurs within a property.
- IntestateDying without leaving a valid will.
- Intestate SuccessionDistribution of property to theheirs of a person who died intestate.
- InvalidNot legally binding or legally effective; notvalid.
- Inverse Condemnation ActionCourt action bya private landowner against the government,seeking compensation for damage to propertythat resulted from government action.
- Investment ValueThe highest price an investorwould pay for a property based on how well itwill serve her investment goals.
- Involuntary AlienationWhen title to property istransferred during the owner’s lifetime withouthis consent.
- Involuntary LienA lien that arises by operation oflaw, without the consent of the property owner.
- Irrevocable ConsentSubjects out-of-state licenseesto the jurisdiction of the courts of the state ofNew York.
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- Joint TenancyA form of co-ownership in which theco-owners have equal undivided interests andthe right of survivorship.
- JoistsLong beams of wood or steel that span thepiers of a foundation (floor joists) or the loadbearing walls of a roof (ceiling joists).
- Joists and Rafters (Roofing)A type of roof framewith joists supported by the outer load-bearingwalls, and a central load-bearing wall that actsas the beams do for the floor joists. The ceilingjoists run horizontally, parallel to the floor; theceiling rafters begin on the outer load-bearingwalls, but rise as they come to(...)
- Judgment1. A court’s binding determination ofthe rights and duties of the parties in a lawsuit.2. A court order requiring one party to pay thewronged party damages.
- Judgment CreditorA person who is owed moneyas a result of a being awarded a judgment in alawsuit.
- Judgment DebtorA person who owes money as aresult of a judgment in a lawsuit.
- Judgment LienA general lien against a judgmentdebtor’s property, which the judgment creditorcreates by recording a certificate of judgment inthe county in which property is located.
- Judicial ForeclosureA lawsuit filed by a lenderor other creditor to foreclose on a mortgageor other lien; a court-ordered sheriff’s sale ofproperty to repay the debt.
- Judicial OpinionA court’s written statementoutlining the facts of a particular case andexplaining the legal basis for the decision.
- Judicial Partitioncourt action to divide realproperty among its co-owners so each owns partin severalty, or (if it is not practical to physicallydivide the property) each gets a share of the saleproceeds.
- Judicial ReviewWhen a court considers whether astatute or regulation is constitutional.
- Jumbo LoansLoans that exceed the maximumamount established by Fannie Mae and FreddieMac for conforming mortgage loans, makingthem nonconforming loans.
- Junior LienholderSecured creditor with a lowerpriority lien than another lien on the same land.
- Junior MortgageAny mortgage with a lower lienposition than another mortgage.
- JurisdictionThe extent of a particular court’sauthority.
- Just CompensationAppropriate or fair value forprivate land taken by the government for publicuse. See: Eminent Domain.
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- KickbacksPaying part of the proceeds of a sale toanother party that helped secure the sale, but isunlicensed.
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- LallyTM ColumnsSteel support columns filled withconcrete.
- LandThe surface of the earth, the area above andbelow the surface, and anything attached to thesurface.
- Land ContractA real estate installment agreementwhere a buyer makes payment to a seller inexchange for the right to occupy and useproperty, but no deed or title transfers until all,or a specified portion of, payments have beenmade. Also called: Installment Land Contract,Installment Sales Contract, and Land(...)
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Lease in which a tenant leasesunimproved land on a long-term basis.
- Land PatentAn instrument conveying public landto an individual.
- Land Use ControlsPublic or private restrictions onhow land may be used (e.g., zoning).
- Landlocked Property1. Land without access to aroad or highway. 2. Land not beside water.
- LandlordA landowner who has leased property toanother. Also called: Lessor.
- Landmarks Preservation Commission (LPC)TheNew York City agency responsible for identifyingand designating the city’s landmarks.
- Latent DefectOne that is not visible or apparent; ahidden defect that would not be discovered ina reasonably thorough inspection of property.Compare: Patent Defect.
- Lawful ObjectiveA legal purpose.
- LeadA toxic metallic element found in paint, dust,water, and the ground.
- Lead AgencyThe agency under the StateEnvironmental Quality Review Act principallyresponsible for determining whether anenvironmental impact statement is requiredin connection with the action and for thepreparation and filing of the statement ifrequired.
- LeaseConveyance of a leasehold estate fromthe fee owner to a tenant; a contract whereone party pays the other rent in exchange forpossession of real estate. See: Gross Lease; NetLease; Percentage Lease; Land Lease.
- Lease Escalation ClauseClause that allowslandlords to raise rent to protect their margin ofprofit and, in some cases, prevent the erosion oftheir expected return due to inflation.
- Lease/OptionWhen a seller leases property tosomeone for a specific term with an optionto buy the property at a predetermined priceduring the lease term, usually with a portionof the lease payments applied to the purchaseprice.
- Leasehold EstateAn estate that gives the holder(tenant) a temporary right to possession, withouttitle. Also called: Less-than-Freehold Estate.
- LegacyReceiving money by will.
- Legal DescriptionA precise description of aproperty. See: Lot and Block; Metes and Bounds;Government Survey System.
- Legal RemedyMoney awarded to the plaintiff ina civil lawsuit; damages. Also called: Remedyor Common Law Remedy. Compare: EquitableRemedy.
- Legal Title1. The interest in property held by therightful owner. 2. The seller’s interest in propertyunder a land contract.
- LesseePerson who leases property; a tenant.
- LessorPerson who leases property to another; alandlord.
- Letter of IntentSignifies two or more parties agreeto do business together.
- Letter of OpinionA letter accompanying theabstract of title issued by an attorney regardingthe status of title to a property.
- Level of AssessmentThe ratio of total assessedvalue to the municipality’s total market value
- Level PaymentA buydown plan where the interestrate reduction (and hence the payment) isconstant throughout the buydown period.
- LeverageThe use of borrowed funds to purchaseproperty with the anticipation of a return onthe funds invested, such that the investor sees aprofit not only on his own investment, but alsoon the borrowed funds.
- Levy1. Verb: to impose a tax. 2. Noun: the tax itself.
- Liability InsuranceInsures individuals againstfinancial losses resulting from the person’sresponsibilities to others imposed by law orcontract.
- LiableLegally responsible.
- LicenseRevocable, non-assignable permissionto enter another person’s land for a particularpurpose. Compare: Easement.
- LienA non-possessory interest in property givinga lienholder the right to foreclose if the ownerdoes not pay a debt owed the lienholder; afinancial encumbrance on the owner’s title.
- Lien PriorityThe order in which liens are paid outof the proceeds of a foreclosure sale. Tax liensalways have the highest priority.
- Lien Theory StatesStates in which a mortgageeholds only a lien against property (not actualtitle) until the loan is repaid, and the mortgagorholds the actual title. Compare: Title TheoryStates.
- Life EstateA freehold estate lasting only as longas a specified person does lives. That person isreferred to as the measuring life.
- Life Estate Pur Autre VieA life estate “for the life ofanother,” where the measuring life is someoneother than the life tenant. Also called: Pur AutreVie.
- Life TenantSomeone who owns a life estate; theperson entitled to possession of the propertyduring the measuring life.
- Lifetime Cap/CeilingThe maximum increase ordecrease in the periodic payment allowableover the life of an adjustable or variable ratemortgage.
- Limited Common AreasAreas in a condominium orco-up owned by all but used by only one owner(i.e., a designated parking space.)
- Limited PartnerA partner in a limited partnershipwho is primarily an investor and does notparticipate in the management of the business,and who is not personally liable for thepartnership’s debts.
- Limited PartnershipA partnership comprised ofone or more general partners and one or morelimited partners.
- Limited Warranty DeedA deed in which thegrantor warrants title only against defects arisingduring the time he owned the property andnot against defects arising before that time ofownership. Also called: Special Warranty Deed.Compare: General Warranty Deed.
- Lineal DescendantsA person’s children,grandchildren, great-grandchildren, and so on.Liquid When an investment can easily beconverted to cash.
- Liquidated DamagesA sum of money the partiesto a contract agree in advance (at the timeof entering into the contract) will serve ascompensation in the event of a contract breach.
- LiquidityThe ability to convert an asset into cashquickly without the loss of principal.
- Lis PendensRecorded notice stating a lawsuit ispending that may affect title to the defendant’sreal estate.
- Listing AgreementA written agency contractbetween a seller and a real estate broker, statingthe broker will be paid a commission for finding(or attempting to find) a buyer for the seller’s realproperty. Compare: Exclusive Agency; ExclusiveRight to Sell.
- LitigantA party to a lawsuit; a plaintiff ordefendant.
- LitigationLawsuit(s).
- Littoral RightsWater rights of a landowner whoseproperty is adjacent to a lake or contains a lake.Compare: Appropriative Rights; Riparian Rights.
- Loan Origination FeePoints charged to a borrowerto cover the costs of issuing a loan.
- Loan-to-Value Ratio (LTV)The amount of moneyborrowed, compared to the value (or price) ofthe property.
- Loan ValueThe amount of money a bank is willingto lend someone to finance property.
- LocationThe exact position of a property.
- Location SurveySurvey that determines if aproperty’s buildings encroach on adjoiningproperty, or any adjoining property’s buildingsencroach on the subject property.
- Loss FactorThe difference between rentable squarefootage and usable square footage.
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A parcel of land; especially, in a subdivision.
- Lot and blockA type of legal description used forplatted property. The description states only theproperty’s lot number and block number in aparticular subdivision.
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- Magnet StoreA major department or chain storestrategically located within a shopping centerto give maximum exposure to smaller satellitestores.
- Mailbox RuleAcceptance of a contract offer iseffective the moment it is mailed, even thoughone party has not yet received it.
