Real Estate Terms

A

ABATEMENT OF JUDGMENT

A document containing a condensation of the essential provisions of a court judgment

ABATEMENT OF NUISANCE

The act of ending or terminating a nuisance; a type of legal action brought to end a nuisance

ABSTRACT OF JUDGMENT

A summary of money judgment. The summary is usually prepared so that it may be recorded, thereby creating a (judgment) lien on real estate owned by the judgment debtor

ABSTRACT OF TITLE

A summary of the instruments affecting title to a parcel of real property as shown by the public records

ACCELERATE

To make a note all due and payable at one time

ACCELERATION CLAUSE

A clause in a deed of trust or mortgage giving the lender the right to call all sums owing him or her to be immediately due and payable upon the occurrence of a certain event. It is also a clause that permits a debtor to pay off a loan before the due date

ACCELERATION CLAUSE

A clause in a promissory note, deed of trust, or mortgage that provides that upon default of a payment or some other stated event, the entire unpaid balance becomes immediately due and payable

ACCEPTANCE

An essential element of every contract, it is the consent to be bound by the offer. In deeds, it is the consent to accept a grant of real property

ACCESS RIGHT

The right of an owner to go into and out of his or her property

ACCOMMODATION PARTY

A person who, without receiving value, signs a promissory note to help another person borrow money or get credit

ACCORD AND SATISFACTION

The discharge of an existing contract by accepting the performance under a substitute contract. Generally, consideration under the new contract is different from and of lesser value than under the original contract, and satisfaction is the performance of that contract; the combination discharges the original contract

ACCRETION

A gradual addition to land from natural causes; for example, from gradual action of ocean or river waters

ACCRUED DEPRECIATION

1. The difference between the cost of replacement new as of the date of the appraisal and the present appraised value
2. The accumulated loss in value that has affected the improvements on real property ACKNOWLEDGEMENT – A formal declaration before an officer duly authorized as a notary public by a person who has executed an instrument, stating that the execution is his or her act and deed. A formal statement (usually before a notary public) by the person signing a deed or document that the instrument was actually and freely signed

ACOUSTICAL TILE

Blocks of fiber, mineral, or metal with small holes or a rough-textured surface to absorb sound, used as covering for interior walls and ceilings

ACQUISITION

The act or process by which a person procures property. ACRE A measure of land equaling 160 square rods, 4840 square yards, 43,560 square feet, or a tract about 208.71 feet square

AD VALOREM

According to value

ADA

Refers to the Americans With Disabilities Act. The ADA applies to equal access to employment, public services, public accommodations, public transportation and telecommunications

ADJACENT

Located next to or near an object or parcel of property

ADJOINING

Located so as to touch an object or share a common property line

ADJUSTED COST BASIS

For tax purposes it is the cost of the property plus improvements and minus depreciation, amortization, and depletion

ADMINISTRATOR

A person appointed by the probate court to administer the estate of a deceased person. His or her duties include making an inventory of the assets, managing the property, paying the debts and expenses, filing necessary reports and tax returns, and distributing the assets as ordered by the probate court

ADULT

Any person 18 years of age and older

ADVERSE POSSESSION

A method of acquiring property based on open and notorious possession, under a claim of right, color of title, continuous use for five years, and the payment of taxes. A method of acquiring property through continuous use of that property while paying taxes on it

AFFIDAVIT

A statement or declaration reduced to writing, sworn to or affirmed before some officer who has authority to administer an oath or affirmation, such as a notary public or a commanding officer in the service

AFFIRM

To confirm, swear, ratifying, verity

AGENCY RELATIONSHIP

A special relationship of trust by which one person (agent) is authorized to conduct business, sign papers, or otherwise act on behalf of another person (principal). This relationship may be created by expressed agreement, ratification, or estoppel

AGENT

One who represents another called a principal and has authority to act for the principal in dealing with third parties. The relationship is referred to as an agency: Someone authorized to act for another (called the principal) in business matters

AGREEMENT

A mutual understanding or compact between parties. Although often used a synonymous with contract, technically it denotes mutual promises that fail as a contract for lack of consideration

AGREEMENT OF SALE

1. A written contract between a buyer and seller setting out the terms of sale
2. An installment sales contract covering real property, especially a long-term contract
AIDS- The seller of real property, his agents or his sub agents do not have to disclose that somebody died of AIDS or had AIDS in said property

ALIENATION

The transferring of property to another. Conveyance or transfer of title to real estate from one person to another person

ALIENATION CLAUSE

In a deed of trust or mortgage, a provision that if the secured property is sold or transferred, the lender has the option of accelerating the loan and declaring the entire unpaid balance immediately due and payable. Also called a “dueon- sale” clause

ALLIGATOR

Purchasing lower priced properties will limit the appetite of the alligator. The alligator is an expensive piece of property that gobbles up all the profits. Negative cash flow on a keeper property is referred to as an alligator

ALL-INCLUSIVE DEED OF TRUST

A financing device whereby a lender makes payments on the existing trust deeds of a borrower and takes from the borrower a junior trust deed with a face value in an amount equal to the amount outstanding on the old trust deeds and the additional amount of money borrowed

ALLUVION (ALLUVIUM)

Soil that has been deposited by accretion on the shore of a river or body of water and that increases the real property

ALTA POLICY

The title insurance policy issued to institutional lenders. The initials stand for American Land Title Association, an organization that regulates and standardizes the provisions within title policies

ALTER EGO

A doctrine, which holds that a corporation is really owned by shareholders as their own property, and therefore it should not be considered as a separate entity. Usually used to try to hold shareholders liable for corporate debts

AMBULATORY

Capable of being changed or revoked. In wills, it refers to the concept that a will may be revoked or modified at any time up to the testator’s death

AMELIORATING WASTE

Improvements to property that, while not damaging the value of the property, technically qualify as waste. For example, an apartment building constructed on property designated only for single-family structures is considered ameliorating waste

AMENITIES

As used in the real estate business, the features that make a piece of real property, especially a home, enjoyable

AMORTIZATION

1. The liquidation of a financial obligation on an installment basis, which includes both principal and interest
2. Recovery of cost or value over a period of time. The method or plan for the payment of a debt, bond, deed of trust, etc., by installments or sinking fund

ANNUAL PERCENTAGE RATE (APR)

The cost of credit as determined in accordance with Regulation Z of the Board of Governors of the Federal Reserve System for implementing the Federal Truth in Lending Act

ANNUITY

A sum of money received or paid yearly or at other fixed periods

ANTICIPATION

Affirms that value is created by the anticipated benefits to be derived in the future

ANTICIPATORY BREACH

Advance notice of intention to violate the terms of a contract

APPEAL

The review or rehearing by a higher court of a low (inferior) court’s decision

APPELLANT

The party appealing a court decision. Either party may appeal; hence, the appellant could have been either the plaintiff or the defendant in the trial court

APPRAISAL

An estimate and opinion of value. An opinion or estimate of the fair market value of a property

APPRAISER

One qualified by education, training, and experience, who is hired to estimate the value of real and personal property on the basis of experience, judgment, facts, and use of formal appraisal processes

APURTENANT

Attached to or considered part of land, because of being considered necessary and incidental to the use of that land. Commonly applied to easements that are considered part of property

ASSESSED VALUE

Value placed on property as a basis for taxation. A value used by the tax assessor before July 1978. It represented 25 percent of the assessor’s fair market value. After deducting any exemptions from assessed value, one applied the tax rate to the net figure to determine annual property taxes

ASSESSMENT

The valuation of property for the purpose of levying a tax, or the amount of tax levied

ASSESSOR

The official who has the responsibility of determining the assessed values

ASSIGNEE

One to whom property is assigned or transferred

ASSIGNMENT

A transfer to another of any property or right. The transfer of one’s entire interest in property. Generally, the term is limited to intangible personal property (that is, stocks, bonds, promissory notes) and to leasehold estates

ASSIGNMENT OF RENTS CLAUSE

A clause in a deed of trust or mortgage, providing that in the event of default, all rents and income from the secured property will be paid to the lender to help reduce the outstanding loan balance

ASSIGNMENT OF RENTS

An assignment of future rents form property as security for a debt

ASSIGNOR

One who assigns or transfers property

ASSUMPTION

Acceptance of personal liability for another’s debt or obligation. In the case of the sale of real estate, the buyer personally accepts and promises to pay off the existing deed of trust

ASSUMPTION OF AGREEMENT

A contract by which a person agrees to pay a debt or obligation owed by someone else

ASSUMPTION OF MORTGAGE OR DEED OF TRUST

The taking of title to property by a grantee in which he or she assumes liability for payment of existing note secured by a mortgage or deed of trust against the property

ATTACHMENT

Seizure of property by court order before judgment, usually done to have it available in the event a judgment is obtained in a pending law suit. The actual or constructive seizure of property by court order during a lawsuit. The usual purpose is to hold the assets as security for the satisfaction of a judgment

ATTACHMENT LIEN

A lien on property arising because of an attachment of that property

ATTEST

1. To affirm to be true or genuine
2. An official act establishing authenticity

ATTORNEY-IN-FACT

An agent authorized to perform certain acts for another under a power of attorney. (See Power of Attorney.)

AVULSION

The sudden tearing away or removal of land by the action of water flowing over or through it

B

BACKFILL

The replacement of excavated earth in a hole or against the side of a structure

BALANCE SHEET

A financial statement showing a person’s assets, liabilities, and net worth

BALLOON PAYMENT

When the final payment on a note is greater than the preceding normal installments, the final installment is termed a balloon payment. An installment promissory note providing for the last payment to be much larger than any previous payment. By statute, any payment more than twice the smallest payment is a balloon payment, although in practice generally the term refers only to the last payment

BANKRUPTCY

Will not eliminate all loans secured by real property

BASE AND MERIDIAN

Imaginary lines used by surveyors from which they find, measure, and describe the location of lands

BASE MOLDING

Molding used at the top of the baseboard

BASE SHOW

Molding used at junction of baseboard and floor, sometimes called a carpet strip

BASEBOARD

A board that goes around the room against the wall and next to the floor

BATTEN

Narrow strips of wood or metal used to cover joints on the interior or exterior of a building; they are also used for decorative effect

BLOCKBUSTING

The illegal practice of trying to lower property values

BEAM

A horizontal structural member supporting a load

BEARING WALL OR PARTITION

A wall or partition that supports any vertical load, in addition to its own weight

BENCH MARKS

A location indicated on a permanent marker by surveyors

BENEFICIARY

1. One entitled to benefit from a trust
2. The lender on the security of a note and deed of trust. The creditor (lender) under a deed of trust

BENEFICIARY STATEMENT

(See Offset Statement)

BEQUEATH

To leave by will

BEQUEST

Personal property that is given by the terms of a will. A gift of personal property by will

BETTERMENT

An improvement on real property that increases the value and is considered a capital asset

BILATERAL CONTRACT

A contract in which the consideration given by each party is a promise: that is, a promise for a promise

BILL OF SALE

A written instrument given by the seller to the buyer to pass title to personal property

BINDER

A written statement that binds the parties to an agreement until formal contracts can be drawn; an agreement to cover a down payment as evidence of good faith

