Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Principles Of Real Estate Syndication > Terminology > Flashcards

Terminology Flashcards

1
Q

Acceptance

A

Words or an act indicating a proposed offer is accepted, thereby creating a binding contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Access Right

A

Landowner’s right of ingress to and egress from his property to a public highway over another’s land

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Accessibility

A

The manner in which a site can be reached

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Accession

A

Additions to property by natural increase or growth, or improvements to real property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Accommodation Lender

A

see Lender

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Accreation

A

Gradual deposit of soil by wind or water onto adjoining property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Accrued Depreciation

A

Total depreciation that has accumulated over a period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Acknowledgement

A

Admitting in writing before an authorized official (usually a notary public) by a person who has executed a document, that he or she in fact did execute (sign) the document

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Acquisition

A

The process of acquiring property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Acquisition Expenses

A

Relate to the cost of acquiring the property such as surgery’s, travel expenses, escrow charges, and legal expenses related to acquisitions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Acre

A

43,560 sqft of land area (approx. 209’ x 209’); or 160 sq rods (4840 sq yards)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Acre-Foot

A

A volume of water equivalent to one acre in area with a depth of one foot (43,560 cubic feet of water)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Action

A

Court Proceeding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Abandon

A

Voluntary termination of interest in property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Acceleration

A

Unless otherwise specified, the maturing of a loan upon the happening of an event. The “accelerating” of the maturity date of the loan. An event that causes an obligation to be due. Some causes of acceleration: (a) TRANSFER, caused by the transfer of an interest in the property (property transfer) or in the title holding entity (equity transfer) including a sale by contract. This can be BROAD TRANSFER, covering a transfer of any type of interest in the property, such as a lease, or a NARROW TRANSFER, which would apply only to a sale or transfer of a specific interest, such as the entire property or a defined portion thereof; (b) DEFAULT, by reason of any default in payment; (c) INSOLVENCY, by reason of an act of insolvency affecting borrower; (d) JUNIOR FINANCING, by reason of the placement of a junior lien; and (e) BREACH OF CONTRACT OR COVENANT, by reason of some contractual breach other than by the above.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Abstract

A

A summary or review of a detailed document or record.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Abstract of Judgment

A

Summary or a court’s order regarding a money judgment. When recorded, it creates a general lien upon all real estate and personal property of a judgment debtor in the county where recorded.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

A & B Partnership

A

Indicates a partnership with at least two classes of partners. See Limited Partnership Interest. “A&B Entity “an entity with two or more classes of equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Absorption

A

A swallowing up or engulfment. Note: land may absorb the building values, e.g., in cases where encroaching higher land uses increased he degree of obsolescence in the building, thus engulfing the building value leaving no value or a negative value to the building.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Abstract of Title

A

A history of the title, summarizing the various links in the chain of title, together with a statement of all liens, charges, or encumbrances affecting a particular property, as maintained in public records.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Abutting

A

Land touching another parcel, such as a highway or adjoining parcel. Also referred to as “adjacent”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Acceleration Clause

A

A provision in a trust deed or mortgage that makes the balance owed immediately due and payable upon the happening of a certain. See ALIENATION CLAUSE, DUE ON SALE CLAUSE. In Wellenkamp v. Bank of America, 22C3d (1978) the Court declared that an acceleration clause upon an outright sale of property is unenforceable by an institutional lender unless there is an impairment of lender’s security interest or an increased likelihood of default. This holding do not presently apply to private lenders (according to the court) nor to federally chartered institutional lenders (according the The Federal Home Loan Bank Board)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Action in Personam

A

Court action seeking a judgement against the person rather than against property, e.g., for money against the maker of an unsecured note.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Action in REM

A

Court action seeking judgement again ask property, e.g., for quiet title to property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Actual Notice

A

A notice that a party has in fact received as compared with constructive notice that is implied or inferred

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Additional Advance

A

A provision that under certain circumstances the lender will advance additional funds for stated purposes. These funds are to be secured by the security pledged for the original loan. Such advances may be obligatory (required by the loan documents) or optional (authorized in the lender elects to make).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Additional Commitment

A

The amount that each investor is obligated to pay in addition to his initial subscription. Generally, this phrase will be applicable only in the case of transactions where, in addition to the down payment, continuing payments will be required because income from the property will not be sufficient to service encumbrances and expenses or further payments are required to the seller. In the event of failure to make such payments an investor’s interest may include one or more of the following: be (a) proportionately reduced and the interest of those who make their payments be increased; (b) sold at public or private sale with the defaulting investor responsible for the deficiency; (c) sold at public or private sale with the defaulting investor to responsible for deficiency; (d) subordinated to the interest of those who are non-defaulting investors; or (e) a combination of the above and/or subject to further restrictions and disabilities as may be provided in the entity agreement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Adjudication

A

Judicial determination of a matter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Adjusted Basis

A

Cost basis of property for tax purposes with certain additions such as improvement costs and certain subtractions such as depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Adjusted Cash Flow

