Real Estate Definitions*

ABANDONMENT:
Abandonment occurs when a person with a right or interest in a property voluntarily gives up that right or interest, either by physically "abandoning" the property or by showing the intention to give up the right or interest.

ABATEMENT:
A decrease or reduction in the price of a property (or in rent chargeable to a tenant). Usually occurs as a result of the discovery of a negative fact about the property which decreases its value from the price originally agreed upon by the parties.

ABLE:
Quite literally, being capable. A Purchaser is ready, willing and able to complete a transaction when she has funds and has signed the documents required to transfer title to a property. If the Vendor is not ready, willing and able to complete the transaction on the date set for completion, the Purchaser may tender upon the Vendor and sue as a result of the failure to complete the transaction.

ABSENTEE OWNER:
An owner of a property who lives elsewhere, leaving tenants in control and occupation of the property.

ABSORPTION RATE:
Expressed as a percentage, the number of properties that can be bought or sold in a particular market. May be broken down as to types and sizes of properties.

ABSTRACT OF TITLE:
A summary listing of the documents registered in the local land registry office and which affect title (ownership) of a particular property.

ABSTRACT PLANT:
See Title Plant.

ABSTRACTION (EXTRACTION) METHOD:
A method by which the value of land may be established. Uses comparable, improved properties and establishes a ratio of their original land value to their value after they have been developed.

ABUT:
Adjoin or share a common boundary, or share even a small portion of a boundary.

ACCELERATED DEPRECIATION:
Depreciation is the reduction of the value of a property or chattel as a result of the passing of time (i.e. a new car may be worth $20,000.00, $18,000.00 after one year, $16,000.00 after two years etc.). Usually used for tax purposes, the depreciation in the value of a property may be used as a tax deduction. If a property or chattel loses its value quickly, this depreciation rate may be accelerated so that most of the value is lost in the first few years and then the depreciation rate decreases later in the property's life span. Also known as "Writing down" the value of a property (or a chattel).

ACCELERATION CLAUSE:
A clause in a mortgage or loan. If the borrower fails to live up to her obligations under the mortgage, the lender has the legal right to demand that the full principal of the mortgage may become due and payable immediately upon the failure.

ACCEPTANCE:
A positive response to an offer or a counter-offer that creates a binding agreement between the parties. Acceptance may be conditional upon the occurrence of certain events.

ACCESS:
The right to enter a property. Access may be restricted to certain times, to certain persons and to certain purposes (i.e. access for the purpose of inspection).

ACCESSIBILITY:
The ease with which one can reach a certain place, person or thing. A property may be inaccessible because it is located far back along a winding, mountainous road that is often blocked in winter. A property may also be said to have good accessibility to highways, shopping, schools etc.

ACCESSORY BUILDING:
A structure on a property that serves a specific purpose, complementing the home or main building. A garage or storage shed.

ACCREDITED ASSESSMENT EVALUATOR (AAE):
A professional designation. A property evaluator who has achieved the requirements of the International Association of Assessing Officers.

ACCREDITED LAND CONSULTANT (ALC):
A professional designation. A person who has met the requirements of the Realtors Land Institute to aid in the marketing of real property.

ACCREDITED RESIDENTIAL MANAGER (ARM): A professional designation for a person trained to manage residential properties. A person who has earned the designation by fulfilling the requirements of the Institute of Real Estate Management (IREM), which is an affiliate of the National Association of Realtors.

ACCRETION:
The growth in size of a parcel of land as a result of the actions of such natural forces as wind or water.

ACCRUED:
An adjective describing something that has come into existence but has not yet been claimed by or distributed to its rightful owner.

ACCRUED DEPRECIATION:
From a tax standpoint, the amount of value of a property or chattel which has already accumulated (but has not been claimed) as a result of the decrease in the value of that property due to the passage of time and the use of the property or chattel.

ACCRUED INTEREST:
Interest which has already been earned but has not yet been paid.

ACKNOWLEDGEMENT:
A statement by a person to the effect that they are aware of a certain fact. May also be a sworn document to the same effect, which further states that the person signing the document did so voluntarily.

ACQUISITION:
The process of taking title to or ownership of something.

ACQUISITION COST:
The cost to the purchaser of obtaining title to anything, including real property. Acquisition cost includes the cost of the transaction of obtaining title, including legal fees and expenses, interest charges on mortgages, land transfer tax, etc.

ACRE:
An imperial measure for land. Equals 43,560 square feet; 4,047 square meters; or 0.047 hectares.

ACT OF GOD:
When used in insurance policies, an event caused by natural forces such as rain, lightning, floods or earthquakes which results in damage to property or chattels.

ACTION TO QUIET TITLE:
A legal proceeding begun for the purpose of settling competing claims to property and establishing clear legal title in one party.

ACTUAL AGE:
As opposed to effective age. The objective age in years of a building measured simply by the passage of time since it was constructed. Effective age is a subjective measurement of the condition of a building, influenced mostly by the maintenance and upkeep carried out on the building over the years.

ACTUAL AUTHORITY:
With reference to an agent or representative. The limits of the power the agent or representative has to bind her principal to an agreement or to a statement.

ACTUAL CASH VALUE:
An insurance term, the value of a building calculated by subtracting the decrease in value caused by age and wear and tear from the cost of replacing the building entirely.

ACTUAL DAMAGES:
An award of the court to compensate an injured party for losses incurred as a result of the actions or omissions of another party.

ACTUAL EVICTION:
Wrongful removal of a tenant from possession of a premises, usually by a landlord, contrary to the terms of the lease.

ACTUAL POSSESSION:
As opposed to constructive possession. When the owner of a property occupies the property on a day-to-day basis. Constructive possession is when the owner takes actions to establish and maintain his ownership of a property without actually occupying it himself (i.e. leasing it to tenants, removing squatters, hiring a security firm).

AD VALOREM:
Latin meaning "according to value." Taxes that are said to be ad valorem are assessed according to the value of the property.

ADC LOAN:
A loan that finances the three major phases of a land development project: (i) acquisition, (ii) development and (iii) construction.

ADDENDUM:
An addition to a document that forms part of it. Similar to a Schedule to an Agreement of Purchase and Sale. May be used to add specific and detailed information material to the contract or upon which contractual terms are based.

ADDITIONAL PRINCIPAL PAYMENT:
A one-time or lump-sum payment made by a borrower in addition to the regular payments on a loan or mortgage which reduces the principal owing on the debt.

ADEQUATE PUBLIC FACILITIES ORDINANCE:
An ordinance by the local level of government controlling development by requiring that infrastructure works (roads, sewers, hydro lines) be completed prior to or concurrent with the building of dwellings or commercial buildings in a new development.

ADJACENT LAND:
An inexact term used to described any property which is situated near or abutting a certain piece of property. Note, an abutting property will always be adjacent but an adjacent property may not be abutting.

ADJUSTABLE RATE MORTGAGE (ARM):
Also known as a Variable Rate Mortgage, a loan secured against land which has an interest rate that changes according to some outside index -- such as the federal prime rate or the interest rate paid on government bonds -- over the term of the mortgage. The change in interest rate will result in a change in the periodic payments due under the mortgage.

ADJUSTED COST BASE:
For the purposes of determining capital gains or losses. The acquisition cost of a property or chattel, plus the cost of any improvements to the property.

ADJUSTED SALES PRICE:
The result of estimating the value of a property by comparison to comparable properties. Take the actual sale price of a property comparable to the subject property, then add the value of any extras which the subject property has but the comparable property did not, then subtract the value of any deficiencies in the subject property not shared by the comparable property.

ADJUSTMENT DATE:
Mortgage term usually preceded by the word "Interest" (i.e. "Interest Adjustment Date"). The date soon after the completion of a purchase and mortgage transaction on which the borrower must make a payment of accumulated interest only, usually used to place the periodic payment dates for the mortgage at the first day of the month (i.e. you borrow on March 18, your interest adjustment date is April 1 and your first regular monthly payment is May 1).

ADJUSTMENT INTERVAL:
Also known as Adjustment Period. The period of time (i.e. week, month, year) between changes in the interest rate charged on a adjustable-rate mortgage.

ADJUSTMENT PERIOD:
See Adjustment Interval.

ADJUSTMENTS:
In real estate sales, the changes made to the selling price to account for the advantages and disadvantages of the subject property, market conditions etc. When closing a real estate transaction, the changes to the purchase price made as a result of realty taxes over- or under-paid by the Vendor, fuel oil provided, tenant's rental payments etc. (Contained on the Statement of Adjustments).

ADMINISTRATOR:
A person appointed by a Court to deal with the estate of a deceased person who died without leaving a will (who dies "intestate"). Note, an executor is a person who is named in a will to deal with the estate of a deceased person.

ADVANCE:
Verb: to deliver a portion of money borrowed under a mortgage or loan before the loan instrument requires the money to be delivered.
Noun: the money so delivered.

ADVERSE POSSESSION:
A method of acquiring or claiming title (ownership) to a piece of land owned by another by occupying it in defiance of the other's title. Most jurisdictions have statutes that set out a certain period of time throughout which the person claiming adverse possession must occupy the land before title passes to that person by operation of law.

AESTHETIC VALUE:
A subjective element in the overall market value of a property created by the physical presentation of the land or buildings.

AFFIANT:
One who swears an affidavit.

AFFIDAVIT:
A sworn statement setting out facts which the affiant states are true. Sworn before a Commissioner for swearing Oaths, Notary Public or other public official.

AFFIDAVIT OF TITLE:
A Vendor's statement to the effect that title is good and marketable and subject to no defects other than those set out in the Agreement of Purchase and Sale or the Vendor's Deed.

AFFIRMATION:
Instead of a sworn oath, a solemn and formal declaration regarding the truth of a statement of facts. Often used when a person's religious convictions preclude swearing an oath.

AFFIRMATIVE FAIR HOUSING MARKETING PLAN:
In an initiative sponsored by the Department of Housing and Urban Development (HUD) to foster integration of races in new housing projects, such a Plan is required before a project becomes eligible for certain U.S. programs.

AFTER-TAX CASH FLOW:
The net proceeds from an income-producing property, after all costs (taxes, mortgage interest, maintenance costs etc.) of owning and operating the property have been deducted.

AFTER-TAX PROCEEDS FROM RESALE:
The net proceeds from the sale of a property. The sale price minus legal fees and expenses, realty commission, any taxes paid, mortgage payout etc.

AGENCY:
The relationship between a person (the Principal) and another person (the Agent) who was appointed, selected, empowered, given authority by the Principal to represent the interests of the Principal in dealings with third parties and to bind the Principal to statements, warranties or contracts.