BLACKTOP

Asphalt paving used in streets and driveways

BLANKET DEED OF TRUST

A deed of trust binding more than one parcel of property as security. It is frequently encountered in subdivisions, where every lot in the subdivision is bound by the same deed of trust. As the lots are sold, they are released from the deed of trust by a partial release provision

BLANKET MORTGAGE

One mortgage or deed of trust that covers more than one piece of real property

BLIGHTED AREA

An area in which real property is declining in value because of destructive economic forces

BOARD FOOT

A unit of measurement for lumber: one foot wide, one foot long, one inch thick (144 cubic inches)

BONA FIDE

Good faith

BONA FIDE PURCHASER (BFP)

A purchaser who pays fair value for property in good faith, and without notice of adverse claims

BOND

An obligation under seal. Real estate bonds are issued on the security of a mortgage or deed of trust. A certificate representing a contract for the payment of money, often used to repay certain loans or held as security to ensure the performance of a stated act

BOOK VALUE

An accounting term, which is the difference between cost and the total amount of depreciation that has been taken

BRACING

Frame lumber nailed at an angle in order to provide stability to the structure

BREACH

The breaking of or failure of duty, either by an act or omission. The violation of or failure to perform an obligation

BREEZEWAY

A covered porch or passage, open on two ends, that connects the house and garage, or two parts of the house

BRIDGING

Wood or metal pieces used to brace floor joists

BROKER

An agent who earns income by arranging sales and other contracts. A real estate broker is an individual licensed by the state of California to arrange the sale or transfer of interests in real property for compensation

BROKER’S TRUST FUND ACCOUNT

Withdrawals from this account may be made only by the broker

BTU

British Thermal Unit; the quantity of heat required to raise the temperature of one pound of water one degree Fahrenheit

BUILDING LINE

Often called a setback line, a building line is a line running a certain distance from the street, in front of which an owner cannot build. These lines are set by law

BUILDING PAPER

A heavy waterproofed paper used as sheathing in exterior walls, or in roof construction as insulation and protection against moisture

BUILT-INS

Cabinets and other features built in as a part of the house

BUSINESS AND PROFESSIONS CODE

One of the 25 California codes containing the laws passed by the state legislature. It contains the statutes regulating the conduct of real estate brokers and establishes the Department of Real Estate

BUSINESS OPPORTUNITY

A term used to describe a business including its stock-intrade, fixtures, and goodwill

C

C.A.R.

Abbreviation for the California Association of Realtors

C.C. & R.

Abbreviation for covenants, conditions, and restrictions. Often used synonymously with general plan restrictions on a subdivision

CAL-VET LOAN (CALIFORNIA VETERANS)

A program administered by the State Department of Veterans LOAN) Affairs for the direct financing of farms and homes for veterans who qualify. The funds for these loans come from the sale of state bonds

CAPITAL ASSESTS

Assets of a permanent nature used in the production of income. Examples would include land, buildings, and equipment

CAPITAL GAIN

The gain recognized for federal and state income tax purposes when a taxpayer disposes of a capital asset

CAPITALIZATION

In appraising, a method of determining value of property by considering net income and a reasonable percentage of return on the investment

CAPITALIZATION RATE

The percentage rate or rate of interest considered a reasonable return on the investment. It is used in the capitalization method of determining value based upon net return

CARET

California Association of Real Estate Teachers; a division of the California Association of Realtors

CARPET STRIP

(See Base Shoe)

CASEMENT WINDOW

A windows set in a frame of wood or metal that swings outward

CASH FLOW

The new amount of cash a property produces when all cash income and other cash generated are added together and all cash expenses and other cash payments are deducted

CAUSE OF ACTION

A legal right; facts giving rise to an enforceable claim

CAVEAT EMPTOR

A Latin phrase meaning ” let the buyer beware”; the legal maxim stating that the buyer must examine the goods or property and buy at his or her own risk

CERTIFICATE OF REASONABLE VALUE

The Veterans Administration’s written appraisal of the value (CRV) of a property

CERTIORARI

The Supreme Court order indicating that the court has decided to exercise its discretion and accept a case offered on appeal. The court reviews only those select cases that it deems worthy of review

CHAIN OF TITLE

A series of conveyances, encumbrances, and other instruments affecting the title from the time original patent was granted, or as far back as records are available. A history of the recorded ownership of real estate and claims against title to real estate

CHATTEL

The old name for personal property

CHATTEL MORTGAGE

A personal-property mortgage. (See Security Agreement.)

CHATTEL REAL

In real estate, an estate less than a freehold estate, such as a lease

CHATTELS

1. Personal property
2. This term is sometimes used in a law to describe any interest in real or personal property other than a freehold

CIRCUIT BREAKER

An electrical device that automatically interrupts an electrical circuit when an overload occurs. Circuit breakers can be reset and today are used instead of fuses

CIVIL CODE

One of the 25 California codes containing the statutes passed by the state legislature. The most important code relating to contracts and real estate, the Civil Code defines the nature and requirements for contracts and real estate transactions, among its many other provisions

CIVIL LAW

CLAPBOARD

Boards that are used for siding and that are usually thicker at one edge

CLIENT

A person represented by a broker or an attorney

CLOUD ON TITLE

A claim or document that affects title to real estate. The actual cloud may ultimately prove invalid, but its existence mars the title

CLTA POLICY

The title insurance policy issued to homeowners and non-institutional lenders. The initials stand for the California Land Title Association, an organization that regulates and standardizes the provisions within title policies

CODE OF CIVIL PROCEDURE

One of the 25 California codes that contain the statutes passed by the state legislature. It contains most of the procedural requirements for enforcing rights granted by other codes, including the procedures for evictions, foreclosures, and lawsuits

CODICIL

An amendment to a will

COLLAR BEAM

A beam that connects the pairs of opposite roof rafters above the attic floor

COLLATERAL

Property subject to a security interest; property used as security for a debt. (See Security Agreement)

COLLATERAL SECURITY

The transfer of property of other valuables to ensure the performance of a principal agreement; an obligation attached to a contract to guarantee its performance

COLLUSION

A secret agreement between two or more persons wishing to defraud another for a wrongful purpose or to obtain an object forbidden by law

COLOR OR TITLE

That which appears to be a good title but, in fact, is not; for example, a forged deed. A document that appears to convey title, but in fact is ineffective, conveying no title at all. It is one of the requirements for adverse possession and easement by prescription

COMBED PLAYWOOD

A grooved building material used primarily for interior finish

COMMERCIAL ACRE

A term applied to the remainder of an acre of land after the area devoted to streets, sidewalks, curbs, and so on has been deducted from the acre

COMMERCIAL PAPER

Negotiable instruments used in business

COMMINGLING

The mixing of different funds so that they can no longer be distinguished. In domestic law it refers to the combination of separate property and community property, so that the separate property and community funds can no longer be distin- guished; in such cases all property is considered community property. For brokers it refers to the mixing of clients’ money with the broker’s separate bank accounts

COMMISSION

An agent’s compensation for performing the duties of his or her agency agreement. In the real estate business, it is usually a percentage of the selling price or a percentage of the lease or rents, for example. Reduction of a real estate commission for a listing contract is considered to be unethical

COMMISSION

A real estate broker may receive a commission from both parties

COMMITMENT

COMMON LAW

The body of law that grew from customs and practices developed and used in England. A body of unwritten law that developed in England from the general customs and usage. It was adopted in the United States and exercised by court decisions following the ancient English principles and the recorded law of a state

COMMUNITY PROPERTY

All property acquired by a husband and wife living together, except separate property. (See Separate Property)
Property owned in common by a husband and wife as a kind of marital partnership

COMPACTION

Packing or consolidation of soil. When soil is added to a lot to fill in low places or to raise the level of the lot, it is often too loose to sustain the weight of buildings. Therefore, it is necessary to compact the added soil so that it will carry the weight of the building without danger of settling or cracking

COMPARATIVE MARKET ANALYSIS

One of three methods in the appraisal process. A means of comparing similar type properties, which have recently sold, to the subject property

COMPETENT

Legally qualified or capable

COMPOUND INTEREST

Interest paid on the original principal and also on the accrued and unpaid interest that has accumulated as the debt matures

CONCLUSIVE PRESUMPTION

A legal assumption that cannot be rebutted, and is therefore accepted as true and binding on the courts

CONDEMNATION

1. The act of taking private property for public use by a political subdivision
2. A declaration by proper governmental authorities that a structure is unfit for use. The taking of private property for public use through the exercise of the power of eminent domain

CONDITION

A provision in a contract stating that the contract will not go into effect or that it will terminate upon the occurrence of some specified future event
1. A restriction added to a conveyance that, upon the occurrence or non-occurrence of some act or event, causes the estate to be defeated
2. A contractual provision that upon the occurrence or nonoccurrence of a stated act or event, an obligation is created, destroyed, or defeated

CONDITION PRECEDENT

A condition that must occur before an estate is created or enlarged, or before some other right or obligation occurs

CONDITION SUBSEQUENT

A condition that, upon its failure or nonperformance, causes the defeat or extinguishment of an estate, right, or obligation

CONDITIONAL COMMITMENT

A loan commitment for a definite amount under certain terms and conditions. It is subject to an unknown purchaser’s satisfactory credit rating

CONDITIONAL SALE CONTRACT

A contract for the sale of property whereby the seller retains legal title until the conditions of the contract have been fulfilled. The buyer has an equitable interest in the property. (See Security Agreement.) A contract for the sale of property by which possession is delivered to the buyer, but title remains with the seller until full payment or the satisfaction of other stated conditions

An exception to or relief from the application of a zoning ordinance, because of special authorization granted by the zoning authorities. The issuance rests on public policy benefits and prior authorization in the zoning ordinance

CONDOMINUM

A system of individual ownership of units in a multifamily structure, combined with joint ownership of common areas of the structure and the land. The ownership of an individual unit in a multi-unit structure, combined with joint ownership of common walkways, land, and other portions of the property

CONDUIT

Usually a metal pipe in which electrical wiring is installed

CONFESSION OF JUDGMENT

Any entry of judgment upon the debtor’s voluntary admission or confession

CONFIRMATION OF SALE

A court approval of the sale of property by an executor, administrator, guardian, or conservator

CONSIDERATION

Anything of value, or that is legally sufficient, given to induce someone to enter into a contract. The inducement for entering into a contract; usually money, services, or a promise, although it may consist of a legal benefit to the promisor or any legal detriment to the promisee

CONSTRUCTION

The interpretation of an ambiguous term or provision in a statute or agreement

CONSTRUCTIVE

A fiction imputed by law

CONSTRUCTIVE EVICTION

A breach of the landlord’s warranty of quiet enjoyment. Any acts by the landlord that substantially interferes with the tenant’s use and enjoyment of the premises

CONSTRUCTIVE NOTICE

Notice given by the public records; that which is considered equivalent to actual notice even though there is not actual notice.
1. Notice given by a recorded document
2. Notice imputed by a law because a person could have discovered certain facts upon reasonable investigation, and a “reasonable man” in the same situation would have conducted such an investigation