A

All cash receipts from project during the ordinary course of business for the fiscal period, without allowing deductions for depreciation, after payment of operating cash expenses, capital expenditures and any sums set aside for restoration or creation of reserves.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Adjusted Capital Contributions

A

Each investor’s capital contribution for the fiscal period, less distributions of sale or refinancing proceeds. Also called Remaining Cash Investment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Administrator

A

A person appointed by the court to administer the estate of a deceased person who left no will, i.e., who died intestate.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

ADR System - Asset Depreciation Range System

A

Internal Revenue Code Section. Method of property depreciation allowance, “useful life” determined by guideline life ranges published by the IRS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Ad Valorem

A

According to the value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Ad Valorem Tax

A

A tax varying with the value of goods or commodity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Advances - Obligatory

A

Money advanced by beneficiary under deed of trust to protect his interests , e.g., real property taxes, hazard insurance premiums.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Advances- Optional

A

Advances made which are not required to protect the security but which hte lender has the right to make under the loan agreement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Adverse Land Use

A

Incompatible land use with detrimental effect of adjacent properties

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Adverse Possession

A

The right of an occupant of land to acquire title against the real owner, where all of the following circumstances are present for the statutory period: possession as been (1) actual, (2) open and notorious, (3) exclusive, (4) hostile (without consent), (5) continuous, and (6) in some jurisdictions, the taxes may have been paid by the claimant for the period required. The foregoing applies to securing title by adverse possession. A non-exclusive easement by adverse possession would not require payment of taxes or exclusive use, but might result from all of the other elements being present for the required period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Affiant

A

One who affirms the statement in an affidavit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Affidavit

A

A statement of declaration reduced to writing, and sworn or affirmed to before some officer who has authority to administrator an oath or affirmation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Affirmative Coverage

A

Insurance policy provisions whereby the insurer affirmatively insures against specific risks not ordinarily covered by the policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

After Acquired Title Estoppel by Deed

A

Title acquired by grantee from grantor who conveyed land before he owned it, and then acquired it. Grantee automatically retains title to such land without having to obtain another deed from his grantor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

After Completion Costs

A

Costs incurred for the development of real property after the regular construction has been completed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

After tax investment

A

The out-of-pocket cost to make an investment after all tax considerations. Also referred to as “hard Dollar investment”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

After Tax Net Cash Proceeds of Resale

A

Resale price of property, less commissions, outstanding debts, and taxes on the ownership interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Age, Actual

A

The number of years elapsed since the original structure was built

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Age, Effective

A

The number of years that is indicated by the condition of the building

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Age Life Method

A

Method of estimating accrued depreciation as percentage of current reproduction costs of new improvements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Agency

A

A relationship of trust. The agent represents the principal who appoints him. SEE FIDUCIARY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

Agreement of Sale

A

A written agreement whereby the purchaser agrees to buy certain real estate and the seller agrees to sell upon terms and conditions set forth therein (also called Land Contract, Contract of Sale, Conditional Sales Contract)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

A.I.C.P.A.

A

American Institute of Certificate Public Accountants (See also A.P.B.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Air Rights

A

Right to Ownership of Everything above physical surface of the land

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Alienation

A

In real estate, to convey the ownership to another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

Alienation Clause

A

A special kind of acceleration that demands payment of a balance due upon the alienation of title.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

All-Inclusive Loan

A

Also called in some cases an “overriding” or Overlapping” or “AITD” or “hold harmless” or “wrap around”. A junior loan where the beneficiary (lender or seller) covenants to pay one or more senior encumbrances and the trust or (borrower or buyer) is responsible for making only one payment on the all inclusive loan to the beneficiary, rather than the junior and senior encumbrances separately. Normally the senior encumbrances are referred to as “underlying.” The face amount of the all inclusive loan includes the equity of the beneficiary as well as the balance of the senior encumbrances at the time of its creation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

Allowance for Vacancy and Income Loss

A

Deduction from potential annual gross income to reflect possible vacancy, turnover, and non-payment of rent by tenants.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

Alluvion (Alluvium)

A

Accretion by gradual action of water on a shore or bank.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

A.L.T.A (American Land Title Association)

A

Extended coverage form of title insurance usually requiring physical inspection of property and survey, as compared to Standard Coverage Policy, which only covers matters of record.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

Amenities

A

State of being pleasant or agreeable, as in respect to a situation, location, or climate. In residential appraising it means those peculiar and intangible benefits arising from ownership. Often refers to special features such as pool, tennis courts, club house, water frontage, etc..

