A
ABANDONMENT - The voluntary
surrender or relinquishment of possession of real property with
the intention of terminating one's possession or interest, but
without vesting this interest in any other person.
ABATEMENT
- A reduction or decrease in amount, degree, intensity or worth.
ABSORPTION
RATE - An estimate of the rate at which a particular classification
of space - such as new office space, new housing, new condominium
units and the like - will be sold or occupied each year.
ABSTRACT
OF TITLE - A concise, summarized history of the title to a specific
parcel of real property, together with a statement of all liens
and encumbrances affecting the property. The abstract of title
does not guarantee or assure the validity of the title of the
property. It merely discloses those items about the property which
are of public record, and thus does not reveal such things as
encroachments, forgeries, and the like.
ACCELERATED
DEPRECIATION - A method of calculating the depreciation of certain
property (that property which is used in a trade or business,
or which is held for the production of income) at a faster rate
than would be achieved from using the straight line method of
depreciation.
ACCELERATION
CLAUSE - A clause in a promissory note, agreement of sale, or
mortgage which gives the lender the right to call all sums due
and payable in advance of the fixed payment date upon the occurrence
of a specified event, such as a sale, default, assignment or further
encumbrance of the property.
ACCEPTANCE
- The expression of the intention of the person receiving an offer
(offeree, usually the seller) to be bound by the terms of the
offer.
ACCESS
- A general or specific right of ingress and egress to a particular
property.
ACCRETION
- The gradual and imperceptible addition to land by alluvial deposits
of soil through natural causes, such as shoreline movement caused
by streams or rivers.
ACCRUED
- That which has accumulated over a period of time such as accrued
depreciation, accrued interest or accrued expenses.
ACKNOWLEDGEMENT
- A formal declaration made before a duly authorized officer,
usually a Notary Public, by a person who has signed a document.
ACRE
- A measure of land equaling 43,560 square feet; 4,840 square
yards; 160 square rods.
ADHESION
CONTRACT - A contract which is very one-sided and favors the party
who drafted the document.
AD
VALOREM - Latin for "according to valuation," usually
referring to a type of tax or assessment.
ADVERSE
POSSESSION - The acquiring of title to real property owned by
someone else, by means of open, notorious and continuous possession
for the statutory period of time (20 years in Hawaii).
AFFIDAVIT
- A sworn statement reduced to writing and made under oath before
a Notary Public or other official authorized by law to administer
an oath.
AGENCY
- A relationship created when one person, the "principal,"
delegates to another, the "agent," the right to act
on the principal's behalf in business transactions and to exercise
some degree of discretion while so acting. An agency gives rise
to a fiduciary relationship and imposes on the agent, as the fiduciary
of the principal, certain duties, obligations and high standards
of good faith and loyalty.
AGENT
- One who is authorized to represent and to act on behalf of another
person (called the principal). A real estate broker is the agent
of his client, be it the seller or buyer, to whom he owes a fiduciary
obligation. A salesman is the agent of his broker and does not
have a direct personal contractual relationship with either the
seller or buyer.
AGREEMENT
OF SALE - An agreement between the seller (vendor) and buyer (vendee)
for the purchase of real property.
AIR
RIGHTS - The rights to the use of the open space or vertical plane
above a property. Ownership of the land includes the right to
all air above the property.
ALIENATION
CLAUSE - A clause in a promissory note or mortgage which provides
that the balance of the secured debt becomes immediately due and
payable at the option of the mortgagee upon the alienation of
the property by the mortgagor.
AMENITIES
- Features, both tangible and intangible, which enhance and add
to the desirability of real estate.
AMORTIZATION
- The gradual repayment of a debt by means of systematic payments
of principal and interest over a set period, where at the end
of the period there is a zero balance.
ANNUAL
PERCENTAGE RATE - The relationship of the total Finance Charge
to the total amount to be finance as required under the Federal
Truth-in-Lending Law.
APPRAISAL
- The process of estimating, fixing, or setting the market value
of real property. An appraisal may take the form of a lengthy
report, a completed form, a simple letter, or even an oral report.
APPRECIATION
- An increase in the worth or value of property due to economic
or related causes, which may prove to be either temporary or permanent.
APPURTENANT
- Belonging to; adjunct; appended or annexed.
ARBITRATION
- The non-judicial submission of a controversy to selected third
parties for their determination in the manner provided by agreement
or by law.
ASSESSED
VALUATION - The value of real property as established by the state
government for purposes of computing real property taxes.
ASSESSMENT
- A specific levy for a definite purpose, such as adding curbs
or sewers in a neighborhood. Individual condominium owners are
subject to special assessments benefiting the project as a whole
and not funded through regular maintenance charges.
ASSIGNMENT
- The transfer of the right, title and interest in the property
of one person, the assignor, to another, the assignee. In real
estate, there are assignments of mortgages, contracts, agreements
of sale, leases, and options, among others.
ASSUMPTION
OF MORTGAGE - The act of acquiring title to property which has
an existing mortgage on it and agreeing to be personally liable
for the terms and conditions of the mortgage, including payments.
ATTACHMENT
- The legal process of seizing the real or personal property of
a defendant in a lawsuit, by levy or judicial order, and holding
it in the custody of the courts as security for satisfaction of
the judgment which the plaintiff may recover in any action upon
a contract, express or implied.
ATTORNEY-IN-FACT
- One who is authorized by another to act in his place under a
power of attorney.
B
BALLOON PAYMENT - The final payment of a note or obligation, which
is substantially larger than the previous installment payments,
and which repays the debt in full; the remaining balance which
is due at the maturity of a note or obligation.
BARGAIN
AND SALE DEED - A deed which recites a consideration and conveys
all of the grantor's interest in the property to the grantee.
BASE
LINE AND MERIDIAN - An imaginary set of lines used by surveyors
to locate and describe land under the Rectangular Survey Method
of property description used in most mainland states.
BASIS
- The financial interest which IRS attributes to the owner of
an asset for purposes of determining annual depreciation and gain
or loss on sale of the asset.
BENCH
MARK - A mark affixed to a permanent reference or monument, such
as an iron post or a brass marker (usually embedded in a cement
sidewalk), used to establish elevations and altitudes over a surveyed
area.
BENEFICIARY
- A person who receives the benefits from the gifts or acts of
another, such as one who is designated to receive the proceeds
from a will, insurance policy or trust.
BILATERAL
CONTRACT - A contract in which each party promises to perform
an act in exchange for the other party's promise to perform.
BILL
OF SALE - A written agreement by which one person sells, assigns
or transfers his right to, or interest in, personal property to
another.
