Vocabulary Flashcards
1
Q
1031 Exchange
A
A Transaction that, under provisions of Section 1031 of the Internal Revenue Code, allows a taxpayer to sell an investment property and purchase another investment property in its place without paying capital gains on the proceeds from the sale.
A.K.A. Like-Kind Exchange, Tax-Deferred Exchange, or Starker Exchange
2
Q
1099-MISC
A
The internal Revenue Service form that is used to report various types of miscellaneous income earned other than salary earned from an employer.
3
Q
13th Ammendment
A
Amendment XIII to the United States Constitution that abolished slavery and involuntary servitude, except as punishment for a crime; passed 1865
4
Q
Abandonment of Homestead
A
The loss of a homestead exemption if the owner moves to another state, sells the property, turns the property into a rental, or no longer occupies the home as a primary residence.
5
Q
Abstract of Title
A
A full summary of the history of ownership and all matter that affect the title.
6
Q
Abutting
A
Refers to parcels that share a boundary. Compare Contiguous
7
Q
Acceleration Clause
A
A clause in loan documents that allows the lender to call the note all due and payable if the borrower breaches the terms.
8
Q
Acceptance
A
The intent of a person receiving an offer to be bound by the terms of the offer.
9
Q
Accession
A
The acquisition of title to land by its addition to real estate already owned, through human actions or natural processes.
10
Q
Accretion
A
The gradual addition of land by natural causes, such as shoreline movements.
11
Q
Acknowledgment
A
A formal declaration made before a notary public by a person signing a document. This prevents fraudulent and forged documents, such as a deed.
12
Q
Acquisition and Development Loan (A & D Loan)
A
A type of commercial loan that covers both the purchase of the land as well as the costs of any improvements needed before the development can be completed.
13
Q
Acre
A
43,560 square feet
14
Q
Acre Foot
A
One foot of water over the entire surface of an acre; contains 325,851 gallons of water.
15
Q
Active Management Area (AMA)
A
Defined areas within Arizona where water management programs, such as restrictions governing groundwater use, are in place.
16
Q
Actual Age
A
The true of chronological age of a building.
17
Q
Actual Damages
A
Compensatory Damages; Award, usually money, intended to compensate the plaintiff for harm caused by the defendant’s act or failure to act.
18
Q
Actual Eviction
A
The physical removal of a tenant from a leased property with the tenant relieved of any further responsibility to pay rent.
19
Q
Actual Notice
A
Express knowledge of a fact. Compare; Constructive Notice
20
Q
Ad Valorem
A
A concept for property taxes that means ‘according to value’
21
Q
Addendum
A
Items of additional material that are attached to an existing contract to explain, modify, or revoke elements of the contract.
22
Q
Adequate Water Supply
A
The standard required from developers outside of an Active Management Area (AMA); if adequate water supply cannot be demonstrated, the developer must disclose this fact in all advertising and promotional material.
23
Q
Adjacent
A
Near, close, contiguous or adjoining, such as two parcels of land that share a boundary.
24
Q
Adjustable Rate Mortgage (ARM)
A
A mortgage loan that has an interest rate on the note that periodically adjusts based on an index that reflects the cost to the lender. Also called; Adjusted Purchase Price
25
Adjusted Basis
The purchase price of a property (basis) minus accumulative depreciation, plus acquisition costs, plus capital improvements. Also called: Adjusted Purchase Price.
26
Adjusted Sales Price
Sales price minus cost of sale (commission and closing costs).
27
Administrator
Court-appointed personal representatives of an estate for someone who dies intestate (without a will)
28
Administrator's Deed
A document that transfers title to real estate from an intestate person (someone who dies without a will) to his or her heirs.
29
Adverse Possession
Acquiring title to land because of a long-term, open, and notorious use of the land. The legal process is called Prescription. The required time period in Arizona in 10 years.
30
Advisory Board
A nine-member board, appointed by the Governor, that advises and gives recommendations to the Commissioner of the Arizona Department of Real Estate. Members service a six-year term.
31
Affidavit of Affixture
A document for owners of mobile homes certifying that the home is immobilized, i.e. anchored to real property.