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

Amenity Package

A

Special features such as swimming pool, tennis courts, etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
62
Q

Amenity Value

A

The value of the pleasure of the property such as good neighborhood, schools, parks, playgrounds, etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
63
Q

Amortization

A

The liquidation of a financial obligation on an installment basis.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
64
Q

Amortized Loan

A

Principal and Interest of loan reduced by a series of regular payments that are often equal or almost equal. As equal payments are made principal reduction increases and interest portion of the loan reduces.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
65
Q

Anchor Tenant

A

One who draws enough customers to encourage smaller tenants to lease in a shopping center

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
66
Q

Annexation

A

(A) Addition of a county’s unincorporated territory to a city or town
(B) Increasing a property by adding, attaching other property to it, e.g., fixtures, improvements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
67
Q

Annuity

A

Series of assured payments made over a period of time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
68
Q

Anticipation

A

Economic principle that value is created by anticipated benefits to be gained in the future. When property value appreciates because of an improved neighborhood.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
69
Q

Antideficiency Legislation

A

Where the buyer is unwilling or unable to pay the balance of a loan, the holder only has recourse against the property and may not obtain a money judgment against the borrower.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
70
Q

Apartment House

A

A Building with separate residential units, generally at least 3 units. Two units would be referred to as a duplex. Three units a Triplex and 4 units a four-plea.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
71
Q

A.P.B. (Accounting Principles Board)

A

An affiliate of the American Institute of Certified Public Accountants, which sets forth standards to be used in the preparation of audits and financial reports.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
72
Q

Application for Qualification

A

A written form filed with the respective securities commissioner requesting a permit to offer and sell interests in a limited partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
73
Q

Appraisal

A

A written opinion of value prepared by an individual whose background and experience would qualify him to give such an opinion. Compensation for the preparation and rendering of such an opinion shall not be in any way contingent upon the determination fo any particular value.It shall constitute the opinion of the appraiser only, and the appraiser shall not in any way be interested in the offering.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
74
Q

Appraisal by Capitalization

A

An estimate of value based upon the capitalization (i.e. obtaining the “present worth”) of income, usually future or anticipated net income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
75
Q

Appraisal by Comparison

A

An estimate of value based upon an analysis of current market sales, listings, and rentals adjusted to reflect major points of difference.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
76
Q

Appraisal By Summation

A

The process of adding together parts of a property separately appraised to form an opinion to the worth of the whole

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
77
Q

Appreciation Build-Up

A

An assumed increase in value due to inflation and supply and demand factors. Should be clearly designated as speculative estimate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
78
Q

Appurtenance

A

Belonging to something else; something that passes as an incident to land, such as right of way

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
79
Q

Architect’s Punch List

A

Discrepancies in building plans or other construction flaws noted by architect during final inspection

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
80
Q

Assessability

A

Indicates that interests in a syndicate are assessable by action of the GENERAL PARTNER under certain limited conditions and that such assessments will generally result in personal liability for the assessment on the part of the INVESTOR. Where the assessment does not result in personal liability, but merely a penalty affecting the investor’s ownership interest, the assessment may be referred o as “Non-Personal Assessability”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
81
Q

Assessed Valuation

A

Value of real estate as set by a unit of government for taxation purposes. Not necessarily corresponding to market valuation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
82
Q

Assessment

A

There are basically two types of assessments: (a) Property assessments are impositions by government agencies or districts as charges for improvements; (b) Entity assessments are impositions by the Entity manager on the interests of the investors for entity purposes. Such assessments may be personal indicating that the assessed investor has personal liability therefore, or non-personal, indicating that only the entity interest itself may be made to pay the assessment if the respective investor does not. Most interests are non-assessable unless so stated in the Offering Circulars. Assessments may be optional or Mandatory.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
83
Q

Asset Base

A

Value of Assets can be (a) book value, (b) market value or (c) cost.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
84
Q

Assessor

A

Public Official who determines assessed value of property for tax purposes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
85
Q

Assignee

A

Person who receives property or a right in an assignment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
86
Q

Assignment

A

The method or manner by which a right, a specialty, or contract is transferred from one person to another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
87
Q

Assignor

A

Person who transfers property or a right to another in an assignment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
88
Q

Assisted Housing

A

Construction, finance or purchase of housing with governmental assistance, e.g., FHA, VA, HUD etc..

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
89
Q

Assumption Agreement

A

Agreement to take over a debt or obligation of another. Original debtor may remain secondarily liable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
90
Q

Assumption Fee

A

Lender’s fee for changing and processing new records for a buyer who assumes an existing loan.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
91
Q

Assumption of Mortgage (or trust deed)

A

Taking over the primary liability to pay an existing mortgage or trust deed debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
92
Q

Attachment

A

Seizure of property by court order to keep it available for payment of a debt to be collected in a pending lawsuit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
93
Q

Attorn

A

A tenant accepting and acknowledging a new property owner.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
94
Q

Attorney-in-fact

A

A person appointed under a “power of Attorney to act on another’s behalf as an agent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
95
Q

Audited Financial Statements

A

Financial statements including the profit and loss statement, cash flow and source of application statement, and balance sheet, which have been attested to by a CPA because of an independent audit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
96
Q

Available Cash Flow-Return to the Investor

A

See NET SPENDABLE. Proceeds from operation of project not required to meet its obligations or operations and available for distributions to investors and sponsor.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
97
Q

Balance Sheet

A

A financial statement showing assets, liabilities, and net worth.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
98
Q