AGENCY BY ESTOPPEL (OSTENSIBLE AGENCY):
An agency relationship created by the actions, behavior or statements of the Principal and/or the Agent upon which a third party relies. Ostensible Agency may be found by a court where no agency relationship was intended by the Principal.

AGENCY BY NECESSITY:
An agency relationship where the authority to represent is imputed to the Agent as a result of an emergency situation to protect the interests of the Principal.

AGENCY BY RATIFICATION:
An agency relationship which is created after the fact when the Principal agrees to be bound by the actions of another person who was acting without authority.

AGENT:
A person empowered by a Principal to act on behalf of the Principal in dealings with third parties. The third party is entitled to rely upon the agreement, assurances or statements of the Agent as being binding on the Principal.

AGREEMENT OF SALE:
Also known as Purchase Agreement, Agreement of Purchase and Sale, Land Agreement etc. A legal contract in which one party agrees to buy and another agrees to sell a property or chattel. Contains terms and conditions of the transaction and is signed by the parties.

AGREEMENT:
A legally binding contract between two or more people, representing a meeting of minds on one or more issues.

AGRICULTURAL PROPERTY:
Land zoned for agricultural or farming activities.

AIR RIGHTS:
A saleable commodity, the right to occupy or use the air space above a specific property.

ALIENATION CLAUSE:
A term of a mortgage which allows the creditor to demand payment in full of principal and interest due upon the sale of the property.

ALLOCATION (ABSTRACTION) METHOD:
Estimating the value of land only by deducting the value of the buildings etc. on the land from the actual market value of the property as a whole.

ALLODIAL SYSTEM:
The system of ownership of property in the United States, meaning free from any claims or rights of a monarch or a feudal lord.

ALTERATION:
A change made to an executed contract which has not been approved by the parties to the contract. An alteration may constitute fraud if it has the impact of significantly affecting the rights of a party to the contract and was intentionally carried out by another party. If fraud is found, the innocent party may void the contract.

AMENITIES:
Positive features of a particular property (such as a pool, central air conditioning, etc.) or attractions located near a particular property (highways, school, shopping, etc.) which have the effect of enhancing the property's value.

AMERICAN LAND TITLE ASSOCIATION (ALTA):
Trade association of American title insurance companies, with a view to standardizing the policies nationwide.

AMERICAN RURAL APPRAISER:
A Professional Designation. Awarded by the American Society of Farm Managers and Rural Appraisers.

AMERICAN SOCIETY OF APPRAISERS:
A Professional Society, for persons involved in the appraisal of both real and personal property.

AMERICAN SOCIETY OF HOME INSPECTORS, INC. (ASHI):
A Professional Trade Organization, for persons specializing in the inspection of the physical condition of homes.

AMERICAN SOCIETY OF REAL ESTATE COUNSELORS (ASREC):
A Professional Society, for persons specializing in helping people buy and sell homes.

AMORTIZATION:
The preparation of a payment plan for a loan which allows for equal payments to be made to the creditor at consistent intervals over the life of the loan (the amortization period). Each payment covers interest accrued over the interval period with the remainder of the payment being applied to reduce the principal owed. If every payment is made on time and in full over the amortization period, the loan will be completely repaid at the end of the amortization period.

AMORTIZATION SCHEDULE:
The printed table of the payments to be made on an amortized loan showing the date and amount of each payment, the amount of each payment which will be applied to interest and to principal and the balance of principal still outstanding on the loan after the payment is made.

ANACONDA MORTGAGE:
A specific kind of mortgage. Contains a clause that states that it secures all debts owed to the mortgagee by the mortgagor and applies to rules of the mortgage to all such debts. Clause is also known as a Mother Hubbard clause.

ANCHOR TENANT:
Description of a tenant in a shopping mall or center. A "name" store that will draw shoppers to the mall and, therefore, benefit the other mall stores. Usually receives a favourable lease.

ANNUAL DEBT SERVICE:
The total amount required to service a loan in a given year.

ANNUAL LOAN CONSTANT:
Ratio of Annual Debt Service to original principal of the loan. Also known as a mortgage constant.

ANNUAL MORTGAGOR STATEMENT:
Document sent by the lender to the mortgagor each year which sets out amounts paid for principal, interest and taxes in the given year and the amount still owing on the principal of the mortgage at the end of the year.

ANNUAL PERCENTAGE RATE (A.P.R.):
A rate designed to allow for the comparison of one type of loan to another. The annual cost of borrowing under a given form of loan (includes in the calculation compounded interest, cost of borrowing etc.). Required to be disclosed by the lender under the American Truth in Lending Act, Regulation Z.

ANNUITY IN ADVANCE:
A form of periodic payment. Payments are made at the beginning of each payment period rather than at the end of each period, as with a normal annuity.

ANNUITY:
A form of periodic payment. Made to the recipient at consistent periodic intervals either for life or for a fixed period of time.

ANTICIPATION, PRINCIPAL OF:
An approach to assessing the future value of land based on possible contingencies (positive or negative).

ANTITRUST LAWS:
Laws requiring competition and a free market, outlawing monopolies in certain businesses.

AO (ACCEPTED OFFER):
A short form used by agents to designate that an offer to purchase has been accepted by the offeree.

APPARENT AUTHORITY:
Where an agent compels, by actions, omissions or statements, a third party to believe the agent has the authority to bind a principal. The authority to bind is apparent due to the behavior of the agent but may not actually exist.

APPLICATION:
A form filled out in order to allow a lender to consider a person for a mortgage or loan. Will contain personal and financial and personal information on the applicant.

APPLICATION FEE:
The fees the lender charges the applicant. May include costs of a property appraisal and a credit report on the applicant. May be payable by applicant even if loan is not approved.

APPOINTMENTS:
Chattels or decorative touches that may affect the value of a property.

APPORTIONMENT CLAUSE:
A clause in a policy of insurance. Allows the payment of compensation for a loss to be divided between insurers holding different policies on the same property.

APPORTIONMENT:
Also known as adjustment. The division of responsibility for certain costs between the parties to a transaction, such as realty taxes. In many U.S. jurisdictions, the vendor is responsible for the day of closing and all days prior to it.

APPRAISAL:
An estimation of the value of a property on a certain date given by a qualified person, usually after an inspection of the property.

APPRAISAL PRINCIPLES:
Elements to be considered by an appraiser in appraising the value of a property, such as competition, supply and demand.

APPRAISAL PROCESS:
A standardized approach to appraising a property, to allow for accuracy and consistency.

APPRAISAL REPORT:
Documentation to support an appraisal of a property. Varies in length but sets out elements considered, positive and negative aspects of property etc.

APPRAISED VALUE:
The estimated market value of a property on a given date, given by a qualified person as a result of an inspection of the property and a consideration of other market forces.

APPRAISER:
A professional who has been trained to assess the value of property.

APPRECIATION:
The increase over time in the value of a property caused by many factors: market conditions, inflation, changes to area around the property, etc.

APPROACHES TO VALUE:
Different methods by which appraisers estimate the value of a property. Include: (1) cost approach, (2) comparison approach, and (3) income approach.

APPROVED ATTORNEY:
A lawyer who meets the requirements of title insurance companies to be able to complete transactions involving title insurance and to render title opinions.

APPURTENANCE:
A right or entitlement which forms part of the ownership of a property and which passes to a new owner when title passes (i.e. an easement or right of way over another property).

ARBITRATION:
An Alternative Dispute Resolution method. Allows an objective third party to settle disputes between parties without resorting to court. Binding arbitration involves the parties agreeing to be bound by the decision of the arbitrator.

"ARM'S LENGTH" TRANSACTION:
A colloquial description of a transaction where none of the parties are related to each other or have common interests -- they have each other at "arm's length". An arms-length transaction is generally at fair market value; in a "non-arm's-length" transaction, the relationship between the parties may cause one or the other to accept less than they are entitled or pay more than fair market value.

ARREARS:
Money which is not paid when due, under a payment plan or amortization schedule. Could lead to enforcement of loan agreement by lender

ARTERIAL STREET:
A main thorough fare or through road, one which is designed to carry traffic through an area where that area is not the destination of the traffic.

ARTIFICIAL PERSON:
As opposed to a natural person. A corporation of other legal entity which has at least some of the legal rights of a human being.

AS IS:
Implied in most Agreements of Purchase and Sale, suggests the Purchaser is accepting the property in its current condition and releases the Vendor from any liability for problems found before or after closing.

"AS-IS" AGREEMENT:
A statement in the Agreement of Purchase and Sale that confirms that the Purchaser shall accept the property and all chattels included in the Purchase in the condition in which they are found at the time the Agreement is signed.

ASKING PRICE:
The price at which the Vendor advertises a property. When used in the advertisement, may suggest flexibility on the part of the Vendor regarding the price.

ASSESSED VALUE:
The value assigned to a given property by the municipality for the purpose of establishing realty taxes payable by the owner of the property.

ASSESSMENT:
Generally, the apportionment of liability of a general cost among individuals. The act of estimating the value of land for tax purposes or the method by which municipalities raise taxes (property tax assessment).

ASSESSMENT BASE:
The total of the assessed values of all properties in a municipality.

ASSESSMENT RATIO:
Assessed value as compared to full market value for a particular property or for all properties as set by the municipality.

ASSESSMENT ROLL:
Public record of the assessed values of properties. Also includes Assessment Roll Number for each property, the number by which the property is identified in the municipal records.

ASSESSOR:
A person who is employed by the municipality to estimate the value of properties for the purpose of taxes.

ASSET:
A thing of value.

ASSIGN:
To transfer interest in a property, contract, right etc..

ASSIGNEE:
The person to whom an interest is transferred. An assignee of an Agreement of Purchase and Sale may buy the property and enforce the contract in the same fashion as the original party.

ASSIGNMENT:
The transfer of any right, claim or interest to another person or corporation. Often used to refer to the transfer of a mortgage from one lender to another. Also a noun describing the document which represents the assignment of the right etc.

ASSIGNMENT OF LEASE:
Subject to the terms of the lease, a transfer of either the lessor's or the lessee's interest in a lease.

ASSIGNOR:
The person who assigns a right or interest to another person.

ASSOCIATE BROKER:
A qualified real estate broker who works with or for another broker.

ASSUMABLE MORTGAGE:
A mortgage that can be taken over ("assumed") by the buyer when a home is sold. If interest rates have risen, an assumable mortgage at a low rate may prove a selling point for the property.

ASSUMPTION CLAUSE:
The paragraph in the mortgage which sets out the borrower's right to have the mortgage assumed by a purchaser.

ASSUMPTION FEE:
A charge levied by the lender (usually against the party assuming the mortgage) for the privilege of assuming a mortgage. May be a fixed amount or a percentage of outstanding principal on the mortgage at the time of the assumption.