CONSUMER CREDIT PROTECTION ACT

A federal law that includes the truth-in- Leading Law

CONSUMER GOODS

Goods sold or purchased primarily for personal, family, or household purposes

CONTINGENT

Conditional, uncertain, conditioned upon the occurrence or nonoccurrence of some uncertain future event

CONTINUATION STATEMENT

A statement filed to extend the time limit on a financing statement that had been filed earlier

CONTRACT OF SALE

(See Conditional Sale Contract)

CONVENANT

An agreement or a promise to do or not to do a particular act.
Covenant: A contractual agreement whereby one of the parties promises to perform or to refrain from doing certain acts

CONVENTIONAL LOAN

A loan that is made that is not federally insured or guaranteed

CONVERSION

Is the misappropriation or misuse of trust funds

CONVERTIBLE ADJUSTABLE RATE

Allows the borrower to adjust to a fixed interest rate

MORTGAGE CONVERTIBLE ADJUSTABLE RATE

Allows the borrower to adjust to a fixed interest rate

MORTGAGE CONVEYANCE

1. The transfer of the title of real property from one to another
2. An instrument that transfers an interest in real property from one person to another. The transfer of title to real estate from one person to another

COOPERATIVE APARTMENT

A form of ownership in which each individual apartment owner shares in a cooperative venture that entitles the owner to use, rent, or sell a specific apartment unit

CORPORATION

A group or a body of persons recognized by law as an individual person with rights and liabilities distinct from those of the persons comprising it. Since the corporation is created by law, it may continue for any length of time that the law prescribes.
An artificial entity given authority to conduct business and possess many of the rights of natural persons. One of the key characteristics is that of perpetual existence

COST BASIS

(See Adjusted Cost Basis)

CO-TENANCY

Any form of joint ownership

COUNTERFLASHING

Flashing used on chimneys at roofline to cover shingle flashing and prevent moisture entry

COUNTER-OFFER

The rejection of an offer by the submission of another offer, different in terms from the original offer.
Any purported acceptance of an offer that introduces new terms is a rejection of that offer, and amounts to a counter-offer

COVERSION

The wrongful appropriation of another’s goods to one’s own use; to change from one character or use to another.
1. In tort, an unauthorized claim of ownership over another’s personal property
2. In property, the change of character of property from real to personal, or vice versa

CPM

Certified Property Manager; a member of the Institute of Real Estate Property management of the National Association of Realtors

CRAWL HOLE

Exterior or interior opening permitting access underneath a building, as building codes may require

CREDIT UNIONS

A growing source of funds for real estate loans

CRV

These initials mean Certificate of Reasonable Value

CURTAIL SCHEDULE

A list of the due dates and amounts by which the principal sum of an obligation will be reduced by partial payments

D

DAMAGES

The indemnity recoverable by a person who has sustained an injury to either his or her person, property, or rights through the act or default of another. Compensation ordered by the courts for the loss of or injury to one’s person or property

DEALER

A person who holds property primarily for sale to his or her customers in the ordinary course of his or her business

DEBT SERVICE

The sum of money needed each payment period to amortize the loan or loans

DEBTOR

1. A party who “owns” the property that is subject to a security interest
2. A person who owes a debt

DECK

Usually an open porch on the roof or another part of the structure

DECLARATORY RELIEF

A court’s decision on the rights of the parties in a question of law, without ordering anything to be done

DEDICATION

An appropriation of land by its owner for some public use and accepted for such use by authorized public officials on behalf of the public. A gift of privately owned land to the public or for public use. It may be voluntary or involuntary

DEED

A written instrument that when properly executed and delivered conveys title

DEED OF TRUST

A security instrument transferring title to property to a third person (trustee) as security for a debt or other obligation

DEFAULT

1. Failure to fulfill a duty or promise or to discharge an obligation
2. Omission or failure to perform any act. Failure to perform a legal duty or to discharge a promise

DEFAULT JUDGMENT

A judgment obtained because the defendant failed to appear and defend his case

DEFEASANCE CLAUSE

The clause in a mortgage or deed of trust that gives the borrower the right to redeem his or her property upon the payment of his or her property upon the payment of his or her obligations to the lender

DEFEASIBLE

Capable of being defeated. A defeasible estate is one that has a condition attached to the title, which, if broken, causes the termination of that estate

DEFENDANT

The party being sued in a lawsuit; the party against whom an action is filed

DEFERRED MAINTENANCE

Maintenance and accumulated repairs that have been postponed

DEFICIENCY JUDGEMENT

A judgment given for the unpaid balance of a debt remaining after the surety is sold. A court decree holding a debtor personally liable for the shortage or insufficiency realized on the sale of secured property. The debtor owes the difference between the sale price of the property and the amount of the secured debt

DELIVERY (OF A DEED)

The unconditional, irrevocable intent of a grantor immediately to divest (give up) an interest in real estate by a deed or other instrument

DEPOSIT

Money given to another as security to ensure the performance of a contract. The money is usually intended to be applied toward the purchase price of property, or forfeited on failure to complete the contract

DEPOSIT RECEIPT

A contract used in the he real estate business that includes the terms of the contract and acts as a receipt for “earnest money” to bind an offer for property by the prospective purchaser. The name given to most real estate contracts containing the terms of the sale of real estate, and receipt for earnest money (deposited)

DEPRECIATION

A loss in value from any cause. This loss in value to real property may be caused by age or physical deterioration, or by functional or economic obsolescence

DESIST AND REFRAIN ORDER

An order that the Real Estate Commissioner is empowered by law and refrain from committing an act in violation of the Real Estate Law

DETERIORATION

The process of gradual worsening or depreciation

DEVISE

A gift of real property by deed

DEVISEE

One who receives real property under a will

DICTUM

A written observation, remark, or opinion by a judge to illustrate or suggest an argument or rule of law not incidental to the case at hand, and which, therefore, although persuasive, is not binding on the judge

DIRECTIONAL GROWTH

The direction in which the residential sections of a city seem destined or determined to grow

DISCLOSURE STATEMENT

A statement that the Truth-in-Lending Law requires a creditor to give a debtor showing the finance charge, annual percentage rate, and other required information

DISCOUNT

To sell a promissory note before maturity at a price less than the outstanding principal balance of the note at the time of sale. It may also be the amount deducted in advance by the lender from the face of the note

DISCOUNT POINTS

A fee charged by the lender when making an FHA or VA loan to offset the lower interest rate the lender will receive compared with conventional loan interest rates. One point is equal to 1 percent

DISCOUNT RATE

The interest rate that is charged on money borrowed by banks from the Federal Reserve System

DISCOUNTED TRUST DEED

An investment in this kind of deed can be a perfect investment

DISCRIMINATORY CONDUCT

The DRE Regulations state that discriminatory conduct is a basis for disciplinary action

DISSOLUTION OF MARRIAGE

A divorce

DISTRICT COURT

The main trial court in the federal court system and the lowest federal court. It has jurisdiction in civil cases where the plaintiffs and defendants are from different states (diversity of citizenship) and the amount in controversy is over $10,000, and in cases involving a federal question

DIVESTMENT

The elimination or removal of a right or title, usually applied to the cancellation of an estate in land

DOMICILE

A person’s permanent residence

DOMINANT TENEMENT

The tenement obtaining the benefit of an easement appurtenant. That parcel of land that benefits from an easement across another parcel of property (servient tenement)

DONEE

The person to whom a gift is made

DONOR

The person who makes a gift

DOUBLE ESCROW

An escrow that will close only upon the condition that a prior escrow is consummated. The second escrow is contingent upon and tied to the first escrow. While double escrow is not illegal, unless there is full and fair disclosure of the second escrow, there may be a possibility of fraud or other actionable conduct by the parties

DOWER

The right that a wife has in her husband’s estate at his death. Dower has been abolished in California

DUE PROCESS OF LAW

A constitutional guarantee that the government will not interfere with a person’s private property rights without following procedural safeguards prescribed by law

DUE-ON-ENCUMBRANCE CLAUSE

A clause in a deed of trust or mortgage that provides that upon the execration of additional deeds of trust or other encumbrances against a secured parcel of property, the lender may declare the entire unpaid balance of principal and interest due and owing

DUE-ON-SALE CLAUSE

An acceleration clause that grants the lender the right to demand full payment of the mortgage or deed of trust upon sale of the property. A clause in a deed of trust or mortgage that provides that if the secured property is sold or transferred, the lender may declare the entire unpaid balance immediately due and payable. Its use has been severely limited by recent court decisions. Also called an alienation clause

DURESS

Unlawful constraint by force or fear. E.I.R. Abbreviation for Environmental Impact Report

E

EARNEST MONEY DEPOSIT

A deposit of money paid by a buyer for real property as evidence of good faith. Cannot be given back to the buyer unless he obtains written permission from the seller

EASEMENT

A right, privilege, or interest that one party has to use the land of another. Example: A right of way. A legal right to use another’s land for one’s benefit or the benefit of one’s property (right-of-way)

EASEMENT APPURTENANT

An easement created for the benefit of a particular parcel of property. There is both a dominant and a servient estate. The easement is annexed to and part of the dominant property

EASEMENT IN GROSS

An easement that benefits a particular individual, not a parcel of property. Involves only a servient estate. A public utility easement is an example

EASY QUALIFIER MORTGAGE

This may be referred to as “low doc” or “no doc” loan

EAVES

The lower projecting edge of a roof over the wall

ECONOMIC LIFE

The remaining useful life of an improvement or structure; that period during which an improvement will yield a return on the investment

ECONOMIC OBSOLESCENCE

The loss in value to property due to external causes such as zoning or a deteriorating neighborhood. It is also referred to as social obsolescence

EFFECTIVE GROSS INCOME

The amount of net income that remains after the deduction from gross income of vacancy and credit losses

EGRESS

Exit; the act or avenue or leaving property

EMBLEMENTS

Things that grow on the land that require annual planting and cultivation

EMINENT DOMAIN

The right of the government and certain others, such as public utilities, to acquire property for public or quasi-public use by condemnation, upon payment of just compensation to the owner. The constitutional or inherent right of a government to take private property for public good upon the payment of just compensation

ENCROACHMENT

The projection of a structure onto the land of an adjoining owner. A structure or natural object that unlawfully extends into another’s property

ENCUMBRANCE

Any claim, interest, or right improperly possessed by another that may diminish the true owner’s rights or value in the estate. Examples include mortgages, easements, or restrictions of any kind. A claim, lien, or charge on property

ENDORSEMENT

(See Indorsement)

ENVIRONMENTAL IMPACT REPORT

A report that must be prepared whenever any agency or individual considers a project that may have a significant impact on the environment, as directed by the California Environmental Quality Act

EQUAL CREDIT OPPORTUNITY ACT

Prohibits discrimination amongst lenders

EQUAL HOUSING OPPORTUNITY

Prohibits discrimination in the listing, sale, lease, rental or financing of real property due to race, creed, religion, sex, marital status or handicap. Should apply exactly the same in all real estate