32
Affidavit of Disclosure
A disclosure document that may be required when selling property that is either in an unincorporated area (not in a city or town), NOT in a subdivision, or if five or fewer parcels are involved in the transaction. It provides information about certain aspects of the property and allows the buyer an opportunity to rescind the contract.
33
Affidavit of Value
Cost $2.00
A sworn statement under oath that indicates the purchase prices paid by the buyer in a transaction; must be filed with the deed and signed by both the buyer and seller.
34
Affirmation of Value
A document that may be used in lieu of an affidavit of value if a party to the transaction objects to taking an oath because of personal or religious reasons.
35
Agency
A relationship of trust between one person (the principal) and another (the agent) in which the agent has the authority to act on behalf of the principal. Agency creates a fiduciary duty on the part of the agent to act in good faith.
36
Agent
One who represents a principal. In Arizona, the designated agent is the agent to the principal. Associated licensees in the office are considered subagents to the principal. Both the agent (the designated broker) and the subagents are fiduciaries to the principal.(the client)
37
Agreement for Sale
A carryback document between buyer and seller. The seller does not give a deed to the buyer until paid in full; therefore, the seller retains legal title and the buyer has equitable title. (also called; Land Contract, Contract for Deed, or Installment Sale)
38
Agreement to Sell
A purchase contract
39
Aggrieved
A party injured
40
Air Lot
The ownership of the interior in a condominium; a property that is above the base elevation of the land, such as in a multi-level building
41
Air Rights
The right to undisturbed use and control of the airspace over a parcel of land (within reasonable limits for air travel); may be transferred separately from the land.
42
Alienation
The transfer of ownership or an interest in property from one person to another, by any means. (the seller is alienated themselves from the property by selling it)
43
Alienation Clause
A clause used in a mortgage allowing the lender to demand the full and immediate payment of the mortgage because the owner transferred ownership of the property. (also called; Due on Sale Clause)
44
Allodial System
A concept of land ownership that allows private individuals to own property.
45
Alluvion
Solid material deposited along a shore by accretion.
46
Amendment
A formal revision to a contract to add, remove, or update elements found in the contract.
47
Amendatory Clause
A clause in a sales contract that amends any terms of the contract that may require a buyer to forfeit earnest money, pay a penalty, or pay additional closing funds if the property fails to appraise at the contract sales price; required when the loan is insured by the Federal Housing Administration (FHA)
48
American Land Title Association (ALTA)
A national association of title companies, abstractors, and attorneys whose members agree to promote uniformity, quality, and professional standards in title insurance policies.
49
Americans with Disabilities Act
A 1990 federal law that prohibits discrimination based on a person's disability and enforces consistent standards in employment (Title I), public services (Title II), public accommodations (Title III), and telecommunications (Title IV).
50
Amortization
Payment of debt in regular, periodic installments of principal and interest (as opposed to interest-only payments).
51
Amortization Schedule
A table or chart that shows the periodic payments, interest and principal requirements, and unpaid loan balance for each period of the life of a loan.
52
Annexation
Attaching personal property to land so that the law views it as part of the real property.
53
Annual Percentage Rate (APR)
The relationship between the cost of borrowing and the total amount financed, represented as a percentage.
54
Anticipation
An economic principle that says value is created by the expectation of future benefits, such as profit on resale, pleasure, tax shelter, production, income, etc. Anticipation is the foundation of the income approach to appraisal.
55
Anti-Deficiency Protection
Laws that protect the borrower from a deficiency judgment if the loan is a purchase-money loan (mortgage or deed of trust) if the secured property in a single or two-family dwelling and on tow-and-a-half acres or less.
56
Antitrust
An area of federal law concerned with maintaining competition in private markets by prohibiting unlawful restraint on trade.
57
Appraisal
An opinion or estimate of value of real property as of a certain date, as supported by objective evidence and data.
58
Appraiser
Someone licensed by the state who, for a fee, is expected to perform valuation services competently and in a manner that is independent, impartial, and objective.
59
Appreciation
An increase in the value of property due to a positive improvement in the area or the elimination of negative factors.
60
Appurtenance
Something that belongs to property and passes with property, but need not be attached to it (example; outbuildings, easements). An appurtenance 'runs with the land'
61
Aquifer
A body of permeable rock that can contain or transmit groundwater.