ASSUMPTION OF MORTGAGE:
The agreement of a purchaser to take on personal liability for a mortgage already registered on title to the property and to make payments under the mortgage. Purchaser takes the place of the vendor in the contract with the lender.

AT-RISK RULE:
A limitation of the amount an investor can claim on his incomes taxes as a result of losses from real estate investments, under the Tax Reform Act of 1986.

ATTACHED HOUSING:
Duplex, triplex, row housing, or townhouses. Two or more dwellings that are attached physically but are owned and/or occupied by different people.

ATTACHMENT:
The binding by a court of a piece of property (real or personal) as security for a debt.

ATTESTATION:
A statement by a person who has witnessed another person signing a document to the effect that they did in fact witness the document. May include statements to the effect that the witness knew the person who signed personally, that the person who signed understood the contents of the document when he signed etc. Required in some states for deeds.

ATTORNEY AT LAW:
A person who has met the requirements to practice law in a particular state of the United States.

ATTORNEY IN FACT:
A person who holds a POWER OF ATTORNEY for another person, which gives the Attorney the power to act on behalf of that other person and bind that other person.

ATTORNEY'S OPINION OF TITLE:
A statement of a lawyer's conclusions with regard to the state of the legal title of a property, issued after the lawyer has completed the appropriate investigations of title.

ATTRACTIVE NUISANCE:
"Attractive" refers to the response of children to a feature of land (whether natural or man-made) which has the potential to be harmful (an uncovered well, a swimming pool, a swift moving stream).

AUCTION:
The process of selling property to the highest bidder.

AUCTIONEER:
A professional (real estate broker or auctioneer, depending on local laws) who sells property at public auctions. Usually paid a percentage of the sale price.

AUGMENTED ESTATE:
The assets of a deceased person against which a surviving spouse may claim an interest. Can include property which the deceased person disposed of while still living if the disposal was in the form of a gift or was not for value.

AUTHORITY:
The right of an agent, conferred by his principal, to bind the principal in dealings with third parties. See actual authority, implied authority, apparent authority, ostensible authority, inherent authority.

AUTHORIZATION TO SELL:
A contract between an property owner and a real estate broker or agent which allows the broker to list the property for sale and which codifies the rights and obligations of the two parties.

BACHELOR APARTMENT:
A small rental dwelling unit which combines living and bedroom spaces into one room (and, sometimes, kitchen space as well). Also known as "efficiency suite" or "studio apartment".

BACK END RATIO:
A comparison of a borrower's monthly expenses to her gross monthly income used to assess her ability to carry a mortgage or other loan.

BACK TITLE LETTER (OR CERTIFICATE):
Notice by a Title Insurance Company to a person searching and certifying title that a previous search has been completed, setting out the status of title of the property as at a given date such that the person searching need only up-date the search.

BACKUP CONTRACT:
An Agreement of Purchase and Sale for a particular property which is conditional (becomes binding) upon the failure of another Agreement for the same property.

BALANCE:
Often as in "balance due", the amount of principal on a loan remaining to be paid at any given time.

BALANCE SHEET:
A table of figures showing the assets, liabilities and net worth of a person or corporation on a given date.

BALLOON (LOAN) MORTGAGE:
A loan which is repaid by a series of small, periodic payments until a given date, when either the balance comes due in a single, large payment or the amount of the payments rises significantly.

BALLOON PAYMENT:
The single, large payment which pays out the balance due on a balloon mortgage.

BANKRUPT:
A noun or adjective. Noun - a person or business which has made an assignment in bankruptcy or has been petitioned into bankruptcy. Adjective - owing more money than you have assets or income to repay.

BANKRUPTCY:
The state of being unable to pay your debts such that you submit yourself to the protection of the state. A person or business may voluntarily assign himself into bankruptcy or may be petitioned into bankruptcy by his creditors. Once in bankruptcy, the person surrenders his assets to a trustee in bankruptcy who sells the assets for the benefit of the bankrupt's creditors, first secured creditors then unsecured creditors. Once a person is discharged from bankruptcy, none of his former creditors may pursue him for his former debts.

BASE RENT:
The set rent payable by a tenant under a lease, to which is added Additional rents as required by the lease (for common area maintenance, for example, or for utilities).

BASIS POINT:
One 100th of 1%.

BEARER INSTRUMENT:
A valuable document (a bond or other security) which does not bear the name of its legal owner; may be redeemed by whoever is in possession of it.

BEDROOM COMMUNITY:
A neighborhood or area which offers little in the way of employment opportunities but plenty of housing, similar to a "suburb" or commuter town.

BEFORE-TAX CASH FLOW:
Gross amount of money available for the use of the owner before taking into consideration taxes.

BEFORE-TAX INCOME:
A person or corporation's gross earnings before taxes are deducted.

BELOW-MARKET INTEREST RATE (BMIR):
A subsidized interest rate on a mortgage or loan, often provided by a government to allow for acquisition of property or reduction in rents charged to tenants.

BENCHMARK:
A permanent feature on land which is used as a point of reference for a land surveyor.

BENEFICIARY:
A person or corporate entity entitled to receive money or assets from a trust or an estate under a will.

BEQUEATH:
To leave an item of personal property to a certain person in a will (see "Devise", which refers to gifts of land in this context).

BEQUEST:
The item bequeathed under a will.

BETTERMENT:
The improvement of real estate that results in a rise in market value. Also, a legal concept of civil law: when a court award, judgment or order in favor of an injured party places that party in a better position than he would have been had his original injury never taken place.

BIANNUAL:
Or semiannual. Occurring every six months or twice per year.

BID:
An offer of a certain amount of consideration.

BIENNIAL:
Occurring once in every two years.

BILATERAL CONTRACT:
A contract which has a balance of consideration promised by the parties, where each promises performance of the contract.

BI-LEVEL:
A description of a house with two levels, where the main entrance to the house is between the two levels.

BILL OF SALE:
Documentary evidence that title to personal property (chattels) has passed to the Purchaser for valuable consideration.

BINDER:
1. A written commitment from an insurance company to insure a property or a certain risk; or
2. A preliminary agreement to purchase a property accompanied by a forfeitable deposit which is lost if the purchaser does not complete the purchase of the property.

BIWEEKLY LOAN OR MORTGAGE:
A loan which features payments equalling one half of the usual monthly payment made every two weeks (to total 26 in a year), thus substantially reducing the life of the mortgage and the interest payable over the life of the mortgage.

BLANKET INSURANCE POLICY:
A single insurance policy that applies to more than one person or property.

BLANKET MORTGAGE:
Where one loan is secured against more than one parcel of land.

BLENDED RATE:
Created when an old loan is refinanced and extended at an interest rate which is different from the original rate: the old debt is still payable at the old rate; the new debt is payable at the new rate; the total amount of the debt is payable at a rate of interest that is somewhere between the two rates.

BLIGHTED AREA:
An area of a community where the infrastructure and buildings have been allowed to decay.

BLUEPRINT:
Construction plans, containing great detail about the particular building.

BOARD OF EQUALIZATION:
United States government body with a mandate to assure uniform property tax assessments.

BOILER PLATE:
A standard clause or provision in a contract which appears in all similar contracts.

BONA FIDE:
Made in good faith, at fair market value, without deceit or fraud.

BOND:
1. A sum of money paid into court as an assurance of the performance of some requirement or as security for payment on a claim. May be used to allow for the removal of a claim for lien from a property while the court action over the lien continues.
2. An interest-bearing instrument.

BORROWER (MORTGAGOR):
The person or company that receives money from a lender (often a bank, credit union or trust company) in exchange for a written promise to pay and a registered lien on property.

BOTTOMLAND:
Low lying land, near a water course or in a valley or similar geographic contour.

BOUNDARY:
Edge or limit of a property. See "property line".

BREACH (OF CONTRACT):
A failure to meet one's obligations, whether under a contract or otherwise. A breach of contract allows the innocent party to enforce the contract, rescind the contract or sue for damages.

BRIDGE FINANCING:
Also known as a "swing loan", a loan used to fill a gap in financing, often between the purchase of a new home and the sale of the old one. If the purchase closes before the sale, the home owner needs to borrow enough money to pay for the new house for the period of time before the equity in his old house comes available as a result of the completion of the sale.

BRITISH THERMAL UNIT (B.T.U.):
A unit of heat or cooling. That required to change the temperature of a pound of water by one degree Fahrenheit.

BROKER:
An intermediary who brings parties together for specific purposes. A mortgage broker brings borrowers together with lenders; a real estate broker brings purchasers together with vendors. Often charges a percentage of the contract price as a fee. Specific training required to become a Real Estate Broker, a professional designation.

BROWNSTONE, BRICK ROW HOUSE, OR EASTERN TOWNHOUSE
A nineteenth-century-style row house, with up to five storeys and a front stoop, verandah or porch leading up to the front door.

BUDGET MORTGAGE:
A mortgage in which the borrower is required to make periodic payments not only for interest and principal, but also for insurance premiums and realty tax installments.

BUFFER ZONE:
An area of land specifically designed to separate one zoning use from another, such as separating a residential neighborhood from an industrial area.

BUILD TO SUIT:
An offer by a landowner to develop the land in a manner dictated by a potential tenant, in return for a long-term lease from the tenant for the developed land.

BUILDER WARRANTY:
An enforceable guarantee of the quality of construction given by a builder or developer.

BUILDING CODE:
Set of regulations established by a municipality to govern the standards of construction in that municipality.

BUILDING LINE OR SETBACK:
The minimum distance a building or other improvement may be constructed from a property line. May be established by agreements, title documents or municipal by-laws or ordinances.

BUILDING PERMIT:
A document obtained from the local government, allowing for the construction of a structure in accordance with the terms of the permit.

BUILDING RESTRICTIONS:
Limiting rules which may appear in building codes or in title documents which control the size, placement, materials, design or location of new construction.

BUILT-INS:
Items which could be chattels but which are installed so as to form part of a building.

BUNGALOW:
A small, one-storey home built in a turn of the century style, often with a prominent front verandah.

BUSINESS DAY:
A day in which normal business is transacted. Generally, Monday to Friday but not weekends or holidays.

BUY-BACK AGREEMENT:
A contract between a purchaser and vendor in which the vendor agrees to repurchase the property from the purchaser if a certain event occurs within a specified period of time. The buy-back price is usually set out in the agreement.

BUY DOWN (ACCOUNT OR MORTGAGE):
The payment of extra money on a loan now so as to reduce the interest rate over a given period or over the life of the loan. This extra payment may be made by the borrower, by the lender (as an incentive to the borrower to borrow from the lender) or by the vendor/builder (as an incentive to the borrower to buy a certain property).

