ABANDONMENT - Forfeiting property through non-use (generally acknowledged by the tenant removing his or her belongings from the premises.)
ABATEMENT OF JUDGMENT - A document containing a condensation of the essential provisions of a court judgment.
ABATEMENT OF NUISANCE - The act of ending or terminating a nuisance; a type of legal action brought to end a nuisance.
ABSTRACT OF JUDGMENT - A summary of money judgment. The summary is usually prepared so that it may be recorded, thereby creating a (judgment) lien on real estate owned by the judgment debtor.
ABSTRACT OF TITLE - A summary of the instruments affecting title to a parcel of real property as shown by the public records.
ACCELERATE - To make a note all due and payable at one time.
ACCELERATION CLAUSE - A clause in a deed of trust or mortgage giving the lender the right to call all sums owing him or her to be immediately due and payable upon the occurrence of a certain event. It is also a clause that permits a debtor to pay off a loan before the due date.
ACCEPTANCE - An essential element of every contract, it is the consent to be bound by the offer. In deeds, it is the consent to accept a grant of real property.
ACCESS RIGHT - The right of an owner to go into and out of his or her property.
ACCOMMODATION PARTY - A person who, without receiving value, signs a promissory note to help another person borrow money or get credit.
ACCORD AND SATISFACTION - The discharge of an existing contract by accepting the performance under a substitute contract. Generally, consideration under the new contract is different from and of lesser value than under the original contract, and satisfaction is the performance of that contract; the combination discharges the original contract.
ACCRETION - A gradual addition to land from natural causes; for example, from gradual action of ocean or river waters.
ACCRUED DEPRECIATION
1. The difference between the cost of replacement new as of the date of the appraisal and the present appraised value.
2. The accumulated loss in value that has affected the improvements on real property
ACKNOWLEDGEMENT - A formal declaration before an officer duly authorized as a notary public by a person who has executed an instrument, stating that the execution is his or her act and deed. A formal statement (usually before a notary public) by the person signing a deed or document that the instrument was actually and freely signed.
ACOUSTICAL TILE - Blocks of fiber, mineral, or metal with small holes or a rough-textured surface to absorb sound, used as covering for interior walls and ceilings.
ACQUISITION - The act or process by which a person procures property.
ACRE - A measure of land equaling 160 square rods, 4840 square yards, 43,560 square feet, or a tract about 208.71 feet square.
AD VALOREM - According to value.
ADA - Refers to the Americans With Disabilities Act. The ADA applies to equal access to employment, public services, public accommodations, public transportation and telecommunications.
ADJACENT - Located next to or near an object or parcel of property.
ADJOINING - Located so as to touch an object or share a common property line.
ADJUSTED COST BASIS - For tax purposes it is the cost of the property plus improvements and minus depreciation, amortization, and depletion.
ADJUSTED GROSS INCOME - The total amount of income a person receives from all sources, less any depreciation, tax, or other allowable deductions.
ADJUSTMENT - Making necessary changes to the asking price compared to similar houses recently sold in the area. One property may have more amenities, such as one more bathroom or other features justifying a higher asking price; in that event, the asking price for the subject property must be changed accordingly.
ADMINISTRATOR - A person appointed by the probate court to administer the estate of a deceased person. His or her duties include making an inventory of the assets, managing the property, paying the debts and expenses, filing necessary reports and tax returns, and distributing the assets as ordered by the probate court.
ADULT - Any person 18 years of age and older.
ADVERSE POSSESSION - A method of acquiring property based on open and notorious possession, under a claim of right, color of title, continuous use for five years, and the payment of taxes.
AFFIDAVIT - A statement or declaration reduced to writing, sworn to or affirmed before some officer who has authority to administer an oath or affirmation, such as a notary public or a commanding officer in the service.
AFFIRM - To confirm, swear, ratifying, verity.
AGENCY DISCLOSURE - Making sure all parties involved in a transaction understand who each agent represents.
AGENCY RELATIONSHIP - A special relationship of trust by which one person (agent) is authorized to conduct business, sign papers, or otherwise act on behalf of another person (principal). This relationship may be created by expressed agreement, ratification, or estoppel.
AGENT - One who represents another called a principal and has authority to act for the principal in dealing with third parties. The relationship is referred to as an agency. Someone authorized to act for another (called the principal) in business matters.
AGENT’S INSPECTION DISCLOSURE - A personal visual inspection of the property made by the agent to determine the condition of all aspects of the property. When doing the inspection, it is a good idea to fill out the transfer disclosure statement.
AGREEMENT - A mutual understanding or compact between parties. Although often used synonymously with contract, technically it denotes mutual promises that fail as a contract for lack of consideration.
AGREEMENT OF SALE
1. A written contract between a buyer and seller setting out the terms of sale.
2. An installment sales contract covering real property, especially a long-term contract
AIDS - The seller of real property, his agents or his sub agents do not have to disclose that somebody died of AIDS or had AIDS in said property.
ALIENATION - The transferring of property to another. Conveyance or transfer of title to real estate from one person to another person.
ALIENATION CLAUSE - In a deed of trust or mortgage, a provision that if the secured property is sold or transferred, the lender has the option of accelerating the loan and declaring the entire unpaid balance immediately due and payable. Also called a "due on sale" clause.
ALLIGATOR - Negative cash flow on a keeper property is referred to as an alligator. The alligator is an expensive piece of property that gobbles up all the profits. Purchasing lower priced properties will limit the appetite of the alligator.
ALL-INCLUSIVE TRUST DEED (AITD) - A financing device whereby a lender makes payments on the existing trust deeds of a borrower and takes from the borrower a junior trust deed with a face value in an amount equal to the amount outstanding on the old trust deeds and the additional amount of money borrowed.
ALLUVION (ALLUVIUM) - Soil that has been deposited by accretion on the shore of a river or body of water and that increases the real property.
ALQUIST PRIOLLO - A legislative act making disclosure of property in special study zones mandatory, to let a potential buyer know if the property lies on earthquake fault lines.
A.L.T.A. POLICY - The title insurance policy issued to institutional lenders. The initials stand for American Land Title Association, an organization that regulates and standardizes the provisions within title policies.
ALTER EGO - A doctrine, which holds that a corporation is really owned by shareholders as their own property, and therefore it should not be considered as a separate entity. Usually used to try to hold shareholders liable for corporate debts.
AMBULATORY - Capable of being changed or revoked. In wills, it refers to the concept that a will may be revoked or modified at any time up to the testator's death.
AMELIORATING WASTE - Improvements to property that, while not damaging the value of the property, technically qualify as waste. For example, an apartment building constructed on property designated only for single-family structures is considered ameliorating waste.
AMENITIES - As used in the real estate business, the features that make a piece of real property, especially a home, enjoyable.
AMO - stands for Accredited Management Organization, a title given by the NAR to firms specializing in property management. At least one member of an AMO must be a certified property manager.
AMORTIZATION
1. The liquidation of a financial obligation on an installment basis, which includes both principal and interest.
2. Recovery of cost or value over a period of time. The method or plan for the payment of a debt, bond, deed of trust, etc., by installments or sinking fund.
ANNUAL PERCENTAGE RATE (APR) - The cost of credit as determined in accordance with Regulation Z of the Board of Governors of the Federal Reserve System for implementing the Federal Truth in Lending Act.
ANNUITY - A sum of money received or paid yearly or at other fixed periods.
ANTICIPATION - Affirms that value is created by the anticipated benefits to be derived in the future.
ANTICIPATORY BREACH - Advance notice of intention to violate the terms of a contract.
APPEAL - The review or rehearing by a higher court of a low (inferior) court's decision.
APPELLANT - The party appealing a court decision. Either party may appeal; hence, the appellant could have been either the plaintiff or the defendant in the trial court.
APPRAISAL - An estimate and opinion of value. An opinion or estimate of the fair market value of a property.
APPRAISER - One qualified by education, training, and experience, who is hired to estimate the value of real and personal property on the basis of experience, judgment, facts, and use of formal appraisal processes.
APURTENANT - Attached to or considered part of land, because of being considered necessary and incidental to the use of that land. Commonly applied to easements that are considered part of property.
“AS IS” - A seller’s statement that he or she is selling a home in its current condition and takes no responsibility for any improvements or repairs. Even if a contract contains an ‘as is’ clause, the broker must disclose all
material facts to the buyer(s)
ASSEMBLAGE - The same concept as Plottage, a process of increasing land’s assessed value by joining two or more adjoining lots to create a larger plot of land.
ASSESSED VALUE - The value a county assessor places on a property or structure to determine its tax basis.
ASSESSMENT - The valuation of property for the purpose of levying a tax, or the amount of tax levied.
ASSESSMENT ROLL - The establishment of a tax base for an area or community by listing all taxable properties and showing the assessed value of each one.
ASSESSOR - The official who has the responsibility of determining the assessed values.
ASSIGNEE - One to whom property is assigned or transferred.
ASSIGNMENT - A transfer to another of any property or right. The transfer of one's entire interest in property. Generally, the term is limited to intangible personal property (that is, stocks, bonds, promissory notes) and to leasehold estates.
ASSIGNMENT OF RENTS CLAUSE- A clause in a deed of trust or mortgage, providing that in the event of default, all rents and income from the secured property will be paid to the lender to help reduce the outstanding loan balance.
ASSIGNMENT OF RENTS - An assignment of future rents form property as security for a debt.
ASSIGNOR - One who assigns or transfers property.
ASSUMPTION - Acceptance of personal liability for another's debt or obligation. In the case of the sale of real estate, the buyer personally accepts and promises to pay off the existing deed of trust.
ASSUMPTION OF AGREEMENT - A contract by which a person agrees to pay a debt or obligation owed by someone else.
ASSUMPTION OF MORTGAGE OR DEED OF TRUST - The taking of title to property by a grantee in which he or she assumes liability for payment of existing note secured by a mortgage or deed of trust against the property.
ATTACHMENT - Seizure of property by court order before judgment, usually done to have it available in the event a judgment is obtained in a pending law suit. The actual or constructive seizure of property by court order during a lawsuit. The usual purpose is to hold the assets as security for the satisfaction of a judgment.
ATTACHMENT LIEN - A lien on property arising because of an attachment of that property.
ATTEST
1. To affirm to be true or genuine.
2. An official act establishing authenticity.
ATTORNEY-IN-FACT - An agent authorized to perform certain acts for another under a power of attorney. (See Power of Attorney.)