BLANKET
MORTGAGE - A mortgage which is secured by several structures or
a number of lots. A blanket mortgage is often used to finance
proposed subdivisions or development projects, especially cooperatives.
BLUE
SKY LAWS - State securities laws designed to protect the public
from fraudulent practices in the promotion and sale of securities,
e.g., through limited partnerships, syndications, bonds.
BOOT
- Money or other property given to make up any difference in value
or equity between two exchanged properties.
BOUNDARIES
- The perimeters or limits of a parcel of land as fixed by legal
description which is usually a metes and bounds description.
BREACH
OF CONTRACT - Violation of any of the terms or conditions of a
contract without legal excuse; default, non-performance, such
as failure to make payment when due.
BROKER
- One who acts as an intermediary between parties to a transaction.
A real estate broker is a properly licensed person who, for a
valuable consideration, serves as an agent to others to facilitate
the sale or lease of real property.
BROKERAGE
- That aspect of the real estate business which is concerned with
bringing together the parties and completing a real estate transaction.
Brokerage involves exchanges, rentals, trade-ins and management
of property, as well as sales.
BUDGET
MORTGAGE - A mortgage with payments set up to cover more than
interest and principal reductions.
BUFFER
ZONE - A strip of land separating one parcel from another.
BUILDING
PERMIT - A written permission granted by the County Building Department
and required prior to beginning the construction of a new building
or other improvement (including fences, fence walls, retaining
walls and swimming pools).
BUILDING
RESIDUAL TECHNIQUE - A method of determining the value of an improvement
normally used in appraising income property.
BULK
TRANSFERS - Any transfer in bulk, and not in the ordinary course
of the seller's business, of a major part of the materials, inventory
or supplies of an enterprise.
BUNDLE
OF RIGHTS - An ownership concept describing all those legal rights
which attach to the ownership of real property, including the
right to sell, lease, encumber, use, enjoy, exclude, will, etc.
BUSINESS
DAYS - Days of the week excluding Saturdays, Sundays, and holidays;
normal working days.
BUSINESS
OPPORTUNITIES - Any type of business which is for sale.
C
CANTILEVER - A projecting beam or overhanging portion supported
at one end only.
CAPITAL
GAIN - The taxable profit derived from the sale of a capital asset.
CAPITAL
IMPROVEMENT - Any structure which is erected as a permanent improvement
to real property; any improvement which is made to extend the
useful life of a property, or to add to the value of the property.
CAPITALIZATION
- A mathematical process for converting net income into an indication
of value, commonly used in the income approach to appraisal.
CAP
RATE (CAPITALIZATION RATE) - The percentage selected for use in
the income approach to valuation of improved property. The cap
rate is designed to reflect the recapture of the original investment
over the economic life of the improvement, to give the investor
an acceptable rate of return (yield) on the original investment,
and to provide for the return on borrowed capital.
CERTIFICATE
OF REASONABLE VALUE (CRV) - A certificate issued by the Veterans
Administration setting forth a property's current market value
estimate, based upon a VA approved appraisal.
CERTIFIED
CHECK - A check which the bank guarantees to be good, and against
which a stop payment is ineffective.
CERTIFIED
PROPERTY MANAGER - A professional property manager who has qualified
for membership in and is a member of the Institute of Real Estate
Management, and is designated a CPM.
CHAIN
OF TITLE - The recorded history of matters which affect the title
to a specific parcel of real property, such as ownership, encumbrances
and liens, usually beginning with the original recorded source
of the title.
CHATTEL
- Personal property which is tangible and moveable.
CLEAR
TITLE - Title to property that is free from liens, defects or
other encumbrances, except those which the buyer has agreed to
accept, such as mortgage to be assumed, the ground lease of record,
and the like; established title; title without clouds.
CLIENT
TRUST ACCOUNT - An account set up by a broker to keep client's
monies segregated from the broker's general funds.
CLOSING
- The final stage of consummating a real estate transaction when
the seller delivers title to the buyer, in exchange for the purchase
price.
CLOSING
COSTS - Expenses of the sale which must be paid in addition to
the purchase price (in the case of the buyer's expenses), or be
deducted from the proceeds of the sale (in the case of the seller's
expenses).
CLOSING
STATEMENT - A detailed cash accounting of a real estate transaction
prepared by an escrow officer or other person designated to process
the mechanics of the sale, showing all cash that was received,
all charges and credits which were made, and all cash that was
paid out in the transaction; also called a settlement statement.
CLOUD
ON TITLE - Any document, claim, unreleased lien or encumbrance
which many impair or injure the title to property or make the
title doubtful because of its apparent or possible validity.
CLUSTER
DEVELOPMENT - The grouping of housing units on less than normal
size homesites, with the remaining land being devoted to common
areas.
CODE
OF ETHICS - A written system of standards of ethical conduct.
The Code of Ethics of the National Association of Realtors, first
written in 1913, establishes the high standards of conduct for
members of the Realtor community.
COLLATERAL
- Something of value given or pledged as security for a debt or
obligation. The collateral for a real estate mortgage loan is
the mortgaged property itself, which has been hypothecated.
COLOR
OF TITLE - A condition which has the appearance of good title,
but which in fact is not valid title, as where title is founded
on some written document which on its face appears valid and effective,
but which is actually invalid.
COMMERCIAL
PROPERTY - A classification of real estate which includes income
producing property such as office buildings, gasoline stations,
restaurants, shopping centers, hotels and motels, parking lots
and stores, and other similar uses.
COMMINGLING
- To mingle or mix; for example, to deposit client funds in the
broker's personal or general account. A licensee found guilty
of commingling can have the license suspended or revoked by the
Real Estate Commission.
COMMISSION
- The compensation paid to a real estate broker(usually by the
seller) for services rendered in connection with the sale or exchange
of real property.
COMMITMENT
- A pledge or promise to do a certain act, such as the promise
of a lending institution to loan a certain amount of money at
a fixed rate of interest to a qualified buyer, provided the loan
is obtained on or before a certain date.
COMMON
AREAS - Land or improvements designated for the use and benefit
of all residents, property owners and tenants.
COMMON
ELEMENTS - Parts of the property which are necessary or convenient
to the existence, maintenance and safety of the condominium, or
are normally in common use by all of the condominium residents.
COMMON
LAW - That body of law which is based on usage, general acceptance,
and custom, as manifested in decrees and judgments of the courts;
judge-made law, as opposed to codified or statutory law.
COMMON
WALL - A wall separating two living units.
COMMUNITY
PROPERTY - A system of property ownership based on the theory
that each spouse has an equal interest in property acquired by
the efforts of either spouse during marriage.