BUYER'S BROKER:
A real estate broker who contracts to represent the interests of a person wishing to purchase a home. (see also "selling agent", "Purchaser's agent").

BUYER'S MARKET:
A condition of the real estate market where there are more properties for sale than people interested in buying them. Buyer's have more choice and less competition for the available properties, resulting in lower prices.

BUY-SELL AGREEMENT:
A pact between partners in a business or shareholders in a company, obliging one to buy the other's interest (and obliging the other to sell) upon the occurrence of some event stated in the agreement.

BY-LAWS:
Rules enacted by a governing body of general application.

CALIFORNIA BUNGALOW:
Compact, early twentieth-century single-storey house.

CALIFORNIA RANCH:
One-storey house, in a post-Second-World-War style, known for its ground hugging design and low, pitched roof.

CALL OPTION (PROVISIONS, RIGHTS):
A lender's right to demand payment of the outstanding balance of the loan at a time specified in the loan agreement.

CANCELLATION CLAUSE:
Provision in a contract that gives one or more parties the right to terminate the contract if a specific event occurs.

CAP:
A limit. In variable rate mortgages, a limit as to how high periodic payments may go or how much the interest may change within a given time period or over the life of the mortgage.

CAP RATE:
Short form for capitalization rate.

CAPACITY OF PARTIES:
Legal competence to sign and be bound by a contract. One might lack capacity as a result of being a minor, being mentally challenged or not being of right mind. A contract signed by an incapable person is not binding.

CAPE COD COLONIAL:
A one-storey house, compact in design and in an early-American-style. Symmetrical layout with a central entrance. Steep, gable-type roof, usually shingled, with a low central chimney.

CAPITAL ASSET:
A property to which certain tax rules (capital gains and capital losses) apply.

CAPITAL EXPENDITURE:
Money spent to improve a property and enhance its value over an extended period of time (as opposed to a repair). May be added to the adjusted cost base of the property improved or depreciated over the useful life of the improvement.

CAPITAL GAIN:
increase in value of a capital property (a property other than a principal residence) upon which tax is payable, either upon disposition of the property or the deemed disposition of the property under tax rules.

CAPITAL IMPROVEMENT:
Value enhancing work carried out on a capital property.

CAPITAL LOSS:
Decrease in value of a capital property (a property other than a principal residence). May be set off against capital gains or against regular income according to the tax rules.

CAPITAL:
The working money in a business venture.

CAPTURE RATE:
A comparison of the sales or leasing rate of a particular real estate development to the sales or leasing rate of all developments in the same market.

CARRYING CHARGES (COSTS):
The expense required to maintain a property over a given period of time, including property taxes, maintenance, insurance payments, interest charges on financing, etc.

CASH EQUIVALENT:
The amount a vendor would have realized on the sale of a property had she not accepted unfavourable (or favourable) financing of the purchaser but received cash instead.

CASH FLOW:
Description of the net income from a property after all expenses of holding and carrying the property are paid.

CASH METHOD:
An accounting method, based on actual cash moving in and out of the company over a given period. See accrual method.

CASH RESERVE:
An amount of money that the purchaser of a property still has after the transaction closes. Some lenders require a certain level of cash reserve (equal to two payments) before granting a mortgage.

CASH THROW-OFF:
See cash flow.

CASH-OUT REFINANCE:
When an owner renegotiates or negotiates a new mortgage and the proceeds of the new financing exceed the money required to pay out the old mortgage and any other costs, liens or expenses, leaving money for the borrower.

CAVEAT EMPTOR:
Latin, meaning "Let the Buyer beware". Maxim which applies to real estate transactions where the onus is on the Purchaser to satisfy herself as to the suitability and condition of the property she is considering for purchase. Vendor is not responsible to the Purchaser for the condition of the property and, unless he is specifically asked, does not generally have an obligation to reveal problems to the Purchaser (except where the defect is hidden, serious and could not be discovered by the Purchaser after reasonably prudent inquiries and investigations).

CC&R'S:
Short form for "covenants, conditions, and restrictions", which are the rules of general application governing the relations between land owners in a specific subdivision, development, condominium development or cooperative housing facility. May be registered on title.

CEILING:
The limit over which the interest rate on a variable rate mortgage may not rise over the life of the loan.

CENTRAL BUSINESS DISTRICT (CBD):
The business and commercial "core" of a municipality (also known as "Downtown").

CERTIFICATE OF ELIGIBILITY:
Document issued by the Department of Veteran's Affairs to qualifying veterans which entitles them to apply for subsidized or guaranteed loans.

CERTIFICATE OF INSURANCE:
A document, issued by the insurance company, setting out the particulars of the insurance coverage for a particular property.

CERTIFICATE OF NO DEFENSE: Document which sets out a certain set of facts which the issuer is agreeing to be bound by. Same as estoppel certificate.

CERTIFICATE OF OCCUPANCY:
Document issued by the local municipality indicating that a new dwelling is suitable for occupation. Generally confirms that the dwelling complies with local building, safety and health by-laws.

CERTIFICATE OF REASONABLE VALUE (CRV):
Document issued by the Department of Veterans Affairs (VA). Based on an appraisal, sets out market value of a particular property for the purposes of establishing maximum principal amount available for a VA mortgage on the property.

CERTIFICATE OF SATISFACTION:
Document registered on title which provides evidence from the lender that a loan instrument (deed of trust, mortgage, other lien) has been paid out and released.

CERTIFICATE OF TITLE:
A written opinion of the quality of a person's ownership of property, issued by a lawyer or a title insurance company after a search of the title records has been conducted. May contain qualifications to the certification regarding defects found or potential defects not investigated.

CERTIFICATE OF VETERAN STATUS:
Document issued by Department of Veteran's Affairs confirming that the person named in the Certificate has served at least 90 days of continuous active duty (including training time) and is eligible for certain VA benefits (such as a VA mortgage).

CERTIFIED COPY:
A copy of a document which bears some form of declaration (usually by the holder of the original document) that it is a true copy of the original.

CERTIFIED GENERAL APPRAISER:
A person who has met the requirements to be licensed to appraise the value of property. Qualification requirements may vary from one jurisdiction to the next.

CERTIFIED HOME INSPECTOR:
A person who has met the requirements to be "certified" to inspect the physical condition of homes. Qualification requirements may vary from one jurisdiction to the next.

CERTIFIED PROPERTY MANAGER (CPM):
A person who has met the requirements of the Institute of Real-Estate Management.

CERTIFIED RESIDENTIAL APPRAISER:
A person who has met the requirements to be licensed to appraise the value of residential properties of no more than four units.

CERTIFIED RESIDENTIAL BROKER (CRB):
A person who has met the requirements of the Realtors National Marketing Institute.

CERTIFIED RESIDENTIAL SPECIALIST (CRS):
A person who has met the requirements of the Realtors National Marketing Institute.

CESTUI QUE TRUST:
The beneficiary of a trust, the person who is the beneficial/equitable owner of the property held in trust for which the trustee holds legal title.

CHAIN OF TITLE:
A part of a title search. A listing, in chronological order, of successive legal owners of a property, often listing as well the registration particulars of the document by which title is transferred from each owner to his successor in title.

CHAIN:
An old unit of measurement of land, measuring 66 feet in length. A chain equals 100 links, each 0.66 feet in length.

CHANGE FREQUENCY:
Term describing the period of time between changes in the interest rate and/or payments of a variable rate (adjustable rate) mortgage or loan (i.e. one week, one month etc.).

CHATTEL:
An item of personal property which is not affixed to the land or building (as opposed to a fixture, an item which is a part of the land or building). Chattels are generally not included in the sale of property unless specifically included in the Agreement of Purchase and Sale.

CHATTEL MORTGAGE:
A debt secured against items of personal property rather than against land, buildings and fixtures.

CLEAR TITLE:
Ownership of land which is marketable and free of competing claims, liens, mortgages or other encumbrances.

CLAIM:
A right asserted against another party. One might register a claim on title to the property to which the claim applies, file a claim under an insurance policy or file a Statement of Claim in court to assert one's rights.

CLASS ACTION:
A legal proceeding which presents the related or similar claims of an identifiable group against a single or group of defendants, usually by using one representative claimant to assert the claims on behalf of the group.

CLIENT:
Customer. The person who hires a professional (broker, banker, lawyer, investment counsellor, etc.)

CLOSED MORTGAGE:
A land loan that cannot be prepaid or re-negotiated before the end of its term without the payment of an interest penalty.

CLOSED-END MORTGAGE:
A mortgage with a set principal amount which cannot be increased or extended during the life of the mortgage.

CLOSING:
The culmination of any transaction in which the interested parties (or their representatives) meet to exchange documents, funds, and property and, if necessary, to register the transfer of title.

CLOSING COSTS:
Moneys expended by a party in completing a transaction, over and above the purchase price, including: legal fees, taxes, mortgage application charges, interest adjustments, registration fees, appraisal fees, etc.

CLOSING DATE:
Also known a Completion Date. The date set in the Agreement of Purchase and Sale upon which the transaction is to be completed, the purchase price paid and the transfer of title registered.

CLOSING STATEMENT:
Also known as HUD-1 statement. A document which sets out the financial agreement between the parties, the costs each must pay, and all other similar information regarding a transaction (may be joint or separate for each party).

CLOUD (ON TITLE):
Any unresolved claim against ownership of all or part of a property, affecting the owner's title to the property and marketability of that title.

CLUSTER HOUSING:
Development design which places attached dwelling in close proximity to each other, with nearby open spaces set out for common use of the dwelling owners.

CODE OF ETHICS:
A set of rules governing the behavior of members of the organization that has established the Code. Lawyers and real estate brokers/agents both have their own Codes.

COINSURANCE:
A technique used to share the risk of a larger development between several insurance companies, each company covering a certain percentage of the total value of the insured property. Each policy may include a clause setting a minimum percentage of the total value of the insured property which the owner must keep insured in order to be eligible for payment under the policy.

COLD CANVASS:
Also known as "Cold Call". Contacting home owners out of the blue to solicit business or, in the case of a real estate broker or agent, listings.

COLLATERAL:
Property (real or personal) which is pledged to secure a loan or mortgage. If the debt is not paid, the lender has the right to sell the collateral to recoup the outstanding principal and interest on the loan.

COLLATERAL MORTGAGE:
A loan which is secured by some sort of written note of indebtedness (such as a Promissory Note) which is secondarily secured by a mortgage registered against a property.

COLLECTION:
The act of pursuing a debtor who is delinquent on his loan payments.

CO-MAKER:
Also known a "Guarantor". Someone who signs a loan document along with the principal borrower, pledging to be responsible for the loan should the borrower fail to pay it.

COMMERCIAL BROKER:
A real estate professional who deals in properties with commercial (business, retail, etc.) uses.