- MaintenanceMonthly fees paid by condominiumowners or co-op shareholders for common areaexpenses like utilities, building maintenance, andupkeep. Also called: Common Area Expenses orMaintenance Fees.
- Management AgreementA written agreement thatgoverns the relationship between a propertyowner/investor and the property manager andoutlines the duties of the property manager.Also called: Property Management EmployeeContract.
- Management ProposalA plan created by theproperty manager for overseeing the property,including market analysis, and developinga variety of financial reports including theoperating budget.
- MarginDifference between the index value andinterest rate charged to the borrower with anARM loan.
- Market PositionThe position an agent’s listingis in compared to similar homes in the sameneighborhood at a similar price.
- Market PriceThe actual open market price paid inan arm’s length transaction.
- Market ValueThe theoretical price a property ismost likely to bring in a typical transaction.
- Marketable TitleTitle free and clear ofobjectionable encumbrances or defects, sothat a reasonably prudent person with fullknowledge of the facts would not hesitate topurchase the property.
- Material BreachA breach of contract importantenough to excuse the non-breaching party fromperforming his contractual obligations.
- Material FactAn important fact; one that is likely toinfluence a decision.
- MaterialmanA person who supplies materials,equipment, or fuel for a construction project.See: Materialman’s Lien. Compare: Mechanic.
- Materialman’s LienSimilar to a mechanic’s lien, butbased on a debt owed to someone who suppliedmaterials, equipment, or fuel for a project (asopposed to labor).
- Measuring LifeA person whose life determines thelength of a life estate. See: Life Estate.
- MechanicA person who performs work(construction, remodeling, repairs, or demolition)on real property. See: Mechanic’s Lien. Compare:Materialman.
- Mechanic’s LienA specific lien claimed by someonewho performed work on property (construction,repairs, or improvements) and has not beenpaid. This term is often used in a general sense,referring to materialmen’s liens as well as actualmechanics’ liens.
- MergerUniting two or more properties bytransferring ownership of each to one person.
- MesotheliomaA form of lung cancer caused byextended exposure to asbestos.
- Metes and BoundsA land survey process wherebya licensed land surveyor starts at an easilyidentifiable point of beginning (POB) anddescribes a property’s boundaries in terms ofcourses, (compass directions), and distances,ultimately returning to the point of beginning.
- MethamphetamineAn illegal, man-made drugthat is extremely addictive. Residues left ina residence from the manufacturing processcan be toxic.
- Mineral RightsRights to the minerals locatedbeneath the surface of a property.
- MinorA person who has not yet reached the age ofmajority; n New York, that is age 18.
- MisdemeanorA misdeed triable in a court ofspecial sessions.
- MisrepresentationA false or misleading statement.See: Fraud.
- MitigationWhen the non-breaching party takesaction to minimize losses resulting from a breachof contract.
- MoldA fungus that can release toxins into theenvironment causing allergic reactions in somepeople.
- Monetary PolicyThe means by which thegovernment can exert control over the supplyand cost of money.
- Monoline PolicyInsurance coverage designed tocover one specific area—property
- MonumentsFixed physical objects stated as pointsof reference in a metes and bounds description.
- MoratoriumSuspends the right of property ownersto obtain development approval while locallegislatures consider, draft, and adopt landuse regulations or rules to respond to new orchanging circumstances not adequately dealtwith by current laws.
- MortgageAn instrument that creates a voluntarylien on real property to secure repaymentof a debt. The parties to a mortgage are themortgagor (borrower) and mortgagee (lender).
- Mortgage BankerOne who originates, sells, andservices mortgage loans, and usually acts as theoriginator and servicer of loans on behalf of largeinvestors, such as insurance companies, pensionplans, and FANNIE MAE.
- Mortgage BrokerOne who, for a fee, places loanswith investors, but typically does not servicesuch loans.
- Mortgage ClauseClause that states in order to geta mortgage loan, property insurance must beobtained prior to closing. The mortgage clausecovers the lender’s interest in preservation andreconstruction of the property after a loss.
- Mortgage CompaniesInstitutions that functionas originators and servicers of loans on behalfof large investors, such as insurance companies,pension plans, or Fannie Mae.
- Mortgage Insurance Premium (MIP)Insuranceoffered through the FHA to insure a lenderagainst default on a loan by a borrower.
- Mortgage Payment Adjustment PeriodTheinterval at which a borrower’s actual mortgagepayments change with an ARM (adjustable ratemortgage).
- Mortgage Payment CapA limit on the amount ofmortgage payment increases that can occur withan adjustable rate mortgage.
- Mortgage ValueThe value of an asset for purposesof securing a mortgage loan.
- MortgageeA lender who accepts a mortgage assecurity for repayment of the loan.
- MortgagorA person who borrows money andgives a mortgage to the lender as security.
- Multiple Listing Service® (MLS)A service wherebylocal member brokers agree to share listings,and further agree to share commissions onproperties sold jointly. The MLS generallyconsists of online computer services and aregularly published book.
- Municipal Engineer’s OfficeThe municipal agencyresponsible for the planning, design, andconstruction of New York’s public works facilitiesand projects.
- Mutual ConsentWhen all parties freely agree tothe terms of a contract, without fraud, undueinfluence, duress, or mistake, and achievedthrough offer and acceptance. Also called:Meeting of the Minds.
- Mutual MistakeWhen both parties to a contractwere mistaken about a fact or a law.
- Mutual Mortgage Insurance PlanThe name ofthe FHA’s insurance program for residentialmortgages.
- MycotoxinA toxic substance produced by somemolds.
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- Narrative ReportA type of appraisal report thatprovides the most detailed analysis, as it allowsthe appraiser to comment fully on the opinionsand conclusions of the appraisal.
- National Association of REALTORS® (NAR®)America’s largest trade association, representing1.3 million members involved in all aspectsof the residential and commercial real estate industries, including brokers, salespeople,property managers, appraisers, and counselors.
- Natural AttachmentsThings growing on a piece ofland, such as trees, shrubs, or crops; consideredpart of real property while growing and personalproperty when removed. Compare: Fixture.
- Negative AmortizationThe balance of a loangrowing due to deferred interest and resultingin an even larger balloon payment for theborrower.
- Negative Amortization CapA limit on the amountof negative amortization that can occur with anadjustable rate mortgage.
- Negative EasementAn easement that preventsthe servient tenant from using her own landin a certain way (as opposed to allowing thedominant tenant to use it). Compare: RestrictiveCovenant.
- NegligenceConduct that falls below the standardof care a reasonable person would exerciseunder certain circumstances; an unintentionalbreach of a legal duty resulting fromcarelessness, recklessness, or incompetence. See:Tort. Compare: Strict Liability.
- Net LeaseLease for which a tenant pays all taxes,insurance, etc., plus utilities and rent
- Net Listing AgreementA listing agreement in which the seller sets a net amount acceptable for a property; if the actual selling price exceeds that amount, the broker is entitled to keep the excesses commission; illegal in New York.{"@context": "https://schema.org","@type": "FAQPage","mainEntity": [{"@type":(...)
- Net Operating Income (NOI)Income left after alloperating costs are paid.
- Net to SellerAn estimate of the money a sellershould receive from a real estate transaction,based on the selling price after all costs andexpenses are paid.
- Net WorthValue of a person’s assets less liabilities.
- New York State Association of REALTORS®AllNew York Real Estate boards fall under this stateboard; a member of the NAR®.
- New York State Human Rights LawExtendsprotected classes beyond those covered in theFair Housing Act to include, age, creed, maritalstatus, military status, and sexual orientation
- New York State Office of Parks, Recreation, andHistoric Preservation (OPRHP)Oversees publicrecreation areas and administers federal andstate preservation projects.
- New York State Uniform Fire Prevention andBuilding CodeSets forth the construction,materials, safety, and sanitary standards forbuildings in New York as well as standardsfor the condition, occupancy, maintenance,rehabilitation, and renewal of existing buildings.
- Non-homesteadProperty that consists of industrialand commercial parcels as well as vacant land.
- Non-judicial ForeclosureForeclosure by a trusteeunder the power of sale clause in a deed of trustwithout the involvement of a court; not used inall states.
- Non-possessory InterestAn interest in propertythat does not include the right to possess andoccupy the property; an encumbrance, such as alien or easement.
- Non-solicitation OrderProhibits the solicitationof residential property listings, and appliesto all real estate brokers and agents; ruledunconstitutional by the U.S. Court of Appeals.
- Nonconforming LoansThose that do not meetFannie Mae/Freddie Mac standards and, thus,cannot be sold on the secondary market.
- Nonconforming UseLand use that does notconform to current zoning laws but is legallyallowed because the land use was establishedbefore the new laws were enacted. Mostnonconforming uses are allowed to continue butmay not be expanded or enlarged.
- Notary PublicAn official whose primary functionis to witness and certify the acknowledgmentmade by one signing a legal document.
- Notice to QuitA notice to a tenant demanding hevacate the leased property. Also called: Notice toVacate.
- Novation1. When one party to a contractwithdraws and a new party is substitutedwith the consent of all parties, relieving thewithdrawing party of liability. 2. The substitutionof a new obligation for an old one.
- NuisanceInterference with the right of quietenjoyment of property.
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- Objective IntentWhat the offeror in a transactionsays and does. Compare: Subjective Intent.
- Observable DepreciationAny loss of value anappraiser attributes to physical deterioration,functional obsolescence, or economicobsolescence
- ObsolescenceThe loss in property value caused byeconomic and/or functional factors.
- OfferWhen one person proposes a contractto another. See: Acceptance. Compare:Counteroffer.