62
Arbitration
A method for resolving disputes out of court whereby an impartial third party renders a binding decision. This is the method by which disputes between REALTOR brokers may be resolved.
63
Area Variance
A variance that permits an owner to build a structure that does not strictly comply with the zoning law's set back requirements, height limits, or other rules affecting the size or placement of buildings.
64
Arizona Administrative Code (A.A.C.)
The official rules of the State of Arizona promulgated by the state agencies, boars, and commissions that have rule-making authority.
65
Arizona Department of Environmental Quality (ADEQ)
The state department tasked with protecting and enhancing public health and the environment in the state; enforces the state's environmental laws and delegated federal programs to prevent air, water, and land pollution and ensure clean-up.
66
Arizona Department of Real Estate (ADRE)
The state agency that regulates real estate, cemetery and membership camping brokers and salespersons. The Department oversees the activities of licensees, investigates complaints, and participates in administrative hearings, It also regulates the sale of subdivisions, unsubdivided lands, timeshares, condominiums, membership campgrounds and cemeteries.
67
Arizona Department of Water Resources (ADWR)
The state department created in 1980 to secure long-term dependable water supplies for Arizona's communities; enforces the state's groundwater code and surface water rights.
68
Arizona Revised Statutes (A.R.S.)
The codified collection of laws that have been passed by the Arizona State Legislature.
69
Arm's Length Transaction
A transaction that occurred under typical conditions int he marketplace, with each of the parties acting in their own best interests.
70
Arrears
Owing payment on things for which one has the use of but has not yet paid for, such as property taxes that are paid in arrears, or the state of being in arrears with a debt obligation (see also Accrued Expenses)
71
Article XXVI
Article of the Arizona Constitution that permits licensed, active real estate brokers and agents to prepare the documents necessary in a real estate transaction handled by their brokerage, without charging a fee.
72
Asbestos
Fibrous material derived from a naturally occurring group of minerals commonly used in insulation. Asbestos fibers released into the air are carcinogenic.
73
Asking Price
The price the seller asked for the property when it was first put on the market. (also called Listing Price)
74
Assemblage
The combining of two or more parcels of land into one larger parcel, usually to increase the usefulness of the land.
75
Assessed Value
For property tax purposes, a percentage of the market value. In Arizona the percentage for:
Residential Property = 10%
Raw Land = 15%
Commercial Property = 18%
76
Assessment
The valuation of real property that is used as a basis for calculating the amount of real estate tax to be levied. Also, the levy or rate to be paid to the government for services provided or constructed by it. (example; curbs, sewers, sidewalks). Sometimes referred to as a "Special Assessment"
77
Assessor
The county official who determines the value of property for property tax purposes.
78
Assign
The act of transferring one's rights.
79
Assignee
The person who receives rights under an assignment.
80
Assignment
1. The transfer of one person's interests under a contract to another.
2. The transfer of a tenant's right of possession, or other interest, in leased property to another person for the remainder of the lease term.
In both cases, assignment does not release the assignor from the obligations stated in the contract.
81
Assignor
The person who transfers rights under an assignment.
82
Assistive Animal
An animal that has been trained to perform tasks that assist people with disabilities. (Also see Service Animal)
83
Associate Broker
A licensee who has qualified as a real estate broker but works for a designated broker.
84
Assumable Loan
A financing arrangement in which the outstanding loan amount can be transferred to someone else.
85
Assumption
The obligation and promise to be personally liable for conditions in a contract.
86
Assumption of Mortgage
An agreement by a buyer to assume the liability under an existing note secured by a mortgage.
87
Assured Water Supply
The demonstration that sufficient water of adequate quality will be continuously available to satisfy the needs of the proposed development for at least 100 years; required from developers within an Active Management Area (AMA).
88
Attachment
Court-ordered seizure of a defendant's property to satisfy a judgment. In the case of real property, attachment creates a lien.
89
Attachment, Man-made
An item of personal property that has been attached to or closely associated with real property in such a way that it is now legally part of the real property (also called; Fixture)
90
Attachment-Natural
Things growing on land, such as trees, shrubs, or crops (also called; Emblements or Fructus Naturales.)
91
Attest
To affirm to be true
92
Attorney-at-Law
An individual licensed to practice law for the public.