COMMERCIAL PROPERTY:
As opposed to residential or industrial property. Property zoned, designed or intended for use retail, office, or similar users.

COMMINGLE:
To allow to mix, as in money belonging to two or more people deposited to the same account and used by each person regardless of the amount they have deposited.

COMMISSION:
Payment to a salesperson (a listing real estate agent or broker) for her efforts in marketing and selling a property, usually expressed as a percentage of the purchase price.

COMMISSION SPLIT:
The division of the payment made to the listing agent between that agent and her broker, or between the listing agent and agent representing the Purchaser (the selling agent).

COMMITMENT:
A promise, usually in writing, to provide a mortgage or other loan. May also be used in insurance field. Sets out details of mortgage, insurance. Often referred to as Commitment Letter or Binder.

COMMITMENT FEE:
The fee charged by the lender to commit itself to a mortgage or loan on specific terms.

COMMON AREA ASSESSMENTS:
Also known as Common Element Fees. A periodic charge levied against all of the owners of units in a condominium or planned unit development (PUD) project which is used by the condominium corporation or homeowner's association to pay for repair, maintenance and other expenses of the common areas in the development.

COMMON AREAS:
Portions of the property and buildings owned by a condominium corporation or planned unit development (PUD) homeowners' association, or a cooperative development's association that are available for the use of all unit owners. Also used in rental properties to refer to those facilities for the use of all tenants.

COMMON ELEMENTS:
A common area in a condominium project which is owned by the condominium corporation and for the use of all unit owners.

COMMON LAW:
As opposed to statute law. Laws or legal principles that have been established by courts over the years. May be codified into a statute or overruled by a statute passed by the government.

COMMUNITY ASSOCIATION:
Any organization established and run by property owners in a particular area, often to represent the common interests of the owners in dealings with government, planning bodies, developers or other outside parties.

COMMUNITY HOME BUYER'S PROGRAM:
Program established to find creative ways to finance home purchases for people with modest income.

COMMUNITY PROPERTY:
The principle that property accumulated by the joint efforts of a married couple should be considered to be owned by both of them in equal shares, no matter who has legal title to the property.

COMPARABLES:
Used in assessing or establishing the fair market value of a property, a property which has been sold recently that is similar in size, condition, location and amenities to the subject property.

COMPETENT PARTIES:
People who are legally capable of entering and being bound by a contract (i.e. of age, mentally capable).

COMPLETION DATE:
See Closing Date.

COMPONENT DEPRECIATION:
For tax purposes, allocating a portion of the total cost of renovation to each component of the renovation (roof, plumbing, electrical, foundation, etc.) and then depreciating the cost of each component separately.

COMPOUND INTEREST:
As opposed to simple interest. The accumulation of interest on a loan over time where interest is charged not only on the principal of the loan but also on all interest accrued against the principal to the end of the last compound period.

CONCESSIONS:
Sacrifices made by a party to convince another party to enter a contract.

CONDEMNATION:
1. The taking of private land for public use by a municipal or other government body through a court action under the principal of Eminent Domain. See also Expropriation.
2. An order made by a health or building department barring the use of a dangerous or hazardous property.

CONDITION(S):
Clauses in the Agreement which must be fulfilled before the Agreement becomes firm and binding. If the condition is not fulfilled, the Agreement will usually become null and void and any deposit paid returned to the Purchaser.

CONDITIONAL OFFER:
An offer to purchase a property which is contingent on the fulfillment of certain conditions before it becomes firm and binding. Also known as "Conditional Sales Contract".

CONDOMINIUM:
A development where individuals own dwelling units but share common areas with the other unit owners of the complex. The maintenance of the common areas etc. is taken care of by the Condominium Corporation in which every unit owner owns a share and has voting rights. The Condominium Corporation is created by the registration of a Declaration and by-laws on title to the property and all individual units.

CONDOMINIUM OWNERS ASSOCIATION:
An organization made up of unit owners in a condominium development established to govern relations between the owners and to administer the rules, by-laws and covenants of the condominium

CONFORMING:
Complying with the requirements of a certain statute, by-law or organization.

CONSERVATOR:
Also called a Committee, Personal Representative or Guardian, a person appointed by the Court to administer the property of a person who is not capable of managing his own affairs.

CONSIDERATION:
The value, asset, service, information etc. which is offered to another party in a contract in exchange for that party's agreeing to enter the contract. A contract is not binding if each party does not offer at least some consideration to the other party(ies).

CONSTANT PAYMENT LOAN:
A type of loan which requires equal, periodic payments over a certain term, at the end of which the amount owing under the loan will be completely paid out.

CONSTRUCTION LOAN:
A structured, short-term loan to a builder or developer to allow for the development of land. Funds are advanced at certain stages of the development project to pay for specific expenses, fees or costs.

CONSTRUCTIVE EVICTION:
Actions of a landlord (or third party) which interfere with a tenant's use and enjoyment of the rented premises to such an extent that the tenant is, at law, considered to have been improperly forced out of the premises.

CONSTRUCTIVE NOTICE:
The legal principle that deems that a person has knowledge of a certain fact once that fact is made a part of a public record. The registration of a lien on title to a property represents constructive notice to all persons interested in that property of that lien, whether they have investigate the title records or not.

CONSUMER REPORTING AGENCY (OR BUREAU):
Also known as Credit Bureau. The source to which the banks or other lenders turn for information on the credit history of an applicant.

CONTIGUOUS:
See also Abutting. Sharing a common boundary, touching.

CONTINGENCY:
An event which may (or may not) happen in the future, a condition that must be fulfilled before a contract becomes firm and binding.

CONTRACT:
A legally binding agreement (oral or written) between two or more persons regarding an exchange of some sort. A legally binding contract must include consideration passing between the parties, an intention on the part of all parties to be bound to the contract, a meeting of the minds of the parties as to the contents of the contract, and an element of clarity such that the terms of the contract may be interpreted, understood and enforced by a court.

CONTRACT FOR DEED:
Also known as a Land Contract or Land Installment Contract. Transfer of a property where the title remains in the Vendor's name until the Purchaser makes the final payment to the Vendor of the Purchase Price.

CONTRACT OF SALE:
Also known as Agreement of Purchase and Sale, Offer to Purchase, Contract of Purchase. The written agreement between the Vendor and Purchaser for the sale of property which contains all of the terms, conditions and financial details of the transaction.

CONTRACT RENT:
The periodic rental payment as set out in the lease contract.

CONTRACTOR:
A tradesman who works in the construction industry under a contract with the owner of the property. See also "sub-contractor".

CONVENTIONAL LOAN:
1. A loan or mortgage to which the normal rules of such transactions apply without the inclusion of a government program (i.e. VA or FHA insurance).
2. A loan or mortgage with a fixed interest rate, fixed payments and a fixed term.

CONVERSION CLAUSE:
A provision in a variable rate mortgage (adjustable rate mortgage) which allows the borrow to change the mortgage to a fixed rate mortgage upon the occurrence of certain events.

CONVERSION:
1. a change in the use of a property, or in the way a property is owned (i.e. from private to condominium ownership)

2. the improper taking of the property of another for one's own use;



3. In Ontario, the transfer of a property from the Registry System of land registration to the new Land Titles Conversion Qualified (LTCQ) computerized system by the agents of the Ontario government.

CONVERTIBILITY CLAUSE:
See "Conversion Clause".

CONVEY:
To transfer title to (or any other interest in) a property to someone else.

CONVEYANCE:
The act of transferring an interest in property to someone else or the document which effects the transfer.

CO-OP:
Short for Cooperative, a mode of land ownership where the occupiers of individual units in a building own an interest in the Cooperative Corporation that owns the whole property.

COOPERATING BROKER:
A Broker who is involved in a real estate transaction and is, therefore, entitled to share in the commission from the transaction.

COOPERATIVE (CO-OP):
See "Co-op".

CORPORATE RELOCATION:
The movement of an employee of a corporation to a new city (or other location) as part of the normal business of the corporation. The employee's moving expenses (including the costs of selling and buying a home) may be paid by the corporation and are tax deductible.

CORPORATION:
A legal entity created by the registration of appropriate incorporating documents with the supervising government office. May be private (ownership held by specific individuals and not traded on a public stock exchange) or public (shares traded on stock exchange). Shareholders are protected from liability for the actions of the corporation. Corporations may enter contracts and own property.

CORPOREAL:
Tangible.

COST APPROACH:
An appraisal method where a property's value is estimated using the cost of the property plus cost of all improvements, minus depreciation.

COST ESTIMATING:
Predicting the total cost of a construction project by estimating, in advance, the actual costs of all elements in the project, including legal fees, labor, permits, materials etc.

COST PLUS CONTRACT:
An agreement with a contractor or builder which sets the contractor's compensation for the project as a percentage of the total cost of all labor and materials.

CO-TENANCY:
When more than one person owns a piece of property. Title will be held by the owners as Joint Tenants (each owns the land equally and, in the event of the death of one of the owners, the survivors continue to share title equally by right of survivorship) or as Tenants in Common (each owner has title to a specific percentage of the land and may sell, mortgage, or bequeath her interest to a third party without consent of the other owners).

COUNTEROFFER:
An answer to an offer. If a prospective Purchaser presents an offer to purchase a property to the owner of the property, that owner may accept the offer as it stands, reject it outright or respond with a "counteroffer" which changes certain terms of the original offer. Making a counteroffer, at law, entails rejection of the original offer. The Purchaser may then counteroffer back, making changes to the owner's counteroffer. Sometimes, the process of counteroffering is referred to as "signing back" the offer.

COUNTY:
A territorial division of land in a geographic region (state or province). Similar to Regions and Regional Municipality.

COVENANT:
A promise contained in a contract or agreement.

COVENANT RUNNING WITH THE LAND:
A covenant that is literally attached to the land and binds present and future owners to the requirements of the covenant. In new developments, such covenants may be restrictive: the owner is not allowed to alter grading patterns of the land, or erect new fences, or put up TV aerials, or to change the color of the exterior of the house. Such restrictive covenants may be enforced by a Homeowners' Association.

CREATIVE FINANCING:
An arrangement for the financing of the purchase of a property which is outside the normal practice of residential financing.

CREDIT:
1. The ability to access money, to use money prior to earning it.
2. The accounting term for a liability or for equity, entered on the right side of the ledger.
3. As a verb, to allot for the benefit of a person (i.e. You must credit the Purchaser on closing for the deposit paid).

CREDIT HISTORY:
A statement of the debts and obligations, whether current or past, of a person which helps a lender to assess the risk of a loan to that person.

CREDIT LIFE INSURANCE:
A form of insurance which is designed specifically to pay out the debts of the insured person in case of their death.