Balloon Payment

A

A payment on maturity of a debt that is greater than the normal payment and is the balance due on maturity date.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
99
Q

Bankrupt

A

A person relieved by a court proceeding from payment of certain debts, after surrender of certain assets to a court appointed trustee

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
100
Q

Base Line

A

Survey line running east and west that is used in establishing township boundaries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
101
Q

Basis

A

Dollar cost assigned to property at acquisition (less losses and depreciation for tax purposes. I.R.C. Sections 167(g), 1011.) in order to compute gains.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
102
Q

Basis-Allocation of

A

Allocation of basis among land, improvements, personal property.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
103
Q

Basis-New Adjusted

A

New owners basis in property acquired in an exchange

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
104
Q

Basis-Old Adjusted

A

Old owner’s adjusted basis in property being disposed of

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
105
Q

Basis Point

A

Used to describe the amount of change in yield in debt instruments such as mortgages- one one-hundredths of one percent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
106
Q

Bearer Instrument

A

Note or other document payable to “bearer” rather than named party

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
107
Q

Before-Tax Cash Flow

A

Cash available before payment of income taxes after payment of operating expenses and contractual debt service

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
108
Q

Bench Mark

A

Location indicated by a land surveyor on a durable marker

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
109
Q

Beneficiary

A

(1) The lender in a trust deed, or

(2) one who receives the income (benefit) from a trust

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
110
Q

Beneficiary’s Statement

A

Statement of a creditor giving the remaining principal balance and other information concerning the debt. Usually obtained when owner wishes to sell or refinance. See OFFSET STATEMENT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
111
Q

Best-Efforts Basis

A

Security broker’s undertaking to use his best efforts to sell the issue. Opposite of FIRM UNDERWRITING

112
Q

Betterment

A

Improvement to property that increases its value as opposed to maintenance, or replacement

113
Q

Bilateral Contract

A

Contract in which a promise is given for a promise. See UNILATERAL

114
Q

Bill of Sale

A

Document used to transfer title (ownership) of personal property

115
Q

Blanket Encumbrance

A

A lien covering more than one item of security of the same class. If the security were real estate, it would be one or more parcels of real estate. (If the security were personal property, it would be more than one item of personal property of the same class). As individual lots are sold, a partial reconveyance from the blanket encumbrance is ordinary

116
Q

Blighted Area

A

A declining area that is seriously affected by destructive economic forces, such as encroaching inharmonious property usages, infiltration of disadvantaged social and economic classes of inhabitants, and/or rapidly depreciating buildings.

117
Q

Blind Pool

A

See NON-SPECIFIED FUND

118
Q

Blue Sky

A

The process of qualifying a securities issue under state securities act

119
Q

Blue Sky Law

A

A state law regulating solicitation and sale of securities

120
Q

Bona Fide

A

In good faith, without fraud

121
Q

Bona Fide Purchaser

A

Good faith property purchaser, for fair value, with out notice of any adverse claim, or rights of third parties.

122
Q

Bond

A

(a) Insurance agreement whereby one party becomes surety to pay, within stated limits, financial losses caused by specified acts, or defaults of a third party.
(B) interest baring security evidencing a long term debt may be secured by lien on property, issued by government or corporation

123
Q

Book Cost

A

Cost shown in general ledger of individual or entity, usually including direct and indirect financing and all development costs

124
Q

Book Value

A

“Value” as reflected on the “books” after subtracting depreciation from original cost of property. For income tax purposes only

125
Q

Boot

A

Non-qualified property received as part of an exchange of realty and/or relief of liability in exchange

126
Q

Borrower(s)

A

The primary obligor(s) in a debt to a lender

127
Q

Breach

A

Failure to perform a duty or promise

128
Q

Break-even Point

A

Amount required to cover all operating expenses and debt service, if any, on the property. Normally expressed in two formulas:
(A) Break-even on operations absent debt service, and
(B) Break-even operations after debt service. Break-even point can be stated as a dollar amount or as a percentage of occupancy.

129
Q

Broker

A

One who negotiates a transaction on behalf of others

130
Q

Broker-Dealer

A

One who is licensed to sell securities and may employ licensed agents for that purpose.

131
Q

B.S.P.R.A. - Builder/Sponsor Profit and Risk Allowancel

A

Developer’s return for assuming risks involved when building low-income housing. Amount subject to government regulations.