AVULSION - The sudden tearing away or removal of land by the action of water flowing over or through it.
BACK-END QUALIFICATION - A ratio of a buyer’s long-term debt obligations to their total gross income. 36% is acceptable.
BACKFILL - The replacement of excavated earth in a hole or against the side of a structure.
BALANCE SHEET - A financial statement showing a person's assets, liabilities, and net worth.
BALLOON PAYMENT - When the final payment on a note is greater than the preceding normal installments, the final installment is termed a balloon payment. An installment promissory note providing for the last payment to be much larger than any previous payment. By statute, any payment more than twice the smallest payment is a balloon payment, although in practice generally the term refers only to the last payment.
BANKRUPTCY - Will not eliminate all loans secured by real property.
BASE AND MERIDIAN - Imaginary lines used by surveyors from which they find, measure, and describe the location of lands.
BASE MOLDING - Molding used at the top of the baseboard.
BASE SHOE - Molding used at junction of baseboard and floor, sometimes called a carpet strip.
BASEBOARD - A board that goes around the room against the wall and next to the floor.
BASIS - Also referred to as “cost basis,” it is the dollar value assigned to a property at the time of purchase. The Internal Revenue Service uses this basis to determine any gain or loss the seller may incur by selling the property to another person. The basis is also used in calculating the depreciation for income tax paid on the sale of the property. Basis is the price of the home before making an adjusted cost basis, which takes into account the addition of any improvements, and deduction of all depreciation factors.
BATTEN - Narrow strips of wood or metal used to cover joints on the interior or exterior of a building; they are also used for decorative effect.
BLOCKBUSTING - The illegal practice of trying to lower property values.
BEAM - A horizontal structural member supporting a load.
BEARING WALL OR PARTITION - A wall or partition that supports any vertical load, in addition to its own weight.
BENCH MARKS - A location indicated on a permanent marker by surveyors.
BENEFICIARY
1. One entitled to benefit from a trust.
2. The lender on the security of a note and deed of trust. The creditor (lender) under a deed of trust
BENEFICIARY STATEMENT - (See Offset Statement.)
BENEFIT ASSESSMENT - The total amount of property owned and enhanced by any renovations, improvements or new construction.
BEQUEATH - To leave by will.
BEQUEST - Personal property that is given by the terms of a will. A gift of personal property by will.
BEST PREVAILING RATE - The term means that the purchase contract is contingent upon the buyer finding the best rate of interest.
BETTERMENT - An improvement on real property that increases the value and is considered a capital asset.
BILATERAL CONTRACT - A contract in which the consideration given by each party is a promise: that is, a promise for a promise.
BILL OF SALE - A written instrument given by the seller to the buyer to pass title to personal property.
BINDER - A written statement that binds the parties to an agreement until formal contracts can be drawn; an agreement to cover a down payment as evidence of good faith.
BLACKTOP - Asphalt paving used in streets and driveways.
BLANKET DEED OF TRUST - A deed of trust binding more than one parcel of property as security. It is frequently encountered in subdivisions, where every lot in the subdivision is bound by the same deed of trust. As the lots are sold, they are released from the deed of trust by a partial release provision.
BLANKET MORTGAGE - One mortgage or deed of trust that covers more than one piece of real property.
BLIGHTED AREA - An area in which real property is declining in value because of destructive economic forces.
BLOCKBUSTING - Influencing people to move out of a neighborhood because another group of people are moving in, causing a perception of lower home values.
BOARD FOOT - A unit of measurement for lumber: one foot wide, one foot long, one inch thick (144 cubic inches).
BONA FIDE - Good faith.
BONA FIDE PURCHASER (BFP) - A purchaser who pays fair value for property in good faith, and without notice of adverse claims.
BOND - An obligation under seal. Real estate bonds are issued on the security of a mortgage or deed of trust. A certificate representing a contract for the payment of money, often used to repay certain loans or held as security to ensure the performance of a stated act.
BOOK SALE - The sale of real property to the state, in name only, when the property owner is delinquent on his or her property taxes. A book sale allows the property owner to remain on the property, but gives him or her only 5 years to pay all delinquent taxes. An auction to sell the property occurs if the property owner does not pay his or her delinquent taxes within 5 years.
BOOK VALUE - An accounting term, which is the difference between cost and the total amount of depreciation that has been taken.
BOOT EXCHANGE – In a tax-deferred exchange property exchange, when properties are not of equal value, cash or non-like property must be added to the exchange and given to the disadvantaged property owner to make the exchange of the two properties equal in value. Personal residences are not allowed.
BRACING - Frame lumber nailed at an angle in order to provide stability to the structure.
BREACH - The breaking of or failure of duty, either by an act or omission. The violation of or failure to perform an obligation.
BREEZEWAY - A covered porch or passage, open on two ends, that connects the house and garage, or two parts of the house.
BRIDGING - Wood or metal pieces used to brace floor joists.
BROKER - An agent who earns income by arranging sales and other contracts. A real estate broker is an individual licensed by the state of California to arrange the sale or transfer of interests in real property for compensation.
BROKERAGE - The act of bringing people together for a mutually beneficial relationship or transaction.
BROKER'S TRUST FUND ACCOUNT - Withdrawals from this account may be made only by the broker.
BTU - British Thermal Unit; the quantity of heat required to raise the temperature of one pound of water one degree Fahrenheit.
BUILDING LINE - Often called a setback line, a building line is a line running a certain distance from the street, in front of which an owner cannot build. These lines are set by law.
BUILDING PAPER - A heavy waterproofed paper used as sheathing in exterior walls, or in roof construction as insulation and protection against moisture.
BUILT-INS - Cabinets and other features built in as a part of the house.
BUSINESS AND PROFESSIONS CODE - One of the 25 California codes containing the laws passed by the state legislature. It contains the statutes regulating the conduct of real estate brokers and establishes the Department of Real Estate.
BUSINESS OPPORTUNITY - A term used to describe a business including its stock-in-trade, fixtures, and goodwill.
BUYER’S AGENT - The agent representing only the buyer in a property transaction.
CALIFORNIA LAND TITLE ASSOCIATION - A trade organization consisting of the state’s title companies.
C.A.R. - Abbreviation for the California Association of Realtors.
C.C.& R. - Abbreviation for covenants, conditions, and restrictions. Often used synonymously with general plan restrictions on a subdivision.
CAL-VET LOAN (California Veterans Farm and Home Purchase Program) - A program, developed in 1921, administered by the State Department of Veterans Affairs for the direct financing of farms and homes for veterans who qualify. The funds for these loans come from the sale of voter-approved state bonds.
CAPITAL ASSESTS - Assets of a permanent nature used in the production of income. Examples would include land, buildings, and equipment.
CAPITAL GAIN - The gain recognized for federal and state income tax purposes when a taxpayer disposes of a capital asset.
CAPITALIZATION - In appraising, a method of determining value of property by considering net income and a reasonable percentage of return on the investment.
CAPITALIZATION RATE - The percentage rate or rate of interest considered a reasonable return on the investment. It is used in the capitalization method of determining value based upon net return. Dividing the net operating income by the sales price of an investment shows the earnings ratio on the selling price and is referred to as the cap rate.
CARET - California Association of Real Estate Teachers; a division of the California Association of Realtors.
CARPET STRIP - (See Base Shoe)
CASEMENT WINDOW - Windows set in frames of wood or metal that swing outward.
CASH FLOW - The new amount of cash a property produces when all cash income and other cash generated are added together and all cash expenses and other cash payments are deducted.
CAUSE OF ACTION - A legal right; facts giving rise to an enforceable claim.
CAVEAT EMPTOR - A Latin phrase meaning "let the buyer beware"; the legal maxim stating that the buyer must examine the goods or property and buy at his or her own risk.
CAVEAT VENDOR - A phrase meaning “it is the seller who must be aware.” This notion has replaced “caveat emptor,” leaving the seller responsible for disclosure and for making all necessary repairs to a property.
CERTIFICATE OF REASONABLE VALUE - The Veterans Administration’s written appraisal of the value (CRV) of a property.
CERTIFICATE OF REDEMPTION - A certificate issued by the county tax collector to a property owner when all monies from past due taxes have been collected.
CERTIFIED APPRAISAL - An appraisal of real property done by a certified, licensed appraiser.
CERTIORARI - The Supreme Court order indicating that the court has decided to exercise its discretion and accept a case offered on appeal. The court reviews only those select cases that it deems worthy of review.
CHAIN OF TITLE - A series of conveyances, encumbrances, and other instruments affecting the title from the time original patent was granted, or as far back as records are available. A history of the recorded ownership of real estate and claims against title to real estate.
CHANGE-IN-OWNERSHIP STATEMENT - In all property transfers, the new buyer must notify the county assessor or recorder of the acquisition for local taxation purposes within 45 days of recording the trust deed to the property.
CHATTEL - The old name for personal property.
CHATTEL MORTGAGE - A personal-property mortgage. (See Security Agreement)
CHATTEL REAL - In real estate, an estate less than a freehold estate, such as a lease.
CHATTELS
1. Personal property.
2. This term is sometimes used in a law to describe any interest in real or personal property other than a freehold.
CIRCUIT BREAKER - An electrical device that automatically interrupts an electrical circuit when an overload occurs. Circuit breakers can be reset and today are used instead of fuses.
CIVIL CODE - One of the 25 California codes containing the statutes passed by the state legislature. The most important code relating to contracts and real estate, the Civil Code defines the nature and requirements for contracts and real estate transactions, among its many other provisions.
CIVIL LAW - A system of jurisprudence, sometimes called Roman law, wherein all the laws are set forth in advance to regulate conduct (as opposed to common law, where the principles of law develop on a case-by-case basis). In California the term also refers to the law relating to and between individuals, as opposed to criminal law.
CIVIL RIGHTS ACT OF 1968 - The Federal act making discrimination based on sex, religion, race, color, handicap, national origin and familial status strictly prohibited. The Department of Housing and Urban Development (HUD) is responsible for enforcing the act.
CLAPBOARD - Boards that are used for siding and that are usually thicker at one edge.
CLIENT - A person represented by a broker or an attorney.