COMPARABLES
- Recently sold properties which are similar to a particular property
being evaluated, and which are used to indicate a reasonable fair
market value for the subject property.
COMPOUND
INTEREST - Interest which is computed upon the principal sum plus
accrued interest.
CONCESSIONS
- Discounts given by landlords to prospective tenants to induce
them to sign a lease.
CONDEMNATION
- Either a judicial or administrative proceeding to exercise the
power of eminent domain, i.e., the power of the government to
take private property for public use.
CONDOMINIUM
OWNERSHIP - An estate in real property consisting of an individual
interest in an apartment or commercial unit, and an undivided
common interest in the common areas such as the land, parking
areas, elevators, stairways, and the like.
CONSIDERATION
- An act or forbearance, or the promise thereof, which is offered
by one party to induce another to enter into a contract; that
which is given in exchange for something from another.
CONSTRUCTIVE
EVICTION - Acts done by a landlord which so materially disturb
or impair the tenant's enjoyment of the leased premises that a
tenant is effectively forced to move out and terminate the lease
without liability for any further rent.
CONSTRUCTIVE
NOTICE - Notice of certain facts which are implied bylaw to a
person because he could have discovered the fact by reasonable
diligence or by inquiry into public records.
CONTINGENCY
- A provision placed in contract which requires the completion
of a certain act or the happening of a particular event before
a contract is binding.
CONTRACT
- A legal agreement between competent parties who agree to perform
or refrain from performing certain acts for a consideration. In
real estate, there are many different types of contracts, including
listings, contracts of sale, options, mortgages, assignments,
leases, deeds, escrow agreements, and loan commitments, among
others.
CONVEYANCE
- The transfer of title to real property by means of a written
instrument such as a deed or an assignment of lease.
COOPERATING
BROKER - A broker who joins with another broker in the sale of
real property.
COOPERATIVE
OWNERSHIP - Cooperative ownership of an apartment unit means that
the apartment owner has purchased shares in a corporation which
holds title to the entire apartment building.
CO-TENANCY
- A form of concurrent property ownership in which two or more
persons own an undivided interest in the same property.
COUNTER-OFFER
- A new offer made as a reply to an offer received from another;
this has the effect of rejecting the original offer, which cannot
thereafter be accepted unless revived by the offeror's repeating
it.
COURTESY
TO BROKERS - The practice of sharing commissions with cooperating
brokers.
COVENANT
- A written agreement or promise of two or more parties by which
either pledges to perform or not to perform specified acts on
a property, or which specifies certain uses or non-uses of the
property.
COVENANTS
AND CONDITIONS - Covenants are promises contained in contracts,
the breach of which would entitle a person to damages. Conditions,
on the other hand, are contingencies, qualifications or occurrences
upon which an estate or property right would be gained or lost.
COVENANTS
RUNNING WITH THE LAND - Covenants which become part of the property
and benefit or bind successive owners of the property.
CUL
DE SAC - A street which is open at one end only, and which usually
has a circular turnaround; a blind alley.
CUSTOMER
TRUST FUND (CTF) - An impound account maintained for the purpose
of setting up a reserve to pay certain periodic obligations such
as real property taxes, insurance premiums, lease rent, and maintenance
fees.
D
DEALER - An IRS designation for a person who regularly buys and
sells real property.
DEBT
SERVICE - The amount of money needed to meet the periodic payments
of principal and interest when a debt is amortized.
DECLARATION
OF RESTRICTIONS - A statement of all the covenants, conditions
and restrictions ("CC&R's") which affect a parcel
of land.
DEDICATION
- The application of privately owned land to the public for no
consideration, with the intent that the land will be accepted
and used for public purposes.
DEED
- A written instrument by which a property owner "grantor"
transfers to a "grantee" an ownership in real property.
DEED
OF TRUST - A legal document in which title to property is transferred
to a third party trustee as security for an obligation owed by
the trustor (borrower) to the beneficiary(lender).
DEFAULT
- Failure to fulfill a duty or promise or failure to perform any
obligation or required act. The most common occurrence of default
on the part of a buyer or lessee is non-payment of money.
DEFERRED
COMMISSIONS - Commissions which are earned but not yet fully paid.
DEFICIENCY
JUDGEMENT - A judgment against a borrower, endorser, or guarantor
for the balance of the debt issued when the security for a loan
is insufficient to satisfy the debt.
DENSITY
- A term, frequently used in connection with zoning requirements,
which means the maximum number of building units per acre or the
number of occupants or families per unit of land area (acre, square
mile, etc.); usually the ratio of land area to improvement area.
DEPOSIT
- Money offered by a prospective buyer as an indication of good
faith in entering into a contract to purchase; earnest money;
security for the buyer's performance of a contract.
DEPRECIATION
(APPRAISAL) - A loss in value due to any cause; any condition
which adversely affects the value of an improvement.
DEPRECIATION
(TAX) - For tax purposes, depreciation is an expense deduction
taken for an investment in depreciable property.
DEPTH
TABLE - Tables of percentage designed to provide a uniform system
of measuring the additional value to lots which accrues because
of added depth, with the extra depth valued according to the added
utility which it creates.
DESCENT
- The acquisition of an estate by inheritance, where an heir succeeds
to the property by operation of law. Descent literally means the
hereditary succession of an heir to property of an ancestor who
dies intestate.
DESCRIPTION
- The portion of a conveyance document which defines the property
being transferred.
DEVELOPER
- One who attempts to put land to its most profitable use by the
construction of improvements.
DEVISE
- A transfer of real property under a will.
DISCLAIMER
- A statement denying legal responsibility, frequently found in
the form of, "There are no promises, representations, oral
understandings or agreements except as contained herein."
DISCOUNT
POINTS - An added loan fee charged by a lender to make the yield
on a lower-than-market interest VA or FHA loan competitive with
higher interest conventional loans.
DISCRIMINATION
- The act of making a distinction against or in favor of a person
on the basis of the group or class to which the person belongs;
the failure to treat people equally.
DISTRAINT
- The right of a landlord, pursuant to a court order, to seize
a tenants belongings for rents in arrears.
DOMICILE
- The state where an individual has his true, fixed, permanent
home and principal business establishment and to which place he
has the intention of returning whenever he is absent.
DOUBLE
ESCROW - An escrow set up to handle the concurrent sale of one
property and purchase of another property by same party.
DOWER
- The legal right or interest a wife acquires in property her
husband held or acquired anytime during marriage.
DUAL
AGENCY - Representing both principals (buyer and seller) to a
transaction.