132
Q

Built-Ins

A

Cupboards, appliances, etc. attached as part of structure

133
Q

Building Line

A

A line established by ordinance, or statute, between which a street, or adjoining lot, a structure is not permitted. Also called a setback

134
Q

Building Residual Technique

A

Method of appraising a building and one of three methods of determining accrued depreciation

135
Q

Building to Land Ratio

A

Ratio of Value of building to value of land

136
Q

Bulk Sale

A

Large transfer out of ordinary course of transfer or’ s business of a substantial part of the personal property of the business

137
Q

Bundle of Rights

A

Beneficial Interests

138
Q

Burn Off

A

Amortization of front end prepayments of interest by adjusting payments in a tax-structured transaction

139
Q

Business Purpose

A

When an ENTITY is primarily involved in non-trade or non-business activities, such as a hobby, sport, or recreational activity and there is no bona Fide intent to operate at a profit, the IRS will disallow all expenses other than those that are deductible without regard to profit motivation. Expenses deductible without regard to profit include interest, state and local taxes, capital losses, bad debts, and casualty and theft loss

140
Q

Buyers Closing Costs

A

Escrow costs to the buyer, including his share of prorated expenses

141
Q

Buyer’s Commitment

A

Valuable consideration or promise given by buyer as initial investment or continuing commitment

142
Q

Buyer’s Market

A

Supply exceeding demand so that market prices are relatively low, giving buyers an advantage

143
Q

Buy-out estimate

A

Projected cost of construction based on price of jobs for which contracts have been completely let.

144
Q

Buy-Sell Agreement

A

Under a buy-sell agreement, if one party desires to sell, he must sell to the other and the other must buy

145
Q

C.A.E.

A

Certified Assessment Evaluator

146
Q

Calendar Year

A

Jan 1 through Dec 31

147
Q

Call

A

Option to purchase at a set price for a given period

148
Q

Capacity

A

Legal right to do something (enter a contract, etc.)

149
Q

Capital Account

A

Account established for each participant, initially equal to original investment, increased by taxable income allocated to that person and reduced by allocated tax losses, cash, and sale or refinancing proceeds distributed to that person

150
Q

Capital Investment (Capital Contribution)

A

The amount invested by a particular INVESTOR that may be his (a) initial or original capital investment at the time of the organization of the partnership; (b) his continuing investment consisting of his additional assessments after initial or original capital investment; or (c) his total investment including his initial and continuing payments.

151
Q

Capital Investment Return

A

Ratio of capital investment to net spendable income the investor earns. Capital investment. Remaining the amount invested less returns from sale, refinance, or otherwise designated in the entity agreement for purposes of determining share of distributable cash.

152
Q

Capitalized Costs

A

Costs, for tax purposes, removed by depreciation of a term of years, rather that being recovered by an immediate tax deduction.

153
Q

Capitalization Rate

A

A formula applied to the net income generated from property to determine its value. If the net income were to be capitalized at 10%, the value of the property would be ten times its income

154
Q

Carrying Charges

A

Non-capital costs incurred by developers in carrying the project prior to occupancy, e.g., interest on loans for land and construction, property taxes, etc.

155
Q

Cash-on-Cash Return

A

Rate of return on investment without regard to tax savings

156
Q

Cash Income or Gross Income

A

Total income of the property prior to expenses and debt service.

157
Q

Cash Liquidating Value

A

The sum that a participant in an investment program is entitled to receive upon request where a program offers liquidity

158
Q

Caveat Emptor

A

“Let the buyer beware”. Places obligation on buyer to examine property before purchasing. Less applicable than in the past.

159
Q

C.C&r.’s

A

Covenants, conditions and restrictions

160
Q

Ceiling

A

In a floating or variable rate loan, the maximum rate of interest to be charged. The opposite is referred to as a “floor” the minimum rate to be charged

161
Q

Certificate of Limited Partnership

A

A summary of the major provisions of a limited partnership agreement which is requested to be filed in the office of the county recorder in which the particular partnership is going to do business

162
Q

Certificate of Occupancy

A

Written authorization by local authority allowing newly completed building to be occupied.

163
Q

Certificate of Reasonable Value

A

Documentation required by federally insured or guaranteed loans evidencing physical inspection of property by federal employee to determine loan to value ratio

164
Q

Certificate of sale

A

Certificate issued to purchaser at an execution sale. Evidences ownership. Given in exchange for deed if there is no redemption from the sale

165
Q

Certificate of Title

A

A title company’s opinion of the condition of the title to a parcel of real estate without guarantee

166
Q

Certification

A

A written statement under penalty of perjury, executed by an officer of principal of borrower that the material contained in a document to which it is affixed is true and correct to the best knowledge of the person subscribing there to. This is to be distinguished from a full disclosure notice, which is a statement executed under penalty of perjury that all material facts have, to the best of the knowledge of the person executing said notice, been disclosed in the document to which it is attached.

167
Q

Cestu Que Trust

A

One for whose benefit property is held in trust

168
Q

Chain

A

Measurement of land equal to 66 feet in length

169
Q

Chain of Title

A

All documents transferring title to a parcel of real estate, beginning with the document originally transferring title from public to private ownership and ending with the latest document transferring title.

170
Q

Change Order

A

Change to the original plan of construction by owner or contractor

171
Q

Chattel Real

A

Interest in land that is less than freehold, e.g., leasehold

172
Q

Check-O-Magic (Automatic check off)

A

A contract between the borrower and the lender which provide that the borrower sign an agreement allowing lender to arrange with the borrowers bank for the bank automatically to, each period, debit the borrower’s account and send to the lender the periodic payment called for in the loan.