- Offer of CompensationThe commission that willbe paid on the sale of property.
- Offer of CooperationAn open invitation to otherbrokers to sell property listed by another broker.
- OffereeA person who receives an offer or to whoman offer is made.
- Offering PlanA document provided by the sponsor(of a condominium or co-op) that offers detailedinformation regarding the property. Also called:Offering Statement.
- OfferorA person who makes an offer.
- Office ManagerA licensed associate real estatebroker who elects to work as an office managerunder the name and supervision of an individualbroker or another broker who is licensed undera partnership, trade name, limited liabilitycompany, or corporation.
- Office of Fair Housing and Equal Opportunity(FHEO)A division of HUD, which is responsiblefor the administration and enforcement offederal laws.
- Official MapA final and conclusive map withrespect to the location and width of amunicipality’s streets, highways, drainagesystems, and parks.
- Open and NotoriousWhen possession or useof land is obvious and unconcealed; one ofthe conditions necessary for easement byprescription.
- Open-end MortgageMortgage loan that allowsborrowers to request additional funds from thelender, up to a certain pre-determined limit,even re-borrowing part of the debt that hasbeen repaid (at the lender’s discretion) withouthaving to re-negotiate the loan.
- Open ListingA nonexclusive listing given by a sellerto as many brokers as he chooses. If the propertyis sold, the broker who was the procuring causeof the sale is entitled to the commission.
- Operating BudgetA budget created to projectthe income and expenses for a property over aone-year period.
- Operating ExpensesThe cost associated withrunning a building and/or business not includingdebt service or depreciation.
- Operating StatementDocument that illustratestotal revenues generated for a given periodbased on rent rolls and management style.
- OptionA contract giving one party the right to dosomething within a designated period withoutobligation. Compare: Right of First Refusal.
- Option to PurchaseA contract giving an optioneethe right, but not the obligation, to buy propertyowned by the optionor during a specified period.
- Option to RenewRenewal methods and the termsby which a renewed lease will exist.
- OptioneePerson to whom an option is given.
- OptionorPerson who gives an option.
- Oral ContractA spoken agreement.
- Oral ReportA type of appraisal report givenin person or over the phone often withoutsupporting documentation.
- Order of ExecutionLegal process in which a courtorders an official (such as a sheriff) to seize andsell property of a judgment debtor to satisfy ajudgment lien.
- OrdinanceA law passed by a local legislative body.Compare: Resolution.
- OriginationThe process of making or initiating anew loan.
- Ostensible AgencyOccurs when an agent isperceived as the principal’s fiduciary by athird party and the principal does not declareotherwise.
- OwnershipTitle to property, dominion overproperty; the rights of possession and control ofreal or personal property.
- Ownership in SeveraltyOwnership by a singleindividual, as opposed to co-ownership. Alsocalled: Severalty.
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- Package MortgageA mortgage where personalproperty, like furniture, is included in theproperty sale and financed together with oneloan.
- Package PolicyTwo or more lines of coveragecombined into one insurance policy. AHomeowners policy is a true package policybecause it combines property insurance withliability insurance.
- ParcelA lot or piece of real estate particularly aspecified part of a larger tract.
- Parol EvidenceEvidence concerning negotiationsor oral agreements not included in a writtencontract that alter or contradict the terms of thewritten contract.
- Part PerformanceThe legal doctrine that allowsa court to enforce an oral agreement thatshould have been in writing when the promiseehas taken irrevocable steps to perform hiscontractual obligation and failure to enforce thecontract would result in an unjust benefit for thepromisor.
- Participation PlanA loan when the buyer andanother investor (or seller, lender, etc.) enter intoa partnership, with the buyer paying an equityshare in lieu of interest. Also called: SharedEquity Plan or Mortgage.
- PartitionAllows any co-owner to end a jointtenancy.
- PartnershipAssociation of two or more peopleto carry on business for profit. Law generallyregards a partnership as a group of individuals,not as an entity separate from its owners.
- Partnership PropertyThe property partners bringinto a business at the outset, or later acquirefor the business; property owned as tenants inpartnership. See: Tenancy in Partnership.
- Party WallA wall shared by two separateproperties; the owners on each side share theright of use.
- Pass-through SecuritieMortgage backedsecurities issued by Ginnie Mae, which payinterest and principal payments on a monthlybasis.
- Passive IncomeDefined in Section 469 as earningsderived from any trade or business or incomeproducingactivity in which the taxpayer doesnot materially participate.
- PatentThe instrument used to convey governmentland to a private individual.
- Patent DefectA visible, apparent defect that canbe seen in a reasonably thorough inspection ofproperty. Compare: Latent Defect.
- PayeeThe one promised payment in a note.
- Payment CapProtects borrowers from largepayment increases in their mortgages.
- Percentage LeaseLease under which a tenant paysa percentage of gross sales in addition to rent.
- Percolation RateThe rate at which water movesthrough soil.
- PerilAnything that can cause a loss (i.e., fire, wind,and hail).
- Periodic EstateA leasehold estate that continuesfor successive equal periods of time (i.e., weekto-week or month-to-month) until terminated byproper notice from either the lessor or the lessee.Also called: Periodic Lease and Periodic Tenancy.
- Permanent BuydownWhen points are paid toa lender to reduce the interest rate and loanpayments for the entire life of the loan.
- Permit SystemSystem used by state and localgovernments to monitor compliance with, andenforce building codes and other regulations.
- Personal PropertyTangible items that (usually) arenot permanently attached to, or part of, the realestate. Also called: Personalty or Chattel.
- PersonaltyPersonal property.
- PitchA roof’s vertical rise in inches, divided by itshorizontal span in feet.
- PITITypical payment on a mortgage loan thatincludes principle, interest, taxes, and insurance,
- PlaintiffThe party who brings or starts a civillawsuit; the one who sues.
- Planned Unit Development (PUD)A special typeof subdivision that may combine nonresidentialuses with residential uses, or otherwisedepart from ordinary zoning and subdivisionregulations; some PUD lot owners co-ownrecreational facilities or open spaces as tenantsin common.
- Planning BoardHolds public hearings, investigatessolutions for the planning issues at hand, andmakes recommendations to the appropriatelegislative authority. In New York City, theplanning board and the zoning board are oneentity known as the Board of Standards andAppeals.
- Planning CommissionA local government agencyresponsible for preparing a community’scomprehensive development plan.Plaster Board Gypsum plaster sandwichedin-between two layers of coarse paper. Itiscommonly used in homes as a wall covering.Also called: Wall Board, Dry Wall, or GypsumBoard.
- PlatA detailed survey map of a subdivisionrecorded in the county where the land is located.Subdivided property is often called plattedproperty. Also called: Plat Map.
- Plat BookA large book containing subdivisionplats; kept at the county recorder’s office.
- Platform ConstructionA type of framing used tobuild a house or building one story at a time,with each story serving as a platform for thenext. Also called: Platform Framing.
- PledgeWhen a debtor transfers possessionof property to the creditor as security forrepayment of the debt. Compare: Hypothecate.
- Pledged Account MortgageAn escrow accountestablished with part of a buyer’s downpayment. The borrower/buyer’s lender thenwithdraws money from the account each monthand applies it to the monthly payment.
- PlottageAn increase in value (to cover the cost ofacquiring the parcels) by successful assemblageusually due to use.
- Pocket CardsContains a licensee’s photo, name,and business address as well as the name andaddress of the affiliated broker; prepared, issued,and delivered by the Department of State incooperation with the Department of MotorVehicles.
- Point of Beginning (POB)The starting point and ending point for a metes and bounds description.
- PointsOne percent of the loan amount. Points canbe charged for any reason but are often used forbuydowns. Also called: Discount Points.
- Police PowerThe constitutional power of state andlocal governments to enact and enforce lawsthat protect the public’s health, safety, morals,and general welfare.
- Polychlorinated Biphenols (PCBs)Organiccompounds manufactured as cooling andinsulating agents for transformers and capacitorsused in industry.
- Porter’s Wage Escalation FormulaTies rentescalation to the wages of a building’s cleaningand maintenance personnel (called “porters”).The formula provides tenant’s rent will increasea specific amount per square foot for a specifiedincrease in the porter’s hourly wages.
- Portfolio Income1. Earnings from interest,dividends, annuities, and royalties not derivedfrom the ordinary course of business. 2.Gain or loss from the disposition of propertythat produces portfolio income or held forinvestment purposes.
- Portfolio LendersFinancial institutions that makereal estate loans, which they keep and service inhouse instead of selling them on the secondarymarkets.
- Positive EasementAn easement that allows thedominant tenant to use the servient tenement ina particular way.
- Possession1. The holding and enjoyment ofproperty. 2. Physical occupation of real property.
- Possessory InterestInterest that entitles the holderto possess and occupy property, now or in thefuture; an estate, which may be either a freeholdor leasehold.
- Possibility of ReverterThe interest held by agrantor (or grantor’s heirs) who has transferreda fee simple determinable. Also called: Reverter.Compare: Power of Termination.
- Post and Beam ConstructionA type of framingwith the floor for higher stories (and the roof)supported by beams that sit on top of posts andthe outside wall perimeter. Also called: Post andBeam Framing.
- Potential Gross IncomeThe potential income aproperty would produce in an ideal situationincluding no vacancy and collection losses.
- Power of AttorneyAn instrument authorizingone person (called an attorney in fact) to actas another’s agent to the extent stated in theinstrument.
- Power of Sale ClauseA clause that allows a trusteeto sell trust deed property without courtsupervision if the terms of the trust deed areviolated.
