Definitions

Real property

The land and anything permanently affixed to it

Fixture

An item of personal property that has been converted to real estate by being permanently affixed to the land or building

A Fixture

Personal property attached to real property. It becomes “real” once annexed. If detached from land or building it would revert back to personal property (severance).

Trade fixture

An item installed by commercial tenant and removable by tenant before expiration of lease

Area preference or situs

This refers to people’s choices and desires for a given area.

Metes and bounds

A legal description that starts and ends at a point of beginning.

Rectangular (government) survey

Based on measurements from baselines and principle meridians.

Meridian

Run north and south

Base lines

Run east and west

Township

Six miles square (36 square miles)

1 acre 43,560 square feet

Subdivision plats

Location of an individual parcel is indicated on a map of the subdivision which is divided into numbered blocks and lots.

Easement

It is a right acquired by one party to use the land of another party for specific purpose.

Encumbrances

A charge, claim, or liability that attaches to and is binding on real estate.

Real estate taxes and special assessments

Usually take priority over all other liens.

General lien

Inheritance tax, a judgement or court decree. A lien that applies to all of debtor’s property.

Specific lien

Real estate taxes, mortgages and mechanic liens. Liens specifically on the property.

Appurtenant easements

They “run with the land” and are not terminated by the sale of either the servient or dominant tenement.

Easement of necessity

Will arise when there is not other access to a property by a street or public way and the easement is required by necessity rather than for convenience.

Freehold estates

Estates of indeterminable length, such as those existing for a lifetime or forever.

Fee simple

Highest type of interest in real estate recognized by law. The holder is entitled to all rights incident to the property. Continues for indefinite period and is inheritable by heirs of owner.

Defeasible fee

Continues for an indefinite period. May be inherited. Ownership with a condition.

Life estate

Limited in durations to life of a life tenant or life or lives of some other designated person or persons.

Remainder interest

Used with a Life Estate. The deed or the will names a third party to whom title will pass on the death of the life estate owner, then such party is said to own remainder interest.

Dower

Wife’s estate in all inheritable real estate of the deceased husband. In severalty one owner

Tenancy in common

Each owner holds an individual interest in severalty. Interests do not have to be equal. Tenancy in common Each owner can sell, convey, mortgage, or transfer his or her interest without the consent of the other co-owners.

Accession

Acquiring the title to additions or improvements to real property as a results of a trade fixture not removed by the tenant prior to the lease termination.

Appurtenance

Rights belonging to land. “In addition to” ownership of something else.

Attachment

A procedure by which property of a debtor is placed in the custody of the law and is held as security, pending the disposition of a creditors suit.

Datum

The horizontal plane from which elevations are measured.

Inchoate right

A right not yet perfected, such as a wife’s or husbands interest in their spouse’s property while the spouse is still alive.

Laches

Court doctrine that bars a legal claims because of undue delay to assert the claim or inaction. Falls under the Statute of Limitations.

Lis pendens

action pending – litigation pending – lawsuit pending

Novation

A transfer of rights and/or duties under a contract.

valuable consideration

Consideration with a monetary measure of value. Can be love and affection.

Situs

Favorable site or preferred location.

Servient tenement

The Easement is placed on this tenement.

Dominant Tenement

The tenement easement user who benefits from the easement.

Prescriptive Easement

An easement created by open, notorious, hostile, and continuous usage. Based on adverse possession.

Escheat

No heirs, therefore the government becomes owners.

Abandonment

The voluntary and permanent cessation of use or enjoyment with no intention to resume or reclaim one’s possession or interest. May pertain to an easement of a property.