DUE
ON SALE CLAUSE - A form of acceleration clause found in some mortgages,
especially savings and loan mortgages, requiring the mortgagor
to pay off the mortgage debt when selling the secured property,
thus resulting in automatic maturity of the note at the lender's
option.
DUPLEX
- A structure that provides housing accommodations for two families
by having separate entrances, kitchens, bedrooms, lanais, living
rooms and bathrooms. A two-family dwelling.
DURESS
- Unlawful constraint or action exercised upon a person whereby
he is forced to perform some act against his will. A contract
entered into under duress is void.
E
EASEMENT - A property interest which one person has in land owned
by another entitling the holder of the interest to limited use
or enjoyment of the other's land.
EASEMENT
IN GROSS - The limited right of one person to use another's land
(servient estate), which right is not created for the benefit
of any land owned by the owner of the easement; that is, there
is no dominant estate, as the easement attaches personally to
the owner, not to the land.
EMBLEMENTS
- Growing crops,such as rice and taro, which are produced annually
through labor and industry.
EMINENT
DOMAIN - The right of government, both state and federal, to take
private property for a necessary public use, with just compensation
paid to the owner.
ENCROACHMENT
- An unauthorized invasion or intrusion of a fixture or other
real property wholly or partly upon another's property, thus reducing
the size and value of the invaded property.
ENCUMBRANCE
- Any claim, lien, charge or liability attached to and binding
upon real property which may lessen the value of the property
but will not necessarily prevent transfer of title.
ENTIRETY,
TENANCY BY - A form of joint ownership of property between husband
and wife with the right of survivorship.
ENVIRONMENTAL
IMPACT STATEMENT - A report which includes a detailed description
of a proposed development project with emphasis on the existing
environment setting, viewed from both a local and regional perspective,
and a discussion of the probable impact of the project on the
environment during all phases.
EQUITY
- That interest or value remaining in property after payment of
all liens or other charges on the property. A owner's equity is
normally the monetary interest over and above the mortgage indebtedness.
ERRORS
AND OMISSIONS INSURANCE - A form of insurance which covers liabilities
for errors, mistakes and negligence in the usual listing and selling
activities of a real estate office or escrow company.
ESCHEAT
- The reversion of property to the state when a decedent dies
intestate and there are no heirs capable of inheriting, or when
the property is abandoned.
ESCROW
- The process by which money and/or documents are held by a disinterested
third person (a "stakeholder") until the satisfaction
of the terms and conditions of the escrow instructions (as prepared
by the parties to the escrow).
ESTOPPEL
- A legal doctrine by which a person is prevented from asserting
rights or facts which are inconsistent with a previous position
or representation he had made by his act, conduct or silence.
ETHICS
- A system of moral principles, rules and standards of conduct.
EVICTION
- The legal process of removing a tenant from possession of the
premises for some breach of the lease contract.
EXCHANGE
- A transaction in which all or part of the consideration for
the purchase of real property is the transfer of property of a
like kind.
EXCLUSIVE
AGENCY - A written listing agreement giving one agent the right
to sell property for a specified time, but reserving to the owner
the right to sell the property himself without payment of any
commission.
EXCLUSIVE
LISTING - A written listing of real property in which the seller
agrees to appoint only one broker to sell the property for a specified
period of time. The two types of exclusive listings are the exclusive
agency and the exclusive right to sell.
EXECUTIVE
- The act of making a document legally valid, such as formalizing
a contract by signing, or acknowledging and delivering a deed.
EXECUTOR
- A person appointed by a testator to carry out the directions
and requests in the last will and testament, and to dispose of
property according to the provisions of the will.
EXECUTORY
CONTRACT - A contract in which one or both of the parties has
not yet performed.
EXTENDER
CLAUSE - A "carry over" clause (referred to as a safety
clause) contained in a listing which provides that a broker is
still entitled to a commission for a set of period of time after
the listing has expired if the property is sold to a former prospect
of the broker.
EXTENSION
- An agreement to continue the period of performance beyond the
specified period.
F
FAIR MARKET VALUE - The highest monetary price which a property
would bring, if offered for sale for a reasonable period of time
in a competitive market, to a seller who is willing but not compelled
to sell, from a buyer, willing but not compelled to buy, both
parties being fully informed of all the purposes to which the
property is best adapted and is capable of being used.
FARM
AREA - A selected geographical area or one specific building to
which a real estate salesperson devotes special attention and
study.
FEASIBILITY
STUDY - An analysis of a proposed project with emphasis on the
attainable income, probable expenses, and most advantageous use
and design.
FEDERAL
HOUSING ADMINISTRATION (FHA) - The FHA was set up in1934 under
the National Housing Act to encourage improvement in housing standards
and conditions, to provide an adequate home financing system by
insurance of housing mortgages and credit, and to exert a stabilizing
influence on the mortgage market.
FEDERAL
TAX LIEN - A federal lien which attaches to real property, either
if the federal estate tax is not paid, or if the taxpayer has
violated the federal income tax or payroll tax laws.
FEDERAL
TRADE COMMISSION (FTC) - A federal agency created to investigate
and eliminate unfair and deceptive trade practices in business.
FEE
SIMPLE - The largest estate one can possess in real property.
A fee simple estate is the least limited interest and the most
complete and absolute ownership in land: it is of indefinite duration,
freely transferable and inheritable. Fee simple title is sometimes
referred to as "the fee.
FIDUCIARY
- A relationship which implies a position of trust or confidence
wherein one is usually entrusted to hold or manage property or
money for another. Among the obligations a fiduciary owes to the
principal are duties of loyalty; obedience; full disclosure; the
duty to use skill, care and diligence; and the duty to account
for all monies.
FILLED
LAND - An area where the grade has been raised by depositing or
dumping dirt, gravel or lava rock.
FINANCE
CHARGE - The total of all costs imposed directly or indirectly
by the creditor and payable either directly or indirectly by the
customer, as defined under the federal Truth-in-Lending Law.
FINANCE
FEE - A mortgage brokerage fee to cover the expenses incurred
in placing the mortgage with a lending institution; a mortgage
service charge or origination fee.
FINANCIAL
STATEMENT - A formal statement of the financial status and net
worth of a person or company, setting forth and classifying assets
and liabilities as of a specified date.
FINDER'S
FEE - A fee paid to someone for producing a buyer to purchase
or a seller to list property; also called a referral fee.
FIRM
COMMITMENT - A definite undertaking by a lender to loan a set
amount of money at a specified interest rate for a certain term.
FIRST
REFUSAL, RIGHT OF - The right of a person to have the first opportunity
either to purchase or lease real property.