173
Q

Chose in Action

A

Personal right recoverable by an action at law

174
Q

Class

A 
(A) of securities indicates the securities being offered have different rights and privileges. All those having the same rights and privileges being of the same class when one class could have (1) a priority over another or (2) have greater participation or Tax Benefits
(B) of Investor, referring to the holder of a particular class of securities.
175
Q

Class Action

A

Plaintiff brings suit on his own behalf and as representative for all others similarly harmed

176
Q

Clear Title

A

Free from encumbrances or defects

177
Q

Close

A

Date on which a transaction is closed and the net proceeds generally are available to the borrower

178
Q

Closed End

A

Indicating an offering or fund that after the sale of a maximum number of units is “closed”, with no additional units to be offered to issue without further amendment of the agreement of partnership. An Open End offering would indicate that further securities could be issued without amending or changing the partnership agreement.

179
Q

Cloud on the Title

A

Claim or encumbrance that, if valid, would affect or impair the owner’s title. Removed by quitclaim deed or court action.

180
Q

Coinsurance

A

More than one insurer sharing a single risk, each undertaking part of the whole risk often the insured retains a portion of the risk itself. The coinsurer may be the insured

181
Q

Collateral

A

Security for a loan

182
Q

Collateral Assignment

A

Assignment of property interest for security purposes, not an absolute assignment

183
Q

Collateral Security

A

Transfer to a creditor of an interest in property providing additional security for the creditor

184
Q

Color of Title

A

Giving the appearance of title, but not in fact title

185
Q

Comfort Letter

A

A letter prepared by the independent certified public accountant indicating that immediately prior to the public issuance of program interests a preliminary review of the company’s books and records indicates no material change from the last certified audit. A comfort letter is not an audit. It refers to a cursory review.

186
Q

Commercial acre

A

The remainder of an acre of subdivided land after the deduction of areas for streets, sidewalks, curbs, etc.

187
Q

Commercial Property

A

Real property, excluding residential property, acquired for investment or commercial use

188
Q

Commission

A

Sum due for services in selling an item of property; an administrative and enforcement tribunal of laws

189
Q

Commitment

A

An agreement to make or buy a loan in the future, not intended for immediate funding, often called a FORWARD COMMITMENT

190
Q

Commitment to Insure

A

Title insurance company report, showing condition of title and obligating insurance company to issue form of policy described upon compliance with and satisfaction of requirements stated

191
Q

Common Areas

A

Land or improvements existing for the benefit of more than one tenant, or property owner

192
Q

Common Law

A

Body of law that grew up from custom and decided cases (often English law) rather than from codified law (Roman law, Spanish law, French law, etc.)

193
Q

Community Apartment Project

A

Subdivision where operation, maintenance and control are exercised by governing board selected by owner’s of fractional interests. Undivided interest in the property is conveyed complete with right to occupy a certain unit or apartment

194
Q

Community property

A

Form of ownership of property in certain states. Real property within the state and personal property wherever located, acquired during marriage, is presumed to be community property when not acquired as the separate property of either spouse. It is owned in common by both spouses

195
Q

Comparable

A

Recently sold properties with similar characteristics to a particular property, which are indicative of fair market value of particular property being compares

196
Q

Comparison Figures

A

In projections, comparing a particular period, normally the latest current period, with some prior period of historical operation

197
Q

Completed Contract Method

A

Method of recording income from construction contracts where income is recorded at completion rather that during progress of hte work.

198
Q

Component Financing

A

Borrowing from separate lenders on separate loans (referred to as “sandwich financing”) on various parts of the property such as (a) the fee, normally by means of a ground lease; (b) the improvements; and (c) the personal property

199
Q

Conclusive presumption

A

Unequivocal inference made by the law

200
Q

Condemnation

A

Taking of private proeprty for public use, with compensation to the owner under the right of eminent domain

201
Q

Condition

A

Provision in agreement, contract providing that a right or interest in property depends on a future event that may or may not happen

202
Q

Condition precedent

A

Condition must be fulfilled before estate can vest

203
Q

Condition Subsequent

A

Failure or non-performance of condition may defeat an estate that has already vested

204
Q

Conditional sale contract

A

Title remains in seller until condition of contract met. Sometimes referred to as a “land contract”

205
Q

Condominium

A

Individual fee ownership of units combined with joint ownership of common areas of the building and the land

206
Q

Confirmation of sale

A

Sale of property by executor, administrator, guardian, or conservator, approved by the court

207
Q

Conflict of interest

A

Anything in the nature of a program that would cause a conflict with the motivation of the general partner, promoter, Spenser, or syndicator to use his best efforts exclusively in the field of real estate investment for the benefit of the respective program. Conflicts of interest are not necessarily prohibited but must be fully disclosed

208
Q

Conservator

A

One appointed by probate court to take care of person and/or property of one unable to do so himself

209
Q

Consideration

A

Anything of value used to induce another to enter into a contract. Either a benefit to pro is or or detriment to promise