EQUAL PROTECTION

The Fourteenth Amendment to the U.S. Constitution and similar provisions in the California Constitution require each citizen to receive equal protection of the laws. There are no minimum standards of protection; all equally situated individuals must simply be treated equally. (The due process clause of the Constitution imposes certain minimum standards of protection)

EQUITY

1. The interest or value that on owner has in real property over and above the liens against it
2. A part of our justice system by which courts seek to supplement the strict terms of the law to fairness under the circumstances, rather than on fixed legal principles or statutes–3. Ownership in property, determined by calculating the fair market value less the amount of liens and encumbrances

EQUITY BUILD-UP

The increase of the owner’s equity due to mortgage principal reduction and value appreciation

EQUITY OF REDEMPTION

The right to redeem property during the foreclosure period. In California the mortgagor has the right to redeem within 12 months after the foreclosure sale

EROSION

The wearing away of the surface of the land by the action of wind, water, and glaciers, for example

ESCALATOR CLAUSE

A clause in a contract that provides for the upward or downward adjustment of certain items to cover the specific contingencies set forth. A clause in a promissory note, lease, or other document that provides that upon the passage of a specified time or the happening of a stated event, the interest rate shall increase

ESCHEAT

The reversion of property to the state when there are no devisees or heirs capable of inheritance. Reversion of property to the state upon the death of an owner who has no heirs able to inherit

ESCROW

The deposit of instruments and funds with a third neutral party with instructions to carry out the provisions of an agreement or contract. A complete or perfect escrow is one in which everything has been deposited to enable carrying out the instructions. The neutral third party (stakeholder) who holds deeds or other documents pursuant to instructions for delivery upon completion or occurrence of certain conditions

ESTATE

The degree, quantity, nature, and extent of the interest that a person has in real property.
1. Ownership interest in real estate
2. The quality and quantity of rights in property

ESTATE AT WILL

The occupation of real property by a tenant for an indefinite period. One or both parties may terminate it at will. A leasehold tenancy, which at common law could be terminated by either party at any time, without advance notice. Thirty days’ notice is now required to terminate this type of estate in California

ESTATE FOR LIFE

A freehold estate whose duration is measured by and limited to the life or lives of one or more persons

ESTATE FOR PERIOD TO PERIOD

A leasehold tenancy that continues indefinitely for successive periods of time, until terminated by proper notice. When the periods are one month in duration, it is often called a month-to-month tenancy

ESTATE FOR YEARS

A lease that will expire at a definite time or date. A leasehold tenancy of a fixed duration, being a definite and ascertainable period of a year or any fraction of multiple thereof. It has a definite beginning and ending date, and hence a known and definite duration

ESTATE OF INHERITANCE

An estate that may go to the heirs of the deceased. All freehold estates are estates of inheritance, except life estates

ESTOP

To ban, stop, or impede

ESTOPPEL

A doctrine whereby one is forbidden to contradict or deny his or her own previous statement, act, or position. The doctrine that prevents a person from exercising a legal right, because that person previously acted in an inconsistent manner, so that a third person detrimentally relied on the earlier acts. An agency is created this way when an individual knowingly allows another individual to act as their agent without authorizing such acts

ET AL

Abbreviation meaning and others (other person)

ET UX

Abbreviation meaning and wife

ETHICS

A standard of conduct that all members of a given profession owe to the public, clients or patrons, and to other members of that profession. Refers to a branch of philosophy that deals with moral science and moral principles. It is a debatable subject and cannot be legislated. It is based on what each individual feels is good or bad

ETHNIC

EVICTION

Dispossession by legal process, as in the termination of a tenant’s right to possession through re-entry or other legal proceedings

EVIDENCE

All relevant information, facts, and exhibits admissible in a trial

EX PARTE

By only one party or side. For example, an injunction obtained by evidence presented by only one side, without notice to the other parties

EXCEPTION

(See Reservation)

EXCHANGE

A reciprocal transfer of properties between two or more parties

EXCLUSIVE AGENCY

A contract hiring the broker as the exclusive agent for the seller. If anyone, except the seller, finds a buyer, the broker has earned the commission

EXCLUSIVE AGENCY LISTING

A written agreement giving one agent the exclusive right to sell property for a specified period of time, but reserving the right of the owner to sell the property himself or herself without liability for the payment of a commission

EXCLUSIVE RIGHT TO SELL AGENCY

A contract hiring the broker as the only person authorized to sell property. If anyone, including the seller, finds a buyer, the broker earns the commissions

EXCLUSIVE-RIGHT-TO-SELL LISTING

A written agreement giving one agent the exclusive right to sell property for a specified period of time. The agent may collect a commission if the property is sold by anyone, including the owner, during the term of the listing agreement

EXCULPATORY CLAUSE

A provision in leases and other instruments seeking to relieve one party of liability for his negligence and other acts. In residential leases such clauses are invalid, and in other leases the courts have limited the landlord’s ability to escape liability for intentional acts, and for acts of affirmative negligence

EXECUTE

To complete, make, perform, do or to follow out. To sign a document, intending to make it a binding instrument. The term is also used to indicate the performance of a contract

EXECUTION LIEN

A lien arising because of an execution on property. A judgment is not self-executing; however, when a writ of execution has been obtained, the sheriff will levy (seize) property, which creates a lien on the property

EXECUTOR

A person named by the testator of a will to carry out its provisions as to the disposition of the estate. A personal representative appointed in a will to administer a decedent’s estate

EXPANSIBLE HOUSE

A home designed for expansion and additions in the future

EXPANSION JOINT

A fiber strip used to separate units of concrete to prevent cracking due to expansion as a result of temperature changes

F

FACADE

The face of a building, especially the front face

FAIR MARKET VALUE

The amount of money that would be paid for a property offered on the open market for a reasonable length of time with both the buyer and the seller knowing all uses to which the property could be put and with neither party being under pressure to buy or sell. See market Value

FALSE PROMISE

A statement used to influence or persuade

FANNY MAE

The Federal National Mortgage Association (FNMA)

FARM

It is a specific geographical location in which an agent walks every month in order to obtain listings

FEDERAL DEPOSIT INSURANCE

A federal corporation that insures deposits in commercial CORPORATION banks (FDIC)

FEDERAL FAIR HOUSING ACT

Was established under Title VIII of the United States Civil Rights Act of 1969. It was amended in 1988. It was created to provide fair housing through out the United States

FEDERAL HOME LOAN BANK (FHLB)

A district bank of the Federal Home Loan Bank System that lends only to savings and loan associations who are members

FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC)

A federal corporation that provides savings and loan associations with a secondary mortgage money market for loans. It is also known as Freddy Mac

FEDERAL HOUSING ADMINISTRATION

An agency of the federal government that insures mortgage (FHA) loans

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA)

A federal corporation that provides lenders with a secondary mortgage money market

FEDERAL RESERVE SYSTEM

The federal banking system of the United States under the control of a central board of governors (Federal Reserve Board). It involves a central bank in each of 12 geographical districts, with broad powers in controlling credit and the amount of money in circulation

FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION (FSLIC)

A federal corporation that insures deposits in savings and loan associations

FEE

An estate of inheritance in real property for life

FEE SIMPLE

An estate in real property by which the owner has the greatest possible power over the title. In modern use it expressly establishes the title of real property with the owner without limitation or end. He or she may dispose of it by sale, trade, or will, as he or she chooses. In modern estates the terms “Fee” and “Fee Simple” are substantially synonymous

FEE SIMPLE ABSOLUTE

The highest estate known at law. A freehold estate of indefinite duration, incapable of being defeated by conditions or limitations. Sometimes simply called fee or fee estate

FEE SIMPLE DEFEASIBLE

A fee simple estate to which certain conditions or limitations attach, such that the estate may be defeated or terminated upon the happening of an act or event. Also called a fee simple subject to condition subsequent estates

FEE SIMPLE SUBJECT TO A CONDITION SUBSEQUENT

A fee simple defeasible estate that requires the holder of the future interest to act promptly to terminate the present interest, in order for that interest to be terminated

FHA

The FHA does not loan money. The FHA loan may be paid off at any time without a penalty. The buyer or the seller may pay discount points on a FHA loan. The down payment on a FHA loan is usually LESS than the down payment on a conventional loan

FIDUCIAR

A person in a position of trust and confidence, as between principal and broker. A fiduciary may not make a profit from his or her position without first disclosing it to the beneficiary

FINANCIAL FREEDOM

The freedom to make purchases with no restraint

FINANCING STATEMENT

The instrument filed to perfect the security agreement and give constructive notice of the security interest, thereby protecting the interest of the secured parties. (See Security Agreement; Security Interest; and Secured Party.) The security interest in personal property. It is analogous to a mortgage on real property, except that it secures personal property. Under the U.C.C., it may be filed in Sacramento with the secretary of state

FINDER’S FEE

Money paid to a person for finding someone interested in selling or buying property. To conduct any negotiations of sale terms, the finder must be a licensed broker or he violates the law

FINISH FLOOR

The final covering on the floor, such as wood, linoleum, cork, or carpet

FIRE STOP

A solid, tight closure of a concealed space placed to prevent the spread of fire and smoke through the space

FIRST AMENDMENT

The constitutional amendment guaranteeing freedom of speech, press, assembly, and religion

FIXTURE

An item of personal property that has been so attached to real property as to be considered part of that real property

FIXTURES

Items that were originally personal property but that have become part of the real property, usually because they are attached to the real property more or less permanently. Examples: Store fixtures built into the property and plumbing fixtures

FLASHING

Sheet metal or similar material used to protect a building from water seepage

FLIPPER PROPERTY

Any property bought for immediate resale and profit

FOOTING

The base or bottom of a foundation wall, pier or column

FORCIBLE DETAINER

Wrongful retention of property by actual or constructive force

FORCIBLE ENTRY

Entry into property without the consent of the owner, by acts that constitute more than mere trespass

FORECLOSURE

A legal proceeding to enforce a lien on such as a mortgage or deed of trust. The process by which secured property is seized and sold to satisfy a debt. A mortgage or involuntary lien must be sold by a court-ordered sale; a sale under a deed of trust may be either by court action or through a private trustee’s sale

FOREFEITURE

Loss of a legal right, interest, or title by default

FORMAL WILL

A will signed by the testator in the presence of two or more witnesses, who must themselves sign the will

FOUNDATION

That part of a structure or wall wholly or partly below the surface of the ground that is the base or support, including the footings

FOURTEENTH AMENDMENT

The constitutional amendment that directs that no state can deprive a person of life, liberty, or property without due process or equal protection of the law

FRAUD

Deception that deprives another person of his her rights or injures him or her. False representation or concealment of material facts that induces another justifiably to rely on it to his detriment

FREEHOLD

An estate of fee. An estate in real property that is either a life estate or an estate in fee

FRONT FOOT

Property measurement for sale or valuation purposes. The property measurement is along the street line, and each front foot extends to the depth of the lot. It is usually used in connection with commercial property

FROSTLINE

The depth of frost penetration in the soil

FRUCTUS

Fruits, crops, and other plants. If the vegetation is produced by human labor, such as crops, it is called fructus industrials; vegetation growing naturally is called fructus naturales