- Power of TerminationThe right to terminate aconditional fee estate if the estate holder fails tomeet the required conditions. Also called: Rightof Re-entry. See: Conditional Fee. Compare:Possibility of Reverter.
- Practical DifficultiesOne reason for issuing azoning area variance—the zoning preventsthe owner from making permitted use of theproperty.
- Pre-approvalProcess by which a lender determineswhether potential borrowers can be financedthrough the lender for a certain amount ofmoney.
- Pre-qualificationProcess by which an agent orlender reviews potential borrowers to determineif they are likely to be approved for a loan and forapproximately what amount.
- Predatory LendingPractice of making loans withexcessively high fees and misrepresented loanterms; predatory lenders often target borrowerswho are financially unstable and who do notqualify for conventional loans.
- Prepayment PenaltiesAdditional money chargedby a lender for paying off a loan early.
- PrescriptionAcquiring an interest in property(usually an easement) by using it openly andwithout the owner’s permission. See: Easementby Prescription. Compare: Adverse Possession.
- Preventive MaintenanceRoutine maintenanceand inspections that keep equipment and theproperty in good working order.
- PriceThe amount a ready, willing, and able buyeragrees to pay for a property and a seller agreesto accept.
- Price FixingAn antitrust violation in whichcompetitors set a standard commission rate.
- Primary MarketsLenders who make mortgageloans directly to borrowers. Also called: PrimaryMortgage Markets. Compare: SecondaryMarkets.
- Principal1. A person who grants another person(an agent) authority to represent him indealings with third parties. 2. One of the partiesto a transaction (such as a buyer or seller), asopposed to those who are involved as agents oremployees (such as a broker or escrow agent).3. With regard to a loan,(...)
- Private Mortgage Insurance (PMI)Insuranceoffered by private companies to insure a lenderagainst borrower default.
- Private RestrictionA restriction imposed onproperty by a previous owner or the subdivisiondeveloper; a restrictive covenant or a conditionin a deed.
- Pro-rata ShareA proportionate share.Proration The division of expenses between buyerand seller in proportion to the actual usage ofthe item represented by a particular expense.Also called: Adjustments.
- ProbateA judicial proceeding in which the validityof a will is established and the executor isauthorized to distribute the estate property; or,when there is no valid will, a judicial proceedingin which an administrator is appointed todistribute the estate to heirs according to thelaws of intestate(...)
- Probate CourtA court that oversees thedistribution of property under a will or intestatesuccession.
- Procedural LawA law that establishes a legalprocedure for enforcing a right. Compare:Substantive Law.
- Procuring CauseThe real estate agent who isprimarily responsible for bringing about a sale,such as by introducing the buyer to the propertyor by negotiating the agreement between thebuyer and seller. Sometimes more than oneagent contributes to a sale. See: Open Listing.
- Proforma StatementA schedule of the projected income and expenses for a real estate investment over a given period.
- PromiseeA person who has been promisedsomething; a person who is supposed to receive the benefit of a legally binding contractualpromise.
- PromisorA person who has made a contractualpromise to another.
- Promissory EstoppelA doctrine applied whensomeone makes a technically unenforceablepromise, but another person acts in reasonablereliance on the promise. If the person whorelied on the promise will suffer harm unless it isenforced, a court may enforce it.
- Promissory NoteA written, legally binding promiseto repay a debt.
- Property InsuranceCoverage that indemnifies aperson with an interest in the property for a losscaused to the property by a covered peril.
- Property ManagementLeasing or renting, oroffering to lease or rent real property of othersfor a fee, commission, compensation, or othervaluable consideration pursuant to a propertymanagement employee contract.
- Property Management ReportA report preparedby property managers to inform owners on thestatus of their property, often including income,expenses, and disbursements information.
- Property ManagerA person hired by a realproperty owner to administer, market,merchandise, and maintain property, especiallyrental property.
- Proprietary LeaseExclusive, longer term leasegiven to a person who lives in a cooperative andowns stock in the cooperative.
- Public AccommodationTitle III of the Americanswith Disabilities Act requiring all public andcommercial facilities are100% accessible to thedisabled.
- Public GrantWhen land owned by the governmentis transferred to an individual.
- Public NuisanceA land use that threatens publichealth, safety, morals, or welfare, or constitutes asubstantial annoyance to the public.
- Public RecordThe official collection of legaldocuments filed with the county recorder. See:Constructive Notice; Recording.
- Public RestrictionA law or regulation limiting orregulating the use of real property.
- PuffingSuperlative statements about the qualityof a property that should not be consideredassertions of fact.
- Punitive DamagesCourt-ordered monetary awardmeant to punish the defendant for malicious oroutrageous conduct and discourage others fromengaging in similar acts. Also called: ExemplaryDamages.
- Purchase AgreementA contract in which a sellerpromises to convey title to real property inexchange for the purchase price. Also called:Purchase and Sale Agreement, PurchaseContract, or Earnest Money Agreement.
- Purchase MoneyWhen the seller finances all orpart of the sale price of a property for a buyer.
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- Qualified FeeWhen a grantor puts a conditionor requirement in the deed and limits the titleto real property. Also called: Conditional Fee,Determinable, Fee Simple Defeasible, orDefeasible Fee.
- Quantity Survey MethodA cost approach appraisalmethod where the appraiser counts the numberand type of each part and material used toconstruct a building, and add the cost for labor,profit, permits, etc.
- Quiet EnjoymentUse and possession of realproperty without interference from previousowners, the lessors, or anyone else claiming title.See: Covenant of Quiet Enjoyment.
- Quiet Title ActionA lawsuit to determine who hastitle to a piece of property or to remove a cloudfrom the title.
- Quitclaim DeedConveys any interest in a parcelof land the grantor has at the time the deedis executed; conveys whatever right, title, orinterest the grantor holds in the propertywithout representation that there is any interestat all.
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- R-FactorA way to measure the insulating value orresistance to heat flow through a material or anobject. The more effective the insulation, thehigher the R-Value it will have.
- R-ValueInsulation’s R-Factor multiplied by theamount of material. See: R-Factor
- RadonA naturally occurring radioactive gas thatemanates from rocks, soil, and water because ofthe decay of uranium.
- RafterSloped support beams that follow the pitchof the roof and serve to hold the outer roofcovering. See: Joist and Rafters.
- Range LinesNorth-south lines running parallel toprincipal meridians at six-mile intervals in thegovernment survey system.
- Rate Adjustment PeriodThe interval at which aborrower’s interest rate changes with an ARM(adjustable rate mortgage).
- Rate CapUsed with ARMs to protect borrowersfrom large interest rate increases.
- Rate of ReturnThe rate at which an investorrecaptures his investment in income-producingproperty.
- RatificationConfirmation or approval of an act notauthorized when it was performed.
- Ready, Willing, and AbleMaking an offer topurchase on terms acceptable to the seller, andhaving the financial ability to complete thepurchase.
- Real EstateLand and everything permanentlyaffixed to it.
- Real Estate AppraiserA person who is speciallytrained to offer an unbiased value of realproperty.
- Real Estate BrokerA person who is licensed torepresent one of the parties in a real estatetransaction for compensation.
- Real Estate Contract1. A purchase agreement. 2. Aland contract. 3. Any contract having to do withreal property.
- Real Estate CyclesGeneral swings in real estateactivity, resulting in increasing or decreasingactivity and property values during differentphases of the cycle.
- Real Estate Investment Trust (REIT)A real estateinvestment business with at least 100 investorsorganized as a trust.
- Real Estate Owned (REO)Property acquiredthrough foreclosure and held in inventory by alending institution.
- Real Estate SalespersonA licensed real estateprofessional associated with a broker and, assuch, who may perform most of the acts as abroker, on behalf of him.
- Real Estate Settlement Procedures Act (RESPA)Requires lenders, mortgage brokers, or servicersof home loans to provide borrowers withpertinent and timely disclosures of the natureand costs of the real estate settlement process.
- Real Estate TaxAn annual tax levied on the valueof real property. Also called: Property Tax orGeneral Real Estate Tax.
- Real Estate Transfer TaxA tax levied on the transferof real property.
- Real PropertyThe physical land and everythingattached to it as well as the rights of ownership(bundle of rights). Compare: Personal Property.
- RealtistA real estate licensee who is a member ofNational Association of Real Estate Brokers.
- REALTOR®Any real estate licensee who is a memberof the National Association of REALTORS® andits affiliated boards; only members may use theterm REALTOR® as it’s a registered trademark ofthe NAR®.
- RealtyReal property.
- ReassessmentThe new assessment of a percentageof a property’s market value.
- Recaptured DepreciationOccurs on a personalasset used for business purposes when the assetis sold.
- Receiver of TaxesMunicipal official responsiblefor managing the day-to-day operations of theOffice of Receiver of Taxes, which collects localtaxes. Other functions include tax billing andcollection, banking, record maintenance, mailand accounting functions.
- ReciprocityWhen states agree to allow licenseesfrom other states to sell real estate in their own.
- Recognition AgreementAn agreement betweenthree parties—the lender, the co-op, and theshareholder—that recognizes the rights oflenders who finance the shareholder.
- ReconciliationVerifying debits and credits havebeen added and subtracted correctly on a realestate settlement statement.
- ReconveyanceAn instrument that releases securityproperty from the lien created by a deed of trust.Also called: Satisfaction of Mortgage.
- RecordingFiling a document at the countyrecorder’s office so it is public record.
- RedliningWhen a lender refuses to make loanssecured by property in a certain neighborhood because of the racial or ethnic composition ofthe neighborhood.
- Reduction Option MortgageA fixed rate mortgagethat gives borrowers a limited opportunity toreduce the interest rate once during the courseof the loan, provided certain conditions are met.