CREDIT LIMIT:
The maximum amount available to a person under a loan, credit card or other borrowing arrangement.

CREDIT RATING:
Based on an analysis of a person's credit history, an evaluation of that person's ability to manage a new debt or debts overall.

CREDIT RISK:
The potential for a borrower to fail to live up to her obligations under a loan arrangement.

CREDITOR:
Any person to whom money is owed. May be secured (the debt has been registered against the property of the debtor) or unsecured.

CUL-DE-SAC:
French term for a "dead-end street". A street which meets another street at one end but is closed at the other, such that little traffic will travel down it and the property owners enjoy excellent privacy.

CUMULATIVE INTEREST:
The total amount charged as interest on a loan or mortgage to a certain date.

CUSTOM BUILDER:
A builder or developer who specializes in creating homes to the specifications and requirements of individual land owners.

DAMAGES:
The estimated monetary value of the injury a person suffers as a result of an unlawful act or negligent act of another person. Once proven, damages may be awarded by a Court.

DATE OF APPRAISAL:
The precise day, month and year upon which an assessment of the value of a property has been given.

DATE OF INSTRUMENT:
The specific day, month and year a legal document was signed or prepared.

DATE OF REGISTRATION:
The specific day, month and year upon which an instrument was registered on title to the property.

DEAD-END STREET:
Also known as "Cul de Sac". A street which is closed at one end so that traffic cannot flow through it.

DEALER:
Similar to a car dealer, a person who offers a collection of properties for sale to the public.

DEBIT:
An entry on a financial statement which reflects payments or disbursements made on behalf of a party for which the party is responsible (opposite of "Credit").

DEBT:
1. An obligation to another person.
2. That obligation which is created by borrowing.
3. The total of all financial obligations of a person or corporation.

DEBT COVERAGE RATIO (DCR):
A comparison of the net income of a property with the cost of payments (principal and interest) on the mortgage on the property, used to assess the ability of the property to generate enough income to pay for itself.

DEBT EQUITY RATIO:
A comparison of the amount owing on a property with the equity (value of property minus amount owing).

DEBT FINANCING:
Paying for the purchase of a property with credit.

DEBT RATIO:
Also known as Debt-to-Income ratio. A comparison of the total monthly payments of all of the borrower's debts (including the mortgage) with the gross monthly income of the borrower, used to assess borrower's ability to pay mortgage.

DEBT SERVICE:
The mortgage payment for a given period of time.

DEBTOR:
A person who has borrowed and therefore owes (opposite of Creditor).

DECLARATION OF RESTRICTIONS:
A Statement made by a developer of a new subdivision which sets out the restrictions of general application throughout the new development.

DECLARATION OF TRUST:
A signed statement by a trustee acknowledging that she holds legal title to property on behalf of someone else (the beneficiary of the trust).

DECREE OF FORECLOSURE:
An order of the Court setting out the amount outstanding on a delinquent mortgage and ordering the sale of the property to pay the mortgagee.

DEDICATION: Often required under subdivision or development agreements, the donation of parcels of land to the municipality for a public use, such as a street, a park or a school.

DEED:
The instrument by which title to property is conveyed from one person to another.

DEED BOOKS:
The permanent record of deeds registered in a particular jurisdiction. Also known as "libers".

DEED IN LIEU OF FORECLOSURE:
A legal instrument in which a borrower conveys property to a lender under a mortgage to save the expense of foreclosure. See also quit-claim deed.

DEED IN TRUST:
A legal instrument conveying legal title to a property to a trustee, may contain statements as to powers of trustee, duties of trustee etc.

DEED OF RECONVEYANCE:
A legal instrument which conveys title from a trustee back to the borrower under a mortgage once the mortgage has been paid out.

DEED OF RELEASE:
A legal instrument signed by lien claimants or mortgagees which gives up their claim to the property. See Discharge and Quit Claim Deed.

DEED OF SURRENDER:
A legal instrument in which a person with a life interest gives up that interest to the person with underlying title.

DEED OF TRUST:
A legal instrument which secures the payment of a loan or mortgage, used in some states instead of mortgages.

DEED POLL:
A legal instrument which conveys title and is made by only one party.

DEED RESTRICTION:
A clause in a deed which limits the use of the property in certain respects.

DEFAULT:
Failure. In mortgages, the failure to make payments in full, on time or at all or to live up to any other obligations placed on the borrower by the loan agreement.

DEFAULT JUDGMENT:
A decision rendered by a Court when the defendant has failed to respond to the claim.

DEFEASANCE CLAUSE:
A clause in a mortgage which ensures that, once the borrower has met all of her obligations under the terms of the mortgage and paid out the entire principle and interest borrowed, the lender's legal interest in the property is extinguished.

DEFEASIBLE:
Able to be revoked in the case of the occurrence (or non-occurrence) of a certain event or the performance (or failure) of a condition.

DEFECT OF RECORD:
A registered claim on title which serves to interfere with the marketability of the owner's title to the property.

DEFECTIVE TITLE:
Ownership of property which is subject to some competing claim.

DEFENDANT:
The person against whom a claim is asserted in a Court action.

DEFERRED INTEREST:
Interest which is not paid as it accumulates but which is added, instead, to the loan principle.

DEFERRED INTEREST MORTGAGE:
A technique for reducing the amount of each periodic payment on a mortgage monthly by postponing the payment of a portion of the interest until a certain date in the future (or to when the property is sold), at which time the interest postponed is added to the principle owing.

DEFERRED MAINTENANCE:
A nice way to say that the property has not been kept up and is depreciating both physically and in value.

DEFICIENCY JUDGMENT:
A Court order against a borrower under a mortgage to pay to the lender an amount sufficient to make up for the difference between what the borrower owes under the mortgage and the amount the lender sold the property for under a mortgage remedy action.

DEGREE:
One 360th of a circle. One 90th of a right angle. Used in astronomic bearings in metes and bounds descriptions of land.

DELINQUENCY:
The condition of being late on a payment but not yet in default.

DELIVERY:
The act of turning over any legal document (including a Deed) to another party so as to make it legally operative and no longer revocable.

DEMAND LOAN:
A type of loan where the lender may require payment in full of the principal (and accumulated interest) at any time.

DEMISE:
A conveyance of an interest in property for a set period of time (such as in a lease).

DEMISED PREMISES:
The portion of the entire property which is leased to a particular tenant.

DENSITY:
A measure of the number of a certain thing within a defined space. Population density, for example, measures the number of people in a given area (a square-mile, an acre etc.)

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD):
A federal agency focusing on programs regarding housing and renewal of city communities.

DEPARTMENT OF VETERANS AFFAIRS (VA):
An independent federal agency which oversees programs for military veterans, including loan and mortgage programs.

DEPOSIT:
1. The money paid up-front by a purchaser as security for her completing the transaction. Also known as "good faith money" or "earnest money".
2. An instrument which is not registered on title but placed in the records for a given piece of land for information purposes.

DEPOSIT OF TITLE DEEDS:
When a lender requires ownership documents to be left with it as further security for a loan.

DEPRECIABLE BASIS:
The initial acquisition cost of an improvement on land, used for income tax purposes. Land may not be depreciated but the improvements (buildings, etc.) may be.

DEPRECIABLE LIFE:
An estimation of the useful, valuable life of certain assets (such as buildings or production machinery).

DEPRECIATION:
1. The lessening of the value of a property over time.
2. A tax adjustment accounting for the reduction in value of an asset (a building or a piece of machinery) over time.

DERELICTION:
The gradual receding of water, leaving more land than was there previously.

DERIVATIVE CONVEYANCE:
A transfer of property made to correct or confirm an earlier conveyance.

DESCENT:
The conveyance of property to those heirs of a deceased person as dictated by the laws of the jurisdiction when no will is left behind.

DESCRIPTION:
Also known as "Legal Description". The manner in which a piece of land is identified. May involve metes and bounds measurements using astronomic bearings or may simply set out Lot and Plan numbers in a specific municipality. Most jurisdictions require description of land to be included in all instruments to be registered on title to that property.

DESIGNATED REAL ESTATE BROKER:
Person designated by a corporation to oversee all real estate activities of that corporation. Must meet requirements for real estate broker's license.

DESIGNATED REAL ESTATE INSTRUCTOR (DREI):
Any person who has met the requirements of the Real Estate Educators Association for this designation.

DETACHED SINGLE-FAMILY HOME:
A free-standing dwelling that is designed to house one family unit.

DETERIORATION:
The impact of time and wear and tear on a dwelling or other building which results in a decrease in its value if nothing is done to counteract it.

DEVELOPER:
A person or company who makes a business of turning vacant or underused parcels of land into new housing (or business, commercial or industrial) surveys.

DEVELOPMENT LOAN:
A loan specifically designed to finance the transformation of a vacant tract into a new survey. May provide for money to be advanced as the stages of the development are completed.

DEVELOPMENT RIGHTS:
The legal ability to develop a parcel of land, usually purchased from the owner of a vacant tract of land by the developer. Title to the property does not change hands until the new survey of properties is sold to third-party purchasers.

DEVISE:
The act of leaving a piece of land to another person in a will.

DEVISEE:
The beneficiary under a will who receives a gift of real estate under the will.

DEVISOR:
The deceased person under whose will the beneficiary receives real estate. More commonly called the "testator".

DINK:
Short form for "Double Income, No Kids". A description of a type of Purchaser in the real estate market.

DIRECT COSTS:
Those expenses in the improvement of property which can be directly attributed to the improvement itself (i.e. labor, material, taxes, etc.). Also known as "hard costs".

DIRECT REDUCTION MORTGAGE:
A kind of mortgage where the principal and interest to be paid are based on the principal remaining. An amortized mortgage.

DIRECTION:
1. A document containing written instructions to a person to do a certain thing in a certain way.
2. A point on a compass, used in legal descriptions.

DIRECTION REGARDING FUNDS:
A direction made by a party who is entitled to money to the party who is obligated to pay the money which sets out how the receiving party wishes the money paid.

DIRECTION REGARDING TITLE:
Also known as "Title Direction". A direction made by the Purchaser to the Vendor of property setting out how the Purchaser wishes to take title. May include the full legal name, the birthdate (if necessary), the address for service of the Purchaser and, if there are more than one Purchaser, the capacity in which they wish to share title ( i.e. as Joint Tenants or Tenants in Common).

DIRECTIONAL GROWTH:
A factor in the value of undeveloped land, the direction in which an urban center tends to expand.

DISAFFIRM:
To refuse to accept a decision already made, to revoke consent, assent or agreement already given.

DISBURSEMENT:
An expenditure of money.

DISCHARGE:
1. A document registered to remove a mortgage from title to a property.
2. To payout out a debt.
3. To meet one's obligations.