FURRING

Strips of wood or metal fastened to wall to even it, form air space, or to give the wall greater thickness

FUTURE ADVANCES

Future (additional) loans made by a lender and secured under the original deed of trust. The advances may be either optional or obligatory, but the deed of trust or mortgage must provide in the security instrument that it will cover any such future advances

FUTURE INTEREST

An estate that does not or may entitle one to possession or enjoyment until a future time

G

GABLE ROOF

Pitched roof with sloping sides

GAMBREL ROOF

A curb roof, having a steep lower slope with a flatter upper slope above

GARNISHMENT

A legal process to seize a debtor’s property or money in the possession of a third party

GAURANTEED NOTE

A permit must be received from the real estate commissioner before being allowed to sell a guaranteed note

GENERAL PLAN RESTRICTIONS

Covenants, conditions, and restrictions placed on a subdivision or other large tract of land, designed to benefit and burden each lot in the tract

GIFT

A voluntary transfer of property without consideration

GIFT DEED

A deed for which there is no material consideration

GIRDER

A beam used to support other beams, joists, and partitions

GOVERNMENT NATIONAL MORTGAGE

A federal corporation that assists in financing special ASSOCIATION (GNMA) assistance programs for federally aided housing. The corporation is also known as Ginny Mae

GRADE

Ground level at the foundation

GRADUATED LEASE

Usually a long-term lease that provides for adjustments in the rental rate on the basis of some future determination. For example, the rent may be based upon the result of appraisals to be made at predetermined times in the future

GRANT

1. To transfer
2. A deed
3. When used in a deed, a technical term implying certain warranties. A transfer or conveyance of real estate

GRANT DEED

In California, a deed in which the word grant is used as a work of conveyance and therefore by law implies certain warranties deed used to transfer property in California. By statute it impliedly contains only two limited warranties

GRANTEE

The buyer; a person to whom a grant is made

GRANTOR

The seller; one who signs a deed. The seller or person who executes a grant

GRID

A chart used in rating the borrower, property, and neighborhood

GROSS INCOME

Total income before expenses are deducted

GROSS RENT MUTIPLIER

A number that reflects the ratio between the sales price of a property and its gross monthly rents. It is used in the income approach of appraising property

GROUND LEASE

An agreement leasing land only, without improvements, ordinarily with the understanding that improvements will be placed on the land by the tenant

GROUND RENT

1. Earnings from the ground only
2. Earnings of improved property after an allowance are made for earnings of improvements–3. A perpetual rent that a grantor in some states may reserve to himself or herself and his or her heirs when he or she conveys real property

GROWTH EQUITY MORTGAGE

This type of mortgage will be paid back faster than the typical 30 year fully amortized mortgage

H

HANDICAP

Includes but is not limited to a physical or mental impairment that substantially limits one or more of a person’s major life activities

HAZARD INSURANCE

Insurance that protects the owner and lender against physical hazards to property such as fire and windstorm damage

HEADER

A beam placed perpendicularly to joists and to which joists are nailed in the framing of openings such as windows, doors, and stairways

HEIRS

Persons who succeed to the estate of someone who dies intestate (without a will). It sometimes indicates anyone who is entitled to inherit a decedent’s property

HEREDITAMENT

A term usually referring to real estate and all that goes with it as being incidental

HIGHEST AND BEST USE

An appraisal phrase that means that use of real property that is most likely to produce the greatest net return on land or buildings, or both, over a given period of time

HIP ROOF

A pitched roof with sloping sides and ends

HOLDEN ACT

Specifically states that “redlining” is illegal in California

HOLDER IN DUE COURSE

One who has taken a negotiable note, check, or bill of exchange in due course
1. before it was past due;
2. in good faith;
3. without knowledge that it has been previously dishonored and without notice of any defect at the time it was negotiated to him or her;
4. for value.
Someone who acquires a negotiable instrument in good faith and without any actual or constructive notice of defect. The acquisition must occur before the note’s maturity. Such a holder takes the note free from any personal defenses (such as failure of consideration, fraud in the inducement) that may be available against the maker

HOLOGRAPHIC WILL

A will that is entirely written, dated, and signed by the testator in the testator’s handwriting. No witnesses are needed

HOMEOWNER’S EXEMPTION

An exemption or reduction in real property taxes available to those who reside on their property as of March 1. The current amount is $70 off the normal tax bill otherwise due

HOMESTEAD

1. A home upon which the owner or owners have recorded a Declaration of Homestead, as provided by California statutes, that protects the home against judgments up to a specified amount
2. A probate homestead is a similarly protected home property set aside by a California probate court for a widow or minor children. A special, limited exemption against certain judgments available to qualified homeowners

HUNDRED PERCENT LOCATION

A retail business location considered the best available for attracting business

I

ILLUSORY CONTRACT

An agreement that gives the appearance of a contract, but in fact is not a contract because it lacks one of the essential elements

IMPLIED

Not expressed by words, but presumed from facts, acts, or circumstances

IMPOUND ACCOUNT

A trust account established by the lender to pay property taxes and hazard insurance

INCOME APPROACH

An appraisal technique used on income producing properties. Also known as the capitalization approach

INCOME TAX

The cost to remodel vacant property may be deducted from the income tax

INCOMPETENT

Someone incapable of managing his or her own affairs by reason of age, disease, weakness of mind, or any other cause

INCREMENT

Any increase
1. A term frequently used to refer to the increased value of land because of population growth and increased wealth in the community
2. “Unearned increment” is used in this connection since the values increased without effort on the part of the owner

INDEBTEDNESS

A debt or obligation

INDEMNIFICATION

Compensation to a person who has already sustained a loss. For example, insurance payment for a loss under policy

INDIRECT LIGHTING

A method of illumination in which the light is reflected from the ceiling or other object outside the fixture

INDORSEMENT

1. The act of signing one’s name on the back of a check or a note, with or without further qualification
2. The signature described above

INFATIONARY HEDGE

Real estate is considered to be the best bet against inflation

INFLATION

This is not an easy condition to eliminate

INFLATIONARY HEDGE

Real estate is considered to be the best bet against inflation

INGRESS

The act of or avenue for entering property

INHERIT

To take property through a deceased’s estate

INJUNCTION

An order issued by a court to restrain one or more parties to a suit or proceeding from performing an act deemed inequitable or unjust in regard to the rights of some other party or parties in the suit or proceeding

INJUNCTION

A court order prohibiting certain acts, or ordering specific acts

INSTALLMENT

A partial payment of a debt due in a series of payments

INSTALLMENT NOTE

A note that provides that payments of a certain sum or amount be paid in more than one payment on the dates specified in the instrument

INSTALLMENT SALES CONTRACT

Also known as an agreement of sale or a land contract

INSTALLMENT-SALE METHOD

A method of reporting capital gains by installments for successive tax years to minimize the impact of capital gains tax in the year of the sale

INSTITUTIONAL LENDER

Lenders who make a substantial number of real estate loans, such as banks, savings and loan associations, and insurance companies

INSTRUMENT

A written legal document created to affect the rights of the parties

INTEREST

The charge or cost for the use of money

INTEREST RATE

The percentage of a sum of money charged for its use

INTEREST RATE CAP

The majority of all the mortgages do contain an interest rate cap

INTERPLEADER

A court proceeding initiated by a stakeholder, such as a broker or escrow agent. This decides the ownership or disposition of trust funds

INTESTATE

A person who dies without a will

INTREST DEDUCTION

The amount of a home equity loan that qualifies for an interest deduction cannot exceed $100,000.00

INVESTOR

A person who holds property primarily for future appreciation in value for federal and state income tax purposes

INVITEE

A person who enters another’s land because of an express or implied social invitation, such as a social guest. The term also covers certain government workers who enter someone’s land, such as police officers and firefighters. Classification of such status was revoked by a recent court case

INVOLUNTARY CONVERSION

The loss of real property due to destruction, seizure, condemnation, foreclosure sale, or tax sale

INVOLUNTARY LIEN

Any lien imposed on property without the consent of the owner

IRREVOCABLE

Incapable of being recalled or revoked; unchangeable

IRRIGATION DISTRICTS

Quasi-political districts created under special laws to provide for water services to property-owners in the district

J

JALOUSIE

A screen or shutter consisting of overlapping horizontal slats that is used on the exterior to keep out sun and rain while admitting light and air

JAMB

The side post or lining of a doorway, window, or other opening

JOINT

The space between the adjacent surfaces of two components joined and held together by nails, glue, or cement, for example

JOINT NOTE

A note signed by two or more persons who have equal liability for payment

JOINT TENANCY

Joint ownership by two or more persons with right of survivorship. Four unities must be present: time, title, interest, and possession. Property held by two or more people with right of survivorship

JOINT VENTURE

In legal effect it is a partnership for a limited, specific business project

JOISTS

One of a series of parallel beams to which the boards of floor and ceiling laths or plaster boards are nailed and supported in turn by larger beams, girders, or bearing walls

JUDGMENT

A court of competent jurisdiction’s final determination of a matter presented to it. The final decision by a court in a lawsuit, motion, or other matter

JUDGMENT AFFIRMED

A decision by an appellate court reaffirming, approving, and agreeing with an inferior court’s decision

JUDGMENT DEBTOR

A person who has an unsatisfied money judgment levied against him or her

JUDGMENT LIEN

A money judgment that, because it has been recorded, has become a lien against the judgment debtor’s real property

JUDGMENT REVERSED

A decision by an appellate court disagreeing with an inferior court’s decision and modifying the decision to conform with its findings

JUNIOR LIEN

A lien lower in priority or rank than another or other liens

JUNIOR MORTGAGE

A mortgage second in lien to a previous mortgage

JURISDICTION

The authority of a court to hear and decide a particular type of case. The power of a court to hear and decide a case or issue

L

LACHES

Unreasonable delay in asserting one’s legal rights

LAND CONTRACT

A contract used in the sale of real property when the seller wishes to retain legal title until all or a certain part of the purchase price is paid by the buyer. It is also referred to as an installment sales contract or an agreement of sale

LAND SALES CONTRACT

A contract for the sale of property, by which possession is delivered to the buyer, but title remains with the seller until full payment or the satisfaction of other stated conditions

LANDLOCKED

Property totally surrounded by other property with no means of ingress or egress

LANDLORD

The person who leases property; the owner of the property

LANDS, TENEMENTS, AND HEREDITAMENT

Inheritable lands or interest

LATE CHARGE

A charge made by a lender against a borrower who fails to make loan installments when due

LATE SUPPORT

The support that the soil of an adjoining owner gives to his or her neighbor’s land

LATH

A building material of wood, metal gypsum, or insulating board fastened to the frame of a building to act as a plaster base

LEASE

A contract between owner and tenant, setting forth conditions upon which the tenant may occupy and use the property and the term of the occupancy

LEASEHOLD ESTATE

The estate of a tenant under a lease. (See Estate for Years.) LEGACY- A gift of money by will

LEGAL DESCRIPTION

A description recognized by law; a description by which property can be definitely located by reference to government surveys or approved recorded maps