CLOSING COSTS - Money that must be paid at the closing of a property transfer beyond the actual purchase price for the property. Some costs include escrow services, recording of documents, broker’s commission and other such costs. Typically the party who pays these costs will be agreed upon between the buyer and seller.
CLOUD ON TITLE - A claim or document that affects title to real estate. The actual cloud may ultimately prove invalid, but its existence mars the title.
CLTA POLICY - The title insurance policy issued to homeowners and non-institutional lenders. The initials stand for the California Land Title Association, an organization that regulates and standardizes the provisions within title policies.
CODE OF CIVIL PROCEDURE - One of the 25 California codes that contain the statutes passed by the state legislature. It contains most of the procedural requirements for enforcing rights granted by other codes, including the procedures for evictions, foreclosures, and lawsuits.
CODICIL - An amendment to a will.
COLLAR BEAM - A beam that connects the pairs of opposite roof rafters above the attic floor.
COLLATERAL - Property subject to a security interest; property used as security for a debt. (See Security Agreement)
COLLATERAL SECURITY - The transfer of property of other valuables to ensure the performance of a principal agreement; an obligation attached to a contract to guarantee its performance.
COLLUSION - A secret agreement between two or more persons wishing to defraud another for a wrongful purpose or to obtain an object forbidden by law.
COLOR OR TITLE - That which appears to be a good title but, in fact, is not; for example, a forged deed. A document that appears to convey title, but in fact is ineffective, conveying no title at all. It is one of the requirements for adverse possession and easement by prescription.
COMBED PLYWOOD - A grooved building material used primarily for interior finish.
COMMERCIAL ACRE - A term applied to the remainder of an acre of land after the area devoted to streets, sidewalks, curbs, and so on has been deducted from the acre.
COMMERCIAL PAPER - Negotiable instruments used in business.
COMMINGLING - The mixing of different funds so that they can no longer be distinguished. In domestic law it refers to the combination of separate property and community property, so that the separate property and community funds can no longer be distinguished; in such cases all property is considered community property. For brokers it refers to the mixing of clients' money with the broker's separate bank accounts.
COMMISSION - An agent's compensation for performing the duties of his or her agency agreement. In the real estate business, it is usually a percentage of the selling price or a percentage of the lease or rents, for example. Reduction of a real estate commission for a listing contract is considered to be unethical.
COMMISSION - A real estate broker may receive a commission from both parties. (A) An agent's compensation for performing the duties of his or her agency agreement. In the real estate business, it is usually a percentage of the selling price or a percentage of the lease or rents. (B) A group of people officially authorized to perform certain duties or functions.
COMMITMENT - A pledge or a promise; a firm agreement.
COMMON INTEREST SUBDIVISION - A community where each owner will have his or her separate unit, apartment or space, and share interest in the common areas of the project. Condominiums, cooperatives, community apartment projects and planned unit developments all fall under this type of subdivision.
COMMON LAW - The body of law that grew from customs and practices developed and used in England. A body of unwritten law that developed in England from the general customs and usage. It was adopted in the United States and exercised by court decisions following the ancient English principles and the recorded law of a state.
COMMUNITY PROPERTY - Property owned in common by a husband and wife as a kind of marital partnership. All property acquired by a husband and wife living together, except separate property. (See Separate Property)
COMPACTION - Packing or consolidation of soil. When soil is added to a lot to fill in low places or to raise the level of the lot, it is often too loose to sustain the weight of buildings. Therefore, it is necessary to compact the added soil so that it will carry the weight of the building without danger of settling or cracking.
COMPARATIVE MARKET ANALYSIS - One of three methods in the appraisal process. A means of comparing similar type properties, which have recently sold, to the subject property.
COMPENSATION - The payment a real estate agent will receive for procuring a ready, willing and able buyer, who makes an accepted offer on property. Compensation can also be referred to as commission.
COMPETENT - Legally qualified or capable.
COMPETITIVE MARKET ANALYSIS - Obtaining and analyzing the sales prices of other similar properties in the same area as the property you are currently representing. Competitive market analysis may compare properties that have been sold up to 6months prior, as well as current listings.
COMPOUND INTEREST - Interest paid on the original principal and also on the accrued and unpaid interest that has accumulated as the debt matures.
CONCLUSIVE PRESUMPTION - A legal assumption that cannot be rebutted, and is therefore accepted as true and binding on the courts.
CONDEMNATION
1. The act of taking private property for public use by a political subdivision.
2. A declaration by proper governmental authorities that a structure is unfit for use. The taking of private property for public use through the exercise of the power of eminent domain.
CONDITION - A provision in a contract stating that the contract will not go into effect or that it will terminate upon the occurrence of some specified future event.
1. A restriction added to a conveyance that, upon the occurrence or non-occurrence of some act or event, causes the estate to be defeated.
2. A contractual provision that upon the occurrence or nonoccurrence of a stated act or event, an obligation is created, destroyed, or defeated.
CONDITION PRECEDENT - A condition that must occur before an estate is created or enlarged, or before some other right or obligation occurs.
CONDITION SUBSEQUENT - A condition that, upon its failure or nonperformance, causes the defeat or extinguishment of an estate, right, or obligation.
CONDITIONAL COMMITMENT - A loan commitment for a definite amount under certain terms and conditions. It is subject to an unknown purchaser's satisfactory credit rating.
CONDITIONAL PUBLIC REPORT - A temporary description of property and the subdivision where the property is located. This report is valid for six months, and can be renewed one time. A conditional report allows a developer to enter into a contractual agreement with a buyer, but escrow cannot close until the final public report has been released.
CONDITIONAL SALE CONTRACT - A contract for the sale of property whereby the seller retains legal title until the conditions of the contract have been fulfilled. The buyer has an equitable interest in the property. (See Security Agreement) A contract for the sale of property by which possession is delivered to the buyer, but title remains with the seller until full payment or the satisfaction of other stated conditions.
CONDITIONAL USE PERMIT - An exception to or relief from the application of a zoning ordinance, because of special authorization granted by the zoning authorities. The issuance rests on public policy benefits and prior authorization in the zoning ordinance.
CONDOMINUM - A system of individual ownership of units in a multifamily structure, combined with joint ownership of common areas of the structure and the land. The ownership of an individual unit in a multi-unit structure, combined with joint ownership of common walkways, land, and other portions of the property.
CONDUIT - Usually a metal pipe in which electrical wiring is installed.
CONFESSION OF JUDGMENT - Any entry of judgment upon the debtor's voluntary admission or confession.
CONFIRMATION OF SALE - A court approval of the sale of property by an executor, administrator, guardian, or conservator.
CONFORMING LOAN - Conventional loans that meet the underwriting standards for purchase by Fannie Mae or Freddie Mac. These loans usually require a very small down payment, lower than a conventional loan. Government backed loans do not require private mortgage insurance as this will be included in the specific mortgage program.
CONSIDERATION - Anything of value, or that is legally sufficient, given to induce someone to enter into a contract. The inducement for entering into a contract; usually money, services, or a promise, although it may consist of a legal benefit to the promisor or any legal detriment to the promisee.
CONSTRUCTION - The interpretation of an ambiguous term or provision in a statute or agreement.
CONSTRUCTIVE - A fiction imputed by law.
CONSTRUCTIVE EVICTION - A breach of the landlord's warranty of quiet enjoyment. Any acts by the landlord that substantially interferes with the tenant's use and enjoyment of the premises.
CONSTRUCTIVE NOTICE - Notice given by the public records; that which is considered equivalent to actual notice even though there is not actual notice.
1. Notice given by a recorded document.
2. Notice imputed by a law because a person could have discovered certain facts upon reasonable investigation, and a "reasonable man" in the same situation would have conducted such an investigation.
CONSUMER CREDIT PROTECTION ACT - A federal law that includes the Truth-in-Leading Law.
CONSUMER GOODS - Goods sold or purchased primarily for personal, family, or household purposes.
CONTINGENT - Conditional, uncertain, conditioned upon the occurrence or nonoccurrence of some uncertain future event.
CONTINUATION STATEMENT - A statement filed to extend the time limit on a financing statement that had been filed earlier.
CONTRACT OF SALE - (See Conditional Sale Contract)
CONTRACT RENT - the amount of rent a landlord is currently charging or receiving for a property, which may be less than the Economic Rent.
CONVENTIONAL LOAN - A loan that is made that is not federally insured or guaranteed. These loans provide the consumer with more flexibility and require less approval or processing time. Those people who need to obtain a larger loan, or a loan above the monetary limits of most government backed loans, must choose the conventional loan.
CONVERSION - Is the misappropriation or misuse of trust funds.
CONVERTIBLE ADJUSTABLE RATE - Allows the borrower to adjust to a fixed interest rate.
(MORTGAGE) CONVEYANCE
1. The transfer of the title of real property from one to another.
2. An instrument that transfers an interest in real property from one person to another. The transfer of title to real estate from one person to another.
COOPERATIVE APARTMENT - A form of ownership in which each individual apartment owner shares in a cooperative venture that entitles the owner to use, rent, or sell a specific apartment unit.
CORPORATION - A group or a body of persons recognized by law as an individual person with rights and liabilities distinct from those of the persons comprising it. Since the corporation is created by law, it may continue for any length of time that the law prescribes. An artificial entity given authority to conduct business and possess many of the rights of natural persons. One of the key characteristics is that of perpetual existence.
COST APPROACH - One of three methods used in the appraisal process. An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting them from the estimated accrued depreciation, and then adding the market value of the land.
COST BASIS - The original amount paid for property. (See Basis and Adjusted Cost Basis)
CO-TENANCY - Any form of joint ownership.
COUNTER-FLASHING - Flashing used on chimneys at roofline to cover shingle flashing and prevent moisture entry.
COUNTER-OFFER - The rejection of an offer by the submission of another offer, different in terms from the original offer. Any purported acceptance of an offer that introduces new terms is a rejection of that offer, and amounts to a counter-offer.
COUNTY ASSESSOR - An elected official who determines the tax basis for each property under his or her jurisdiction.
COVENANT - An agreement or a promise to do or not to do a particular act. Covenant: A contractual agreement whereby one of the parties promises to perform or to refrain from doing certain acts.
COVENANT OF QUIET ENJOYMENT - The promise a landlord makes to a tenant, implied by law, not to interfere in the possession or use of leased property.
