VOCABS Flashcards
Bundle of Rights
Legal rights of a title
Easement
right to use land of another
Tenant improvement allowances
amount landlord is willing to spend so tenant can renovate a commercial space to make it more appropriate tp whatever they are doing
Abandonment
voluntarily giving up rights of responsibility of possession of the property
Sale Lease Back
sells property, then sells it back. Becomes tenant of new owner
Sandwich Lease
(Sub Lease)
Existing tenant leases to a third party
Gross Lease
Tenant pays a fix amount to the landlord
Residential
Net Lease
Tenant pays for insurance taxes and maintenance
more common on commercial property
Percentage Lease
amount of rent payed by the lessee if a percentage of gross income of the lessee’s business
(commercial parking lot)
Leases
contract between lessor and lessee which gives possession, not ownership to the lessee.
(personal property)
Chattel Real
tangible moveable personal property
Cow moves
Estate at Sufferance
tenant continues to occupy after the rental agreement is ended (owner is suffering)
Estate at Will
can be ended at anytime by landlord or tenant
Periodic Tenancy
tenancy is renewed periodically
week to week, month to month
Estate for years
Estate or tenancy lasting for a fixed amount of time
summer rental, two dates attach to it
Less Than Freehold Estate
hold for defined length of time
Life Estate pur autre vie
interest in real property that last the length of someone’s life who is not the life tenant
(goes back to original owner)
Life Estate
interest in real property that last the length of someone’s life
Fee simple defeasible
puts condition on use of a property
no alcohol served on property
Fee Simple Estate
a “type of freehold estate” can be sold or inherited
Freehold Estate
ownership is held of an undefined length of time
Appurtenances
Goes with the land (Real Property)
Reliction
gradual recession of water leaving land uncovered
Avulsion
sudden violent tear of land by water.
if a dam breaks water comes rushing down
Accretion
increase in the amount of land due to natural causes
Riparian Rights
Rights an owner would have when they live along side a moving body of water. (River)
Littoral Rights
Rights an owner would have if they live on a static body of water. (Lake Sea or Ocean)
Trade Fixture
type of fixture linked to a business
Fixture
personal property that is now considered real property
incorporated into land
Personal Property
goes with person when sold
moveable
Real Property
cant move
goes with real estate
Subleases
Existing tenant leases to a third party
Encroachment
building thats on another persons land
Assignment
when one party passes responsibility to another
Surrender
giving up possession of property
Constructive eviction
fail to do something that they are legally obligated to do.
making sure there is no heating when its freezing outside
Estoppel Statement
sign statement certifying certain facts are correct
cant contradict by signer
Deeds
Evidence of a title transfer
receipt when you buy
Grant Deed
A Deed that includes two implied warrantees
1) Grantor didn’t give title
2) estate has no enclose encumbrances
Quitclaim Deed
Deed operates as release
(fast, quickly)
transfer ownership
Warranty Deed
Property owner transfers title warrants he owns title free and clear of all leins
(No Money is Owed)
Special Warranty Deed
grantor warrants against defects the occurred during ownership
General Warrant Deed
seller guarantees that he or she holds clear title of real estate and has rights to sell free and clear
Bargain and Sale Deed
Conveys real property without conveyances
Reconveyance
borrower is release from mortgage debt and transfers the title from the beneficiary to the borrower
(evidence everything is payed off)
Title
shows ownership of property
Chain of Title
record of all previous owners of a particular land
Abstract of Title
provides title deeds and documents a right to dispose the land
Cloud on title
shows defects on title
unreleased lein
Quiet title action
court action to remove cloud on title
Alienation of Title
loss of title
Title Insurance
insures against any losses due to defects with title after its been examine.
Standard Policy of Title Insurance
most buyers get to protect themselves from defective delivery of deed.