LENDER GUIDELINES

Most lenders use Fannie Mae and Freddie Mac underwriting guidelines

LESSEE

A tenant; the person who is entitled to possession of property under a lease

LESSOR

A landlord; the property owner who executes a lease

LETTER OF INTENT

An expression of intent to invest, develop, or purchase without creating any firm legal obligation to do so

LEVY

To execute upon; to seize and sell property to obtain money to satisfy a judgment

LIABILITIES

Debts or claims that creditors have against assets

LICENSE

Personal, non-assignable authorization to enter and perform certain acts on another’s land

LICENSEE

Under the law before 1968, which classified persons who entered upon others’ land, a licensee was someone who entered upon land with the owner’s express or implied permission for a business purpose

LIEN

A lien makes the debtor’s property security for the payment of a dept or the discharge of an obligation. A charge or claim against property as security for payment of a debt or obligation

LIFE ESTATE

An estate in real property that continues for the life of a particular person. The “life” involved may be that of the owner or that of some other person. An estate in property whose duration is limited to and measured by the life of a natural person or persons

LIGHT COLORS

Light colors make a room look larger

LIMITED PARTNERSHIP

A partnership composed of some partners whose contribution and liability are limited. There must always be one or more general partners with unlimited liability and one or more limited partners with limited liability. A special partnership composed of limited and general partners. The general partners have unlimited liability and total management, whereas the limited partners have to voice in the management and their only financial exposure is to the extent of their investment. In some ways the limited partners’ interest is similar to that of stockholders in a corporation

LINTEL

A horizontal board that supports the load over an opening such as a door or window

LIQUIDATED DAMAGES CLAUSE

An agreement between the parties that in the event of a breach, the amount of damages shall be liquidated (set or fixed). The amount is set before the breach, usually at the time of making the contract, on the assumption that the exact amount of damages is difficult to determine because of the nature of the contract

LIS PENDENS

A notice of pending litigation recorded to give constructive notice of a suit that has been filed. A recorded notice that a lawsuit is pending, the outcome of which may affect title to property

LISTING

An employment contract between a broker and his principal (client). A listing is automatically canceled upon the death of the agent (real estate broker) or the principal (owner). Another real estate broker must negotiate a new listing with the owner upon the death of the real estate broker

LISTING AGREEMENT

An employment contract authorizing a broker to sell, lease, or exchange an owner’s property

LITIGATION

A civil lawsuit; a judicial controversy

LOAN COMMITTEE

The committee in a lending institution that reviews and approves or disapproves the loan applications recommended by a loan officer

LOAN CORRESPONDENT

A loan agent usually used by distant lenders to help the lender make real estate loans

LOAN PACKAGE

A group of documents prepared along with a loan application to give the prospective lender complete details about the proposed loan

LOAN TRUST FUND ACOUNT

(See Impound Account)

LOAN VALUE

The lender’s appraised value of the property

LOUVER

An opening with a series of horizontal slats set at an angle to permit ventilation without admitting rain, sunlight, or vision

LTV

These initials mean “loan to valuation”

M

MAI

A term that designates a person who is a member of the American Institute of Appraisers of the National Association of Realtors

MANDAMUS

A court decree ordering a lower court judge, public official, or corporate officer to perform an act acquired of that office

MARGIN OF SECURITY

The difference between the amount of secured loan(s) on a property and its appraised value

MARGINAL LAND

Land which barely pays the cost of working or using it

MARKET DATA APPROACH

(See Comparative Market Analysis)

MARKET PRICE

The price paid regardless of pressures, motives, or intelligence

MARKET VALUE

1. The price at which a willing seller would sell and a willing buyer would buy, neither being under abnormal pressure
2. As defined by the courts, it is the highest price estimated in terms of money that a property would bring if exposed for sale in the open market, allowing a reasonable time to find a purchaser with knowledge of the property’s use and capabilities for use

MARKETABLE TITLE

Title free and clear of reasonable objections and doubts; also called merchantable title

MATERIAL FACT

A fact that would be likely to affect a person’s decision in determining whether to enter into a particular transaction. Any information that will influence the judgment or decision of the customer

MECHANIC’S LIEN

A lien given by statute to persons supplying labor, materials, or other services to improve real property. Whenever a contractor, laborer, or materialman provides labor or materials to improve real property and is not paid, that person is entitled to a lien against the property as a means of securing payment. Certain statutory steps must be taken to file, record, and foreclose the lien. Memo to set: A document filed in a lawsuit which asks to be placed on the waiting list (“docket”) for the next available court date

MENACE

A threat to use duress. (See Duress)

MERGER OF TITLE

The combination of two estates. Also refers to the joining of one estate burdened by an encumbrance and another estate benefited by the encumbrance. Whenever a benefit and a burden are merged, the encumbrance is extinguished

MERIDIANS

Imaginary north-south lines that intersect base lines to form a starting point for the measurement of land

METES AND BOUNDS

Terms used to describe the boundary lines of land, setting forth all the boundary lines together with their terminal points and angles. Metes means measurements Bounds means boundaries

MILLIONARES

Ninety percent of all millionaires become that way from owning property

MINOR

1. A person under the age of majority
2. In California all persons under eighteen years of age – the age of majority in California. Someone under age 18

MINUS CASH FLOW

An event that takes place when there is not enough cash to cover expenses and service the mortgage debt

MISREPRESENTATION

An intentional or negligent suggestion or statement of a material fact in a false manner with the intent of deceiving someone into taking a course of action he would not otherwise normally pursue. A licensee may be disciplined for misrepresentation even though the misrepresentation did not result in a loss to the principal

MITIGATION

Facts or circumstances that tend to justify or excuse an act or course of conduct

MOBILE HOME

A stationary, non-motorized vehicle designed and equipped for human habitation. It may be transported to a home site by special equipment

MOLDING

Usually patterned strips used to provide ornamental variation of outline or contour, such as cornices, bases, window and doorjambs

MONEY TO MAKE MONEY

It takes money to make money in real estate is the general belief

MONTH-TO-MONTH TENANCY

A lease of property for a month at a time, under a periodic tenancy that continues for successive months until terminated by proper notice, usually 30 days

MONUMENT

A fixed object and point established by surveyors or others to establish land locations

MORATORIUM

The temporary suspension, usually by stature, of the enforcement of liability for debt

MORTGAGE

An instrument by which property is hypothecated to secure the payment of a debt or obligation

MORTGAGE

A contract by which property is hypothecated (pledged without delivery) for the repayment of a loan

MORTGAGE GUARANTY INSURANCE

Insurance against financial loss available to mortgage lenders from the Mortgage Guaranty Insurance Corporation, a private company organized in 1956

MORTGAGE LOAN BROKER

Is required to have a real estate license

MORTGAGEE

One to whom a mortgagor gives a mortgage to secure a loan or performance of an obligation: the lender under a mortgage. (See Secured Party.) A creditor (lender) under a mortgage

MORTGAGOR

One who gives a mortgage on his or her property to secure a loan or assure performance of an obligation; the borrower under a mortgage. (See Debtor.) A borrower (property owner) of money under a mortgage

MULTIPLE LISTING

A listing, usually an exclusive-right-to-sell, taken by a member of an organization composed of real estate brokers with the provisions that all members will have the opportunity to find an interested client; a cooperative listing. A listing taken by a broker and shared with other brokers through a specialized distribution service, usually provided by the local real estate board. Generally, such listings are exclusive right to sell listings

MUNICIPAL COURT

An inferior trial court having jurisdiction in cases involving up to $15,000 in money damages and in unlawful detainer actions in which the rental value is under $1,000 per month

MUTUAL ASSENT

An agreement between the parties in a contract. The offer and acceptance of a contract

MUTUAL WATER COMPANY

A water company organized by or for water-users in a given district, with the object of securing an ample water supply at a reasonable rate. Stock is issued to users

N

NAR

National Association of Realtors

NAREB

National Association of Real Estate Boards. This trade organization is now known as the National Association of Realtors

NEGATIVE AMORTIZATION

Occurs when normal payments on a loan are insufficient to cover all interest then due, so that unpaid interest is added to principal. Thus, even though payments are timely made, the principal grows with each payment

NEGATIVE AMORTIZATION

Occurs when the debt service is not sufficient to cover the interest amount of the loan. This note should only be used in area that is appreciating in value

NEGATIVE AMORTIZATION

Occurs when the debt service is not sufficient to cover the interest amount of the loan

NEGLIGENCE

Either the failure to act as a reasonable, prudent person, or the performance of an act that would not be done by a reasonable, prudent person

NEGOTIABLE INSTRUMENT

A check or promissory note that meets specified statutory requirements and is therefore easily transferable in somewhat the same manner as money. The negotiable instrument can be passed by endorsement and delivery (or in some cases by mere delivery), and the transferee takes title free of certain real defenses (such as failure of consideration, fraud in the inducement) that might exist against the original maker of the negotiable instrument

NEPA

Abbreviation for the National Environmental Protection Act, a federal statute requiring all federal agencies to prepare an Environmental Impact Statement and meet other requirements whenever a major federal action is anticipated that could significantly affect the environment

NET LISTING

Listing that provides that the agent may retain as compensation for his or her services all sums received over and above a stated net price to the owner. An employment agreement that entitles the broker to a commission only in the amount, if any that the sales price of the property exceeds the listing price

NONFREEHOLD ESTATE

A lease tenancy. (See under Estates for the four types of leasehold estates)

NONJUDICIAL FORECLOSURE

Foreclosure and sale of property without resort to court action, by private sale. For deeds of trust the foreclosure provisions are outlined by the statutes and the requirements in the security instrument, which include a notice of default, right to reinstate, publication of sale, and trustee’s sale

NOTARY PUBLIC

An individual licensed by the state to charge a fee for acknowledging signatures on instruments

NOTE

A signed written instrument promising payment of a stated sum of money. Shortened name for a promissory note

NOTICE OF COMPLETION

A notice recorded after termination of work on improvements, limiting the time in which mechanic’s liens can be filed against the property

NOTICE OF DEFAULT

A notice that is recorded in the county recorder’s office stating that a trust deed is in default and that the holder has chosen to have the property sold. The trustor (property owner) has three months after the date of recording to reinstate the loan. Recorded notice that a trustor has defaulted on his secured debt

NOTICE OF NONRESPONSIBILITY

A notice provided by law designed to relieve a property owner from responsibility for the cost of work done on the property or materials furnished for it when the work or materials were ordered by a person in possession. Notice relieving an owner from possession. Notice relieving an owner from mechanic’s liens for work on property not ordered by that owner

NOTICE TO QUIT

A notice to a tenant to vacate rented property. Also called a threeday notice. Notice given to a tenant in default of his lease terms or on his rent, which directs him either to cure the default or to vacate the premises

NOVATION

The acceptance of a new contract in substitution for the old contract, with the intent that the new contract will extinguish the original contract. Sometimes encountered in transfers of deeds of trust, where the new owner assumes the debt and the lender, through novation, releases the former owner from any liability under the original promissory note and deed of trust