COVENANT TO REPAIR - Legally implied responsibility of the landlord to make necessary repairs to leased properties
COVERSION - The wrongful appropriation of another's goods to one's own use; to change from one character or use to another.
1. In tort, an unauthorized claim of ownership over another's personal property.
2. In property, the change of character of property from real to personal, or vice versa.
CPM - Certified Property Manager; a member of the Institute of Real Estate Property management of the National Association of Realtors.
CRAWL HOLE - Exterior or interior opening permitting access underneath a building, as building codes may require.
CREDIT UNIONS - A growing source of funds for real estate loans.
CRV - These initials mean Certificate of Reasonable Value.
CURTAIL SCHEDULE - A list of the due dates and amounts by which the principal sum of an obligation will be reduced by partial payments.
DAMAGES - The indemnity recoverable by a person who has sustained an injury to either his or her person, property, or rights through the act or default of another. Compensation ordered by the courts for the loss of or injury to one's person or property.
DEALER - A person who holds property primarily for sale to his or her customers in the ordinary course of his or her business.
DEBT SERVICE - The sum of money needed each payment period to amortize the loan or loans.
DEBTOR
1. A party who "owns" the property that is subject to a security interest.
2. A person who owes a debt
DECK - Usually an open porch on the roof or another part of the structure.
DECLARATORY RELIEF - A court's decision on the rights of the parties in a question of law, without ordering anything to be done.
DEDICATION - An appropriation of land by its owner for some public use and accepted for such use by authorized public officials on behalf of the public. A gift of privately owned land to the public or for public use. It may be voluntary or involuntary.
DEED - A written instrument that, when properly executed and delivered, conveys title.
DEED OF TRUST - A security instrument transferring title to property to a third person (trustee) as security for a debt or other obligation.
DEFAULT
1. Failure to fulfill a duty or promise or to discharge an obligation.
2. Omission or failure to perform any act. Failure to perform a legal duty or to discharge a promise.
DEFAULT JUDGMENT - A judgment obtained because the defendant failed to appear and defend his case.
DEFEASANCE CLAUSE - The clause in a mortgage or deed of trust that gives the borrower the right to redeem his or her property upon the payment of his or her obligations to the lender.
DEFEASIBLE - Capable of being defeated. A defeasible estate is one that has a condition attached to the title, which if broken causes the termination of that estate.
DEFENDANT - The party being sued in a lawsuit; the party against whom an action is filed.
DEFERRED MAINTENANCE - Maintenance and accumulated repairs that have been postponed.
DEFICIENCY JUDGEMENT- A judgment given for the unpaid balance of a debt remaining after the surety is sold. A court decree holding a debtor personally liable for the shortage or insufficiency realized on the sale of secured property. The debtor owes the difference between the sale price of the property and the amount of the secured debt.
DELIVERY (OF A DEED) - The unconditional, irrevocable intent of a grantor immediately to divest (give up) an interest in real estate by a deed or other instrument.
DEMISE - The conveyance of real estate to a person for use during a set period of time. A lease will demise property to the tenant for the duration of the contract.
DEPOSIT - Money given to another as security to ensure the performance of a contract. The money is usually intended to be applied toward the purchase price of property, or forfeited on failure to complete the contract.
DEPOSIT RECEIPT - A contract used in the real estate business that includes the terms of the contract and acts as a receipt for "earnest money" to bind an offer for property by the prospective purchaser. The name given to most real estate contracts containing the terms of the sale of real estate, and receipt for earnest money (deposited).
DEPRECIATION - A loss in value from any cause. This loss in value to real property may be caused by age or physical deterioration, or by functional or economic obsolescence. A decrease in value of an asset, which is used in computing property value for tax purposes.
DEPRECIABLE BASIS - Is based on the original purchase price minus the land value.
DESIST AND REFRAIN ORDER (D&R) - The Real Estate Commissioner is empowered by law to order a person or company to refrain from committing any act in violation of the Real Estate Law.
DETERIORATION - The process of gradual worsening or depreciation.
DEVISE - A gift of real property by deed.
DEVISEE - One who receives real property under a will.
DICTUM - A written observation, remark, or opinion by a judge to illustrate or suggest an argument or rule of law not incidental to the case at hand, and which, therefore, although persuasive, is not binding on the judge.
DIMINISHED CAPACITY - A state of mind that causes an imbalance between the perceived value of the real property investment and actual return on investment of the real property investment. Usually this happens when a property purchase is made impulsively and not carefully thought out; i.e., the investor “fell in love” with the property.
DIMINISHING RETURNS - At some threshold, building more units or larger buildings creates a higher cost per unit.
DIRECTIONAL GROWTH - The direction in which the residential sections of a city seem destined or determined to grow.
Disclosure - The act of telling your client or the third party all required information regarding a property, transaction or financial aspect of the real estate transfer.
DISCLOSURE STATEMENT - A statement that the Truth-in-Lending Law requires a creditor to give a debtor showing the finance charge, annual percentage rate, and other required information.
DISCOUNT - To sell a promissory note before maturity at a price less than the outstanding principal balance of the note at the time of sale. It may also be the amount deducted in advance by the lender from the face of the note.
DISCOUNT POINTS - A fee charged by the lender when making an FHA or VA loan to offset the lower interest rate the lender will receive compared with conventional loan interest rates. One point is equal to 1 percent.
DISCOUNT RATE - The interest rate that is charged on money borrowed by banks from the Federal Reserve System.
DISCOUNTED TRUST DEED - An investment in this kind of deed can be a perfect investment. A discounted trust deed usually occurs when a seller carries back a note and deed of trust. If the seller wishes to sell the note, the investor or broker will buy the note at a discount.
DISCRIMINATORY CONDUCT - The DRE Regulations state that discriminatory conduct is a basis for disciplinary action.
DISSOLUTION OF MARRIAGE - A divorce.
DISTRICT COURT - The main trial court in the federal court system and the lowest federal court. It has jurisdiction in civil cases where the plaintiffs and defendants are from different states (diversity of citizenship) and the amount in controversy is over $10,000, and in cases involving a federal question.
DIVESTMENT - The elimination or removal of a right or title, usually applied to the cancellation of an estate in land.
DOCUMENTARY TRANSFER TAX - A tax on the transfer of property from one person to another. This tax is payable to the jurisdiction in which the property is located (either the city or the county). The documentary transfer tax in California is 55 cents per $500, or $1.10 per every $1,000, of the purchase price of the property.
DOMICILE - A person's permanent residence.
DOMINANT TENEMENT - The tenement obtaining the benefit of an easement appurtenant. That parcel of land that benefits from an easement across another parcel of property (servient tenement).
DONEE - The person to whom a gift is made.
DONOR - The person who makes a gift.
DOUBLE ESCROW - An escrow that will close only upon the condition that a prior escrow is consummated. The second escrow is contingent upon and tied to the first escrow. While double escrow is not illegal, unless there is full and fair disclosure of the second escrow, there may be a possibility of fraud or other actionable conduct by the parties.
DOWER - The right that a wife has in her husband's estate at his death. Dower has been abolished in California.
DUAL AGENCY - A situation where the broker will represent both the buyer and seller in the same transaction.
DUE PROCESS OF LAW - A constitutional guarantee that the government will not interfere with a person's private property rights without following procedural safeguards prescribed by law.
DUE-ON-ENCUMBRANCE CLAUSE - A clause in a deed of trust or mortgage that provides that upon the execration of additional deeds of trust or other encumbrances against a secured parcel of property, the lender may declare the entire unpaid balance of principal and interest due and owing.
DUE-ON-SALE CLAUSE - An acceleration clause that grants the lender the right to demand full payment of the mortgage or deed of trust upon sale of the property. A clause in a deed of trust or mortgage that provides that if the secured property is sold or transferred, the lender may declare the entire unpaid balance immediately due and payable. Its use has been severely limited by recent court decisions. Also called an alienation clause.
DURESS - Unlawful constraint by force or fear.
DUTY OF CARE - This means that the principal may not sabotage the agent in securing a ready, willing and able buyer for the property.
E.I.R. - Abbreviation for Environmental Impact Report.
EARNEST MONEY DEPOSIT - A deposit of money paid by a buyer for real property as evidence of good faith. Cannot be given back to the buyer unless he obtains written permission from the seller.
EARNS ON SALES PRICE RATIO - Dividing the net operating income by the sales price of an investment property shows the earnings ratio on the selling price and is referred to as the capitalization (or cap) rate.
EARTHQUAKE SAFETY DISCLOSURE - The form that poses seven questions regarding a property to help a buyer understand its relative safety in the event an earthquake should hit.
EASEMENT - A right, privilege, or interest that one party has to use the land of another. Example: A right of way. A legal right to use another's land for one's benefit or the benefit of one's property (right-of-way).
EASEMENT APPURTENANT - An easement created for the benefit of a particular parcel of property. There is both a dominant and a servient estate. The easement is annexed to and part of the dominant property.
EASEMENT IN GROSS - An easement that benefits a particular individual, not a parcel of property. Involves only a servient estate. A public utility easement is an example.
EASY QUALIFIER MORTGAGE - This may be referred to as "low doc" or "no doc" loan.
EAVES - The lower projecting edge of a roof over the wall.
ECONOMIC LIFE - The remaining useful life of an improvement or structure; that period during which an improvement will yield a return on the investment. For residential property, the useful life of an improvement is 27.5 years, while nonresidential property has a useful life of 39 years.
ECONOMIC OBSOLESCENCE - The loss in value to property due to external causes such as zoning or a deteriorating neighborhood. It is also referred to as social obsolescence.
ECONOMIC RENT- the amount of rent a landlord could charge for a specific property in an open market.
ECONOMY OF SCALE - The principle where building more units will decrease the cost per unit to build.
EFFECTIVE GROSS INCOME - The amount of net income that remains after the deduction from gross income of vacancy and credit losses.
EGRESS - Exit; the act or avenue or leaving property.
EMBLEMENTS - Things that grow on the land require annual planting and cultivation.
EMINENT DOMAIN - The right of the government and certain others, such as public utilities, to acquire property for public or quasi-public use by condemnation, upon payment of just compensation to the owner. The constitutional or inherent right of a government to take private property for public good upon the payment of just compensation.
ENCROACHMENT - The projection of a structure onto the land of an adjoining owner. A structure or natural object that unlawfully extends into another's property.