Extended policy of title Insurance
insurance policy with increase coverage
Estate in Severalty
property owned by one individual or corporation
Concurrent Estate
property owned by more than one person
Joint Tenancy
the right of survivorship
Tenancy in Common
if tenant dies, it goes to heirs
Encumbrances
burden of property
Easement
right to use someone else is land for special purpose
Dominent Tenement
land enjoined the easement
Servient Tenement
land burden by the easement
Easement by prescription
easement granted after someone entered for a period of time that’s given a right to do so.
Zoning
Police power that divides and into area for designated use
Variance
Exception to the rule
Down Zoning
Commercial to Residential
Grandfather Clause
exempt from new rule
Nonconforming Use
A type of zoning variance where a parcel of land may be given an exception from current zoning ordinance due to improvements made by prior owner or before the current zoning ordinances made the desired use non-conforming under local law.
Building Codes
Protect public health, safety and general welfare
Interstate
No will
Testate
Has a will
Probate
executor for the estate of deceased person sells property in order to divide the property among the beneficiaries
Holographic Will
written by hand
Marginal Tax Rate
percentage taken from your next dollar of taxable income.
1031 Tax Deferred Exchange
- Defer Taxes
- Identify 45 days, acquire within 180 days of closing pervious property.
Boot
Fair housing value of other property received in an exchange
Ad Valorem
Latin for according to value
Condemnation
Process of Compensation a person gets when property is taken by eminent domain.
Inverse Comdemnation
Suing government for compensation when property is taken.
Encroachment
when a structure is built in part in a neighbors property
General Liens
lien against all personal property
Voluntary Lien
lien that exist of an action taken by a debtor
Involuntary Lien
Lien that were imposed on an individual
i.e. tax judgment lien
Mechanic Lien
Lien on behalf who have supplied labor or materials that improve property
Judgment Lien
Lien placed by the court
Lis Pendis
lawsuit pending involving either the title to the property or a claimed ownership interest in it.
Injunction
Court order that compels a party to do or refrain from specific acts
Constructive Notice
Signifies that a person should have known as a reasonable person would have
Actual Notice
Personally given to somebody
Escrow
Neutral third party
Debit
Money owned
Credit
Money received
Short Rate
A higher periodic rate for short term than what was originally contracted.
Impounds
Money set aside by lender to pay for recurring cost that take priority over loan such as taxes and insurances
RESPA
Eliminating kickbacks and referral fees which add unnecessary to settlement services
TILA
- Inform use of consumer credit
- Require disclosures about its terms and cost to standardize the manner in which cost associated with borrowing are calculated and disclosed.
Fair Housing Act
1968 act banning refusal to sell or rent a dwelling to any person because of race, color, religion, sex or national origin
Jones vs Mayer
1968 court case that banned all racial recrimination, private as well as public, in the sale or rental of property based on the thirteenth amendment
Sherman Anti-Trust Act
Bans anti competitive behavior such as price fixing
Americans with Disabilities Act
1990 act prohibiting discriminations against people with disabilities in employment, transportation, public accommodation, communication and government activities.
Misrepresentation
The action or offense of giving a false or misleading account of the nature of something.
Material Fact
A fact that if known, might have caused a buyer or seller of real estate to make a different decision
Actual Fraud
Fraud committed with the actual intent tp deceive and thereby injur another
Constructive Fraud
- Person gained an unfair advantage over another by unfair methods.
- Intent does not need to be shown.