NUISANCE

Anything that is injurious to health or indecent or offensive to the senses, or any obstruction to the free use of property so as to interfere with the comfortable enjoyment of life or property or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake or river, bay, stream, canal, or basin, or any public park, square, street, or highway. A legal wrong arising from acts or use of one’s property in a way that unreasonably interferes with another’s use of hid property

O

OBLIGEE

A promisor; a person to whom another is bound by a promise or another obligation

OBSOLESCENCE

Loss in value due to reduced desirability and usefulness of a structure because its design and construction become obsolete; loss because of becoming old-fashioned and not in keeping with modern needs

OFFER

A proposal to create a contract, which signifies the present intent of the offeror to be legally bound by his proposal

OFFEREE

A person to whom an offer is made

OFFEROR

A person who makes an offer

OFFSET STATEMENT

Statement by owner of a deed of trust or mortgage against the property, setting forth the present status of the debt and lien. Also called a beneficiary statement

OPEN HOUSE

Is an opportunity for a licensee to meet potential buyers and sellers, and therefore is considered to be in the best interest of the licensee and not the seller. This is NOT the most effective way to method to advertise a piece of rental property

OPEN LISTING

An authorization given by a property-owner to a real estate agent in which the agent is given the nonexclusive right to secure a purchaser. Open listings may be given to any number of agents without liability to compensate any except the one who first secures a buyer ready, willing, and able to meet the terms of the listing or who secures the acceptance by the seller of a satisfactory offer

OPEN-END MORTGAGE OR DEED OF TRUST

A mortgage containing a clause that permits the mortgagor or trustor to borrow additional money without rewriting the mort- gage or deed of trust

OPTION

A right to have an act performed in the future; a right given for a consideration to purchase or lease a property upon specified terms within a specified time; a contract to keep an offer open for a particular period of time. The right of a person to buy or lease property at a set price at any time during the life of a contract

OPTION LISTING

A listing that also includes an option, permitting the broker to buy the property at the stated price at any time during the listing period

ORAL CONTRACT

A verbal agreement, one not reduced to writing

ORDINANCE

A law passed by a political subdivision of the state (such as a town, city, or county)

ORIENTATION

Placement of a house on its lot with regard to its exposure to the rays of the sun, prevailing winds, privacy from the street, and protection from outside noises

OR-MORE CLAUSE

A simple prepayment clause that permits the borrower to make a normal payment or any larger amount, up to and including the entire outstanding balance, without a prepayment penalty

OSTENSIBLE AGENCY

An agency implied by law because the principal intentionally or inadvertently caused a third person to believe someone to be his agent, and that third person acted as if that other person was in fact the principal’s agent

OVER IMPROVEMENT

An improvement that is not the highest and best use for the site on which it is placed, by reason of excessive size or cost

OVERAGES IN TRUST ACC

Any unexplained overages in the trust account must be held in trust by the licensee and must be maintained in a separate record

OVERHANG

The part of the roof that extends beyond the walls and that shades buildings and covers walks

OWNERSHIP

The right of a person to use and possess property to the exclusion of others

P

PARITY WALL

A wall erected on the line between two adjoining properties that are under different ownership for the use of both owners

PAROL

Oral or verbal

PAROL EVIDENCE RULE

A rule of courtroom evidence that once the parties make a written contract, they may not then introduce oral agreements or statements to modify the terms of that written agreement. An exception exists for fraud or mistake, which will permit the parties to offer evidence to vary the terms of the writing

PARQUET FLOOR

Hardwood flooring laid in squares or patterns

PART TIME STATUS

Many real estate agents have other full-time jobs. A part time agent cannot devote a full time effort to represent a client; therefore the failure to disclose a part time status is considered an unethical real estate practice

PARTIAL RECONVEYANCE

In a deed of trust or mortgage, a clause that permits release of a parcel or part of a parcel from the effects and lien of that security instrument. The release usually occurs upon the payment of a specified sum of money

PARTITION ACTION

A legal action by which co-owners seek to sever their joint ownership. The physical division of property between co-owners, usually through court action

PARTNERSHIP

An association of two or more persons to unite their property, labor or skill, or any one or combination thereof, in prosecution of some joint business, and to share the profits in certain proportions. An agreement of two or more individuals jointly to undertake a business enterprise. If it is a general partnership, all partners have unlimited liability and, absent other agreements, share equally in the management and profits of the business

PATENT

Conveyance of title to government land

PAYMENT CLAUSE

A provision in a promissory note, deed of trust, or mortgage, permitting the debtor to pay off the obligation before maturity

PENNY

The term, as applied to nails, that serves as a measure of nail length and is abbreviated by the letter d

PERCENTAGE LEASE

A lease on property, the rental for which is determined by the amount of business done by the tenant, usually a percentage of gross receipts from the business, with provision for a minimum rental

PERIMETER HEATING

Baseboard heating or any system in which the heat registers are located along the outside walls of a room, especially under the windows

PERIODIC TENANCY

A leasehold estate that continues indefinitely for successive periods of time, until terminated by proper notice. When the periods are one month in duration, it is often called a month-to-month lease

PERSONAL INJURY

A term commonly used in tort (e.g. negligence cases) indicating an injury to one’s being or body (for example, cuts or broken bones) as opposed to injury to his property

PERSONAL PROPERTY

Any property that is not real property. (See Real Property.) Property that is movable, as opposed to real property, which is immovable; also includes intangible property and leasehold estates

PETITIONER

A person who petitions the court on a special proceeding or a motion

PIER

A column of masonry used to support other structural members

PITCH

The incline or rise of a roof

PLAINTIFF

The party who initiates a lawsuit; the person who sues another

PLATE

A horizontal board placed on a wall or supported on posts or studs to carry the trusses of a roof or rafters directly; a shoe or base member, as of a partition or other frame; a small flat board placed on or in a wall to support girders and rafters, for example

PLEDGE

Deposition of personal property by a debtor with a creditor as security for a debt or engagement

PLEDGEE

One who is given a pledge as security. (See Security Party)

PLEDGOR

One who gives a pledge as security. (See Debtor)

PLOTTAGE INCREMENT

The appreciation in unit value created by joining smaller ownerships into one large single ownership

PLYWOOD

1. Laminated wood made up in panels 2. Several thickness of wood glued together with grains at different angles for strength

POCKET LISTING

When a real estate licensee convinces a seller that he can procure a buyer for the property and wants to withhold the information from the multiple listing services. This is considered unethical

POINTS

Points paid for refinancing must be spread out over the life of the loan to be deductible on a person’s income tax

POLICE POWER

The right of the state to enact laws and regulations and its right to enforce them for the order, safety, health, morals, and general welfare of the public.
The power of the state to prohibit acts that adversely affect the public health, welfare, safety, or morals. (Zoning and building codes are examples of exercise of the police power.)

POWER OF ATTORNEY

An instrument authorizing a person to act as the agent of the person granting it. A special power of attorney limits the agent to a particular or specific act, as a landowner may grant an agent special power of attorney to convey a single and specific parcel of property. Under a general power of attorney, the agent may do almost anything for the principal that the principal could do himself or herself. A document authorizing a person (an attorney-in-fact) to act as an agent

POWER OF TERMINATION

The future interest created whenever there is a grant of a fee simple subject to a condition subsequent estate. The future interest matures into a present interest estate only if the holder timely and properly exercises his right upon a breach by the current holder of the fee estate

PREFABRICATED HOUSE

A house manufactured, and sometimes partly assembled, before delivery to the building site

PREJUDGEMENT ATTACHMENT

An attachment of property made before the trial, with the intent of holding that property as security, to have an asset to sell if the court judgment is favorable to the attaching party

PREPAYMENT PENALTY

Penalty for the payment of a note before it actually becomes due. A fee or charge imposed upon a debtor who desires to pay off his loan before its maturity. Not all prepayment clauses provide for a penalty, and in many real estate transactions the law regulates the amount of penalty that may be changed

PRESCRIPTION

Securing of an easement by open, notorious, and uninterrupted use, adverse to the owner of the land for the period required by statute, which, in California, is five years. A method of obtaining an easement by adverse use over a prescribed period of time

PRESENT INTEREST

An estate in land that gives the owner the right to occupy his property immediately; as opposed to a future interest, which grants only the right to occupy the premises at some future date

PRESUMPTION

That which may be assumed without proof. A conclusion or assumption that is binding in the absence of sufficient proof to the contrary

PRIMA FACIE

1. Presumptive on its face
2. Assumed correct until overcome by further proof. Facts, evidence, or documents that are taken at face value and presumed to be as they appear (unless proven otherwise)

PRINCIPAL

The (client) employer of an agent. Someone who hires an agent to act on his behalf. The term also refers to the amount of an outstanding loan (exclusive of interest)

PRIORITY

That which comes first in point of time or right. Superior, higher, or preferred rank or position

PRIVITY

Closeness or mutuality of a contractual relationship

PROBATE

Court supervision of the collection and distribution of a deceased person’s estate. This takes place in Superior Court within the county where the property is located

PROCEDURAL LAW

The law of how to present and proceed with legal rights (for example, laws of evidence, enforcement of judgments). It is the opposite of substantative law

PROCURING CAUSE

That event originating from another series of events that, without a break in continuity, results in an agent’s producing a final buyer. Proximate cause. A broker is the procuring cause of a sale if his or her efforts set in motion an unbroken chain of events that resulted in the sale

PROFIT A PRENDRE

An easement coupled with a power to consume resources on the burdened property,/p>

PROMISSORY NOTE

A written promise to pay a designated sum of money at a future date

PROPERTY

Anything that may be owned. Anything of value in which the law permits ownership

PRORATION OF TAXES

Division of the taxes equally or proportionately between buyer and seller on the basis of time of ownership

PUFFING

Putting things in their best perspective is not subject to disciplinary action

PUNITIVE DAMAGES

Money awarded by the court for the sole purpose of punishing the wrongdoer, and not designed to compensate the injured party for his damages

PURCHASE MONEY INSTRUMENT

A mortgage or deed of trust that does not permit a deficiency judgment in the event of foreclosure and sale of the secured property for less than the amount due on the promissory note. It is called purchase money since the deed of trust and mortgage was used to buy all or part of the property

PURCHASE-MONEY MORTGAGE OR PURCHASE-MONEY DEED OF TRUST

A mortgage or deed of trust given as part or all of the consideration for the purchase of property or given as security for a loan to obtain money for all or part of the purchase price

Q

QUARTER ROUND

A molding whose profile resembles a quarter of a circle

QUASI

Almost as if it were

QUASI-CONTRACT

A contract implied by law; that is, the law will imply and consider certain relationships as if they were a contract

QUIET ENJOYMENT

The right of an owner to the use of property without interference with his or her possession or use

QUIET TITLE ACTION

QUITCLAIM DEED

A deed to relinquish any interest in property that the grantor may have, but implying no warranties. A deed that transfers only whatever right, title, or interest, if any, the grantor owns, without implying any warranties

QUITE TITLE

A court action brought to establish title and to remove a cloud from the title

R

RADIANT HEATING

A method of heating, usually consisting of coils or pipes placed in the floor, wall, or ceiling

RAFTER

One of a series of boards of a roof designed to support roof loads

RANGE

A strip of land six miles wide, determined by a government survey, running in a north-south direction