210
Q

Constant

A

The amount of annual debt service (expressed as a percentage of the original loan balance required to fully amortize the loan in equal payments of principal and interest monthly, quarterly, or annually) over a given period of time

211
Q

Construction Costs

A

Direct costs to improve raw land or building

212
Q

Contiguity Insurance

A

The endorsement on title insurance policy indicating that the perimeter surgery of the property is insured

213
Q

Contiguous

A

(A) actual contact, (b) adjoining

214
Q

Contingent

A

Dependent on uncertain future events

215
Q

Continuing commitment

A

Consideration to be given by buyer after his initial investment

216
Q

Contour

A

A line connecting the points on a land surface that have the same elevation

217
Q

Contract of sale (also referred to as a “land contract” or “conditional sale contract”)

A

An agreeement whereby one party has bound himself to purchase and receives possession from the other, but no legal title, as opposed to a CONTRACT TO PURCHASE whereby one party has agreed to buy and the other has agreed to sell, but both title and possession remain with the seller until further conditions take place prior to transfer of possession.

218
Q

Contract Rent

A

Rent due pursuant to rental or lease agreement

219
Q

Contractor’s Fee

A

A payment to a licensed contractor for overhead and profit for supervising construction

220
Q

Constructive Notice

A

Notice given by the public records

221
Q

Constructive Trust

A

Trust imposed by law to prevent unjust enrichment

222
Q

Conventional Mortgage

A

One not guaranteed or insured by a federal agency

223
Q

Convertible Debt

A

Debt that can be converted into equity shares usually a stated amount of issuers equity

224
Q

Conveyance

A

The means or medium by which title to real estate in transferred

225
Q

Co-op sale or loan

A

Indicates that more than one BROKER is involved in the sale and that there is a sharing of COMMISSION

226
Q

Corporation

A

An artificial “person” created by law

227
Q

Cost Basis

A

Value of property determined at time fo purchase by amount of purchase

228
Q

Cost Certification

A

Independent audit statement of FHA insured housing projects as required by Section 227 National housing act and FHA regulations

229
Q

Cost, Historical

A

The total cost of a project based on prices at the time of construction

230
Q

Cost Plus Contract

A

Construction contract wherein contract price is equal to cost of construction plus profit allowance to builder

231
Q

Cost, Replacement

A

The cost that would be incurred in acquiring a substitute property of equivalent desirability and utility

232
Q

Cost, Reproduction

A

The cost of reproducing a new replica property on the basis of current prices with the same or closely similar material, labor, plus contractor’s overhead, profits and fees

233
Q

Cost of Reproduction (or Replacement) New Less Depreciation

A

The possible combinations are too numerous to list; the appraiser must study each engagement’s requirements to decide which category, or categories of depression all are applicable.

234
Q

Cost, Trended

A

Original cost new adjusted by application of an index to develop normal cost at another date, under similar conditions of acquisition, construction and installation. Care must be exercised to insure that proper indexes are applied to historical cost involving units or structures acquired used, or to purchased assets for a lump sum wherein an allocation of the price paid may have been distributed among the various assets.

235
Q

Costs

A

Costs are often broken down into DIRECT COSTS that are the physical items tat go into the project itself, and INDIRECT COSTS that might be financing, carrying charges, architect’s fees, engineering fees, developer’s profit and overhead, etc. Cost can also be ACTUAL COST (often termed “historical cost” or “replacement costs”) based on present market prices of the components of the property.

236
Q

Covenant

A

An agreement in a deed or other instrument governing activities or uses permitted or prohibited upon real estate.

237
Q

Coverage

A

Percentage by which the net spendable income prior to debt service equals the constant required to service the loan. If the constant is $10,000 per year, and the net spendable income is 15,000 the coverage is 150%

238
Q

CPI

A

Consumer Price Index of the Bureau of Labor Statistics

239
Q

Credit Report

A

Report obtained by potential lender regarding credit standing of potential borrower.

240
Q

C.R.V.

A

Certificate of Reasonable Value issued by Federal Housing Administration

241
Q

Co-Tenancy

A

Ownership of property by 2 or more persons

242
Q

Curtail Schedule

A

Listing of amounts by which principal sums of a debt are to be reduced by partial payments and the due date for such payments (AKA Mortgage Am Schedule)

243
Q

Curtesy

A

Interest in wife’s property allowed to a husband

244
Q

Custodial Accounts

A

Bank Accounts used for funds belonging to others.

245
Q

Dealer of Property

A

One whose occupation is the sale of real property from inventory and whose profits on such sales because of his dealer status are ordinary income rather than capital gain. One can be a dealer with respect to some property and an investor with respect to other property

246
Q

Debt

A

In reference to a given loan, all the elements of the loan including the instruments, the security, and the obligation of the borrower. When talking about a financial statement, the total amount owed by a borrower to all creditors

247
Q

Debt Service

A

The amount of money (both principal and interest) required to meet encumbrances on a parcel of property. Expressed in terms of TOTAL (meaning the entire amount required to service the loan during the period it is outstanding; ANNUAL (being the amount required to service encumbrances during a calendar year); or MONTHLY (being the amount required to service encumbrances monthly). Specify whether the discussion concerns TOTAL, ANNUAL, or MONTHLY

248
Q

Declaration of Abandonment

A

Document recorded to terminate a homestead

249
Q

Declaration of CC&R’s (Covenants, Conditions and Restrictions)

A

Restrictions placed on owner’s use of property in subdivisions and condominium developments. Binding on all owners of interest in the subdivision and enforceable as equitable servitude’s.