ENCUMBRANCE - Any claim, interest, or right improperly possessed by another that may diminish the true owner's rights or value in the estate. Examples include mortgages, easements, or restrictions of any kind. A claim, lien, or charge on property.
ENDORSEMENT – (See Indorsement)
ENVIRONMENTAL HAZARDS DISCLOSURE - Telling a buyer of any environmental hazards they know or suspect may exist on the property, or nearby areas.
ENVIRONMENTAL IMPACT REPORT - A report that must be prepared whenever any agency or individual considers a project that may have a significant impact on the environment, as directed by the California Environmental Quality Act.
EQUAL CREDIT OPPORTUNITY ACT - Prohibits discrimination amongst lenders.
EQUAL HOUSING OPPORTUNITY - Prohibits discrimination in the listing, sale, lease, rental or financing of real property due to race, creed, religion, sex, marital status or handicap. Should apply exactly the same in all real estate.
EQUAL PROTECTION - The Fourteenth Amendment to the U.S. Constitution and similar provisions in the California Constitution require each citizen to receive equal protection of the laws. There are no minimum standards of protection; all equally situated individuals must simply be treated equally. (The due process clause of the Constitution imposes certain minimum standards of protection.)
EQUITY
1. The interest or value that on owner has in real property over and above the liens against it.
2. A part of our justice system by which courts seek to supplement the strict terms of the law to fairness under the circumstances, rather than on fixed legal principles or statutes.
3. Ownership in property, determined by calculating the fair market value less the amount of liens and encumbrances.
EQUITY BUILD-UP - The increase of the owner's equity due to mortgage principal reduction and value appreciation.
EQUITY OF REDEMPTION - The right to redeem property during the foreclosure period. In California the mortgagor has the right to redeem within 12 months after the foreclosure sale.
EROSION - The wearing away of the surface of the land by the action of wind, water, and glaciers, for example.
ESCALATOR CLAUSE - A clause in a contract that provides for the upward or downward adjustment of certain items to cover the specific contingencies set forth. A clause in a promissory note, lease, or other document that provides that upon the passage of a specified time or the happening of a stated event, the interest rate shall increase.
ESCHEAT - The reversion of property to the state when there are no devisees or heirs capable of inheritance. Reversion of property to the state upon the death of an owner who has no heirs able to inherit.
ESCROW - The deposit of instruments and funds with a third neutral party with instructions to carry out the provisions of an agreement or contract. A complete or perfect escrow is one in which everything has been deposited to enable carrying out the instructions. The neutral third party (stakeholder) who holds deeds or other documents pursuant to instructions for delivery upon completion or occurrence of certain conditions.
ESCROW COMPANY - A neutral entity holding documents and funds in a transfer of real property, acting for both parties pursuant to instructions. An escrow agent or company may be: a real estate broker; bank; savings and loan institution; escrow company; title insurance company; or an attorney. Real estate agents may only act as escrow agents if they are the buyer or seller’s broker.
ESTATE - The degree, quantity, nature, and extent of the interest that a person has in real property.
1. Ownership interest in real estate.
2. The quality and quantity of rights in property
ESTATE AT SUFFERANCE - Tenancy created when the lessee is in wrongful possession of property (even if the initial possession was lawful).
ESTATE AT WILL - The occupation of real property by a tenant for an indefinite period. One or both parties may terminate it at will. A leasehold tenancy, which at common law could be terminated by either party at any time, without advance notice. Thirty days' notice is now required to terminate this type of estate in California.
ESTATE FOR LIFE - A freehold estate whose duration is measured by and limited to the life or lives of one or more persons.
ESTATE FOR PERIOD TO PERIOD - A leasehold tenancy that continues indefinitely for successive periods of time, until terminated by proper notice. When the periods are one month in duration, it is often called a month-to-month tenancy.
ESTATE FOR YEARS - A lease that will expire at a definite time or date. A leasehold tenancy of a fixed duration, being a definite and ascertainable period of a year or any fraction or multiple thereof. It has a definite beginning and ending date, and hence a known and definite duration.
ESTATE OF INHERITANCE - An estate that may go to the heirs of the deceased. All freehold estates are estates of inheritance, except life estates.
ESTATE TAX - A tax applied to estates worth more than $600,000.
ESTOP - To ban, stop, or impede.
ESTOPPEL - A doctrine whereby one is forbidden to contradict or deny his or her own previous statement, act, or position. The doctrine that prevents a person from exercising a legal right, because that person previously acted in an inconsistent manner, so that a third person detrimentally relied on the earlier acts. An agency is created this way when an individual knowingly allows another individual to act as their agent without authorizing such acts.
ET AL - Abbreviation meaning and others (other person).
ET UX - Abbreviation meaning and wife.
ETHICS - A standard of conduct that all members of a given profession owe to the public, clients or patrons, and to other members of that profession. Refers to a branch of philosophy that deals with moral science and moral principles. It is a debatable subject and cannot be legislated. It is based on what each individual feels is good or bad.
ETHNIC - The seller of a property is not allowed to ask the buyer their ethnic background.
EVICTION - Dispossession by legal process, as in the termination of a tenant's right to possession through re-entry or other legal proceedings.
EVIDENCE - All relevant information, facts, and exhibits admissible in a trial.
EX PARTE - By only one party or side. For example, an injunction obtained by evidence presented by only one side, without notice to the other parties.
EXCEPTION - (See Reservation)
EXCHANGE - A reciprocal transfer of properties between two or more parties.
EXCLUSIVE AGENCY - A contract hiring the broker as the exclusive agent for the seller. If anyone, except the seller, finds a buyer, the broker has earned the commission.
EXCLUSIVE AGENCY LISTING - A written agreement giving one agent the exclusive right to sell property for a specified period of time, but reserving the right of the owner to sell the property himself or herself without liability for the payment of a commission.
EXCLUSIVE AUTHORIZATION TO ACQUIRE REAL PROPERTY LISTING - The contract between a broker and buyer to find property that meets the buyer’s specifications. The buyer will then pay the broker a commission for services rendered. With this type of listing, the broker is the agent of the buyer, not the seller.
EXCLUSIVE RIGHT TO SELL AGENCY - A contract hiring the broker as the only person authorized to sell property. If anyone, including the seller, finds a buyer, the broker earns the commissions.
EXCLUSIVE-RIGHT-TO-SELL LISTING - A written agreement giving one agent the exclusive right to sell property for a specified period of time. The agent may collect a commission if the property is sold by anyone, including the owner, during the term of the listing agreement.
EXCULPATORY CLAUSE - A provision in leases and other instruments seeking to relieve one party of liability for his negligence and other acts. In residential leases such clauses are invalid, and in other leases the courts have limited the landlord's ability to escape liability for intentional acts, and for acts of affirmative negligence.
EXECUTE - To complete, make, perform, do or to follow out. To sign a document, intending to make it a binding instrument. The term is also used to indicate the performance of a contract.
EXECUTION LIEN - A lien arising because of an execution on property. A judgment is not self-executing; however, when a writ of execution has been obtained, the sheriff will levy (seize) property, which creates a lien on the property.
EXECUTOR - A person named by the testator of a will to carry out its provisions as to the disposition of the estate. A personal representative appointed in a will to administer a decedent's estate.
EXPANSIBLE HOUSE - A home designed for expansion and additions in the future.
EXPANSION JOINT - A fiber strip used to separate units of concrete to prevent cracking due to expansion as a result of temperature changes.
FACADE - The face of a building, especially the front face.
FACTORED BASE YEAR VALUE (FBYV) - Is a base year value that has been increased by inflation factor adjustments.
FAIR EMPLOYMENT AND HOUSING ACT (FEHA) - A California civil code preventing discrimination against tenants based on marital status, race, color, religion, sex, national origin or ancestry.
FAIR HOUSING AMENDMENTS ACT OF 1988 - A federal law preventing landlords from discriminating against physical handicap, familial status and age of tenants.
FAIR MARKET VALUE - The amount of money that would be paid for a property offered on the open market for a reasonable length of time with both the buyer and the seller knowing all uses to which the property could be put and with neither party being under pressure to buy or sell. See market Value.
FALSE PROMISE - A statement used to influence or persuade.
FANNY MAE - The Federal National Mortgage Association (FNMA).
FARM - It is a specific geographical location in which an agent walks every month in order to obtain listings.
FARMER MAC - Also known as the Federal Agricultural Mortgage Corporation, is a stockholder-owned, publicly-traded company that was chartered by the United States federal government in 1988 to serve as a secondary market in agricultural loans such as mortgages for agricultural real estate and rural housing.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) - An independent agency of the United States federal government that preserves public confidence in the banking system by insuring deposits.
FEDERAL FAIR HOUSING ACT - Was established under Title VIII of the United States Civil Rights Act of 1969. It was amended in 1988. It was created to provide fair housing throughout the United States.
FEDERAL HOME LOAN BANK (FHLB) - A district bank of the Federal Home Loan Bank System that lends only to savings and loan associations who are members.
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - A federal corporation that provides savings and loan associations with a secondary mortgage money market for loans. It is also known as Freddy Mac.
FEDERAL HOUSING ADMINISTRATION - An agency of the federal government that insures mortgage (FHA) loans.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - A federal corporation that provides lenders with a secondary mortgage money market.
FEDERAL RESERVE SYSTEM - The federal banking system of the United States under the control of a central board of governors (Federal Reserve Board). It involves a central bank in each of 12 geographical districts, with broad powers in controlling credit and the amount of money in circulation.
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION (FSLIC) - A federal corporation that insures deposits in savings and loan associations.
FEE - An estate of inheritance in real property for life.
FEE SIMPLE - An estate in real property by which the owner has the greatest possible power over the title. In modern use it expressly establishes the title of real property with the owner without limitation or end. He or she may dispose of it by sale, trade, or will, as he or she chooses. In modern estates the terms "Fee" and "Fee Simple" are substantially synonymous.
FEE SIMPLE ABSOLUTE - The highest estate known at law. A freehold estate of indefinite duration, incapable of being defeated by conditions or limitations. Sometimes simply called fee or fee estate.
FEE SIMPLE DEFEASIBLE - A fee simple estate to which certain conditions or limitations attach, such that the estate may be defeated or terminated upon the happening of an act or event. Also called a fee simple subject to condition subsequent estates.