FISCAL
YEAR - A business year used for tax, corporate or accounting purposes,
as opposed to a calendar year.
FIXTURE
- An article which was once personal property but has been so
affixed to the real estate that it has become real property (e.g.
stoves, bookcases, plumbing, etc.). If determined to be a fixture,
then the article passes with the property even though it is not
mentioned in the deed.
FLAG
LOT - A land parcel having the configuration of an extended flag
and pole. The pole represents access to the site which is usually
located to the rear of another lot fronting a main street.
FLOOR
AREA RATIO - The ratio of floor area to land area expressed as
a percent or decimal, which is determined by dividing the total
floor area on a zoning lot by the lot area.
FLOOR
DUTY - A frequent practice in real estate brokerage offices of
assigning one sales agent the responsibility for handling all
telephone calls and office visitors for a specified period of
time.
FORECLOSURE
- A legal procedure whereby property used as security for debt
is sold to satisfy the debt in the event of default in payment
of the mortgage note or default of other terms in the mortgage
document.
FRAUD
- Any form of deceit, trickery, breach of confidence or misrepresentation
by which one party attempts to gain some unfair or dishonest advantage
over another.
FREE
AND CLEAR TITLE - Title to real property which is absolute and
unencumbered by any liens, mortgages, clouds or other encumbrances.
FRONTAGE
- The length of a property abutting a street or body of water;
that is, the number of feet that "front" the street
or water.
FUNCTIONAL
OBSOLESCENCE - A loss in value of an improvement due to functional
inadequacies, often caused by age or poor design.
G
GARNISHMENT - A legal process designed to provide a means for
creditors to safeguard for themselves the personal property of
a debtor which is in the hands of a third party ("garnishee").
GENERAL
AGENT - One who is authorized to perform any and all acts associated
with the continued operation of a particular job or a certain
business.
GENERAL
CONTRACTOR - A construction specialist who enters into a formal
construction contract with a land owner or master lessee to construct
a real estate building or project.
GENERAL
PARTNER - A co-owner of a partnership who is empowered to enter
into contracts on behalf of the partnership and who is fully liable
for all partnership debts.
GIFT
TAX - A graduated federal tax paid by a donor upon making a gift.
GOOD
FAITH - Bona fide. An act is done in good faith if it is in fact
done honestly, whether it be done negligently or not.
GOOD
WILL - An intangible, salable asset arising from the reputation
of a business.
GOVERNMENT
SURVEY - A system of land description in which large blocks of
land are divided into tracts bounded by imaginary lines conforming
to the true meridian.
GRADUATED
RENTAL LEASE - A lease in which the rent payments commence at
a fixed, often low rate, but "step up" or increase at
set intervals as the lease term matures.
GRANDFATHER
CLAUSE - Common expression used to convey the idea that something
which was once permissible continues to be permissible despite
changes in the controlling law.
GRANTEE
- The person who receives from the grantor a grant of real property.
GRANTOR
- The person transferring title to, or an interest in, real property.
A grantor must be competent to convey; thus, for example, an insane
person cannot convey title to real property.
GROSS
AREA - The total floor area of a building measured from the exterior
of the walls (excluding those unenclosed).
GROSS
INCOME MULTIPLIER - A useful rule of thumb to estimate market
value of income producing residential property. The multiplier
is derived by using comparable sales divided by the actual or
estimated monthly rentals and arriving at an acceptable average.
GROSS
LEASE - A lease of property under which the lessee pays a fixed
rent, and the lessor pays the taxes, insurance, and other charges
regularly incurred through ownership.
GUARDIAN
- One who is given the lawful custody and care of another(called
a ward).
H
HABENDUM CLAUSE - That part of the deed beginning with the words
"to have and to hold," following the granting clause
and reaffirming the extent of ownership that the grantor is transferring.
HABITABLE
- Being fit to live in. The residential landlord has an obligation
to keep the leased premises in a habitable condition.
HEIR
- A person who inherits under a will or a person who succeeds
to property by the laws of descent if the decedent dies without
a will (intestate).
HIGHEST
AND BEST USE - That use which, at the time of appraising the property,
is most likely to produce the greatest net return to the land
and/or the building over a given period of time.
HIGH
RISE - A popular expression for a condominium or apartment building
generally higher than six stories.
HOLD
HARMLESS CLAUSE - A clause inserted in a contract whereby one
party agrees to indemnify and protect the other party from any
injuries or lawsuits arising out of the particular transaction.
HOLDOVER
TENANT - One who stays on the leased premises after his lease
has expired. The landlord normally has the choice of evicting
the holdover tenant or permitting him to remain and continue to
pay rent.
HOMEOWNER'S
ASSOCIATION - A non-profit association of homeowners organized
pursuant to a declaration of restrictions or protective covenants
for a subdivision, a PUD, or a condominium.
HOMESTEAD
- A home which is used as a personal residence.
HOUSE
RULES - Rules of conduct adopted by a board of directors of a
condominium and designed to promote harmonious living among the
owners and occupants.
HUD
- A federal cabinet department officially known as the Department
of Housing and Urban Development.
HYPOTHECATE
- To pledge specific real or personal property as security for
an obligation, without surrendering possession of it
I
IMPLIED WARRANTY OF HABITABILITY - A legal doctrine imposing on
the landlord a duty to make the leased premises acceptable to
live in and ready for occupancy and to continue to maintain them
in a state of repair throughout the entire term of the lease.
IMPOUND ACCOUNT - A trust account
established to set aside funds for future needs.
IMPROVED LAND - Real property whose
value has been enhanced by the addition of on-site and off-site
improvements such as roads, sewers, utilities, buildings, etc.;
as distinguished from raw land.
IMPROVEMENTS - Valuable additions
made to property, amounting to more than repairs, costing labor
and capital and intended to enhance the value of the property.
Improvements of land would include grading, sidewalks, sewers,
streets, utilities, etc. Improvements on land would include buildings,
fences, and the like.
IMPUTED INTEREST - Interest implied
by the federal tax law.
INCOME APPROACH - An approach to
the valuation or appraisal of real property as determined by the
amount of net income the property will produce over its remaining
economic life.
INCOME PROPERTY - Property purchased
primarily for the income to be derived plus certain tax benefits,
such as accelerated depreciation. Income property can be commercial,
industrial or residential.
INCORPOREAL RIGHTS - Intangible
or non-possessory rights in real property such as easements, licenses,
profits and the like.
INDEPENDENT CONTRACTOR - One who
is retained to perform a certain act, but who is subject to the
control and direction of another only as to the end result and
not as how he performs the act. The critical feature, and what
distinguishes an independent contractor and an employee or agent,
is the right to control.