Lead

May cause mental retardation

Abstract of title

A condensed version of the history of a title to a particular parcel of real estate as recorded in the county clerks records; consists of a summary of the original grant and all subsequent conveyance and encumbrances affecting the property.

accretion

An increase or addition to land by the deposit of sand or soil washed up naturally from a river, lake or sea

accrued depreciation

The actual depreciation that has occurred to a property at any given date; the difference between the cost of replacement new and the present appraised value.

acknowledgement

A declaration made by a person to a notary public or other public official authorized to take acknowledgements that an instrument was executed by him or her as a free and voluntary act

actual eviction

The result of legal action originated by a lessor by which a defaulted tenant is physically ousted from the rented property pursuant to a court order.

administrator

The party appointed by the county court to settle the estate of a deceased person who died without leaving a will. Intestate.

ad valorem tax

A tax levied according to value; generally used to refer to real estate tax (general tax).

adverse possession

The actual, visible, hostile, notorious, exclusive, and continuous possession of another’s land under a claim to title.

Possession for a statutory period may be a means of acquiring title.

affidavit

A written statement signed and sworn to before a person authorized to administer an oath.

agent

One who represents or has the power to act for another person.

agreement of sale

A written agreement by which the purchaser agrees to buy certain real estate and the seller agrees to sell, on the terms and conditions set forth in the agreement.

air lot

A designated airspace over a piece of land.

Alienation

The act of transferring property to another. May be voluntary or involuntary.

Alluvion

The actual soil increase resulting from accretion.

Accretion

is the opposite of erosion.

amendments

Changes to previously approved and adopted written agreements. Used to amend a contract.

amenities

Neighborhood facilities and services that enhance a property’s value.

Americans with Disabilities Act (ADA)

A federal law, effective in 1992, designed to eliminate discrimination against individuals with disabilities. Must be followed by companies with 15 or more employees.

amortized loan

A loan in which the principal and interest are payable in monthly or other periodic installments over the term of the loan. The payment going to Interest decreases while principle increases.

anticipation

An appraising principle created by the expectation of certain future events causing values to either increase or decrease.

appraisal

An opinion of value. An estimate of the quantity, quality, or value of something. (the process through which conclusions about property value are obtained).

appraised value

An estimate of a property’s present worth.

Appreciation

An increase in the worth or value of a property due to economic or related causes. The causes may prove to be either temporary or permanent.

arbitrage

The simultaneous purchase and sale of a security with the purpose of obtaining a higher yield from the differential between its acquisition and selling price. A fancy name for profit.

arbitration

A means of settling a controversy between two parties through the medium of an impartial third party whose decision on the controversy will be final and binding.

assessment

The imposition of a tax, charge or levy, usually according to established rates. assignment The transfer in writing of rights or interest in a bond, mortgage, lease, or other instrument.

assumption of mortgage

The transfer of title to property to a grantee, by which the grantee assumes liability for payment of an existing note secured by a mortgage against the property.

attorney in fact

The holder of a power of attorney.

avulsion

A sudden tearing away of land by the action of natural forces. The two ends of a barrier island got washed away during a hurricane.

balloon payment

The final payment of a mortgage loan that is considerably larger than the required periodic payments. It is predetermined. Used when the loan amount was not fully amortized.

benchmark

A permanent reference mark or point established for the use by surveyors when measuring elevation.

testate

Died with will.

bilateral contract

A promise for a promise.

A Purchase Agreement.

A contract in which each party promises to perform an act in exchange for the other party’s promise to perform

bill of sale

A written instrument given to pass title to personal property.

blanket mortgage

A mortgage that covers more than one parcel of real estate and provides for each parcel’s partial release from the mortgage lien on repayment of a definite portion of debt.

blockbusting

The illegal practice of inducing homeowners to sell their property by making representations regarding the entry a people covered as protected classes into the neighborhood.

Boycotting

Two or more businesses conspire against other businesses to reduce competition. Illegal under Sherman Antitrust Act.

bridge loan

A loan that bridges the sale of property.

broker

One who buys and sells as an agent for another and for a commission. brokerage The business of buying and selling as agents for others and for a commission.

brownfields

Deserted, defunct, and derelict toxic industrial waste sites in need of renewal.

buffer zone

A strip of land that separates one land use from another.

bundle of legal rights

The theory that land ownership involves ownership of all legal rights to the land, such as possession, control within the law, disposition and enjoyment.

buydown

A payment made, sometimes by the seller to help the buyer qualify for the loan. Prepaid interest.

capital gain

Profit earned from the sale of an asset.

capital investment

The initial capital and the long term expenditures made to establish and maintain a business or investment property.

capitalization rate

The rate of return a property will produce on the investor’s investment.

cost approach

The process of estimating the value of a property by adding the appraiser’s estimate of the reproduction or replacement cost of the building less depreciation. The final step is to add in the value o the land.

caveat emptor

“let the buyer beware”

chain of title

The succession of conveyances of real property.

chattel

French word for cattle. personal property

conventional loan

A loan that is not insured or guaranteed by a government agency.