- RefereeSomeone who is empowered by the courtto exercise judicial power to convey land.
- Referee’s DeedDeeds that contain no covenants orwarranties although ownership is implied.
- Reference to a PlatA description on a deed thatincludes the property’s location on a plat map.
- ReferendumWhen citizens vote on an issue.
- ReformationA legal action to correct a mistake,such as a typographical error, in a deed or otherdocument.
- RegressionWhen the value of the “best” home in agiven area is negatively affected by other homesin the area.
- Regulation1. A rule adopted by an administrativeagency. 2. Any governmental order having theforce of law.
- Regulation ZFederal guidelines under the Truthin-Lending Act that require full disclosure of allcredit terms for consumer loans.
- Release1. To give up a legal right. 2. A document inwhich a legal right is given up.
- Release ClauseA clause in a mortgage agreement for a subdivision that allows the borrower to pay a certain amount of money to release one or more lots with the mortgage continuing to cover the other lots.
- RelictionWhen a body of water gradually recedes,exposing land that was previously under water.Also called: Dereliction.
- Remainder Interest:A future interest that becomespossessory when a life estate terminates andthat is held by someone other than the grantorof the life estate. Compare: ReversionaryInterest.
- RemaindermanThe person who has an estate inremainder.
- RemedyThe means by which a court enforces aright, imposes a penalty, or makes some otherorder to impose its will. Compare: EquitableRemedy and Legal Remedy.
- Renewal PremiumRecurring fee to continue aninsurance policy.
- RentConsideration paid by a tenant to a landlord inexchange for possession and use of property.
- Rent ControlGovernmental restrictions on howmuch rent a landlord can charge.
- Rent RollSpreadsheet or listing of key informationabout a property (i.e., total number of units,tenant names and apartment numbers, leasedates, and the rent each tenant pays).
- Rentable Square FootageThe amount of spaceused in calculating a lease payment; rentablesquare footage is larger than the actual spacetenants occupy because it includes their shareof the property’s service areas like the lobby,corridors, and other common areas.
- RenunciationWhen someone who has beengranted something or has accepted somethinglater gives it up or rejects it; as when an agent withdraws from the agency relationship.Compare: Revocation.
- ReplacementBuilding a functional equivalent of anoriginal building. Compare: Reproduction.
- Replacement Cost (R/C)The cost, for insurancepurposes, of replacing property withoutdeduction for depreciation.
- ReproductionBuilding an exact replica of anoriginal building, duplicating the materials,design, functional layout, workmanship, andeven inadequacies.
- Reproduction CostThe cost to build an exactreplica of an original building, giving the newstructure the same look and feel as the original.
- RescissionWhen a contract is terminated and eachparty gives anything acquired under the contractback to the other party (verb form is rescind).Compare: Cancellation.
- ReservationA document a condominium buyersigns to reserve a particular unit. Also called:Reservation Request and Intent to PurchaseAgreement.
- Reserve AccountAn account maintained by abroker for the deposit of client’s money (i.e.,good faith deposits). Also called: Trust Account.2. An account maintained by a lender for thedeposit of borrowers’ extra 1/12 monthlydeposits to cover next year’s insurance and taxpayments. Also called: Escrow Account.
- Reserve RequirementsThe percentage ofcustomers’ deposits commercial banks arerequired to keep on deposit, either on hand atthe bank or in the bank’s own accounts; moneythe bank cannot lend to other people.
- Resident ManagerRepresents a propertymanagement firm and may live on the premisesof the building she manages.
- Residential Lead-based Paint Hazard ReductionActResidential Lead-based Paint Hazard ReductionAct
- Residential Market AnalysisIn-depth study of alisting as it stands on its own, as well as in light ofcurrent market conditions.
- Residual IncomeThe amount of income a borrowerhas left after subtracting taxes, housingexpenses, and all recurring debts and obligations(used for VA loan qualifying).
- RestitutionRestoring something to a person ofwhich she was unjustly deprived.
- RestrictionA limitation on the use of real property.Compare: Public Restriction; Private Restriction.
- Restrictive Covenant1. A limitation on realproperty use, imposed by the owner. 2. Apromise to do, or not to do, an act relating to realproperty.
- Retail Investment PropertyWhere a specific typeof business activity occurs—retail sales andrelated business activities.
- Retaliatory EvictionWhen a landlord evicts atenant in retaliation for complaining about codeviolations or violations of the Landlords andTenants Act, or for participating in a tenants’rights group.
- Return on InvestmentA saver/investor’sexpectation that he will eventually get back theinterest paid while the equity was invested.
- ReverseTo overturn a lower court’s decision onappeal, ruling in favor of the appellant. Compare:Affirm.
- Reverse Equity MortgageWhen a homeownerover age 62 with little or no outstanding liens,mortgages her home to a lender and, in return,receives a monthly check. Also called: ReverseMortgage.
- Reversionary InterestA future interest thatbecomes possessory when a temporary estate(such as a life estate) terminates, and is held bythe grantor (or grantor’s successors in interest).Compare: Remainder Interest.
- RevocationWhen someone who granted oroffered something withdraws it, as when aprincipal withdraws the authority granted to theagent, an offeror withdraws the offer. Compare:Renunciation.
- RezoneAn amendment to a zoning ordinance,usually changing the uses allowed in a particularzone. Also called: Zoning Amendment. Compare:Spot Zoning.
- RiderAn amendment to a contract.
- Right of DisposalA right to transfer all or some of aperson’s ownership interest in real property.
- Right of EnjoymentA right to enjoy the benefitsof land ownership without outside interference.See: Quiet Enjoyment.
- Right of First RefusalA right to have the firstchance to buy or lease property if the ownerdecides to sell or lease it. Also called: Right ofPre-emption. Compare: Option.
- Right of SurvivorshipA characteristic of statutorysurvivorship tenancy, joint tenancy, andtenancy by the entireties; surviving co-tenantsautomatically acquire a deceased co-tenant’sinterest in the property.
- Right of UseThe right landowners have to makeproperty productive (part of bundle of rights).
- Right of Way (ROW)An easement giving the holderthe right to cross another person’s land.
- Right to RescindThe consumer’s right to rescindany credit transaction involving her principalresidence as collateral (except first mortgages),up to midnight of the third business day afterthe transaction.
- Riparian RightsThe water rights of a landownerwhose property is adjacent to or crossedby a river (or any body of water). Compare:Appropriative Rights; Littoral Rights.
- RiskThe probability that events will not occur asexpected.
- Risk ManagementIdentifying, managing, andminimizing the potential risks on the property.
- Rough-insItems hidden by finished walls, but thatare vital to the operation of the house.
- Running with the LandBinding or benefiting thesuccessive owners of a piece of property, ratherthan terminating when a particular ownertransfers his interest. Usually refers to easementsor restrictive covenants.
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- Safe Drinking Water Act (SDWA)A governmentact established by the EPA that sets qualitystandards for water intended for humanconsumption.
- Sale and LeasebackA method for financingcommercial or industrial properties in which acompany constructs the building then becomesa tenant by selling the building to an investor.
- Sales AssociateAny licensed real estate salespersonassociated with a broker; sales associates neveract independently, they act on behalf of thebroker. Also called: Salesperson.
- Sales Comparison ApproachAn appraisal methodthat estimates the value of real property byperforming a market analysis of the area wherethe subject property is located. Data is collectedand adjustments made for differences.
- Sales ContractContracts in which a seller promisesto convey title to real property to a buyer inexchange for the purchase price. Also called:Purchase Agreements, Sale Agreements,Purchase and Sale Agreements, Offers toPurchase, and Earnest Money Agreements.
- Satisfaction of MortgageThe document amortgagee gives the mortgagor when themortgage debt is paid in full acknowledgingthe debt has been paid and the mortgage is nolonger a lien against the property.
- Savings and Loan Associations (S & L)Institutionsthat specialize in taking savings deposits andmaking mortgage loans.
- ScarcityCharacteristic of real property that saysthere is a limited supply of real estate.
- Second MortgageA security instrument in asecond lien position.
- Secondarily LiableWhen a party is not completelyreleased from liability of an obligation; thus ifthe lender cannot recover the loan from the newparty, the party who is secondarily liable may stillbe pursued.
- Secondary MarketsPrivate investors andgovernment agencies that buy and sellmortgages. Also called: Secondary MortgageMarket. Compare: Primary Markets
- Secret ProfitA financial benefit an agent takesfrom a transaction without authorization fromthe principal, nor informing the principal of thebenefit retained. See: Self-dealing.
- SectionA one-mile-by-one-mile square withina township used for the government surveysystem; one section equals 640 acres, 36 sectionsequal one township.
- Sectional IndexAn index that lists recordeddocuments under the tax parcel number ofthe property they apply to, grouping togetherall recorded documents affecting a particularproperty. Also called: Tract Index.
- Secured CreditorA creditor with a lien on specificproperty that enables him to foreclose andcollect the debt from the sale proceeds if it is nototherwise paid.
- SecuritizationAct of pooling mortgages and thenselling them as mortgage-backed securities.
- Security DepositMoney a tenant gives a landlordat the beginning of tenancy to ensure the tenantwill comply with the terms of the lease. Thelandlord may retain all or part of the depositto cover unpaid rent, repair costs, or otherdamages, if necessary.
- Security InstrumentsInstruments (i.e., mortgages and trust deeds) that give a creditor the right to have the collateral sold to satisfy the debt if the debtor fails to pay according to the terms of the agreement.
- Security InterestThe interest a creditor mayacquire in the debtor’s property to ensure thatthe debt will be paid.