INDUSTRIAL PARK - An area zoned
industrial and containing sites for many separate industries and
developed and managed as a unit, usually with provisions for common
services for the users.
INJUNCTION - A legal action which
forbids a party defendant from doing some act; it requires a person
to whom it is directed to refrain from doing a particular thing.
INSPECTION - A visit to and review
of the premises. A prudent purchaser of property always inspects
the premises before closing.
INSTITUTIONAL LENDER - Financial
institutions such as banks, insurance companies, savings and loans
or any lending institution whose loans are regulated by law.
INTEREST - The sum paid or accrued
in return for the use of money.
INTERIM FINANCING - A short-term
loan usually made during the construction phase of a building
project; often referred to as the "construction loan."
INTESTATE - To die without a valid
will.
INVENTORY - An itemized list of
property. Many brokers recommend that their clients attach to
the sales contract an inventory of property to be included in
the sale of a residential property, including a condominium dwelling.
INVERSE CONDEMNATION - An action
for "just compensation "brought by one whose property
has been effectively "taken" or substantially interfered
with or taken without just compensation
J
JOINT AND SEVERAL LIABILITY - A situation in which more than one
party is liable to repay a debt or obligation and a creditor can
obtain compensation from one or more parties, either individually
or jointly, whichever he chooses.
JOINT TENANCY - A form of property
ownership by two or more persons in which the joint tenants have
one and the same interest, arising by one and the same conveyance,
commencing atone and the same time and held by one and the same
possession (the concept of "four unities").
JOINT VENTURE - The joining of
two or more people in a specific business enterprise such as the
development of a condominium project or a shopping center.
JUDGMENT LIEN - A lien binding
on all the real estate of a judgment-debtor and giving the holder
of the judgment a right to levy (i.e. to seize) the land for satisfaction
of the judgment.
JUDICIAL FORECLOSURE - A method
of foreclosing upon real property by means of a court supervised
sale. After an appraisal, the court determines an upset price
below which no bids to purchase will be accepted.
JUNIOR MORTGAGE - A mortgage which
is subordinate in right or lien priority to an existing mortgage
on the same realty, such as a second mortgage.
JURISDICTION - The authority or
power to act, such as the authority of a court to hear and render
a decision that binds both parties.
JUST COMPENSATION - An amount of
compensation to be received by a party for the taking of property
under the power of eminent domain.
L
LAND - The surface of the earth extending down to the center and
upward to the sky, including all natural things thereon such as
trees, crops, or water; plus the minerals below the surface and
the air rights above.
LAND CONTRACT - Another name for
an installment purchase contract, by which the buyer obtains equitable
title (the right to use the property) while the seller retains
legal title (recorded title) as security for payment of the balance
of the purchase price.
LAND DESCRIPTION - A description
of a particular piece of real property.
LAND LEASEBACK - A creative financing
device often used with raw land which a developer wants to improve,
in which the developer sells the land to an investor who leases
the land back to the developer under a long-term net lease and
subordinates his fee ownership to the lender providing development
financing.
LAND, TENEMENTS AND HEREDITAMENTS
- A feudal phrase used to describe all types of immovable realty
including the land, buildings and all appurtenant rights thereto.
LAND TRUST - An association organized
by common owners of real property, which holds title to the real
property in the name of one or more trustees for the benefit of
the owners, whose beneficial interests may be represented by trust
certificates.
LANDLOCKED - Real property having
no access to a public road or way.
LANDLORD - The lessor or the owner
of leased premises. The landlord retains a reversion interest
in the property so that when the lease ends the property will
revert to the landlord.
LANDMARK - A stake, stream, cliff,
monument or other object or feature which is used to fix or define
land boundaries; also a prominent feature of a landscape or property
that is the symbol for the place.
LANDSCAPING - Shrubs, bushes, trees
and the like, on the grounds surrounding a structure.
LATERAL AND SUBJACENT SUPPORT -
The support received by a parcel of real property from the land
adjoining it is called lateral support. Subjacent support is that
support which the surface of the earth receives from its underlying
strata.
LAW DAY - The date an obligation
becomes due; sometimes refers to the closing date.
LEASE - A lease is both a contract
between lessor (landlord) and lessee (tenant) and a conveyance
or demise of the premises by the lessor to the lessee. A lease
is a contract in that item bodies the agreement between the parties.
LEASEHOLD - A less-than-freehold
estate which a tenant possesses in real property.
LEGAL DESCRIPTION - A description
which is complete enough that an independent surveyor could locate
and identify a specific piece of real property.
LEGAL NOTICE - That notice which
is either implied or required by law. Constructive notice under
the recording laws is also referred to as legal notice.
LEGAL RATE OF INTEREST - The maximum
interest rate permitted bylaw, with anything above that rate being
usury.
LESSEE - The person to whom property
is rented or leased; called a "tenant" in most residential
leases.
LESSOR - The person who rents or
leases property to another. In residential leasing, the lessor
is often referred to as a landlord.
LESS-THAN-FREEHOLD ESTATE - An
estate held by one who rents or leases property. This classification
includes an estate for years, periodic tenancy, estate at will,
and estate at sufferance.
LETTER OF CREDIT - An agreement
or commitment by a bank ("issuer") made at the request
of a customer ("account party") that the bank will honor
drafts or other demands of payment from third parties ("beneficiaries")
upon compliance with the conditions specified in the letter of
credit.
LETTER OF INTENT - An expression
of intent to invest, develop or purchase without creating any
firm legal obligation to do so.
LEVEL PAYMENT MORTGAGE - A mortgage
which is scheduled to be repaid in equal periodic payments which
include both principal and interest.
LEVERAGE - The use of borrowed
funds to purchase investment property with the anticipation that
the property acquired will increase in return so that the investor
will realize a profit not only on his own investment, but also
on the borrowed funds; the employment of a smaller investment
to generate a larger rate of return through borrowing.
LICENSEE - A person who has a valid
license. A real estate licensee can be a salesperson or a broker,
active or inactive, an individual, a corporation, or a partnership.
LIEN - A charge or claim which
one person (lienor) has upon the property of another (lienee)
as security for a debt or obligation. Liens can be created by
agreement of the parties (mortgage) or by operation of law (tax
liens).
LIFE ESTATE - Any estate in real
or personal property which is limited in duration to the life
of its owner or the life of some other designated person.
LIMITED COMMON ELEMENTS - That
special class of common elements in a condominium reserved for
the use of a certain apartment(s) to the exclusion of other apartments.