CLUE

Comprehensive Loss Underwriting Exchange

constructive notice

Notice given to the world by recorded documents. Recording a deed gives constructive notice to the world.

Comprehensive Loss Underwriting Exchange

CLUE An insurance company repository for reported claim activity and previous property damage.

consideration

Something of value that induces one to enter into a contract.

commingling

The illegal act of a real estate broker who mixes the money of other people with that of his or her own.

conforming mortgages

Securitized mortgages sold on the secondary market that meet certain requirements established by Fannie mae and Freddie mac.

CERCLA

Comprehensive Environmental Response, Compensation, and Liability Act

condominium

The fee simple absolute ownership of an apartment or a unit, generally found in a multi unit building. All owners have an undivided interest in the ownership of the common areas.

Comprehensive Environmental Response, Compensation, and Liability

Act Federal legislation passed in 1980 requiring owners of contaminated properties to bear the cleanup cost without excuse.

condemnation

A judicial or administrative proceeding or process to exercise the power of eminent domain.

CERCLA

known as Superfund

unilateral contract

A one-sided contract by which one party makes a promise to induce a second party to do something.

trustee

One who as agent for others handles money or holds title to their land.

township lines

The horizontal lines running at six mile intervals parallel to the baseline in the rectangular survey system.

title insurance

Insurance designed to indemnify the holder for losses sustained by reason of defects in a title, up to and including the policy limits. Insures up to the date it is issued.

“time of the essence”

A phrase in a contract that requires the performance of a certain act within a stated period of time.

testator

A will maker.

testate

Having made and left a valid will.

tenement

Everything that may be occupied under a lease by a tenant.

tenancy by the entirety

(husband and wife) Spouses

tenancy at will

An estate that gives the lessee the right to possession until the estate is terminated by either party.

tax sale

A court-ordered sale of real property to raise money to cover delinquent taxes. Usually sold at auction.

supply

The number of goods available in the market to be sold at a given price.

datum

A horizontal plane from which heights and depths are measured.

usury

The practice of charging more than the rate of interest allowed by law.

Usury laws

protect the consumer.

writ of attachment

The method by which a debtor’s property is placed in the custody of the law and held as security.

subdivision

A tract of land divided by the owner, known as the subdivider, into blocks, building lots and streets. Once completed it gets recorded.

subordination agreement

An agreement that changes the order of priority of liens between two creditors.

subrogation

The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of the original claimant.

steering

The illegal practices of channeling home seekers to particular areas or avoiding specific areas.

statute of limitations

The law pertaining to the period of time within which certain actions must be brought to court.

specific lien

A lien affecting or attaching only to a certain, specific parcel of land or piece of property.

special assessments

A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement, such as a street, a school, a sidewalk or a sewer. (not limited to these improvements)

servient tenement

The land on which an easement exist in favor of an adjacent property.

secondary mortgage market

A market for the purchase and the sale of existing mortgages. Banks buying and selling from each other. When a bank buys a loan from another bank, an appraisal needs to take place.

Deed of Satisfaction

A document acknowledging the payment of a debt. Given to the mortgagor when the mortgage has been paid.

sale and leaseback

A transaction in which an owner sells her or his improved property and as part of the same transaction and signs a long term lease to remain in possession of the premises.

riparian rights

An owner’s right in land that borders flowing water such as a stream or river.