- SeizenThe possession of a freehold estate; ownership. Also spelled: Seisin or Seizin.{"@context": "https://schema.org","@type": "FAQPage","mainEntity": [{"@type": "Question","name": "What is seizen?","acceptedAnswer": {"@type": "Answer","text": "The possession of a freehold estate; ownership."}},(...)
- Self-dealingWhen a real estate agent buys the principal's property (or sells it to a relative, friend, etc., or to a business the agent has an interest), without disclosing that fact to the principal, then sells it for a profit.{"@context": "https://schema.org","@type": "FAQPage","mainEntity": [{"@type":(...)
- Self-help EvictionWhen a landlord uses physicalforce, a lockout, or a utility shutoff to remove atenant, instead of the legal process.
- Seller FinancingWhen a seller extends credit to abuyer to finance the purchase of the propertyinstead of or in addition to the buyer obtaining aloan from a third party.
- Seller’s AgentThe agent who is representing onlythe seller in a transaction and owes, all loyalty tothat seller/client.
- Seller’s MarketA situation in the housing marketwhen there are more buyers than there areproperties for sale.
- Senior MortgageAny mortgage that has a higherlien position than another mortgage.
- Separate PropertyIn states with a communityproperty system, any property owned by amarried person that is not held jointly withthe spouse as community property. Compare:Community Property.
- Septic SystemA type of private sewage disposalsystem used in areas that do not have publicsewers.
- ServicingThe continued maintenance of a loanafter it has been made (e.g., collecting payments,keeping records, and handling defaults).
- Servient TenantThe owner of a servient tenement;that is, someone whose property is burdened byan easement.
- Servient TenementProperty burdened by aneasement; the owner of the servient tenement(the servient tenant) is required to allowsomeone who has an easement (the dominanttenant) to use his property.
- SetbacksProvisions that require residences belocated a specified distance between the frontproperty line to the building line, as well as fromthe interior property lines.
- Settlement1. An agreement between the partiesto a civil lawsuit, in which the plaintiff agrees todrop the suit in exchange for a sum of money or the defendant’s promise to do or refrain fromdoing something. 2. Closing.
- Settlement StatementA document preparedby the buyer’s and seller’s attorney or bankrepresentatives that itemizes all expenses andcosts paid by the buyer and seller to close thereal estate transaction.
- SeverableWhen one part or provision in a contractcan be held unenforceable without making theentire contract unenforceable.
- Share LoanA type of co-op loan signifying a buyeris purchasing shares in a corporation, rather thana mortgage for ownership of property.
- Shared Equity MortgageLoan for which the buyerand another investor (or seller, lender, etc.) enterinto a partnership, with the buyer paying anequity share in lieu of interest.
- ShareholdersStockholders in a corporation.
- SheathingA structural covering, often made ofplywood, placed over a building frame’s exteriorwall studs or roof rafters.
- Sheriff’s DeedA deed issued by the court to aproperty purchaser from a foreclosure sale.
- Sheriff’s SaleA foreclosure sale held after a judicialforeclosure. Also called: Execution or ExecutionSale.
- Sick Building SyndromeWhen poor air quality in abuilding causes symptoms of headache, fatigue,nausea, sore throat, nose and eye irritation, etc.among its occupants.
- Side YardThe area between a building and one sideboundary of the lot on which it is located.
- SidingThe outer covering for a home’s exteriorwalls, designed to shed water and protect thehome from the elements.
- Sill PlateBottom piece of a frame horizontallyanchored to the foundation providing a nailingsurface for the floor or wall system.
- Simultaneous ClosingA seller financing techniqueused when an investor or seller creates a privatemortgage note and then simultaneously closeswith the buyer on the same day.
- Sit Down ContractWhen all negotiating isconducted in one place at one time with allparties to the contract and their attorneyspresent.
- SiteA plot of land with enhancements that make itready for a building or structure.
- SitusPlace where something exists; an area ofpreference thus giving it economic attributes(value).
- Slab-on-grade ConstructionA concrete foundationbuilt directly on the ground level. A slabon-grade house or building does not have abasement.
- SoffitThe underside of an arch, beam, overhang,or eaves.
- Special AgentAn agent with limited authority toact on behalf of the principal.
- Special AssessmentA tax or levy against realproperty for improvements; not imposed on allresidents of a community, but only to ownerswho will benefit from the improvement.
- Special Assessment DistrictA geographicarea designated to pay for infrastructure costs for a specific project. Properties within thedistrict each pay a portion of the total projectcost. Creates a special assessment lien (aninvoluntary lien).
- Special Purpose Real EstateProperties consideredhaving a limited use, such as a church or tennisclub.
- Special Use PermitPermit issued in certain zoningdistricts when conditions designed to protectsurrounding properties are met.
- Specific LienA lien that attaches only to a particularproperty. Compare: General Lien.
- Specific PerformanceA legal remedy in whicha court orders someone who has breached acontract to perform as agreed rather than simplypaying monetary damages.
- Specific Tax PoliciesTax laws that can encourage ordiscourage a particular behavior or activity.
- SpecificationsIn construction, specifications arewritten documents explaining the requirementsfor the scope of the work including materials,standards, and expected quality of the finishedproduct. Also called: Plans.
- Sphere of InfluencePeople you know and whomyou can ask for referrals.
- SponsorAlso known as the developer, a sponsoris the person, corporation, or other entitythat is part of the sale and development of acondominium or co-op property.
- Sponsoring BrokerThe broker for whom a licenseeworks.
- Spot ZoningThe illegal rezoning of a single parcelor a small area to benefit one or more propertyowners rather than carry out the objectives ofthe master plan.
- Stabilized BudgetA property’s income andexpenses averaged over a five year period.
- Stable IncomeIncome that can reasonably beexpected to continue in the future.
- StachybotrysA type of mold known as “black mold”that produces mycotoxins.
- Stare DecisisLegal doctrine requiring judges tofollow precedents (from the same jurisdiction) tomake laws consistent and predictable.
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In constitutional law, action by agovernment (federal, state, or local) rather thanby a private party.
- State Implementation Plan (SIP)Study requiredby the Environmental Protection Agency to helpstates meet national air quality standards.
- State of New York Mortgage Agency (SONYMA)Offers programs funded by the sale of taxexemptbonds and designed to make housingaffordable to low- and moderate-incomehouseholds.
- StatuteA law enacted by a state legislature or theU.S. Congress. See: Statutory Law. Compare:Ordinance; Resolution.
- Statute of FraudsA law that requires certain typesof contracts to be in writing and signed to beenforceable.
- Statute of LimitationsA law requiring a particulartype of lawsuit to be filed within a specified timeafter the event giving rise to the suit occurred.
- Statutory EmployeeIndependent contractorsspecifically classified as employees by statute forSocial Security and Medicare taxes.
- Statutory LawLaws adopted by a legislative body(Congress, state legislature, or a county or citycouncil), as opposed to constitutional law, caselaw, or administrative regulations.
- Statutory Life EstateA life estate held by a personwhose dower rights have vested (because aperson’s spouse sold property without a dowerrelease, and subsequently died).
- Statutory Non-employeeDirect sellers and licensesreal estate agents; treated as independentcontractors for all tax purposes if certainconditions are met.
- Statutory RedemptionAllows a mortgagor toredeem property for a set period of time aftera foreclosure sale regardless of the timing ofother events. Compare: Equitable Right ofRedemption.
- Statutory Survivorship TenancyA form of coownership,used in some states, to replace jointtenancy and tenancy by the entireties; eachco-tenant has an equal undivided interest in realproperty and the right of survivorship.
- SteeringChanneling prospective buyers or tenantsto particular neighborhoods based on their race,religion, national origin, or ancestry.
- Stigmatized PropertyProperties that do not haveany physical defects but have become lessmarketable because they were the scene of acrime, suicide, or other undesirable event. .
- Straight Line DepreciationSimple depreciationmethod that takes the total cost of a buildingand divides that by the number of years thebuilding is expected to be useful.
- Straight MortgageA loan that comes due ona specified date, often before the periodicpayments would pay it off. Also called: TermMortgage
- Straight NoteA note that calls for payments ofinterest only during the term of the note, witha balloon payment at the end to pay off theprincipal balance.
- Strict ForeclosureForeclosure with a strictdeadline, past which a mortgagor can nolonger reclaim interest in the real property outof the foreclosure proceedings by bringing themortgage current.
- Strict LiabilityWhen someone is held legallyresponsible for an injury to another, even thoughhe did not act negligently. Compare: Negligence.
- StudsThe vertical beams that serve to frame thehouse. Drywall and/or siding are attached tostuds.
- SubagencyCreated when an offer of subagencyis accepted (e.g., when a listing broker offerscompensation to other brokers as a subagent,the cooperative broker agrees to represent theinterest of the seller).
- SubagentAn agent of an agent; a person that anagent has delegated authority, so the subagentcan assist in carrying out the principal’s orders.
- Subdivision1. Land divided into two or moreparcels. 2. A residential development.
- Subdivision RegulationsState and local laws withwhich developers must comply before the landcan be subdivided.
- Subjacent SupportThe support land receives fromthe land beneath it.
- Subject PropertyProperty for which a valueestimate is sought.
- Subject ToWhen property is transferred to abuyer along with an existing mortgage or lien,but without the buyer accepting personalresponsibility for the debt. The buyer must makethe payments to keep the property, but onlyloses her equity in the event of default. Compare:Assumption; Novation.
- Subjective IntentWhat the offeror in a transactionis actually thinking but necessarily what he does.Compare: Objective Intent.
- SubleaseWhen a tenant transfers only part of hisright of possession or other interest in leasedproperty to another person for part of theremaining lease term. Compare: Assignment.