93
Attorney General
The chief legal officer of the state, elected to a four-year term, who also serves as the legal advisor to the Commissioner of the Arizona Department of Real Estate.
94
Attorney-In-Fact
A person specifically designated in an instrument (power of attorney) to do something legally for another in his stead. An attorney-in-fact has a fiduciary relationship with the principal. An attorney-in-fact need not be an attorney-at-law.
95
Authorization to Sell
A listing agreement, a contract of employment between the seller (the principal) and the broker (the agent).
96
Automatic Stay
An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.
97
Avulsion
The erosion or tearing away of land through natural causes, such as flooding, which may remove soil or cave in the banks of a river.
98
Backup Offer
A possibility when a home seller has accepted an offer from a buyer but is still accepting offers from other buys in the event the original offer falls through.
99
Bad Debt
A debt that cannot be recovered
100
Bait and Switch
A deceptive sales technique that involves advertising to a consumer with a particular product or rate to attract them, then persuading them to accept less favorable terms so that the loan originator can earn a higher fee. Most states have consumer protection laws that make this tactic illegal.
101
Balloon Payment
A lump sum payment that is due at the end of a note term, because the note used paid only part of the principal and/or interest. (AKA Partially Amortized Mortgage)
102
Bankruptcy
A court process that cancels some debt and provides some relief for creditors. Chapter 7, sometimes called a straight bankruptcy, is a liquidation proceeding; Chapter 13, sometimes called a reorganization proceeding, is filed by individuals who want to pay off their debts over a period of three to five years.
103
Bargain and Sale Deed
A deed that conveys ownership from the grantor to the grantee without any expressions of warranty. Often used under a legal proceeding. (AKA Grant Deed)
104
Baseline
A primary line running east to west that establishes a north and south boundary in the rectangular survey system of legal land description.
105
Basis
A buyer's initial cost for a real estate purchase; the dollar amount the Internal Revenue Service attributes to an asset in determining annual gain or loss, or depreciation, on the sale of the asset.
106
Benchmark
Local markers that surveyors can use as starting point for determining elevation.
107
Beneficial Use
The right to use and enjoy property
108
Beneficiary
One who receives a benefit; refers to the lender in a trust deed.
109
Bequeath
To leave or transfer property to someone else via a will
110
Bequest
A gift of personal property given in a will
111
Bequestor
One who leaves property to others in a will
112
Bilateral Contract
A contract in which the parties expressly enter into mutual agreements or engagements (example; real estate sales contract). Each party promises to perform some act.
113
Bill of Sale
An instrument in writing that transfers ownership of tangible personal property.
114
Binder
1. A short-term contract that can be used in certain parts of the country to hold a real estate transaction together until other arrangements are made. It does not contain specifics (examples; inspection provisions, closing date).
2. Money given by a buyer upon signing a sales contract, showing the buyer's intention to carry out the terms of the contact.
115
Blanket Mortgage
A single mortgage loan where two or more different parcels of property are offered as security for the loan
116
Blind Ad
An advertisement in which a licensee attempts to advertise a property for sale without disclosing his or her licensee status, or when a licensee attempts to mislead the public into believing a property is for sale by owner.
117
Blockbusting
An illegal act whereby owners are encoursged to sell their properties because minorities are moving into their neighborhood. AKA panic selling or panic peddling.
118
Blue Sky Laws
Laws regulating the sale of securities, intended to protect consumers from fraud.
119
Boilerplate
Standardized language used in contracts for the sake of efficiency and completeness.
120
Bona Fide
Genuine and with good faith; without fraud or deceit.
121
Boot
Taxable, not like-kind property used in an exchange, such as cash or other personal property that is used to balance an exchange of real property, can be borrowed.
122
Branch Office
A physical location separate from a broker's main office that is used by licensees to meet or consukt with clients or customers on a regular basis.
123
Breach
An unexcused failure to perform according to the terms of a contract.
124
Bridge Loan
A short-term loan that occurs between the termination of one loan and the beginning of another. AKA Gap Loan or Swing Loan
125
Bring Down Endorsement
An extension of a title search to verify that no liens have been filed against a property between the timeframe of the original search and the recording of the deed or mortgage. AKA Continuance
126
Broker
A person licensed under the laws of the state to transact real estate business on behalf of another(acting as an agent). In Arizona, a broker must hsve 3 years of experience and can be a designated broker or associste broker.