250
Q

Declaration of Homestead

A

Document recorded to create a homestead

251
Q

Decree

A

A type of court order

252
Q

Dedication

A

A grant of land or easement by an owner to some public use together with acceptance for such use by or on behalf of the public

253
Q

Deductions

A

Specified allowable items subtracted from income before calculating taxes to be paid. A method of tax shelter deductions are subject to “investment at-risk rule” and “limit on investment interest rule” of the IRS

254
Q

Deed

A

A written instrument which, when properly executed and delivered, transfers title to real estate.

255
Q

Deed in Lieu of Foreclosure

A

Deed given by investor/owner/debtor to the trustee of a deed of trust for the benefit of the beneficiary/lender/mortgagee to prevent foreclosure of the property

256
Q

Deed of Revonveyance

A

The transfer of legal title from the trustee tot he trust or (borrower) after a trust deed debt has been paid

257
Q

Deed of Trust

A

Written instrument transferring title to land to a trustee as security for a debt or other obligation. Also called a TRUST DEED

258
Q

Deep Shelter

A

Indicated a project wherein there are losses available to shelter other income of the investor. See TAX SHELTER

259
Q

Default

A

The non-performance of a duty, whether arising under a contract, or otherwise; failure to meet an obligation

260
Q

Default Judgement

A

A court order after the defendant has failed to answer the complaint in a lawsuit

261
Q

Defeasable

A

Ownership with conditional restrictions that, if broken, can cause forfeiture of title to grantor or his heirs

262
Q

Defeasance Clause

A

A Clause in a deed that contains conditional restrictions, which if broken, can cause forfeiture of title back to grantor or his heirs

263
Q

Deferral

A

Tax incentive structure setting up investments with deductions occurring during years of high earnings, and income and capital gains occurring during reduced earning periods or on retirement. Postponement techniques resulting in taxes being paid in the future

264
Q

Deferred Maintenance

A

Negligent or “putting off” care of a proeprty. An excessive form of deterioration

265
Q

Deferred Purchase (Deferred Payment Sale)

A

A condition of payment of property whereby the property may be paid for in certain designated periods spaced over a specified length of time

266
Q

Deficiency

A

The difference between the indebtedness sued upon and hte sale price, or market value of the real estate at the foreclosure sale.

267
Q

Deficiency Judgement

A

A court order to pay the balance (deficiency) owed on a loan after the proceeds from sale of the security are not sufficient to pay off the loan

268
Q

Delivery

A

Unequivocal transfer of a deed from donor/seller to donee/buyer in such a manner that it cannot be revoked

269
Q

Demise

A

Transfer of an estate for years, for life or at will

270
Q

Depletion

A

Tax allowance on a wasting asset, e.g., such as mineral deposits. Percentage depletion deduction allowance throughout the production period. Effectively enables investor to recover more than his investment tax free

271
Q

Deposit Receipt

A

Form acknowledging deposit. May also form contract for sale and purchase of land when executed by both buyer and seller.

272
Q

Depreciation

A

That sum which a qualified individual (generally a certified CPA) has determined to be the reasonable allowance (for tax purposes) charge against profit and loss for tax purposes for the depreciating value of the building due to its increasing age. There are 5 principle methods of computing tax deprecation: (a) Straight line; (b) 200% declining balance; (c) 150% declining balance; (d) 125% declining balance; (e) Sum of the years digits. Of the above, (b) through (e) are termed accelerated methods of depreciation. Depreciation taken on a UNIT basis is where one estimated life is applied to all parts of the building.

273
Q

Component Basis

A

Where the assets are broken up and different lives are applied to the respective parts of the building. Reference should be made to the regulations of the IRS as to the applicability and definition of the various methods. It is also deemed a loss in value from any cause. An effect caused by deterioration or obsolescence or both is (a) PHYSICAL, while for tax purposes is (b) tax.

274
Q

Depreciation, Normal

A

The amount anticipated under average use and ordinary conditions

275
Q

Depth Table

A

A chart used by appraisers

276
Q

Deraign

A

To prove

277
Q

Deterioration

A

An impairment of physical condition, due to wear and tear, decay:
(A) physical loss of value resulting from disintegration, wear, tear, and action of the elements, (b) functional obsolescence, value loss resulting from decreased utility, due to deficiencies inherent in the structure, or (c) Economic obsolescence, value loss resulting from decreased utility, due to adverse external economic influences

Principles Of Real Estate Syndication (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions