Glossary - Flashcards
Abandonment
Non-payment of taxes
Abstract of Title
A history of the ownership of a parcel of land which lists transfers of title, rights, and liabilities.
Acceleration Clause
States that upon default, all of the principal installments come due immediately.
Accession
The idea that the owner of land is entitled to all that the soil produces or all that is added to the land either intentionally or by mistake. Trade fixtures not removed are “assessed” by the owner of the property.
Accretion
Refers to land which is accumulated by the gradual washing or motion of water.
Accrued
An accumulation.
Acknowledgment
A formal declaration made by the grantor conveying the property to the grantee – a necessary element for validity of a deed.
Acre
A measure of land equal to 43,560 square feet.
Action to Quiet Title
The lawsuit filed by a person to remove or clear the claims of others against property.
Actual Notice
The actual knowledge that a person has about the existence of a particular fact.
Ad Valorem
A prefix meaning “based on value”. Most local governments levy an ad valorem tax on property.
Adverse Possession
A method of acquiring original title to property by open, notorious and hostile possession for a statutory period of time; also referred to as prescription. POACH.
Agency
A relationship in which one party (the principal) authorizes another party (the agent) to act as the principal’s representative in dealing with third parties.
Agent
One who acts for and in place of a principal for the purpose of affecting the principal’s legal relations with third persons.
Air Rights
The right to use, control and occupy the space above a particular parcel of land.
Alienation Clause
A provision in a mortgage requiring full payment of the debt upon the transfer of title to the property, due on sale. Prevents loan assumptions.
Allodial
The free and full ownership of rights in land by individuals, which is the basis of real property in the United States.
Amortization
The repayment of a financial obligation over a period of time in a series of periodic installments. In a level-payment mortgage, this is the portion of the debt service that reduces the principal.
Amortized Loan
A financial debt that is paid off over a period of time by a series of periodic payments. A loan can be fully amortized or partially amortized requiring a balloon payment to satisfy the debt at the end of the term.
Annual Percentage Rate (APR)
The yearly cost of credit. Interest Rate plus finance charge.
Appraisal
An opinion or estimate of value performed by a person licensed to do so.
Appreciation
An increase in value.
Appurtenance
Any right or privilege which belongs to and passes with land.
Arms-length Transaction
Occurs between willing buyer and willing seller with each party completely knowledgeable about the market. A purchaser of property between relatives (father & son) would not be an “arms length transaction”.
Arrears
Not on time; late in making payments or completing work. Interest is paid in arrears.
As is
A phrase which disclaims any promises or warranties. A person purchasing real estate “as is” takes it in exactly the condition in which it is found. Seller cannot hide latent defects.
Assemblage
Bringing two or more lots together under one ownership.
Assessed Value
The value placed on property, by the tax assessor, for the purpose of determining the property tax.
Assignment
(1) the means by which a person transfers contract rights;(2) occurs when the lessee parts with the entire estate, retaining no interest.
Attachment
The process of taking a person’s property into legal custody by a court order called a writ of attachment. Property is frozen.
Attestation
The act of witnessing a person’s signing of an instrument by a notary public.
Attorney in Fact
A person given the authority to act on behalf of another under a power of attorney.
Attorney’s Opinion of Title
A statement issued by an attorney after analyzing an abstract as to quality of title.
Avulsion
Occurs in cases where there is a sudden loss of land through nature
Bad Title
Title with defects making it unmarketable.
Balloon Payment
The remaining balance, at maturity, on a loan that has not been completely repaid through periodic payments. Once paid, the outstanding balance is zero. Partially amortized loan.
Bargain and Sale Deed
An instrument conveying title which recites a valuable consideration and commonly uses the words “bargain and sale” or words of similar import.
Bench mark
A bronze disk permanently placed and precisely identified by government survey teams.
Bilateral Contract
A contract in which a promise is given for the promise of another. It becomes binding when mutual promises are communicated. (A real estate contract).
Bill of Sale
A document used to transfer ownership of personal property.
Blanket Mortgage
A mortgage which covers more than one piece of real estate. Often used by a developer in the financing of undeveloped lots. Contains a partial release clause
Block A
Means of subdividing large tracts of land into smaller sections, each of which is numbered. For example, Lot 4, Block 8
Blockbusting
Any activity which attempts to drive prices down for the purpose of causing transition from one ethnic group to another. This is a violation of Federal Fair Housing Laws. Also called “panic selling”.
Bounds
Refers to boundaries; used with the word “metes” in the metes and bounds method of land description.
Breach of Contract
A failure to perform, as promised, at the time the performance was due.
Buffer Zone
A means by which planners use space to separate two adjoining districts which have incompatible uses. A buffer zone consists of uses which are compatible with uses in each adjoining district.
Building Code
Ordinances passed by local governments with special minimum standards of construction for new buildings. They also apply to major additions to old construction.
Bundle of Rights
The rights of an owner to possess, control, enjoy, sell, lease, mortgage, and dispose of the property.
Bylaws
Legal documentation in a condominium regime which provides the establishment of the home-owner’s association; provides the powers and authority given to the board of directors; and indicates various rights and responsibilities of the unit owners.
Capital Gains
The tax profit realized from the sale of property. (A “tax free” exchange is a deferment of capital gains).
Capitalization
Used in the income approach to value. To capitalize income means to convert future income into present (current) value.
Capitalization Rate
The rate of return considered to be a reasonable return on investment - given the risk.
Caveat Emptor
Means “Let the Buyer beware”.
Certificate
The first thing a veteran should request if attempting to purchase a property using VA eligibility.
Certificate of Eligibility Certificate
Given to veterans bearing evidence of their qualifications for a VA mortgage loan
Certificate of Reasonable Value (CPR)
Issued by the Veterans Administration to certify the value of property secured by a VA mortgage. Appraisal.
Certificate of Title
A document given by the title examiner stating the quality of title the seller possesses.
Chain of Title
A history of the ownership affecting title to a parcel of land.
Chattel Mortgage
One in which personal property is pledged to secure a note.
City Planning
The effort on the part of the city to coordinate, direct and control the type of development taking place, so as to ensure maximum benefits to the populace.
Civil Rights Act of 1866
A law which prohibits discrimination in all real estate transactions based on race - commercial and residential.
Closing Costs
The expenses incurred and paid at the time of settlement in the transferring of property.
Cloud on Title
Any claim affecting title to property.
Co-Insurance
Coinsurance is a common clause or provision in building insurance policies under which the insured agrees to maintain insurance on his or her property in an amount equal to at least 80% of the replacement cost. It the property is not insured to that amount and a loss is incurred the insurance company will make the insured share in the loss on a pro-rata basis.
Collateral
Property which has been pledged as security for a loan.
Color of Title
Adverse possession.
Commercial Banks
The largest financial intermediary directly involved in the financing of real estate. Their primary real estate activity involves short-term loans.
Commingling
Illegally mixing deposits or monies, collected from a client, with one’s personal or business account. Taking money out too soon or putting it into escrow too late (10 banking days).
Common Elements
Property jointly owned on a pro-rata basis with other unit owners in a condominium regime.
Common Law
(1) a body of legal rules derived from accepted customs and procedures in England. Serves as the foundation for most laws in every state except Louisiana, which uses the system of civil law; (2) system of judge-made law (“case law”) as opposed to codified or statutory law.
Community Property
Any property acquired in certain states by purchase, or as compensation by either spouse during the period of marriage, is considered to be owned in an undivided half interest by each.
Comparable
Comparable property recently sold which is used in the market data approach
Comparative Analysis
A method of determining the value of property in which the selling prices of similar properties are used as the basis for estimating the value of the subject property.