127
Broker Protection Clause
A clause in an agency agreement that provides the broker is still entitled to commission if the property is sold during a certain time under certain circumstances.
128
Broker's Trust Account
A bank account, separate from a real estate broker's personal and business accounts, used to segregate trust funds from the broker's own funds.
129
Brown v. Board of Education
A landmark 1954 civil rights case before the U.S. Supreme Court declaring that separate public schools for black and white students were unconstitutional, thereby overturning Plessy v. Ferguson.
130
Brownfields
Real properties whose expansion, redevelopment, or reuse may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.
131
Budget Mortgage
A mortgage agreement where payments include principal and interest on the loan plus 1/12 of the year's property taxes and hazard insurance premiums.
132
Buffer Zone
A tract of land between two differently zoned areas
133
Bulk Land
Parcels of land that are 160 acres or larger
134
Bulk Sale Transfer
Transfer of title to personal property under the Uniform Commercial Code (UCC)
135
Bundle of Rights
Legal rights conferred to owners of real property, including rights to mortgage, sell, make improvements, enjoyment, lease and use property.
136
C Corporation
A legal entity owned by its shareholders that has limited liability. The corporation is taxed as an entity as well as the dividends received by the shareholders, therefore, double taxation.
137
Caisson
Column lots that form the structural support of air lots
138
Calendar Year
365 Days.
139
Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM)
A federal law enacted to curb unsolicited commercial e-mail, or spam, to both computers and wireless devices without prior permission. Required an opt-out provision.
140
Cap
The maximum increase in the interest rate, or the maximum interest rate, that a lender can charge on an adjustable rate mortgage.
141
Captial Expenditures
An expense incurred to improve property.
142
Captial Gains
The gain from the sale of a capital asset (example; one held for investment purposed)
143
Captial Improvement
The addition of a permanent structural change or restoration of some aspect of real property that will either enhance the property's value, increase its useful life, or adapt it to a new use.
144
Capital Losses
Monetary loss resulting from an investment's decrease in value.
145
Captialization
A method of determining the present value of income property by discounting the annual net income by a commonly used rate of return.
IRV Formula: Income / Rate = Value
146
Capitalization Rate
A rate of return, stated an a percent, used to derive a value opinion from the anticipated net operating income a property could generate. it is used for direct capitalization in the income approach. (see also Cap Rate)
147
Captialized Value
The current value of an asset, based on the total income expected to be realized over its economic life span.
148
Capping
The addition of two to four feet of topsoil and plants to a landfill to form a barrier between the contaminated material and the surface, protecting people and the environment.
149
Carryback
Property lien in which a seller assumes the lender's role and carries the unpaid balance of the purchase price as a loan to the buyer.
150
Cash Flow
The net spendable income from an investment after operating and fixed expenses including debt service. If expenses exceed income, the cash flow is negative. AKA Cash Throw-Off
151
Cash-On-Cash Return
The bottom line of any investment expressed as a percentage by dividing the investment's cash flow by the down payment and settlement costs.
152
Caveat Emptor
A Latin phrase meaning "let the buyer beware". The rules states that a buyer is expected to examine property carefully, instead of relying on the seller to point out problems.
153
CC&Rs
A declaration of COVENANTS, CONDITIONS, and RESTRICTIONS; usually recorded by a developer to create a general plan of private restrictions for a subdivision.
154
Cease and Desist
A court of administrative order requiring the cessation of certain activities.
155
Central Arizona Project (CAP)
A 336-mile canal/aqueduct that diverts water from the Colorado River for delivery to central and southern Arizona; managed by the Central Arizona Water Conservation District. (CAWCD)
156
Certificate of Eligibility
A statement issued by the Department of Veteran's Affairs to establish the status and amount of a veteran's eligibility to qualify for a guaranteed loan.
157
Certificate of No Defense
AKA Estoppel Certificate or Certificate of No Set-Off;
A legal instrument used by a lender so that beyond a certain date, the borrower agrees that the loan balance is correct if no dispute is made, and thus there is no defense to challenge it. This is generally used when a note is sold, and so it is for the benefit of the investor who buys the note. These may also be used when commercial property is sold and the tenants verify the terms of the lease.