RATIFICATION

The adoption or approval of an act performed on behalf of a person without previous authorization. Approval and confirmation of a prior act performed on one’s behalf by another person without previous authority

READY, WILLING, AND ABLE BUYER

A purchaser of property, who is willing to buy on terms acceptable to the seller, and who further possesses the financial ability to consummate the sale. Producing such a buyer sometimes earns the broker a commission, even though a sale is not forthcoming

REAL ESTATE LICENSEE

Can be a good source to find first trust deeds that can be purchased at a discount

REAL ESTATE BOARD

An organization whose members consist primarily of real estate brokers and salespersons

REAL ESTATE INVESTMENT TRUST

A specialized form of holding title to property that enables investors to pool their resources and purchase property, while still receiving considerable tax advantages, without being taxed as a corporation. Also known as REIT

REAL ESTATE TRUST

A special arrangement under federal and state law whereby investors may pool funds for investments in real estate and mortgages and yet escape corporation taxes

REAL PROPERTY

Land and anything affixed, incidental, or appurtenant to it, and anything considered immovable under the law. Land, buildings, and other immovable property permanently attached thereto

REALTOR

A real estate broker holding active membership in a real estate board affiliated with the National Association of Realtors

REBUTTABLE PRESUMPTION

A presumption that is not conclusive and that may be contradicted by evidence. A presumption that applies unless proven inapplicable by the introduction of contradictory evidence

RECAPTURE

1. The rate of interest necessary to provide for the return of an investment 2. A provision in tax laws that reduces certain benefits from claiming depreciation

RECEIVER

A neutral third party, appointed by the court to collect the rents and profits from property, and distribute them as ordered by the court. Often used as a remedy when mere damages are inadequate

RECONVEYANCE

A conveyance to the landowner of the legal title held by a trustee under a deed of trust. The transfer of property back from a lender who holds an interest as security for the payment of a debt. In a deed of trust, the beneficiary reconveys property upon satisfaction of the promissory note

RECORDATION

Filing of instruments for record in the office of the county recorder. The act of having a document filed for record in the county recorder’s office. Once recorded, the instrument gives constructive notice to the world

REDEMPTION

Buying back one’s property after a judicial sale. The repurchasing of one’s property after a judicial sale

REFORMATION

A legal action to correct a mistake in a deed or other document

REINSTATEMENT

A right available to anyone under an accelerated promissory note secured by a deed of trust or mortgage on property. If a deed of trust is foreclosed by trustee’s sale, the debtor may have up to three months from the recording of the notice of default to pay the amount in arrears plus interest and costs, thereby completely curing the default (reinstating) without penalty

REJECTION

Refusal to accept an offer. Repudiation of an offer automatically terminates the offer

RELEASE

To give up or abandon a right. The release of rights may be voluntary, as when one voluntarily discharges an obligation under a contract. The release may be involuntary, by operation of the law; for example, one’s wrongful conduct may bar him from asserting his rights. In deeds of trust a partial release clause frees certain property from the security of the deed of trust upon the payment of specified sums of money

RELEASE CLAUSE

A stipulation in a deed of trust or mortgage that upon the payment of a specific sum of money to the holder of the deed of trust or mortgage, a particular lot or area shall be removed from the blanket lien on the whole area involved

RELICTION

The gradual lowering of water from the usual watermark

REMAINDER

An estate that vests after the termination of the prior estate, such as after a life estate. Example: A life estate may be granted to Adams, with the remainder granted to Baker. Most commonly, an estate (future interest) that arises in favor of a third person after a life estate

REMAND

To send back to a lower court for further action

REMEDY

The means by which a right is enforced, preserved, or compensated. Some of the more common remedies are damages, injunctions, rescission, and specific performance

RENT

The consideration paid by a tenant for possession of property under a lease

RENTAL PROPERTY

Renting property to the first person that comes along can be a costly mistake

RENTAL PROPERTY

Rental income from a smaller property may show a higher rate of profit than from a more expensive property

RENUNCIATION

Is the cancellation of an agency relationship by the real estate agent requires written notice to the principal

RESCISSION

The unmaking of a contract, and the restoring of each party to the same position each held before the contract arose

RESCISSION OF CONTRACT

The canceling of a contract by either mutual consent of the parties or legal action

RESERVATION

A right or interest retained by a grantor when conveying property; also called an exception

RESIDUE

That portion of a person’s estate that has not been specifically devised

RESPA

Prohibits the giving and receiving of kickbacks and unearned fees

Real Property

Land building, and those things permanently affixed to them

Reconveyance Deed

An instrument used to transfer title from a trustee to the equitable owner of real estate, when title is held as secured collateral.

Recording

Filing documents affecting real property as a matter of public record, giving constructive notice to future purchasers, creditors, or other interested parties.

Redeem

To buy back, repurchase or recover.

Redemption

The process of canceling a defeasible title to land, such as created by a mortgage foreclosure or tax sale.

Redemption Period

A time period during which a mortgage, deed of trust, or contract can be redeemed. Usually set by statute, and after judicial foreclosure.

Redlining

An outlining on a map of certain high risk areas for real estate loan purposes, meaning that lenders will not extend credit in those areas. Illegal in most states.

Regulation Z

A regulation issued under the Truth-In-Lending Law, which requires that a credit purchaser be advised in writing of all costs connected with the credit portion of the purchase.

Release

An instrument releasing property from a lien of a mortgage, judgment, etc. When a deed of trust is used, the instrument’s called a reconveyance.

Remainder

An estate which takes effect after the termination of the prior estate, such as a life estate. A future possessory interest in real property.

Replevin

To repossess or a court action to repossess.

Rescission

The cancellation of a contact and restoration of the parties to the same position they held before the contract was entered into.

Reservation

A right, either permanent or temporary, created and retained by a grantor of property.

R.E.S.P.A

Real Estate Settlement Procedures Act

Restriction

A use or uses prohibited to the owner of land. Restrictions are set forth by former orders in a deed or by a recorded declaration of restrictions by a developer of a subdivision.

Reversion

The right to future possession or enjoyment by a person, or the person’s heirs, creating the preceding estate. Example the estate that is returned to the lessor at the end of a lease.

Reversionary Interest

A future interest a person has in property after present possession is terminated.

Right of Survivorship

The right of the survivor of a deceased person to the property of the deceased.

Riparian Rights

The right of a landowner whose land borders on a stream or watercourse to use and enjoy the water which is adjacent to or flows over the owner’s land provide such use does not injure other riparian owners.

S

Satisfaction

Discharge of an obligation by payment of the amount due, as on a mortgage or trust deed, or payment of a debt awarded, such as satisfaction of a judgment.

Separate Property

Property owned by a married person in his or her own right outside of the community interest including property acquired by the spouse (1) before marriage, (2) by gift or inheritance (3) from rents and profits on separate property, and (4) with the proceeds from other separate property.

Severalty

An estate of property held by one person alone. Sole ownership.

Sheriff’s Deed

Deed given at sheriff’s sale in foreclosure of mortgage. The giving of said deed begins a statutory redemption period. Also given at a court ordered sale, pursuant to the execution of a judgment.

Special Warranty Deed

A deed in which he grantor warrants or guarantees the title only against defects arising during grantor’s ownership of the property and not against defects existing before the time of grantor’s ownership.

Statute of Frauds

Laws requiring certain types of contracts to be in writing. All contracts for the sale of real property must be in writing, and leases for more than one year must be in writing.

Statute of Limitations

Time periods to enforce a claim by court action. After the statutorily defined time period for the type in action has expired, the court will not hear the claim.

Statutory Lien

An involuntary lien, created by law rather than by contract, including tax liens, judgment liens, mechanic’s liens, etc.

Statutory Warranty Deed

A short term warranty deed which warrants by inference that the seller is the undisputed owner, has the right to convey the property, and will defend the title if necessary. This type of deed protects the purchaser in that the conveyor covenants to defend all claims against the property. If conveyor fails to do so, the new owner can defend said claims and sue the former owner.

Subagent

A person upon whom the powers of an agent have been conferred, not by the principal, but by an agent as authorized by the agent’s principal.

Sublease

A lease, under which the lessor is the lessee of a prior lease of the same property.

Subordinate

To make subject to or junior or inferior to.

Subrogation

Replacing one person with another in regard to a legal right or obligation.

Substitution, Principle of

Affirms that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property, assuming no costly delay is encountered in make the substitution.

Supply and Demand, Principle of

In appraising, a valuation principle stating that the market value is affected by intersection of supply and demand forces in the market as of the appraisal date.

T

Tax Free Exchange

The trade or exchange of one real property for another without the need to pay income taxes on the gain at the time of the trade. The tax on the gain is postponed under the rules of IRS Code Section 1031. Also known as a 1031 Exchange.

Tenancy by the Entirety

A form of ownership by husband and wife whereby each owns the entire property. In the event of the death of one, the survivor owns the property without probate.

Tenancy for Years

Any estate for a definite time period (a lease).

Tenacy in Common

An undivided ownership in real estate by two or more persons. The interests need not be equal, and in the event of the death of one, the survivor owns the property without probate.

Tenancy in Partnership

An undivided ownership interest by partners of a partnership. Right of survivorship applies.

Tenant at Sufferance

One who comes into possession lawfully, but who holds over after termination of his interest.

Tenant at Will

One who holds possession by permission of the owner or landlord, but without agreement for a fixed term of possession.

Tenant for Life

An estate in real property for the life of a living person. The estate then reverts back to the grantor or on to a third party.

Tenant in Severalty

One who owns property alone.

Tender

Offer to perform

Testate

Having written a last will and testament.

Title

Evidence one has of right to land possession. The rights of ownership often referred to as the “bundle of rights”.

Township

A territorial division of land established by federal survey, being six miles square and containing 36 sections, each one mile square.

Trade Fixtures

Articles of personal property annexed by a business tenant to real property which are necessary to the carrying on of a trade or business and are removable by the tenant.

Trust Account

An account used by brokers, escrow agents, or anyone holding money in trust for another.

Trust Deed

An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor), in favor of a lender (beneficiary), and reconveyed upon full payment.

Trustee

One who holds title to real property under the terms of a deed of trust.

Trustee’s Deed

Trustor

The borrower under a deed of trust. One who deeds his property to a trustee as security for the repayment of a loan.

U

Undivided Interest

A partial interest by two or more people in the same property, whether the interest of each is equal or unequal.

Unearned Increment

An increase in value of real estate due to no effort on the part of the owner which is most often due to the increase in a population in an area.

V

Valid

Having force or binding force, legally sufficient and authorized by law.

Valuation

The estimating of value. An appraisal.

Void

To have no force or effect. That which is unenforceable.

Voluntary Lien

A lien placed against real property by the voluntary act of the owner. Most commonly, a mortgage or deed of trust.

W

Warranty Deed

A deed used in many states to convey fee title to real property.

Wrap-Around Mortgage

A second or junior mortgage with a face value of both the amount it secures and the balance due under the first mortgage. The mortgagee under the wrap-around collects a payment based on its face value and then pays the first mortgagee.