DISCLAIMER:
A statement of refusal of responsibility of a legal right etc.

DISCLOSED PRINCIPAL:
The person on whose behalf an agent is acting when that person's identity is made know to the person with whom the agent is dealing.

DISCLOSURE:
Sometimes known as "Vendor's Disclosure", a legal requirement in some jurisdictions in which the Vendor of a property must provide a written statement to a prospective purchaser setting out defects in the property known to the Vendor.

DISCLOSURE STATEMENT:
A document issued by a lender to a borrower in which the lender sets out the terms and conditions of the loan. Often required under legislation.

DISCOUNT:
A sum of money held back from a mortgage advance as prepaid interest.

DISCOUNT POINT:
See point. Each point is equal to 1% of the principal.

DISCOUNT RATE:
A benchmark for interest rates, the rate charged by the Federal Reserve System on loans to banks.

DISCOUNT REAL ESTATE BROKER:
A licensed real estate broker who charges a commission at a lower rate.

DISPOSSESS:
To remove a person from occupation of a property by a legal action.

DISPOSSESS PROCEEDINGS:
The legal action taken to dispossess a person of property.

DISTRAINT:
A landlord's action for recovering arrears in rent by taking possession of and selling the tenant's personal property.

DISTRESS:
The right of a party to sell the real or personal property of another party to pay for arrears in rent or loan payments.

DISTRESSED PROPERTY:
A property which is to be sold in order to pay arrears on a mortgage.

DISTRICT:
A terms used to classify neighborhoods according to their use: residential, commercial, industrial, etc.

DOCUMENT:
1. Noun: a paper which establishes certain facts or attempts to bring about a certain result.
2. Verb: to set out events, facts or beliefs in written form.

DOCUMENTARY STAMP:
A levy paid to the local government for registration of a document (a deed or mortgage) in the public records, often calculated as a percentage of the purchase price or the value of the mortgage.

DOG:
A slang term for a property that, as a result of factors such as poor condition, poor location or poor design, is slow to sell.

DOMICILE:
The place where a person legally resides.

DOMINANT ESTATE:
The property which enjoys the benefit of an easement over another property (known as the servient estate).

DONEE:
The person who receives a gift, bequest, or who is named an attorney in a power of attorney.

DONOR:
The person who gives a gift, bequest, gives power of attorney or who settles property in a trust for another person (the beneficiary).

DOUBTFUL TITLE:
Ownership of land which is questionable as a result of a possibly valid competing claim.

DOWER:
The interest enjoyed by a wife in real property her husband acquired during his life time. The right becomes exercisable upon the death of the husband. Dower still exists in some jurisdictions but has been abandoned in most.

DOWN PAYMENT:
The amount of money provided by the Purchaser toward the total price of the property (not including legal fees or other acquisition costs). In general, downpayment plus mortgage equals purchase price.

DOWNZONING:
The reduction of the density allowed for a certain property under zoning by-laws, such as from high density (high rise apartment) to medium density (low rise or individual homes).

DRAGNET CLAUSE:
A term of a mortgage which establishes the subject property as security for the present and for all future debts of the owner to the lender.

DRAIN:
A means, whether natural or otherwise, by which water is allowed to flow off a property.

DRY MORTGAGE:
Also known as "non-recourse loan" because the lender has no personal right of action against the property owner in the event of default. The lender may only sell the property to enforce the loan obligation.

DUAL AGENCY:
A breach of agency rules which must be disclosed to the parties. Where one agent (often a real estate broker or agent) represents both sides in a contract (i.e. the Vendor and the Purchaser) such that the agent has a conflict of interest.

DUE DATE:
The date established in the loan agreement upon which all moneys then outstanding on the loan become due and payable in full.

DUE ON SALE CLAUSE:
A clause in a mortgage which requires that the mortgage be paid out in full upon the sale of the property against which it is secured. A mortgage with this clause may not be assumed by a purchaser.

DUMMY:
Slang term for the trustee in an undisclosed trust situation where a nominee holds legal title of property for an unnamed principal.

DUPLEX:
A building which houses two separate dwelling units.

DURESS:
A state in which the improper, threatening or coercive actions of another place a person in a disadvantage psychological position. A person is not bound by a contract she enters while under duress.

DWELLING:
A house, home, living unit. Generally refers to a building designed for use as a living space.

EARNEST MONEY DEPOSIT:
A sum of money paid by a potential purchaser as proof of her intention to complete the purchase transaction. Held in trust, usually by the Listing Agent, and credited to Purchaser off purchase price. May be forfeited if Purchaser fails to complete transaction.

EASEMENT:
The right of the owner of one parcel of land to use all or part of the land of another for a specific purpose. Runs with the land. Requires one property to be in dominant position (enjoys the benefit of the easement) and one property to be in servient position (is subject to the right).

EASEMENT BY NECESSITY:
A land owner's right to make use of the property of another (or a portion of it) for a specific purpose, when such use is required to allow the land owner to enjoy his own land.

EASEMENT BY PRESCRIPTION:
The continuing, unchallenged use of all or part of a property by the owner of a neighboring or nearby property for a specific period of time (20 years in many jurisdictions) such that, by law, the using owner gains a legal right to continue that use.

EASTLAKE HOUSE:
A house which is remarkable for its three-dimensional ornamentation following a nineteenth-century style.

ECONOMIC BASE:
The commercial or industrial foundation of a community which provides opportunities for employment.

ECONOMIC DEPRECIATION:
The decline in value of a property which is caused by reasons outside of the property itself.

ECONOMIC LIFE:
The length of time an improvement to real estate can be expected to provide more value than its operating or upkeep costs.

EFFECTIVE AGE:
An appraisal term for the age of improvements to a property based on an assessment of their current condition (i.e. a well-maintained 100-year-old house could have an effective age of 10 years while a ramshackle, unmaintained 20-year-old house could have an effective age of 50 years). Opposite of "actual age".

EFFECTIVE GROSS INCOME:
1. For borrowers, the actual amount of money earned from stable sources over a set period (i.e. a month) before taxes and expenses are deducted.
2. For rental properties, the amount of income the property will produce if leased at market value before costs, taxes, upkeep and discounts for vacancy are deducted.

EFFECTIVE RATE:
The actual rate (or interest or return) once all factors are accounted for (factors include compounding of interest or costs of earning the return).

EFFICIENCY RATIO:
A comparison of the space in a building available for lease to the total space of the building.

EFFICIENCY UNIT OR APARTMENT:
A term for a small dwelling unit in which kitchen and sometimes bath areas are combined with the living area. Also known as "bachelor apartment" or "studio apartment".

EGRESS:
Means of exit from a room, building or property (often to a road).

EJECTMENT:
Legal proceeding to evict a tenant without a lease.

ELIZABETHAN OR HALF TIMBER STYLE:
A two-storey or two-and-a-half storey, English-style house which has the upper storey overhanging the first, often with stone and stucco walls and half-timber beams.

EMINENT DOMAIN:
The right of a body of government (often a state) to expropriate private property, while paying appropriate compensation to the owner.

EMPTY NESTERS:
Middle-aged or older couples whose children have grown up and "left the nest" to live on their own. Often looking to sell a larger house and buy a smaller one.

ENCROACHMENT:
The intrusion across the property line and into one property of an improvement to a neighboring property. May result in a claim for adverse possession if the encroachment is unchallenged for a long period of time.

ENCUMBRANCE:
Any right, interest or other claim against land which is registered on title and affects the owner's ability to sell the property.

ENDORSER:
The person who signs a document to represent the transfer of property to another.

ENERGY EFFICIENT:
A description of a property which has special features aimed at reducing use of electrical or heating power (i.e. insulation, double-insulated windows, high-efficiency furnace, etc.).

ENERGY TAX CREDITS:
A tax break given to property owners who took steps to save energy in their property such as installing insulation.

ENTITLEMENT:
1. The legal right to a benefit or program.
2. Name for the VA home loan benefit.

ENVIRONMENTAL IMPACT STATEMENT (EIS):
A report on the anticipated effect of a development on the local environment. May be required for federal funding for the development.

ENVIRONMENTAL PROTECTION AGENCY (EPA):
U.S. government agency for the protection of the environment.

EQUAL CREDIT OPPORTUNITY ACT:
U.S. federal law aimed at affording people of all races, genders, religions, ages etc. an equal chance to borrow money.

EQUALIZATION BOARD:
Agency with a mandate to ensure fairness in property tax assessments.

EQUITABLE CONVERSION:
A common law doctrine which treats a Vendor under an Agreement for the sale of property as holding the property in trust for the Purchaser even before the transaction has been completed such that the Vendor is liable to the Purchaser for any damage negligently caused to the property.

EQUITABLE TITLE:
The common law interest of the Purchaser in the property for which she has entered an Agreement to Purchase prior to the completion of the transaction.

EQUITY:
The difference, in dollars, between the market value of a property and the principal owing on debts secured against the property. The amount of money the owner will be able to keep from a sale transaction once the mortgages are paid out. Also known as "owner's interest".

EQUITY BUILDUP:
The increase over time of the owner's interest in a property, the difference between the value of the property and the amount owed on the mortgage.

EQUITY LOAN:
A loan to a home owner secured against the equity the owner enjoys in the property.

EQUITY OF REDEMPTION:
The right a borrower has to pay out in full a mortgage against a property that has gone into foreclosure or power of sale proceedings, thus redeeming the property.

EROSION:
The gradual diminishing of land or soil as a result of the action of water, wind, rain, etc.

ERRORS AND OMISSIONS INSURANCE:
Professional protection from liability for mistakes, negligence, etc.

ESCALATOR CLAUSE:
Part of a net lease. A provision that increases the rent payable under a lease when certain costs of the building increase (i.e. taxes, utility charges, etc.).

ESCAPE CLAUSE:
Any provision in a contract that allows one or more parties to end the contract upon the occurrence of certain events.

ESCHEAT:
The reversion of title to a property to the state. Can occur when an owner dies with no legal heirs or when a corporate owner is dissolved by act of law or by voluntary act while holding legal title to the property.

ESCROW:
A state wherein consideration, benefits, legal rights, money, documents or other valuables are transferred to another party in advance of that party's legal entitlement to them, on the basis that the legal entitlement will arise at a given point in the future. A form of trust.

ESCROW ACCOUNT:
A form of trust account in which advance payments are held on behalf of the payor until the contract allows their use by the payee or a third party.

ESCROW AGENT:
Any independent third party who receives items to be held in escrow, holds such items until transfer is allowed, and then delivers them.

ESCROW CLOSING:
The completion of a transaction whereby documents, consideration etc. are held in trust (either by the parties and their representatives or by an independent third party) pending the completion of certain conditions, at which time the items held in escrow are released and the transaction is completed.