158
Certificate of Reasonable Value (CRV)
A document issued by the Department of Veteran Affairs that states the value of the subject property based on an approved appraisal. A VA-guaranteed loan amount cannot exceed the CRV.
159
Certificate of Sale
A document that the highest bidder receives at a sheriff's foreclosure sale.
160
Chain of Title
The record of deeds (or other documents) showing transfer of title or real property from one person to the next, as disclosed in the public records.
161
Chattel
Personal Property
162
Chattel Mortgage
A mortgage deed that create a lien on personal property.
163
Chattel Real
An interest, such as a leasehold, in an item of immoveable property, such as land or a building.
164
Check Lines
AKA Correction Lines;
In the rectangular survey system, lines running every 24 miles that are used to make a correction to compensate for the curvature of the earth.
165
Civil Law
The body of law concerned with the rights and liabilities of one individual in relation to another; includes contract, tort, and property law.
166
Civil Litigation
A lawsuit in which one individual sues another for compensation.
167
Civil Rights
Fundamental rights guaranteed to all persons by the law. The term is primarily used in reference to federal, state, and local laws for protections against discrimination based on race, religion, sex, national origin, and other defined classes.
168
Client
A buyer or seller - or tenant or landlord - who is represented by an agent. AKA Principal
169
Close of Escrow (COE)
A real estate transaction that has been completed and the sale is final.
170
Closing Costs
Expenses incurred in the transfer of real estate in addition to the purchase price.
171
Closing Disclosure
A settlement statement prepared by the lender or closing agent itemizing all expenses and costs paid by the buyer and seller needed to close the real estate transaction as required for RESPA-related transactions.
172
Cloud on the Title
A valid encumbrance affecting title of estate in land, such as a mortgage or judgment.
173
Code of Ethics
A set of principles and standards based on core values by which a group of professionals are expected to conduct themselves.
174
Codicil
An addition to a will that does not revoke the entire will.
175
Collateral
Property pledged as security for a debt.
176
Collateral Lien Document
The interest a creditor may acquire in the debtor's property to ensure that the debt will be paid. AKA Security Instrument.
177
Collusion
An agreement between two or more persons to defraud someone.
178
Co-Maker
A person, who with other individual(s) guarantees a financial commitment, a borrower.
179
Commercial Bank
A financial institution that provides a variety of financial servcies.
180
Commingling
Illegally mixing personal funds with money held in trust on behalf of a client.
181
Commission
Compensation paid to a broker for services in a real estate transaction; usually a percentage of the sales prices, rather than a flat fee.
182
Commissioner
The person who heads the Arizona Department of Real Estate. Appointed by the Governor, the Commissioner has no set term. Prior to appointment, the Commissioner must have at least five years of experience in real estate, banking, or title/escrow business.
183
Commissioner's Rules
Rules and regulations adopted by the Arizona Department of Real Estate and published in the Arizona Administrative Code (A.A.C.) in Title 4, Chapter 28.
184
Common Law
Long-established rules that are principles founded on customer, decisions, and opinions of the court.
185
Community Facilities District (CFD)
A special purpose public improvement district in Arizona that has the ability to levy long-term bonds to finance and provide public infrastructure, such as water, sewer, schools, and streets.
186
Community Property
Property accumulated by legal spouses through the efforts of either during their marriage. Community property laws provide that each spouse has an equal interest in the property so acquired. However, the spouses can own property sole and separate from the community.
187
Compensation
The valuable consideration given by one person or entity to another person or entity in exchange for the performance of some activity or service.
188
Compensatory Damages
Award usually money, intended to compensate the plaintiff for harm caused by the defendant's act or failure to act. AKA Actual Damages
189
Competent
1. Of sound mind, for the purposes of entering a contract or executing a will; not suffering from mental illness, retardation, or senility.
2. Of sound mind and having reached the age of majority.
190
Competitive Market Analysis
A method of determining the approximate market value of a subject property by comparing it to other similar properties in a given area that have sold, are presently for sale, or did not sell. AKA Comparative Market Analysis
191
Compound
Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.
192
Comprehensive Loss Underwriting Exchange (CLUE) Report
A report available from Lexis/Nexis that tracks insurance claim history on real property.