LIMITED PARTNERSHIP - A partnership
formed by two or more persons having as members one or more general
partners and one or more limited partners.
LINE OF CREDIT - A maximum amount
of money a bank will lend one of its more reliable and credit
worthy customers without need for any formal loan submission.
LIQUIDATED DAMAGES - An amount
predetermined by the parties to an agreement as the total amount
of compensation an injured party should receive in the event the
other party breaches a specified part of the contract.
LIQUIDITY - The ability to sell
an asset and convert it into cash at a price close to its true
value.
LIS PENDENS - A legal document
recorded in the Bureau of Conveyances, which gives constructive
notice that an action has been filed in either a state or federal
court affecting a particular piece of property. "Lis Pendens"
is a Latin term which means "action pending" and is
in the nature of a quasi-lien.
LISTING - A written employment
agreement between a property owner and a broker authorizing the
broker to find a buyer or a tenant for a certain real property.
LITTORAL LAND - Land bordering
on the shore of a sea or ocean and thus affected by the tide currents.
LOAN COMMITMENT - A commitment
by a lender of the amount he will loan to a qualified borrower
on a particular piece of real estate for a specified amount of
time under specific terms.
LOAN-TO-VALUE RATIO - The ratio
that the amount of the loan bears to the appraised value of the
property or the sales price, whichever is lower.
LOCUS SIGILLI - Latin for "under
seal", used in the abbreviated form, "L.S.," at
the end of signature line in some formal legal documents; used
instead of the actual seal.
LOSS PAYEE - The person designated
on an insurance policy to be paid in case the insured property
is damaged or destroyed.
M
MAINTENANCE - The care and work put into a building to keep it
in operation and productive use; the general repair and upkeep
of a building. If maintenance is deferred, the building will suffer
a loss in value.
MALL - A landscaped public area
set aside for pedestrian traffic.
MARGINAL LAND - Land which is of
little value because of some deficiency, such as poor access,
lack of adequate rainfall, or steep terrain.
MARKETABLE TITLE - Good or clear
title reasonably free from risk of litigation over possible defects;
also referred to as merchantable title. Marketable title need
not, however, be perfect title.
MARKET VALUE - The highest price,
estimated in terms of money, which a property will bring if exposed
for sale in the open market, allowing a reasonable time to find
a purchaser who buys with knowledge of all the uses to which the
property is adapted and for which it is capable of being used.
MASTER PLAN - A comprehensive plan
to guide the long-term physical development of a particular area.
MEANDER LINE - An artificial line
used by the surveyors to measure the natural, uneven, winding
property line formed by rivers, streams and other watercourses
bordering a property.
MECHANIC'S LIEN - A statutory lien
created in favor of material men and mechanics to secure payment
for materials supplied and services rendered in the improvement,
repair or maintenance of real property.
METES AND BOUNDS - A common method
of land description that identifies a property by specifying the
shape and boundary dimensions of the parcel, using terminal points
and angles.
MILITARY CLAUSE - A clause inserted
in some residential leases to allow the military tenant to terminate
the lease in case of transfer, discharge or other circumstances
making termination appropriate.
MINERAL RIGHTS - Rights to subsurface
land and profits. Normally, when real property is conveyed, the
grantee receives all right and title to the land including everything
above and below the surface, unless excepted by the grantor.
MISREPRESENTATION - A false statement
or concealment of a material fact made with the intent to induce
some action by another party.
MONEY - The cash deposit (including
initial and additional deposits) paid by the prospective buyer
of real property as evidence of his good faith intention to complete
the transaction; called hand money or a binder in some states.
MONTH-TO-MONTH TENANCY - A periodic
tenancy where the tenant rents for one month at a time. In the
absence of rental agreement (oral or written), a tenancy is deemed
to be month-to-month, or in the case of boarders, week-to-week.
MONUMENTS - Visible markers, both
natural and artificial objects, which are used to establish the
lines and boundaries of a survey.
MORTGAGE - A legal document used
to secure the performance of an obligation. In effect, the mortgage
states that the lender can look to the property in the event the
borrower defaults in payment of the note.
MORTGAGE BANKER - A corporation
or firm which normally provides its own funds for mortgage financing.
MORTGAGE BROKER - A person or firm
which acts as an intermediary between borrower and lender; one
who, for compensation or gain, negotiates, sells or arranges loans
and sometimes continues to service the loans.
MORTGAGEE - The one who receives
and holds a mortgage as security for a debt; the lender; a lender
or creditor who holds a mortgage as security for payment of an
obligation.
MORTGAGOR - The one who gives a
mortgage as security for a debt; the borrower; usually the landowner;
the borrower or debtor who hypothecates or puts up his property
as security for an obligation.
MULTIPLE LISTING SERVICE (MLS)
- An organization created by Realtors to facilitate the sharing
of listings among member brokers.
N
NATIONAL ASSOCIATION OF REALTORS - Formerly known as the National
Association of Real Estate Boards (NAREB), it is the largest and
most prestigious real estate organization in the world.
NEGATIVE CASH FLOW - The investment
situation where cash expenditures to maintain an investment (taxes,
mortgage payments, maintenance, etc.) exceed the cash income received
from the investment.
NEGOTIABLE INSTRUMENT - Any written
instrument which may be transferred by endorsement or delivery
so as to vest legal title in the transferee.
NEGOTIATION - The transaction of
business aimed at reaching a meeting of minds among the parties;
bargaining.
NET INCOME - The sum arrived at
after deducting from gross income the expenses of a business or
investment, including taxes and insurance, and allowances for
vacancy and bad debts; what the property will earn in a given
year's operation.
NET LEASE - A lease, usually commercial,
whereby the lessee pays not only the rent for occupancy, but also
pays maintenance and operating expenses such as tax, insurance,
utilities and repairs. Thus the rent paid is "net" to
the lessor.
NET WORTH - The value remaining
after deducting liabilities from assets.
NOMINAL CONSIDERATION - A consideration
bearing no relation to the real value of the contract. A deed
often recites a nominal consideration, such as "ten dollars
and other valuable consideration."
NON-COMPETITION CLAUSE - A provision
in a contract or lease prohibiting a person from operating or
controlling a nearby business which would compete with one of
the parties to the contract.
NONCONFORMING USE - A permitted
use which was lawfully established and maintained but which no
longer conforms to the current use regulations because of a change
in the zoning.
NONDISTURBANCE CLAUSE - A clause
inserted in a mortgage whereby the mortgagee agrees not to terminate
the tenancies of lessees who pay their rent if the mortgagee forecloses
on the mortgagor-lessor's building.