ESCROW COLLECTIONS:
Moneys taken in by the agent and set aside for future payments as required by the contract (i.e., in a mortgage situation, for taxes, insurance, etc. on the property). Also known as "escrow deposits", "impounds" or "reserves".

ESCROW DEPOSIT:
Similar to "escrow collections", the deposit of funds for the purpose of future payments required under the contract.

ESCROW DISBURSEMENTS:
The payment out of escrow funds of taxes, insurance, etc. as required by the contract. Also known as "escrow payments".

ESCROW REIMBURSEMENT:
The return to the borrower of left over funds held in escrow once the debt has been paid out.

ESTATE:
1. The nature and extent of a person's interest in real property.
2. The term used to described the collection of assets of a deceased person.

ESTATE AT SUFFERANCE:
The continued occupation of a premises by a tenant after the lease has expired or after the landlord has taken legal and appropriate steps to remove the tenant.

ESTATE AT WILL:
The occupation of a premises by a tenant for an undefined period, which either party may terminate at will.

ESTATE FOR LIFE:
Also known as "Life Estate". A legal interest in property which ends with the death of the person who is entitled to the interest.

ESTATE FOR YEARS:
Entitlement to land which allows a person to occupy, use and enjoy the land for a specified period of time.

ESTATE IN REVERSION:
The right of an owner to re-occupy land once the estate he has granted to another person (such as an estate for years or an estate for life) has come to an end.

ESTATE TAX:
A government levy against the property in the estate of a deceased person, payable out of the estate.

ESTOPPEL:
A legal doctrine which blocks a person from taking a position on any fact which is contrary to a position that same person previously took on that same fact. Also blocks a party from re-opening an issue that has previously been decided by a court.

ESTOPPEL CERTIFICATE:
A document issued by an interested party setting out certain facts to which the issuer agrees to be bound. May be issued by a Condominium Corporation (setting out the common element fees for a particular unit, the amount in the corporation's reserve account, any special assessments against unit owners, etc.), by a mortgagor or mortgagee (setting out the terms, conditions, interest rate and principal outstanding) or by a tenant in a building to be purchased (setting out amount of rent, the amount of any rental deposit, etc.).

ET AL:
Latin meaning "and others".

ET CON:
Latin meaning "and husband".

ET UX:
Latin meaning "and wife".

EVALUATION:
An analysis of a property regarding its potential uses rather than its current value.

EVICTION:
The forced removal of a tenant from occupation of a property. Also known as "Actual eviction". See also "constructive eviction".

EVIDENCE OF TITLE:
Instruments or documents that provide any proof or information regarding ownership of land.

EXAMINATION OF TITLE:
Similar to a subsearch: a review of the current title to a property for the purposes of establishing current apparent owners and encumbrances.

EXCEPTION:
An exclusion from coverage in a policy of insurance, usually referring to a known risk or defect for which the insurer assumes no responsibility.

EXCLUSIVE AGENCY LISTING:
A contract whereby the owner of a property grants a single agent or broker the right to market the property for sale.

EXCULPATORY CLAUSE:
The term of a mortgage giving the borrower the right simply to surrender the property to the lender as payment for the loan without personal liability to the borrower for any shortfall.

EXECUTED CONTRACT:
1. A contract which has been completely carried out by the parties.
2. A contract which has been signed by the parties.

EXECUTION:
1. The act of signing a legal document.
2. A writ filed with a Sheriff of a jurisdiction evidencing a legal claim against the person named in the Writ. May attach to real property owned by the person named in the writ.

EXECUTOR:
The person or people appointed in a will to give effect to the wishes of the testator (the maker of the will) as set out in the will. A female executor may be called "Executrix".

EXECUTORY CONTRACT:
A contract which has not yet been completely fulfilled by one or more of the parties.

EXPENSE RATIO:
A comparison of the costs of owning and operating something to its potential gross income.

EXPOSURE (MARKET):
A term used to describe the presence, through advertising, of a property that is for sale in the marketplace.

EXTENSION:
The postponement of the completion date of an Agreement, agreed to by the parties to the Agreement.

COASTAL NORTH SAN DIEGO COUNTY REAL ESTATE



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FACADE:
An exterior wall of a building or house.

FACE LIFT:
Slang term for cosmetic changes to the appearance of a property which may improve the selling price.

FACE RATE OF INTEREST:
The rate of interest chargeable on a loan as set out in the loan document.

FACE VALUE:
The value of an item as set out in the instrument creating it or representing it.

FAIR CREDIT REPORTING ACT:
A law which standardizes the form and rules of disclosure of credit reports created by consumer/credit reporting agencies and establishes procedures for the correction of errors on a person's credit report.

FAIR MARKET VALUE:
The value of an item as established by a consideration of how much an independent buyer would pay to an independent seller in a completely free transaction for the item.

FANNIE MAE:
The U.S.'s largest supplier of mortgages to home buyers and owners, a corporation established by Congress. The Federal National Mortgage Association (FNMA).

FARM MORTGAGE:
A mortgage secured against agricultural land.

FARMER'S HOME ADMINISTRATION (FMHA):
U. S. Department of Agriculture agency providing financing for farmers, residents of rural areas, etc.

FARMLAND:
A category of land for zoning or other legal purposes, denoting property used for agricultural purposes.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC):
A U.S. Government agency providing insurance to depositors of money into financial institutions up to a certain amount.

FEDERAL HOME BOARD:
U.S. board that regulates federal savings and loan associations.

FEDERAL HOUSING ADMINISTRATION (FHA):
Division of the Department of Housing and Urban Development, sets standards for the underwriting of private mortgages. Also insures residential mortgages made by private lenders.

FEDERAL LAND BANKS:
Local banks providing long-term mortgages to farmers and owners of agricultural lands.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA):
See "Fannie Mae".

FEDERAL RESERVE BANK:
One of a set of twelve banks servicing one of twelve reserve districts in the U.S.A.

FEDERAL RESERVE SYSTEM (FRS):
The central bank of the United States, controls supply of money, credit availability and benchmark interest rates. Made up of the twelve Federal Reserve Banks.

FEDERAL REVENUE STAMP:
Stamp affixed to deeds evidencing payment of the tax on the transfer of land required to be paid up until January 1, 1968.

FEDERAL TAX LIEN:
An encumbrance registered on title to a property securing a tax debt owed by the property owner to the national government.

FEE APPRAISER:
A person who estimates the value of a property for a fee.

FEE SIMPLE:
The best title to property available, representing the absolute ownership of a parcel of land.

FEE SIMPLE DETERMINABLE:
An estate in land where the owner's title to a property in fee simple is dependent on the occurrence (or non-occurrence) of a particular event. Usually represented by the inclusion of "As long as" in the deed.

FEE SIMPLE SUBJECT TO A CONDITION SUBSEQUENT:
An estate in land where the owner's title in fee simple may be terminated by the former owner or her heir's upon the occurrence of a particular event. The termination must be carried out by the former owner and is not automatic upon the occurrence of the event.

FEE SIMPLE SUBJECT TO AN EXECUTORY LIMITATION:
An estate in land where the owner's title in fee simple may be terminated by the occurrence or non-occurrence of a particular event, at which time title passes to a named third party.

FEE TAIL:
An archaic form, an estate in land where title to the property was limited to the owner and his descendants with no power to transfer. Usually created by a transfer to the person "and the heirs of his body".

FEES:
1) The money required at the outset by a lender from the borrower or held back from the mortgage advance.
2) The amounts charged by a professional for services rendered.

FIDUCIARY:
A person charged by law and equity with a higher duty of care for another person. A person who, as a result of a relationship with another person, is required by law to place the other person's interests equal to or ahead of his own in all dealings involving that other person. The relationship is often created when the other person approaches the fiduciary to use the fiduciary's special skills and knowledge, for a fee, to benefit the other person. Real estate agents, lawyers, trustees, investment brokers etc. are often fiduciaries.

FIDUCIARY RELATIONSHIP:
A relationship of trust and confidence between two people in which one person (the fiduciary) holds much more power, knowledge or skill than the other and is, therefore, held by the law to a higher standard of conduct.

FIFTEEN-YEAR MORTGAGE:
A loan with payments amortized over a fifteen-year period, rather than the usual twenty-five-year amortization period.

FILTERING DOWN PROCESS:
The gradual decline in the value of a property, whether due to market forces, changes in desirability of neighborhood or deterioration of condition of the home, such that a property once owned by a high-income family might eventually be owned by a low-income family.

FINAL VALUE ESTIMATE:
The product of a real estate appraiser's completed work, an assessment of the value of a property based on all factors and taking into consideration the different evaluation methods available.

FINANCE CHARGE:
The total cost, in dollars, of a loan or mortgage over its life, including appraisal/application/commitment fees, financing insurance, interest paid over the life of the loan.

FINANCIAL INSTITUTION:
A generic term for banks, trust companies, credit unions, and perhaps other investment companies that deal with money, hold money, invest money and lend money.

FINANCIAL RISK:
An assessment of the possibility that a given investment or loan will fail to bring a return and may result in a loss of the original investment or loan.

FINANCIAL STATEMENT:
A document which sets out the assets, income, expenses and debts of a person or company to allow a third person to assess that person or corporation's financial health (i.e. when considering lending money to that person or corporation).

FINANCING:
The manner in which a proposed purchaser intends to make up the difference between cash on hand and the purchase price.

FINANCING STATEMENT:
A form of lien filed by a lender or creditor and registered against the personal property (all or specific items) of a debtor. Generally filed when a loan is secured against personal property.

FINDER'S FEE:
Commission paid to a mortgage broker for placing a mortgage with a specific institution.

FIRE AND EXTENDED COVERAGE INSURANCE:
A promise issued by a registered insurance company to compensate the owner of a particular property for losses as a result of specified risks (i.e fire, flood, storms, vandalism, etc.).

FIRM AND BINDING:
Description of a legal contract once all conditions have been removed. It is now legally enforceable by the parties to it.

FIRM COMMITMENT:
A promise from a lender to lend a specific borrower a specified amount of money on specified terms to be secured against a specific property.

FIRM OFFER:
An offer to purchase delivered to the potential Vendor by a potential Purchaser who will not negotiate any changes to the offer.

FIRM PRICE:
An indication in a real estate advertisement that the price asked for the property is not open for negotiation.

FIRST LIEN:
The registered legal claim which stands first in line to enjoy the proceeds of a sale of the property. Liens generally are ordered according to time or registration but various statutes allow some liens (realty taxes) to jump to the head of the line.

FIRST MORTGAGE:
A mortgage that, when registered, is first in line on the property, giving the lender superior right to the proceeds of the sale of the property over other, later claimants.

FIXED EXPENSES:
Costs