- Subordination ClauseA contract that gives amortgage recorded at a later date priorityover an earlier recorded mortgage. Also called:Subordination Agreement.
- SubpoenaDocument ordering a person to appearat a deposition or court proceeding to testify orproduce evidence.
- Subprime LoanA loan with a higher interest ratethan a conventional loan.
- Subsequent Good Faith PurchasersLater granteesof a deed who paid consideration for it andthey are given some protection from claims notrecorded).
- Substantial PerformanceWhen a promisor doesnot perform all of his contractual obligations, butdoes enough so the promisee is required to fulfillhis obligations. Compare: Material Breach.
- Substantive LawA law that establishes a right orduty. Compare: Procedural Law.
- SubstitutionTheory that an informed buyer willnot pay more for a home than a comparablesubstitute.
- Subsurface RightsThe implication that alandowner has rights to the land below thesurface to the center of the earth, even though itis not documented.
- Successor in InterestA person (i.e., a buyer or anheir) who has acquired property previously heldby someone else.
- Superfund Amendments and ReauthorizationAct (SARA)Act that amended the CERCLA,designated more money to the Superfund trust,and established new environmental laws andregulations.
- Supply and DemandLaw of economics that saysfor all products, goods, and services, whensupply exceeds demand, prices will fall, andwhen demand exceeds supply, prices will rise.
- Support RightsThe right to have one’s landsupported by the land adjacent to and beneathit.
- SurrenderGiving up an estate (such as a life estateor leasehold) before it has expired.
- SurveyThe process of locating and measuringthe boundaries of a property, and indentifyingimprovements, encroachments, and easementsassociated with the land.
- SuspensionA real estate agent’s license beingtemporarily withdrawn. Usually, reactivation isautomatic the day after the suspension is lifted.Compare: Revocation.
- SyndicateAn association of people or entitiesformed to operate an investment business. Asyndicate is not a recognized legal entity; can beorganized as a corporation, partnership, or trust.
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- TackingWhen successive periods of use orpossession by more than one person are addedtogether to equal the 21 years required forprescription or adverse possession.
- Takeout LoanA loan that is used to pay offa construction loan when construction iscomplete.
- TakingWhen the government acquires privateproperty for public use by appropriation. Thedifference between a “taking” and eminentdomain is that the property is regulated bya government authority to the economicdetriment of the owner, without compensation.
- TaxAn annual tax levied on the value of realproperty.
- Tax AssessorAn official who evaluates property forthe purpose of taxing it.
- Tax DeductibilityThe ability to write-off a portionof interest from a loan on the amount of taxesowed to the government.
- Tax-deferred ExchangesExchanges where taxablegain is deferred until a later date.
- Tax DepreciationCalculating depreciation that canbe used to determine any expense that can bededucted from income to determine net profit.
- Tax LevyDetermine tax rates by developing andadopting a budget, evaluating the revenue fromall sources other than property taxes (state aid,sales tax, user fees, etc.), and then subtractingthe revenues from the original budget.
- Tax LienA lien on real property to secure thepayment of taxes.
- Tax SaleSale of property after foreclosure of a taxlien.
- Tax ShelterAny method used to reduce taxableincome, thereby reducing the amount of tax paidto a government.
- TaxationThe process of a government levying acharge on people or things.
- Temporary BuydownWhen points are paid to alender to reduce the interest rate and paymentsearly in a loan, with interest rate and paymentsrising later.
- TenancyLawful possession of real property; anestate.
- Tenancy at SufferancePossession of property by aholdover tenant.
- Tenancy at WillWhen a tenant is in possession withthe owner’s permission, but with no definitelease term and no rent being paid (or rent is notpaid on a regular basis); e.g., a landlord lets a holdover tenant remain on the premises withoutpaying rent until a new tenant is found.
- Tenancy by the EntiretiesA form of property coownershipby husband and wife, in which eachspouse has an undivided one-half interest andthe right of survivorship, with neither spouseable to convey or encumber his or her interestwithout the other’s consent.
- Tenancy in CommonA form of co-ownershipin which two or more persons each have anundivided interest in the entire property (unityof possession), but no right of survivorship.
- Tenancy in PartnershipThe form of co-ownershipin which general partners own partnershipproperty, whether or not title to the property isin the partnership’s name. Each partner has anequal undivided interest, but no right to transferthe interest to someone outside the partnership.
- Tenancy (or Estate) for Yearssee: Estate for Years
- TenantSomeone in lawful possession of realproperty, especially, someone who has leasedproperty from the owner; can also refer tosublessees.
- TenderAn unconditional offer by one party to a contract to perform his or her part of the agreement; made when the offer or believes the other party will breach to establish the offeror’s right to sue if the other party doesn’t accept it. Also called: Tender Offer or Tendering Performance.
- TenementsEverything of a permanent natureassociated with a piece of land and ordinarilytransferred with the land. Tenements are bothtangible (buildings, for example) and intangible(air rights, for example).
- Tentative Assessment RollThe public recordlisting assessed value for all real property in amunicipality.
- TermA prescribed period of time; especially, thelength of time a borrower has to pay off a loan,or the duration of a lease.
- TermitesWood eating insects that can underminethe structural integrity of a building.
- Territorial JurisdictionThe geographical area overwhich a particular court has authority.
- TestateRefers to someone who has died and left awill. Compare: Intestate.
- TestatorA man who makes a will.
- TestatrixA woman who makes a will.
- TesterSee: Checker.
- Tie-in ArrangementsRequiring the consumer, asa condition of a transaction, to use, or not use aparticular service or product.
- Time is of the EssenceA contract clause that meansperformance on the exact dates specified isan essential element of the contract; failure toperform on time is a material breach.
- Time ShareAn ownership interest that gives theowner a right to possession of the property onlyfor a specific, limited period each year.
- Time Value of Money (TVM)The relationshipbetween time, money, a rate of return andearnings growth.
- TitleThe actual lawful ownership of real propertyand refers to holding the bundle of rightsconveyed. Title is not a document, but rather atheory pertaining to ownership.
- Title ClosingThe final stage in a real estatetransaction; transfer of real property ownershipfrom seller to buyer occurs, according to theterms and conditions in a sales contract orescrow agreement.
- Title InsuranceAn insurance policy that protectsthe lender (and sometimes the property owner)against loss due to disputes over the ownershipof a property and defects in the title that werenot found in the search of the public record.
- Title PlantA duplicate (usually microfilmed) of acounty’s public record, maintained by a titlecompany at its offices for use in title searches.
- Title ReportA report issued by a title company,disclosing the condition of the title to a specificpiece of property.
- Title SearchAn inspection of the public record todetermine all rights and encumbrances affectingtitle to a piece of property.
- Title Theory StatesStates in which a mortgageeholds actual title to property until the loan isrepaid. Compare: Lien Theory States.
- TopographyThe physical characteristics of thecontour a parcel of land.
- Torrens SystemTitle registration systemadministered by the state, which guaranteesindefeasible title to those included in theregister; adopted in New York and other states,but is costly and rarely used.
- TortA breach of the standards of reasonableconduct imposed by law (as opposed to a dutyvoluntarily taken on in a contract) that causesharm to another person, giving the injuredperson the right to sue the one who breachedthe duty. Also called: Civil Wrong (in contrast to acriminal wrong, a crime).(...)
- Total Debt Service RatioRelationship of totalmonthly debt obligations to income, expressedas a percentage.
- Touch and Concern the LandLegal doctrine thatsays restrictive covenants must be related toactual landuse to be enforceable.
- Township LinesEast-west lines that run parallel tobase lines at six-mile intervals in the governmentsurvey system.
- TownshipsSquare divisions of land, 6 miles by 6miles, in the government survey system. Onetownship contains 36 sections.
- Trade FixtureEquipment a tenant installs for usein his or her trade or business, and which can beremoved by the tenant before the lease expires.
- Transfer of Development RightsThe exchange ofzoning privileges from areas with low populationneeds to areas of high population needs.
- TransformerTransfer power from one circuit toanother.
- TrespassAn unlawful physical invasion of propertyowned by another.
- TrialThe fundamental court proceeding in alawsuit, in which a judge (and in some cases, ajury) hears evidence presented by the plaintiffand defendant and issues a judgment. Compare:Appeal.
- Trial RecordAll documents and transcripts from atrial.
- Trigger PhraseA word or phrase that describes aloan, including the down payment, terms, andmonthly payment. If an ad uses a trigger phrase,disclosures are needed to tell everything aboutthe loan.
- Triple Net LeaseA lease in which the tenant paysall the expenses associated with the property,including rent.
- True TaxThe amount that would be paid beforeany exemptions held by the present owner aresubtracted.
- TrustA legal arrangement in which title to property(or funds) is vested in one or more trustees whomanage the property (or invest the funds) onbehalf of the trust’s beneficiaries, in accordancewith instructions set forth in the documentestablishing the trust.
- Trust AccountA bank account, separate from a realestate broker’s personal and business accounts,used to segregate trust funds from the broker’sown funds.
- Trust FundsMoney or things of value received byan agent, not belonging to the agent but beingheld for the benefit of others.
- TrusteeA person appointed to manage a trust onbehalf of the beneficiaries.
- Trustee’s SaleA non-judicial foreclosure sale undera deed of trust.
- Trustorthe borrower who owes payment of a noteon a deed of trust.
- Truth-in-Lending ActAct that requires lendersto disclose consumer credit costs to promoteinformed use of consumer credit.
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- Umbrella Liability PolicyProvides broad coveragefor an insured’s liability over and above liabilitycovered by underlying contracts.