193
Conciliation
A method for resolving fair housing complaints whereby the individual against whom a complaint was filed assures that the violation will be remedied.
194
Concurrent Tenancy
Ownership of property by more than one person. AKA Co-Ownership or Co-Tenancy
195
Condemnation
1. The act or process of taking private property for public use, through the government's power of eminent domain. AKA Appropriation
2. A declaration that a structure is unfit for occupancy and must be closed or demolished.
196
Conditional
Subject to one of more requirements being met.
197
Conditional Acceptance
See Counter Offer
198
Conforming Loan
A loan that meets the qualifying standards established by Fannie Mae or Freddie Mac and, thus, can be sold on the secondary market.
199
Conformity
An economic principle that says a home usually achieves maximum value when it is surrounded by homes similar in style and function.
200
Consent Order
A negotiated settlement between the Arizona Department of Real Estate and a licensee when Enforcement and Compliance finds evidence to support discipline. Once signed by ADRE and the licensee, it becomes effective immediately and cannot be appealed.
201
Consideration
Something of value given to another as compensation for entering into a contract.
202
Construction Loan
Interim financing used during construction of a building; a short-term loan.
203
Constructive Eviction
A landlord's act (or failure to act) that interferes with the tenant's quiet enjoyment of the property, or makes the property unfit for its intended use, to such an extent the tenant is forced to move out.
204
Constructive Notice
Notice given by publication in a newspaper, recording, or other method.
205
Consumer
A person or entity seeking or receiving licensed activities.
206
Consumer Financial Protection Bureau (CFPB)
An agency funded by the Federal Reserve with rulemaking and enforcement authority over many consumer financial laws, including the Truth in Lending Act and the real Estate Settlement Procedures Act. Established under Title X of the Wall Street Reform and Consumer Protection Act.
207
Contiguous
Refers to parcels that touch at any point.
208
Contingency
Provision in a contract or deed that makes the parties' rights and obligations depend on the occurrence (or nonoccurence) of a particular event.
209
Contour Maps
A topographic map showing the physical characteristics of a parcel of land, including the elevation.
210
Contract
An agreement that the law will enforce. The elements of a contract are mutual assent (offer and acceptance_, consideration, competent parties, legal subject matter and sometimes that the contract be in writing if required by the Statue of Frauds.
211
Contract for Sale
See Purchase Contract
212
Contract Rent
The amount of rent stated in the terms of the lease.
213
Contribution
The theory that a specific item or feature of a property is worth only what it actually contributes in value to that parcel or real estate.
214
Conventional Life Estates
An estate created by deed or will that may be for the tenant's own life or the life of another.
215
Conventional Loan
A loan that is not guaranteed or insured by a government agency.
216
Conversion
1. The illegal use of funds being held in trust.
| 2. Changing an existing rental apartment building into a condominium.
217
Convey
To transfer title to property
218
Conveyance
A written instrument, such as a deed or a bill of sale, that transfers title to property.
219
Cooperating Broker
A subagent to the seller who is cooperating in the sale with the listing broker.
220
Corporeal
Real property that can be touched, such as land, buildings, and other improvements.
221
Correction Deed
A deed that corrects prior recorded deeds with minor mistakes, such as in spelling or legal descriptions.
222
Correction Lines
In the rectangular survey system, lines running every 24 miles that are used to make a correction to compensate for the curvature of the earth. AKA Check Lines
223
Cost
The dollars needed to develop, produce, or build something.
224
Cost Approach
A method of appraisal based on reproduction cost new of an improvement, minus any depreciation, plus side value. Often used when comparable sales cannot be found, as with unique properties or public buildings, or for custom homes or new construction. AKA Summation Method
225
Counter Offer
A response to an offer to enter into a contract, changing some of the terms of the original offer. A counteroffer is a rejection of the original offer (not a form of acceptance), and does not create a binding contract until it is agreed upon by both parties.
226
Covenants, Conditions and Restrictions
A declaration of covenants, conditions, and restrictions; usually recorded by a developer to create a general plan of private restrictions for a subdivision.
227
Credit
1. the availability of money; the ability to borrow money.
| 2. A sum of money to be received.
228
Creditor
A person or other entity, such as a bank, who is owed a debt.