Commingling
mixing of funds
Puffing
Gross exaggeration of facts
Caveat Emptor
Latin for buyers beware
Essential of Valid Contract
Mutual consent
Lawful object
Consideration
capable party
Void Contract
Lack one one of the 4 essential elements
Voidable Contract
Option to rescind
Bilateral Contract
Promise for a promise
example would be a exclusive listing
Unilateral Contract
Promise for an act
example would be a open listing or a option contract
Executed Contract
A contract that has been fully preformed
The Statute of Frauds
States what contract must be in writing
Stature of Limitation
States time frames for certain contracts
Novation
Latin for new as in relates to contracts
Codicil
Amendment
Agency
A.C.O.L.D. Accountability Care Obedience Loyalty Disclosure
Fiduciary
A position of trust, good faith and honesty
Actual Authority
Expressly conferred by a principal to and agent to act on the principals behalf
Ostensible Authoity
Authority granted by acceptance of action on the principals behalf
Dual Agent
Buyer and Seller have the same broker
General Agent
- Authorized to preform any and all acts associated with the job
- A real estate licensee acting in the capacity of a property manager
Special Agent
- Limited authority granted to him or her through principal
- Relationship with the principal is not expected to be continuous
- Listing contract creates a special agency
Listing
Bilateral employment contract
Exclusive Listing
- One broker can be paid
- no need to show you are procuring cause in order to be compensated
Exclusive Authorization and Right to Sell Listing
Broker gets paid if property sold regardless of procurance cause
Open listing
- Seller can hire multiple brokers
- Broker that proves procuring cause would be compensated.
Net Listing
Money revived above and beyond a designated amount
Protection Period Cause
Safety Clause
Compensated after listing expires if you can prove you are the procuring cause
Contingency Clause
Defines a condition or action that must be met in order for a real estate contract to become binding.
Hold Harmless Clause
- AKA a liability waiver
- agreement whereby parties agree not to hold the other party responsible for any loss, damage or legal liability that may arise under the agreement.
Interim Occupancy Agreement
Staying after sale
Deposit
Placing something of value to show that you are serious about your offer
Value
What a willing buyer is willing to pay on the open market
Essential Element of Value
STUD
Scarcity
Transferability
Utility
Demand
Principle of Substitution
no prudent person would pay for a property when another one readily available that has the same use, and income for less
Principle of Contribution
How much does an item contribute to the net income of a property
Principle of Regression
The value of a more expensive home placed in a neighborhood of less expensive homes will drop in value
Principle of Progession
Value of less expensive properties will increase when placed in the area of more expensive properties
Principle of Highest and Best Use
- How much of a net returen you can get by building on the property
- If the use is temporary, it would then be considered the Interim use
Plottage
Combine land to make one
Appraisal
Estimate of value
Narrative Appraisal
A comprehensive appraisal report is a “complete” appraisal
Market Data Apprpach
- Examination and comparison of actual sale of comparable properties.
- Bust used to find values of houses and vacant lots
Cost Approach
- Finding out how much would it cost to replace the building brand new
- Better for new building not old
Capitalization Approach
- Converts income into value
- A property that can prove to bring in more income will increase the value
- Most appropriate for a shopping center
Gross Multipliers
Price divided by rent
Cap Rate
Higher Cap rate represents higher risk
Acre
43,560 sq ft
Depreciation
Loss in value to any cause
Mortgage
A voluntary, specific lien
Mortgage Brokers
- Intermediary between consumers and lenders
- Mortgage broker originates loans while the mortgage lender funds loans.
Interest
Rent on money
Leverage
Borrowed capital to increase the potential return of an investment
Amortization
Paying off of debt
Negative Amortization
Interest paid but debt increases
Balloon Loan
Loan that does not fully amortize over its term
Appreciation
increase in value over time
Construction Loan
Short term loan use to finance the building or a property
Obligatory Advances
Money given during a construction loan at agreed upon stages
Participation Loan
A loan that requires interest plus a portion of the profits as payments
Interim Loan
Short term financing
Take-Out-Loan
- Long term loans replaced interim
- Financing, such as a short-term construction loan
- Usually mortgages with fixed payment that are amortizing
Subject To
seller liable, buyers not liable
Assume
relieves seller, buyer is liable
Hypothecate
Pledging an assets as collateral for a loan while retaining ownership
Subordination Clause
Current debts will take priority over debts made in future
Prepayment Clause
Pays down or pays off mortgage
Prepayment Penalty
Regulates what the borrower is allowed to pay off and when.
Due-on-sale Clause
Balance of the loan may be called to repay in full upon sale