- UnconstitutionalViolating a provision of the U.S.Constitution or a state constitution.
- Underground Storage TanksHolding tanks thatcan used to store chemicals, fuels, toxic wastesand other substances. Regulated by the EPA.
- UnderwriterA person who evaluates a loanapplication to determine its risk level for a lenderor investor.
- UnderwritingThe process of evaluating anddeciding whether to make a new loan.
- Undisclosed Dual AgencyOccurs when both principal parties in the same transaction are represented by a fiduciary without full disclosure to and approval from all parties in the transaction.{"@context": "https://schema.org","@type": "FAQPage","mainEntity": [{"@type": "Question","name": "What is undisclosed dual(...)
- Undivided InterestA co-tenant’s interest, givinghim or her the right to possession of the wholeproperty, rather than a particular section of it.See: Unity of Possession.
- Undivided LoyaltyThis is given up by the buyerand seller when they consent to dual agency.
- Undue InfluenceExerting excessive pressure onsomeone to overpower the person’s free willand prevent him or her from making a rationalor prudent decision; often involves abusing arelationship of trust.
- Unencumbered PropertyProperty whose seller hasclear title free of mortgages or other liens.
- Unenforceable ContractA contract that a courtwould refuse to enforce. For example, a contractmay be unenforceable because its contentscannot be proven, or because it is not in writing,or because the statute of limitations has run out.
- Uniform Commercial Code (UCC)Sets out certainrequirements for negotiable instruments.
- Uniform Residential Appraisal Report (URAR)Astandard appraisal report form used by lendersand appraisers because it has been developedand approved by secondary mortgage marketplayers Fannie Mae and Freddie Mac.
- Uniform Standards of Professional AppraisalPractice (USPAP)Professional appraisalstandards developed by The AppraisalFoundation, and now recognized throughout theUnited States as accepted standards of appraisalpractice.
- Unilateral ContractWhen only one party makes alegally binding promise and the other has not.The promise will become legally binding if theother party chooses to accept it (similar to anoffer). Compare: Bilateral Contract.
- Unilateral MistakeWhen only one of the parties toa contract was mistaken about a fact or a law.
- UniquenessCharacteristic of real property thatsays each piece of land, each building, and eachhouse is a different piece of real estate. Alsocalled: Non-homogeneity.
- Unit Owners AssociationThe organization thatmanages the operation of a condominium,imposing assessments and arranging forthe maintenance of the common areas. Theassociation’s members are the unit owners andthey usually elect a board of directors. Alsocalled: a Condominium Association.
- Unities of Interest, Possession, Time, and TitleFourunities required to form a joint tenancy wherebyall owners share equally and simultaneously inthese conditions.
- Unity of InterestEach co-owner having an equalinterest (equal share of ownership) in a piece ofproperty.
- Unity of PossessionEach co-owner being equallyentitled to possession of the entire property,because the ownership interests are undivided.See: Undivided Interest.
- Unity of TimeWhen each co-owner acquired title atthe same time.
- Unity of TitleWhen each co-owner acquired titlethrough the same instrument (deed, will, orcourt order).
- Universal AgentAn agent authorized to doeverything that can be lawfully delegated to arepresentative.
- Unjust EnrichmentAn unfairly obtained benefit byone party at the expense of another.
- Unlawful Detainer ActionA summary legal actionto regain possession of real property; especially,a lawsuit filed by a landlord to evict a defaultingtenant and regain possession of the property.Also called: a Forcible Detainer Action.
- Unnecessary HardshipReason for a zoning usevariance if permitted uses of the property are noteconomically feasible and the property cannotbe used without the variance.
- UntenantableNot fit for occupancy (used todescribe rental property).
- Urea-FormaldehydeA clear chemical that is used inmanufacturing including building materials suchas particle board, plywood paneling, carpeting,and insulation.
- Urea-Formaldehyde Foam Insulation (UFFI)A typeof housing insulation used in the 1970’s. It wasbanned because of the formaldehyde fumesit released that caused a myriad of symptomsamong homeowners who had it.
- Usable Square FootageThe amount of actual spacewithin the perimeter of the tenant’s premises,including walls, columns, and airshafts; the floorarea where tenants can actually lay carpet andplace furniture.
- Use VarianceAllows landowners to use their landin a way that is not permitted under currentzoning laws. This type of variance is grantedonly in cases of unnecessary hardship. Toprove unnecessary hardship, owners mustestablish that the requested variance meets fourstatutorily prescribed conditions.
- UsuryLaws limiting the maximum interest rate that can be charged.
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- Vacancy and Collection LossesEstimate as tohow much future income may be lost when abuilding isn’t fully occupied or tenants don’t payrent.
- Vacant LandUnimproved land or land with nobuilding on it.
- ValidThe legal classification of a contract that isbinding and enforceable in a court of law.
- Valid ContractA binding, legally enforceablecontract.
- ValuationThe process of gathering and analyzinginformation to determine the value of a piece ofproperty.
- ValueAmount of goods or services offered in themarketplace in exchange for something.
- Value in UseThe present worth of the future benefits of ownership.
- Variable ExpenseExpenses that are not consistentand regular amounts, and depend on issuesincluding the type, size, age, and condition of aproperty.
- VarianceA form of administrative relief that allowsproperty to be used in a way that does notcomply with the literal requirements of thezoning ordinance. There are two basic types ofvariances: use variances and area variances.
- VendeeA buyer or purchaser; particularly someonebuying property under a land contract.
- VendorA seller; particularly, someone sellingproperty by means of a land contract.
- Vendor’s LienA lien to secure payment of thepurchase price balance, held by a real estateseller if the buyer does not pay the seller in fullat closing (unless the buyer gives the seller amortgage for the balance).
- VestedWhen a person has a present, fixed right orinterest in property, even though he or she maynot have the right to possession until sometimein the future. For example, a remainderman’sinterest in property vests when it is granted, notwhen a life estate ends.
- Veterans Administration (VA)Government agencythat guarantees mortgage loans for eligibleveterans.
- VetoWhen the president or governor formallyrejects a bill that Congress or the legislature haspassed. The bill will not become law unless thelegislature votes to override the veto.
- Vicarious LiabilityWhen one person is responsiblefor the actions of another.
- Village Board of TrusteesServe as the primarygoverning bodies of New York villages.
- ViolationAn action which goes against specificrules or regulations set by national, state or localgovernment and those set by specific governingbodies of a trade or profession. Such as when alicensee goes against any Act set forth in Article12-A.
- VoidHaving no legal force or effect.
- Void ContractA contract that is not an enforceablecontract because it lacks one or more of therequirements for contract formation, or isdefective in some other respect.
- Voidable ContractA contract that one of theparties can disaffirm, without liability, because ofa lack of legal capacity or a negative factor suchas fraud or duress.
- VoltageA measure of the force that pusheselectricity through a wire.
- Voluntary Affirmative Marketing Agreements(VAMA)These programs are designed toaffirmatively promote fair housing to all homeseekers through a series of commitments andshared responsibilities.
- Voluntary AlienationWhen title to property istransferred voluntarily through a sale, gift,dedication, or grant.
- Voluntary ConveyanceWhen a debtor returns property to the lender in lieu of foreclosure.Generally, the debtor does not receive any compensation for surrendering title to the property, but does avoid foreclosure.
- Voluntary LienA lien placed against property withthe consent of the owner; a mortgage (or, inother states, a deed of trust).
- Voluntary PartitionWhen co-owners agree to terminate their co-ownership, dividing the property so each owns a piece of the property in severalty.
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- WaiverThe voluntary relinquishment or surrenderof a right.
- Warranty DeedA deed carrying warranties(guarantees) of clear title and the grantor’s rightto convey. See: General Warranty Deed; LimitedWarranty Deed.
- Waste, Act ofDestruction, damage, or materialalteration of property by someone in possessionwho holds less than a fee estate (such as a lifetenant or lessee).
- Water RightsThe right to use water in or from ariver, stream, or lake. See: Appropriative Rights;Littoral Rights; Riparian Rights.
- WetlandsEcosystems where the land is permeatedwith water, which either lies on or near thesurface of the land.
- WillA person’s legally binding instructionsregarding how his or her estate should bedisposed of after death. Also called: Testament.
- Women’s Council of Realtors (WCR)Anorganization devoted to addressing the issues,needs, and concerns of women in the real estateprofession. (Now affiliated with the NAR.)
- Words of ConveyanceA clause in a deed that states that the grantor intends to convey title to the land. Also called: Granting Clause.{"@context": "https://schema.org","@type": "FAQPage","mainEntity": [{"@type": "Question","name": "Is words of conveyance and granting clause the same thing?","acceptedAnswer":(...)
- Wraparound MortgageWhen a seller keeps theexisting loan and continues to pay on it, whilegiving the buyer another mortgage. Also called:Wraparound Financing.
- Writ of ExecutionA court order directing a public officer (often the sheriff or marshal) to seize and/or sell property to regain possession for the owner and/or satisfy a debt.
- Writ of PossessionA court order issued after an unlawful detainer action, informing a tenant that he must vacate the landlord’s property within a specified period or be forcibly removed by the sheriff.
- Wrongful EvictionWhen a landlord evicts a tenant in violation of the tenant’s rights.
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- YieldThe total amount of money that can be madefrom an investment.
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- Zoning Board of AppealsBy issuing variancesprotects landowners from the unfair applicationof zoning laws in particular circumstances.Hears appeals from the decisions of zoningenforcement officers and building inspectorswhen interpretations of zoning ordinances areinvolved.
- Zoning OrdinanceSets forth the type of use permitted under each zoning classification and specific requirements for compliance.