229
Criminal Law
The body of law concerned with crimes, an individual's actions against society.
230
Criminal Litigation
A lawsuit in which the government sues an individual to punish the wrongdoer and protect society.
231
Curable Depreciation
Physical deterioration of a property that is economically feasible to repair or replace.
232
Curtesy
The fractional interest of a husband in the estate of his wife at the time of her death. Not legal in Arizona.
233
Customer
A party to a transaction who is not a principal. In Arizona's Law of Agency, the buy is the customer and the seller is the principal
234
Damages
An amount of money a defendant is ordered to pay to a plaintiff.
235
Datum
A point, line, or surface from which elevations are measured.
236
Debit
Any sum of money owed; a charge on a closing statement.
237
Debt
The amount of money owed on a note or other promise to pay.
238
Debt Coverage Ratio (DCR)
Used to determine a company's ability to generate enough income to cover the expense of a debt, calculated as net operating income divided by debt service. AKA Debt Service Coverage Ratio
239
Debt Ratio
The relationship of a borrower's total monthly debt obligations, including housing and long-term debts with 10 or more payments remaining, to income, expressed as a percentage. AKA Debt to Income Ratio, Debt Service Ratio, Back End Ratio
240
Debt Relief
The reorganization of debt, relieving the debtor of liability for some or all of a debt burden. When relieved of a debt, individuals receive a Form 1099 - C form, and must report it as income on their tax return.
241
Debtor
A person or other entity who owes money to another.
242
Decedent
A person who has died
243
Deed
A written instrument transferring the grantor's ownership or, or interest in, real property.
244
Deed in Lieu of Foreclosure
A deed to property voluntarily given by a borrower to the lender to satisfy the debt and avoid foreclosure. AKA Voluntary Conveyance.
245
Deed of Reconveyance
A deed that a trustee signs and gives to the trustor (the borrower) to convey title back to the trustor when the loan (deed of trust) has been paid in full.
246
Deed of Trust
A three-party security instrument that conveys naked title to a trustee. The borrower, called the trustor, has equitable title. The lender is the beneficiary. In Arizona, a deed of trust is more common than a mortgage because a deed of trust allows the trustee to sell the property if the trustor defaults, thereby bypassing the judicial foreclosure procedure (a power of sale clause). Once the note is repaid, the trustee conveys legal title to. the trustor.
247
Deed Restrictions
Private limitations on the use of property, contained in the deed as a means of controlling the quality or character of a subdivision or specific piece of property.
248
Default
Failure to fulfill an obligation, duty, or promise.
249
Default in Prior Mortgage
A clause in a junior mortgage that allows the lender, usually the seller, to make the payments on the prior loans that are in default. The payments can then be added to the balance of the loan and the lender can then foreclose.
250
Defeasance Clause
1. A clause used to defeat or cancel a certain right upon the occurrence of a specific event, for example, requiring a lender to give a borrower release of the lien once the loan is repaid.
2. Clause used to give a borrower the right to redeem real estate after default on a note by paying the full amount due plus fees and court costs.
251
Defeasible Fee
An estate that reverts back to the grantor if a condition is broker
252
Deferred Maintenance
Physical deterioration or loss in value of a building from postponing maintenance.
253
Deficiency Judgement
A personal judgement against a borrower if the lender/creditor does not receive the amount of the lien plus the costs associated with foreclosure at a foreclosure sale. In Arizona, a lender cannot have a deficiency judgement if the secured property is a single or two-family dwelling and on two-and-a-half acres or less.
254
Delivery of Deed
The legal act of transferring title of property to the grantee.
255
Demand
A letter from a lender to a borrower requesting payment of the amount due.
256
Demise
The transfer of possession in an estate to another by lease.
257
Deny
The refusal to issue or renew a real estate license.
258
Depreciation
1. The decease in value to real property improvements caused by deterioration or obsolescence
2. A loss in value as an accounting procedure for use as an accounting procedure for use as a tax deduction for income tax purposes. Investors use depreciation as a tax shelter.
259
Law of Descent
A system whereby title to property passes by operation of law to the heirs of one who dies owning property without a will.
260
Designated Broker
The principal broker who is responsible for the acts of all licensees under his or her license. In Arizona, each real estate company has one designated broker.