JTWROS

joint tenancy

reverse annuity mortgage

A mortgage loan that allows the owner to receive periodic payments based on the equity in the home. Must be 62 years or older.

rescission

The termination of a contract by mutual agreement of the parties.

redlining

The illegal practice of denying loans or restricting their number for certain areas of a community.

redemption period

A period of time established by state law during which a property owner has the right to redeem her or his real estate from a foreclosure or tax sale by paying the sales price, interest and costs.

REALTOR

A registered trademark term reserved for the sole use of active members of local REALTORS.

“ready, willing, and able” buyer

One who is prepared to buy property on the seller’s terms and is ready to take positive steps to consummate the transaction.

quitclaim deed

A deed by which the grantor transfers whatever interest he or she has in the real estate without warranties or obligations. The deed with the least protection.

purchase money mortgage

A note secured by a mortgage or deed of trust given by a buyer, as a mortgagor, to a seller, as a mortgagee, as part of the purchase price of the real estate. Seller financing.

pur autre vie

“for the life of another”

 prospectus

A printed advertisement, usually in pamphlet form, presenting a new development, subdivision, business venture or stock issue.

Eminent Domain

Right of a government agency to take public property for the good of the public.

Prepayment penalty

A charge imposed on a borrower by a lender for early payment of the loan principal to compensate the lender for interest and other charges that would otherwise be lost.

plat book containing plat maps

A book containing recorded subdivisions of lands.

plat

A map of a town, section, or subdivision indicating the location and boundaries of individual parcels.

personal property

Items called chattels, that do not fit into the definition of real property; movable objects.

periodic estate

An interest in leased property that continues from period to period-week to week, month to month or year to year.

percentage lease

A lease commonly used for retail property in which the rental is based on the tenants gross sales; often stipulates a base monthly rental plus a percentage of any gross sales above a certain amount.

party wall easements

A wall that is located on or at a boundary line between two adjoining parcels for the use of the owners of both properties.

partition

The division of real property when the parties do not all voluntarily agree to terminate the co ownership; takes place through a court procedure.

participation financing

A mortgage in which the lender participates in the income of the mortgaged venture beyond a fixed return or receives a yield on the loan in addition to the straight interest rate.

package mortgage

A method of financing in which the purchase of the land also finances the purchase of certain personal property items. Real and personal property.

optionor

The party that grants or gives an option.

optionee

The party that receives and holds an option. option The right to purchase property within a definite time at a specified price. No obligation to purchase exists. The seller is obligated to sell if the option holder exercises the right to purchase. A unilateral contract.

open listing

A listing contract under which the broker’s commission is contingent on the broker’s producing a “ready, willing and able” buyer before the property is sold by the seller or another broker; the principal (owner) reserves the right to list the property with other brokers.

notarize

To certify or attest to a document, as by a notary public.

nonhomogeneity

A lack of uniformity;

misrepresentation

To represent falsely; to give an untrue idea of a property. May be accomplished by omission or concealment of a material fact. Puffing can lead to misrepresentation.

mill

A tax rate used by municipalities to compute property tax. progression The smallest home in a neighborhood benefits by nearby larger and more expensive homes.

marketable title

A good or clear salable title. Reasonably free from risk of litigation over possible defects.

Net lease

Tenant pays a portion of the landlord’s expenses.

littoral rights

A landowners claim to use water in large lakes and oceans adjacent to her or his property or the ownership rights to land boardering these bodies of water up to the high water mark. Navigable waters.

lis pendens

A pending lawsuit.

life estate

A freehold estate in land that is limited in duration to the life of the owner or to the life or lives of some other designated person or persons.

life tenant

A person in possession of a life estate.

lessee

The tenant who leases a property from a lessor.

lessor

One who leases property to a tenant.

leasehold estate

A tenant’s right to occupy real estate during the term of a lease, generally considered to be a personal property interest.

laches

An equitable doctrine used by the courts to bar a legal claim or prevent the assertion of a right because of undue delay, negligence, or failure to assert the claim or right.

joint tenancy

The ownership of real estate by two or more parties. Equal interest.

Joint Tenancy With Rights Of Survivorship.