NORMAL WEAR AND TEAR - That physical
deterioration which occurs in the normal course of the use for
which a property is intended, without negligence, carelessness,
accident or abuse of the premises (or equipment or chattels) by
the occupant, members of household, or their invitees or guests.
NOTE - A document signed by the
borrower of a loan, stating the loan amount, the interest rate,
the time and method of repayment and the obligation to repay.
The note is the evidence of the debt. When secured by a mortgage,
it is called a mortgage note.
NOTICE - (1) Legal notice is notice
which is required to be made by law, or notice which is imparted
by operation of law as a result of the possession of property
or the recording of documents. (2) Notice which is required by
contract, for example, when the parties agree to terminate a contract
by the written notice of either party 30 days prior to termination.
NOTICE OF COMPLETION - Document
filed to give public notice that a construction job has been completed
and that mechanics' liens must be filed within ,say, 45 days to
be valid.
NOTICE OF DEFAULT - A notice to
a defaulting party that there has been a default, usually providing
a grace period in which to cure the default.
NOTICE OF NONRESPONSIBILITY - A
legal notice designed to relieve a property owner from responsibility
for the cost of improvements ordered by another person.
NOTICE TO QUIT - A written notice
given by a landlord to his tenant, stating that the landlord intends
to regain possession of the leased premises and that the tenant
is required to quit and remove himself from the premises either
at the end of the lease term or immediately if there is a breach
of lease or if the tenancy is at will or by sufferance; sometimes
refers to the notice given by the tenant to the landlord that
he intends to give up possession on a stated day.
NOVATION - The substitution of
a new obligation for an old one; substitution of new parties to
an existing obligation, as where the parties to an agreement accept
a new debtor in place of an old one.
NUISANCE - Conduct or activity
which results in an actual physical interference with another
person's reasonable use or enjoyment of his property for any lawful
purpose.
NULL & VOID - Having no legal
force or effect; of no worth; unenforceable; not binding.
O
OBSOLESCENCE - A type of depreciation of property.
OFFER - A promise by one party
to act or perform in a specified manner provided the other party
will act or perform in the manner requested.
OFFER AND ACCEPTANCE - The two
components of a valid contract; a "meeting of the minds."
OFFICE EXCLUSIVE - A listing in
which the seller refuses to submit the listing to Multiple Listing
Service, even after being informed of the advantages of MLS, and
signs a certification to that effect.
OFFSITE COSTS - Costs such as for
sewers, streets, utilities, etc., which are incurred in the development
of raw land, but are not connected with the actual construction
of the buildings (onsite costs).
OPEN-END MORTGAGE - A mortgage
in which the borrower is given a limit up to which he may borrow,
with any incremental advances of money up to but not exceeding
the original borrowing limit to be secured by the same mortgage.
OPEN HOUSE - The common real estate
practice of showing a listed home to the public during established
hours, frequently on Sunday afternoons.
OPEN LISTING - A listing given
to any number of brokers. The first broker who secures a buyer
ready, willing and able to purchase at the terms of the listing
is the one who earns the commission.
OPEN SPACE - Certain portion of
the landscape which has not been built upon and which is sought
either to be reserved in its natural state or used for agricultural
or recreational purposes (such as parks, squares, and the like).
OPERATING EXPENSES - Those periodic
and necessary expenses which are essential to the continuous operation
and maintenance of a property.
OPINION OF TITLE - An opinion by
a person competent in examining titles, usually a title attorney,
as to the status of the title of a property.
OPTION - An agreement to keep open,
over a set period, an offer to sell or purchase property.
ORIGINATION FEE - The finance fee
charged by a lender for placing a mortgage, which covers initial
costs such as preparation of documents and credit, inspection
and appraisal fees.
OVERIMPROVEMENT - An improvement
which by reason of excess size or cost is not the highest and
best use for the site on which it is placed.
OVERRIDE - A commission paid to
managerial personnel (e.g. principal broker) on sales made by
their subordinates, usually calculated as a percentage of the
gross sales commissions earned by the salesperson.
P
PACKAGE MORTGAGE - A method of financing in which the loan that
finances the purchase of a home also finances the purchase of
personal items such as a washer and dryer, refrigerator, stove
and other specified appliances.
PARCEL - A specific portion of
a larger tract; a lot.
PARTIAL RELEASE - A clause found
in a mortgage which directs the mortgagee to release certain parcels
from the lien of the blanket mortgage upon the payment of a certain
sum of money.
PARTICIPATION MORTGAGE - A mortgage
in which the lender participates in the income of the mortgaged
venture beyond a fixed return, or receives a yield on the loan
in addition to the straight interest rate.
PARTITION - The dividing of common
interests in real property owned jointly by two or more persons.
PARTNERSHIP - "An association
of two or more persons to carry on as co-owners a business for
profit," as defined in the Uniform Partnership Act, which
is in force in a majority of the states.
PARTY WALL - A wall which is located
on or at a boundary line between two adjoining parcels and is
used or is intended to be used by the owners of both properties
in the construction or maintenance of improvements on their respective
lots.
PENTHOUSE - An apartment located
on the roof of a building, or more commonly, an apartment on the
top floor of a building.
PERCENTAGE LEASE - A lease whose
rental is based on a percentage of the monthly or annual gross
sales made on the premises.
PERCOLATION TEST - A hydraulic
engineer's test of soil to determine the ability of the ground
to absorb and drain water.
PERFORMANCE BOND - A bond, usually
posted by one who is to perform work for another, which assures
that a project or undertaking will be completed as per agreement
or contract.
PERIODIC TENANCY - A leasehold
estate which continues from period to period, such as month to
month, year to year. All conditions and terms of the tenancy are
carried over from period to period, and continue for an uncertain
time until proper notice of termination is given.
PERMANENT FINANCING - A long-term
loan, as opposed to an interim loan.
PERSONAL PROPERTY - Things which
are tangible and moveable; property which is not classified as
real property; chattels; personalty.
PIGGYBACK LOAN - A joint loan with
two lenders sharing a single mortgage.
PLANNED UNIT DEVELOPMENT (PUD)
- A modern concept in housing designed to produce a high density
of dwellings and maximum utilization of open spaces.
PLAT - A map or a town, section,
or subdivision indicating the location and boundaries of individual
properties.
PLOTTAGE - The merging or consolidating
of adjacent lots into one larger lot, with the consequent result
of improved usability and increased value; also called assemblage.
POCKET LISTING - A listing which
is retained by the listing broker or salesperson, who does not
make it available to other brokers in the office or to other Multiple
Listing Service members.
POINT OF BEGINNING - The starting
point in a metes and bounds description of property,