JTWROS

intestate

The condition of a property owner who dies without leaving a will. (With Out Will)

index lease

A lease that allows the rent to be increased or decreased periodically based on an index.

inchoate right

Incomplete right, such as a wife’s dower interest in her husband’s property during his life.

hypothecation

The pledge of property as security of a loan in which the borrower maintains possession of the property while it is pledged as security.

homestead protection

The land and the improvements theron designated by the owners as his or her homestead.

holographic will

A will that is written, dated, and signed in the handwriting of the maker.

highest and best use

The possible use of land that will produce the greatest return or use and thus develop the highest land value.

ground lease

A lease of land only. Usually a long term lease.

gross lease

Tenant pays rents, landlord pays all expenses of property; most common form of residential lease

grantor

A person who transfers his or her interest in property to another by grant

grantee

A person to whom a grant is conveyed (the person receiving the interest).

grant

The act of conveying or transferring title to real property.

Government National Mortgage Association (GNMA)

Ginnie Mae

general lien

A lien on all real and personal property owned by a debtor.

fixture

An article of personal property which has been installed in or attached to land or a building thereon, in such a manner that it is now considered to be a part of the real estate.

fraud

A deliberate deception intended to secure an unfair or unlawful gain.

freehold estate

An estate in land in which ownership is for an indeterminate length of time in contrast to a leasehold estate.

fee simple estate

Absolute ownership with all the rights associated with ownership of real property.

Federal National Mortgage Assoication (FNMA)

(FNMA) “Fannie Mae” a quasipublic agency converted into a private corporation whose primary function is to buy and sell FHA and VA mortgages in the secondary market.

Federal Housing Administration

(FHA) A federal agency established in 1943 to increase home ownership by providing an insurance program to safeguard the lender against the risk of nonpayment.

Federal Home Loan Mortgage Corporation ( FHLMC)

A Corporation who buys primarily conventional mortgage loans in secondary market, does not guarantee principal and interest payments of these mortgages.

Fair Housing Act of 1968

Title VIII

expressed contract

A written or oral agreement in which all terms are explicitly stated. “pay first”

executory contract

A contract that has not as yet been fully performed.

exclusive-right-to-sell listing

An employment agreement in which the broker is given the exclusive right to market the seller’s property and receive a commission regardless of who sells the property.

exclusive-agency listing

The owner reserves the right to sell without paying anyone a commission if the owner sells to a prospect who has not been introduced or claimed by the broker.

estate in land

Amount of ownership. The degree, quantity, nature, and extent of interest a person has in real property.

estate for years

Lease with a definite start and end date. escheat The reverting of property to the State when heirs capable of inheriting are lacking.

errors and omissions insurance

The insurance used by an agent when an unprofessional or unintentional mistake or error occur. Helps the agent pay for the mistake.

encroachment

A fixture or structure which invades a portion of a property belonging to another.

emblements

Crops nurtured in the year of the transfer or sale of the property. They are considered personal property.

easement in gross

A utility company easement. A billboard could be a gross lease.

easement by prescription

An easement acquired by long continuous use. If a person uses ‎another’s land for a sufficient period of time, the owner may not be able to prevent continued use.‎

easement by necessity

An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor’s land

easement

A right, privilege or interest limited to a specific purpose which one party has in the land of another.

duress

The use of unlawful constraints that forces action or inaction against a persons will.

dominant tenement

A property that includes in its ownership the appurtenant right to use an easement over another person’s property for a specific purpose.

devise

A gift of real estate that is given to someone through a will.

determinable fee estate

A fee simple estate in which the property automatically reverts to the grantor on the occurrence of a specified event or condition. Ownership with a condition.

designated agency

An agency relationship where a client designates a broker to appoint an agent to singularity represents the interest of one party to the exclusion of all others.

descent

The hereditary succession of an heir to the property of a relative who dies intestate.

deed restriction

A clause in a deed limiting the use of the property.

dba

doing business as

defeasible fee estate

An estate in which the holder has a fee simple title to the property that will end on the occurrence or nonoccurrence of some event.

radon

An odorless, colorless gas that enters the house through the basement. May cause lung cancer.