FEE SIMPLE SUBJECT TO A CONDITION SUBSEQUENT - A fee simple defeasible estate that requires the holder of the future interest to act promptly to terminate the present interest, in order for that interest to be terminated.
FEHA (Fair Employment and Housing Act) – A California civil code preventing discrimination against tenants based on marital status, race, color, religion, sex, national origin or ancestry .
FHA (Federal Housing Administration) - For people who find that purchasing a home is simply out of their reach, in 1934 the government established the FHA to insure loans made by approved lending institutions (such as banks or mortgage companies). The loans made must follow all FHA guidelines. The FHA does not loan money. The FHA loan may be paid off at any time without a penalty. The buyer or the seller may pay discount points on a FHA loan. The down payment on a FHA loan is usually LESS than the down payment on a conventional loan.
FIDUCIARY - A person in a position of trust and confidence, as between principal and broker. A fiduciary may not make a profit from his or her position without first disclosing it to the beneficiary.
FIDUCIARY RESPONSIBILITY - The agent will look out for the client’s best interests in all property transfer dealings, putting the client’s needs and wants ahead of his or her own, and remaining loyal in all dealings to the client.
FILTERING DOWN - As new developments are constructed, or more prestigious areas of town are developed, the wealthy will relocate to these areas, leaving their old homes for persons with lesser economic means.
FINANCIAL FREEDOM - The freedom to make purchases with no restraint.
FINANCING STATEMENT - The instrument filed to perfect the security agreement and give constructive notice of the security interest, thereby protecting the interest of the secured parties. (See Security Agreement; Security Interest; and Secured Party.) The security interest in personal property. It is analogous to a mortgage on real property, except that it secures personal property. Under the U.C.C., it may be filed in
Sacramento with the secretary of state.
FINDER'S FEE - Money paid to a person for finding someone interested in selling or buying property. To conduct any negotiations of sale terms, the finder must be a licensed broker or he violates the law.
FINISH FLOOR - The final covering on the floor, such as wood, linoleum, cork, or carpet.
FIRE HAZARD AREAS - A region or area specifically identified and mapped out by the state and the Department of Forestry as being prone to possible elevated fire danger.
FIRE STOP - A solid, tight closure of a concealed space placed to prevent the spread of fire and smoke through the space.
FIRPTA (FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT) - When people outside the United States wish to invest money in property located in California, there are different federal and state tax laws that apply.
FIRST AMENDMENT - The constitutional amendment guaranteeing freedom of speech, press, assembly, and religion.
FISCAL YEAR - A year used for business or accounting purposes; the fiscal year may have different start and end dates from the calendar year.
FIXED-RATE LOAN - As its name suggests, is a loan where the interest rate is fixed for a given period of time. These are used for long-term amortized loans.
FIXTURE - An item of personal property that has been so attached to real property as to be considered part of that real property.
FIXTURES - Items that were originally personal property but that have become part of the real property, usually because they are attached to the real property more or less permanently. Examples: Store fixtures built into the property and plumbing fixtures.
FLASHING - Sheet metal or similar material used to protect a building from water seepage.
FLIPPER PROPERTY - Any property bought for immediate resale and profit.
FLOOD HAZARD AREAS - A region or area specifically identified and mapped out by the Federal Emergency Management Agency as being prone to possible flooding.
FOOTING - The base or bottom of a foundation wall, pier or column.
FORCIBLE DETAINER - Wrongful retention of property by actual or constructive force.
FORCIBLE ENTRY - Entry into property without the consent of the owner, by acts that constitute more than mere trespass.
FORECLOSURE - A legal proceeding to enforce a lien on such as a mortgage or deed of trust. The process by which secured property is seized and sold to satisfy a debt. A mortgage or involuntary lien must be sold by a court-ordered sale; a sale under a deed of trust may be either by court action or through a private trustee's sale.
FOREFEITURE - Loss of a legal right, interest, or title by default.
FORMAL WILL - A will signed by the testator in the presence of two or more witnesses, who must themselves sign the will.
FOUNDATION - That part of a structure or wall wholly or partly below the surface of the ground that is the base or support, including the footings.
FOURTEENTH AMENDMENT - The constitutional amendment that directs that no state can deprive a person of life, liberty, or property without due process or equal protection of the law.
FRANCHISE TAX - California’s tax on corporations.
FRAUD - Deception that deprives another person of his her rights or injures him or her. False representation or concealment of material facts that induces another justifiably to rely on it to his detriment.
FREEHOLD - An estate of fee. An estate in real property that is either a life estate or an estate in fee.
FRONT-END QUALIFICATION - A ratio of a buyer’s housing costs to his or her gross income. 28% is acceptable.
FRONT FOOT - Property measurement for sale or valuation purposes. The property measurement is along the street line, and each front foot extends to the depth of the lot. It is usually used in connection with commercial property.
FROSTLINE - The depth of frost penetration in the soil.
FRUCTUS - Fruits, crops, and other plants. If the vegetation is produced by human labor, such as crops, it is called fructus industrials; vegetation growing naturally is called fructus naturales.
FULL PERFORMANCE OF ESCROW - Escrow is terminated is by carrying out all instructions, disbursing all funds, and recording and delivering all documents to the involved parties.
FURRING - Strips of wood or metal fastened to wall to even it, form air space, or to give the wall greater thickness.
FUTURE ADVANCES - Future (additional) loans made by a lender and secured under the original deed of trust. The advances may be either optional or obligatory, but the deed of trust or mortgage must provide in the security instrument that it will cover any such future advances.
FUTURE INTEREST - An estate that does not or may entitle one to possession or enjoyment until a future time.
GABLE ROOF - Pitched roof with sloping sides.
GAMBREL ROOF - A curb roof, having a steep lower slope with a flatter upper slope above.
GARNISHMENT - A legal process to seize a debtor's property or money in the possession of a third party.
GENERAL PLAN RESTRICTIONS - Covenants, conditions, and restrictions placed on a subdivision or other large tract of land, designed to benefit and burden each lot in the tract.
GIFT - A voluntary transfer of property without consideration.
GIFT DEED - A deed for which there is no material consideration.
GIRDER - A beam used to support other beams, joists, and partitions.
GOOD FAITH ESTIMATE - An estimate of all closing costs given to the buyer.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - A federal corporation that assists in financing special assistance programs for federally aided housing. The corporation is also known as Ginny Mae.
GRADE - Ground level at the foundation.
GRADUATED LEASE - Usually a long-term lease that provides for adjustments in the rental rate on the basis of some future determination. For example, the rent may be based upon the result of appraisals to be made at predetermined times in the future.
GRANT
1. To transfer.
2. A deed.
3. When used in a deed, a technical term implying certain warranties. A transfer or conveyance of real estate.
GRANT DEED - The most commonly used property deed to transfer title in California is the grant deed. There are two guarantees contained in a grant deed:
1. The grantor states that the property has not been sold to anybody else.
2. The grantor states that the property is not burdened by any encumbrances apart from those the seller has already disclosed to the buyer.
GRANTEE - The buyer; a person to whom a grant is made.
GRANTOR - The seller; one who signs a deed. The seller or person who executes a grant.
GRID - A chart used in rating the borrower, property, and neighborhood.
GROSS INCOME - Total income before expenses are deducted.
GROSS LEASE - A lease in which the landlord pays for the operating expenses on a property (which may include taxes, maintenance and repairs).
GROSS RENT MUTIPLIER - A number that reflects the ratio between the sales price of a property and its gross monthly rents. It is used in the income approach of appraising property.
GROUND LEASE - An agreement leasing land only, without improvements, ordinarily with the understanding that improvements will be placed on the land by the tenant.
GROUND RENT
1. Earnings from the ground only.
2. Earnings of improved property after an allowance are made for earnings of improvements.
3. A perpetual rent that a grantor in some states may reserve to himself or herself and his or her heirs when he or she conveys real property.
GROWTH EQUITY MORTGAGE - This type of mortgage will be paid back faster than the typical 30 year fully amortized mortgage.
GUARANTEED NOTE - A permit must be received from the real estate commissioner before being allowed to sell a guaranteed note.
GUARANTEE OF TITLE - An assurance that a title to property is clear.
HANDICAP - Includes but is not limited to a physical or mental impairment that substantially limits one or more of a person's major life activities.
HARD MONEY LOAN - A type of trust deed or loan given in exchange for cash. The borrower can utilize the money for any purpose; it need not be used to purchase property.
HAZARD INSURANCE - Insurance that protects the owner and lender against physical hazards to property such as fire and windstorm damage.
HAZARDOUS WASTE DISCLOSURE - Buyers and tenants must be informed of hazardous waste disposal on or near their property. Health and Safety code Section 25359.7(a) requires that this disclosure be made if there is evidence of hazardous waste disposal or if there is reasonable cause to believe there may have been dumping on the property at one time.
HEADER - A beam placed perpendicularly to joists and to which joists are nailed in the framing of openings such as windows, doors, and stairways.
HEIRS - Persons who succeed to the estate of someone who dies intestate (without a will). It sometimes indicates anyone who is entitled to inherit a decedent's property.
HEREDITAMENT - A term usually referring to real estate and all that goes with it as being incidental.
HIGHEST AND BEST USE - An appraisal phrase that means that use of real property that is most likely to produce the greatest net return on land or buildings, or both, over a given period of time.
HIP ROOF - A pitched roof with sloping sides and ends.
HOA - Home Owners Association
HOME INSPECTION NOTICE - All borrowers on residential homes financed through FHA financing, or on HUD properties with 1-4 units, must sign a home inspection notice called The Importance of a Home Inspection.
HOLDEN ACT - also known as the Housing Financial Discrimination Act, requires borrowers to be notified of the prohibition against discriminatory practices by lenders and the rights that borrowers have under the law and specifically states that "redlining" is illegal in California.
HOLDER IN DUE COURSE - One who has taken a negotiable note, check, or bill of exchange in due course
1. before it was past due;
2. in good faith;
3. without knowledge that it has been previously dishonored and without notice of any defect at the time it was negotiated to him or her;
4. for value. Someone who acquires a negotiable instrument in good faith and without any actual or constructive notice of defect. The acquisition must occur before the note's maturity. Such a holder takes the note free from any personal defenses (such as failure of consideration, fraud in the inducement) that may be available against the maker
HOLDOVER TENANCY - A tenancy where the tenant remains in possession of the property after the lease term has ended.
HOLOGRAPHIC WILL - A will that is entirely written, dated, and signed by the testator in the testator's handwriting. No witnesses are needed.
HOMEOWNER'S EXEMPTION - The homeowner’s exemption allows the owner to be exempt of the first $7,000 of the property’s full cash value. This exemption is only allowed for primary residences, which may include townhouses, condominiums and residences. It is not available for vacation properties or income properties that are not the primary residence. The homeowner must obtain a form from the county tax assessor, and submit it by February 15 of the current tax year, to be eligible for the $7,000 exemption.
HOMESTEAD
1. A home upon which the owner or owners have recorded a Declaration of Homestead, as provided by California statutes, that protects the home against judgments up to a specified amount.
2. A probate homestead is a similarly protected home property set aside by a California probate court for a widow or minor children. A special, limited exemption against certain judgments available to qualified homeowners.
HUNDRED PERCENT LOCATION - A retail business location considered the best available for attracting business.
ILLUSORY CONTRACT - An agreement that gives the appearance of a contract, but in fact is not a contract because it lacks one of the essential elements.
IMPERFECT MARKET - A market where traditional principles of supply and demand do not apply.
IMPLIED - Not expressed by words, but presumed from facts, acts, or circumstances.
IMPOUND ACCOUNT - A trust account established by the lender to pay property taxes and hazard insurance.
INCOME APPROACH - An appraisal technique used on income producing properties. Also known as the capitalization approach.
INCOME TAX - The cost to remodel vacant property may be deducted from the income tax.
INCOMPETENT - Someone incapable of managing his or her own affairs by reason of age, disease, weakness of mind, or any other cause.
INCREMENT - Any increase.
1. A term frequently used to refer to the increased value of land because of population growth and increased wealth in the community.
2. "Unearned increment" is used in this connection since the values increased without effort on the part of the owner.
INDEBTEDNESS - A debt or obligation.
INDEMNIFICATION - Compensation to a person who has already sustained a loss. For example, insurance payment for a loss under policy.
INDIRECT LIGHTING - A method of illumination in which the light is reflected from the ceiling or other object outside the fixture.
INDORSEMENT
1. The act of signing one's name on the back of a check or a note, with or without further qualification.
2. The signature described above.
INFLATION - Inflation is an increase in price that is representative of the economy as a whole.
INFLATIONARY HEDGE - Real estate is considered to be the best bet against inflation.
INGRESS - The act of or avenue for entering property.
INHERIT - To take property through a deceased's estate.
INJUNCTION - An order issued by a court to restrain one or more parties to a suit or proceeding from performing an act deemed inequitable or unjust in regard to the rights of some other party or parties in the suit or proceeding. A court order prohibiting certain acts, or ordering specific acts.
INSTALLMENT - A partial payment of a debt due in a series of payments.
INSTALLMENT NOTE - A note that provides that payments of a certain sum or amount be paid in more than one payment on the dates specified in the instrument.
INSTALLMENT SALES CONTRACT - Also known as an agreement of sale or a land contract.
INSTALLMENT SALE METHOD - A method of reporting capital gains by installments for successive tax years to minimize the impact of capital gains tax in the year of the sale.
INSTITUTIONAL LENDER - Lenders who make a substantial number of real estate loans, such as banks, savings and loan associations, and insurance companies.
INSTRUMENT - A written legal document created to affect the rights of the parties.
INTEREST - The charge or cost for the use of money.
INTEREST RATE - The percentage of a sum of money charged for its use.
INTEREST RATE CAP - The majority of all the mortgages do contain an interest rate cap.
INTERPLEADER - A court proceeding initiated by a stakeholder, such as a broker or escrow agent. This decides the ownership or disposition of trust funds.
INTESTATE - A person who dies without a will.
INTEREST DEDUCTION - The amount of a home equity loan that qualifies for an interest deduction cannot exceed $100,000.00.
INVESTOR - A person who holds property primarily for future appreciation in value for federal and state income tax purposes.
INVITEE - A person who enters another's land because of an express or implied social invitation, such as a social guest. The term also covers certain government workers who enter someone's land, such as police officers and firefighters. Classification of such status was revoked by a recent court case.
INVOLUNTARY CONVERSION - The loss of real property due to destruction, seizure, condemnation, foreclosure sale, or tax sale.
INVOLUNTARY LIEN - Any lien imposed on property without the consent of the owner.
IREM (Institute of Real Estate Management) – IREM, a division of NAR, is a professional organizations for property managers, which has a code of ethics similar to that of NAR.
IRREVOCABLE - Incapable of being recalled or revoked; unchangeable.
IRREVOCABLE ORDER - The transfer of funds into escrow, also called an “Assignment of
Funds”. This will transfer money that will come out of an escrow pending the sale of the purchasers’ property.
IRRIGATION DISTRICTS - Quasi-political districts created under special laws to provide for water services to property-owners in the district.
JALOUSIE - A screen or shutter consisting of overlapping horizontal slats that is used on the exterior to keep out sun and rain while admitting light and air.
JAMB - The side post or lining of a doorway, window, or other opening.
JOINT - The space between the adjacent surfaces of two components joined and held together by nails, glue, or cement, for example.
JOINT NOTE - A note signed by two or more persons who have equal liability for payment.
JOINT TENANCY - Joint ownership by two or more persons with right of survivorship. Four unities must be present: time, title, interest, and possession. Property held by two or more people with right of survivorship.
JOINT VENTURE - In legal effect it is a partnership for a limited, specific business project.
JOISTS - One of a series of parallel beams to which the boards of floor and ceiling laths or plaster boards are nailed and supported in turn by larger beams, girders, or bearing walls.
JUDGMENT - A court of competent jurisdiction's final determination of a matter presented to it. The final decision by a court in a lawsuit, motion, or other matter.
JUDGMENT AFFIRMED - A decision by an appellate court reaffirming, approving, and agreeing with an inferior court's decision.
JUDGMENT DEBTOR - A person who has an unsatisfied money judgment levied against him or her.
JUDGMENT LIEN - A money judgment that, because it has been recorded, has become a lien against the judgment debtor's real property.
JUDGMENT REVERSED - A decision by an appellate court disagreeing with an inferior court's decision and modifying the decision to conform with its findings.
JUNIOR LIEN - A lien lower in priority or rank than another or other liens.
JUNIOR MORTGAGE - A mortgage second in lien to a previous mortgage.
JURISDICTION - The authority of a court to hear and decide a particular type of case. The power of a court to hear and decide a case or issue.
LACHES - Unreasonable delay in asserting one's legal rights.
LAND CONTRACT - A contract used in the sale of real property when the seller wishes to retain legal title until all or a certain part of the purchase price is paid by the buyer. It is also referred to as an installment sales contract or an agreement of sale.
LAND SALES CONTRACT - A contract for the sale of property, by which possession is delivered to the buyer, but title remains with the seller until full payment or the satisfaction of other stated conditions.
LANDLOCKED - Property totally surrounded by other property with no means of ingress or egress.
LANDLORD - The person who leases property; the owner of the property.
LANDS, TENEMENTS, AND HEREDITAMENT - Inheritable lands or interest.
LATE CHARGE - A charge made by a lender against a borrower who fails to make loan installments when due.
LATE SUPPORT - The support that the soil of an adjoining owner gives to his or her neighbor's land.
LATENT DEFECTS - Harmful defects in a property which may cause unforeseen harm to the buyer. These defects may or may not be visible to the untrained eye.
LATH - A building material of wood, metal gypsum, or insulating board fastened to the frame of a building to act as a plaster base.
LEASE - A contract between owner and tenant, setting forth conditions upon which the tenant may occupy and use the property and the term of the occupancy.
LEASE ASSIGNMENT - The action wherein a tenant transfers his or her interest in the leasehold to another tenant. The transfer of lease is permanent, and the original tenant has no further responsibilities to the landlord after the transfer.
LEASE OPTION - A lease wherein the landlord gives the current tenant the option to purchase the property within a certain time period.
LEASEHOLD ESTATE - The estate of a tenant under a lease. (See Estate for Years.)
LEGACY - A gift of money by will.
LEGAL DESCRIPTION - A description recognized by law; a description by which property can be definitely located by reference to government surveys or approved recorded maps.
LENDER GUIDELINES - Most lenders use Fannie Mae and Freddie Mac underwriting guidelines.
LESS-THAN-FREEHOLD - Another name for a lease or the interest a lessee has in property when leasing from another.
LESSEE - A tenant; the person who is entitled to possession of property under a lease.
LESSOR - A landlord; the property owner who executes a lease.
LETTER OF INTENT - An expression of intent to invest, develop, or purchase without creating any firm legal obligation to do so.
LEVERAGE - The ratio of debt to current value.
LEVY - To execute upon; to seize and sell property to obtain money to satisfy a judgment.
LIABILITIES - Debts or claims that creditors have against assets.
LICENSE - Personal, non-assignable authorization to enter and perform certain acts on another's land.
LICENSEE - Under the law before 1968, which classified persons who entered upon others' land, a licensee was someone who entered upon land with the owner's express or implied permission for a business purpose.
LIEN - A lien makes the debtor's property security for the payment of a dept or the discharge of an obligation. A charge or claim against property as security for payment of a debt or obligation.
LIFE ESTATE - An estate in real property that continues for the life of a particular person. The "life" involved may be that of the owner or that of some other person. An estate in property whose duration is limited to and measured by the life of a natural person or persons.
LIGHT COLORS - Light colors make a room look larger.
LIMITED PARTNERSHIP - A partnership composed of some partners whose contribution and liability are limited. There must always be one or more general partners with unlimited liability and one or more limited partners with limited liability. A special partnership composed of limited and general partners. The general partners have unlimited liability and total management, whereas the limited partners have no voice in the management and their only financial exposure is to the extent of their investment. In some ways the limited partners' interest is similar to that of stockholders in a corporation.
LINTEL- A horizontal board that supports the load over an opening such as a door or window.
LIQUIDATED DAMAGES CLAUSE - An agreement between the parties that in the event of a breach, the amount of damages shall be liquidated (set or fixed). The amount is set before the breach, usually at the time of making the contract, on the assumption that the exact amount of damages is difficult to determine because of the nature of the contract.
LIQUIDITY - The ability to generate cash from an investment in a hurry.
LIS PENDENS
1. Latin for "a suit pending." The term may refer to any pending lawsuit.
2. A written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it. The notice is usually filed in the county land records office. Recording a lis pendens alerts a potential purchaser or lender that the property’s title is in question, which makes the property less attractive to a buyer or lender.
LISTING - An employment contract between a broker and his principal (client). A listing is automatically canceled upon the death of the agent (real estate broker) or the principal (owner). Another real estate broker must negotiate a new listing with the owner upon the death of the real estate broker.
LISTING AGREEMENT - An employment contract authorizing a broker to sell, lease, or exchange an owner's property.
LITIGATION - A civil lawsuit; a judicial controversy.
LOAN COMMITTEE - The committee in a lending institution that reviews and approves or disapproves the loan applications recommended by a loan officer.
LOAN CORRESPONDENT - A loan agent usually used by distant lenders to help the lender make real estate loans.
LOAN PACKAGE - A group of documents prepared along with a loan application to give the prospective lender complete details about the proposed loan.
LOAN TRUST FUND ACCOUNT- (See Impound Account)
LOAN VALUE - The lender's appraised value of the property.
LOCKBOX - A secured box or storage device housing a key, allowing cooperating brokers access to the property for showings when the listing agent is not available.
LONG-TERM DEBT - Debt such as a car note, credit card bills, and other mortgages or long term loans.
LOUVER - An opening with a series of horizontal slats set at an angle to permit ventilation without admitting rain, sunlight, or vision.
LTV - These initials mean "loan to valuation"
MAI - A term that designates a person who is a member of the American Institute of Appraisers of the National Association of Realtors.
MANDAMUS - A court decree ordering a lower court judge, public official, or corporate officer to perform an act. Latin for "we command." Also called a "writ of mandate." A writ of mandamus is the opposite of an order to cease and desist, or stop doing something (an injunction).
MARGIN OF SECURITY - The difference between the amount of secured loan(s) on a property and its appraised value.
MARGINAL LAND - Land which barely pays the cost of working or using it.
MARKET DATA APPROACH - (See Comparative Market Analysis)
MARKET PRICE - Market price is the price at which property actually sold. The market price does not necessarily mirror the accurate market value. The market price may be higher or lower than the market value, depending on the market.
MARKET VALUE
1. The price at which a willing seller would sell and a willing buyer would buy, neither being under abnormal pressure.
2. As defined by the courts, it is the highest price estimated in terms of money that a property would bring if exposed for sale in the open market, allowing a reasonable time to find a purchaser with knowledge of the property's use and capabilities for use.
MARKETABLE TITLE - Title free and clear of reasonable objections and doubts; also called merchantable title.
MATERIAL FACT - A fact that would be likely to affect a person's decision in determining whether to enter into a particular transaction. Any information that will influence the judgment or decision of the customer.
MECHANIC'S LIEN - A lien given by statute to persons supplying labor, materials, or other services to improve real property. Whenever a contractor, laborer, or materialman provides labor or materials to improve real property and is not paid, that person is entitled to a lien against the property as a means of securing payment. Certain statutory steps must be taken to file, record, and foreclose the lien.
MELLO-ROOS BONDS - Municipal-type bonds that homeowners assume to help transfer costs for public works projects such as streets and sewers from the developer to the homeowners.
MEMO TO SET: A document filed in a lawsuit which asks to be placed on the waiting list ("docket") for the next available court date.
MENACE - A threat to use duress. (See Duress)
MERCHANTABLE TITLE - (See Marketable Title)
MERGER OF TITLE - The combination of two estates. Also refers to the joining of one estate burdened by an encumbrance and another estate benefited by the encumbrance. Whenever a benefit and a burden are merged, the encumbrance is extinguished.
MERIDIANS - Imaginary north-south lines that intersect base lines to form a starting point for the measurement of land.
METES AND BOUNDS - Metes and bounds are used mostly to describe complicated or irregular shaped properties. Metes and bounds describe property based on measurements between boundaries or landmarks. Metes most closely describe the distance or measurement between two given points, while bounds refer to the boundaries, or points, being referenced in the measurement between landmarks or monuments. Bounds can include both artificial and natural features. Examples of artificial bounds are roads, canals or stakes. Examples of natural bounds are rivers, streams, lakes, boulders, land formations and trees.
MILITARY ORDNANCE LOCATION - If the seller or seller’s agent is aware that the property is within one mile of a former military training ground which had contained explosives or other hazardous materials, this fact must be disclosed.
MILLIONARES - Ninety percent of all millionaires become that way from owning property.
MINOR
1. A person under the age of majority.
2. In California all persons under eighteen years of age - the age of majority in California. Someone under age 18.
MINUS CASH FLOW - An event that takes place when there is not enough cash to cover expenses and service the mortgage debt.
MISREPRESENTATION - An intentional or negligent suggestion or statement of a material fact in a false manner with the intent of deceiving someone into taking a course of action he would not otherwise normally pursue. A licensee may be disciplined for misrepresentation even though the misrepresentation did not result in a loss to the principal.
MITIGATION - Facts or circumstances that tend to justify or excuse an act or course of conduct.
MLS - Multiple Listing Service (see Multiple Listing)
MOBILE HOME - A stationary, non-motorized vehicle designed and equipped for human habitation. It may be transported to a home site by special equipment. Mobile homes still attached to their chassis and wheels are moveable, and so are considered personal property. Mobile homes that are permanently attached to a foundation are considered real property.
MOLDING - Usually patterned strips used to provide ornamental variation of outline or contour, such as cornices, bases, window and doorjambs.
MONEY TO MAKE MONEY - It takes money to make money in real estate is the general belief.
MONTH-TO-MONTH TENANCY - A lease of property for a month at a time, under a periodic tenancy that continues for successive months until terminated by proper notice, usually 30 days.
MONUMENT - A fixed object and point established by surveyors or others to establish land locations.
MORATORIUM - The temporary suspension, usually by stature, of the enforcement of liability for debt.
MORTGAGE - An instrument or contract by which property is hypothecated (pledged without delivery) to secure the repayment of a loan.
MORTGAGE GUARANTY INSURANCE - Insurance against financial loss available to mortgage lenders from the Mortgage Guaranty Insurance Corporation, a private company organized in 1956.
MORTGAGE LOAN BROKER - Is required to have a real estate license.
MORTGAGEE
1. The party to a mortgage who makes the loan
2. A person who holds mortgaged property as security for repayment of a loan
MORTGAGOR - A person who borrows money by mortgaging his property to the lender as security. (See Debtor)
MULTIPLE LISTING - A listing, usually an exclusive-right-to-sell, taken by a member of an organization composed of real estate brokers with the provisions that all members will have the opportunity to find an interested client; a cooperative listing. A listing taken by a broker and shared with other brokers through a specialized distribution service, usually provided by the local real estate board. Generally, such listings are exclusive right to sell listings.
MUNICIPAL COURT - An inferior trial court having jurisdiction in cases involving up to $15,000 in money damages and in unlawful detainer actions in which the rental value is under $1,000 per month.
MUST-BUY - A person who is under pressure from one source or another and must purchase a home regardless of whether the market is in their favor, or whether they are paying above market value for the home.
MUST-SELL - A person who is under pressure from one source or another and must sell a home, no matter if he or she has to take a loss or sell the house for under market value.
MUTUAL ASSENT - An agreement between the parties in a contract. The offer and acceptance of a contract.
MUTUAL WATER COMPANY - A water company organized by or for water-users in a given district, with the object of securing an ample water supply at a reasonable rate. Stock is issued to users.
NAR - National Association of Realtors.
NAREB - National Association of Real Estate Boards. This trade organization is now known as the National Association of Realtors.
NEGATIVE AMORTIZATION - Occurs when normal payments on a loan are insufficient to cover all interest then due, so that unpaid interest is added to principal. Thus, even though payments are timely made, the principal grows with each payment. This note should only be used in area that is appreciating in value.
NEGLIGENCE - Either the failure to act as a reasonable, prudent person, or the performance of an act that would not be done by a reasonable, prudent person.
NEGOTIABLE INSTRUMENT - A check or promissory note that meets specified statutory requirements and is therefore easily transferable in somewhat the same manner as money. The negotiable instrument can be passed by endorsement and delivery (or in some cases by mere delivery), and the transferee takes title free of certain real defenses (such as failure of consideration, fraud in the inducement) that might exist against the original maker of the negotiable instrument.
NEPA - Abbreviation for the National Environmental Protection Act, a federal statute requiring all federal agencies to prepare an Environmental Impact Statement and meet other requirements whenever a major federal action is anticipated that could significantly affect the environment.
NET LEASE - A lease where the tenant will pay all expenses (such as taxes, maintenance and repairs) in addition to monthly rent.
NET LISTING - Listing that provides that the agent may retain as compensation for his or her services all sums received over and above a stated net price to the owner. An employment agreement that entitles the broker to a commission only in the amount, if any, that the sales price of the property exceeds the listing price.
NET OPERATING INCOME (NOI) - What is left from the adjusted gross income after deducting operating expenses, but before loan payments, reserves for replacements, depreciation allowances, and income tax liability from any taxable income are subtracted. In many ways it is the single most important figure in the entire income-expense statement, for it is this item that is used by lenders, appraisers, and investors to determine the value of the property.
NEUTRAL DEPOSITORY - An escrow business conducted by someone who is a licensed escrow holder.
NON-EXCLUSIVE LISTING - A listing agreement wherein other brokers may enter into an agency agreement with the seller. The broker or broker’s agent actually making the sale will earn the commission, while all other brokers will not receive any compensation. Not usually found in California.
NONFREEHOLD ESTATE - A lease tenancy. (See under Estates for the four types of leasehold estates)
NONJUDICIAL FORECLOSURE - Foreclosure and sale of property without resort to court action, by private sale. For deeds of trust the foreclosure provisions are outlined by the statutes and the requirements in the security instrument, which include a notice of default, right to reinstate, publication of sale, and trustee's sale.
NOTARY PUBLIC - An individual licensed by the state to charge a fee for acknowledging signatures on instruments.
NOTE - A signed written instrument promising payment of a stated sum of money. Shortened name for a promissory note.
NOTICE OF COMPLETION - A notice recorded after termination of work on improvements, limiting the time in which mechanic's liens can be filed against the property.
NOTICE OF DEFAULT - A notice that is recorded in the county recorder's office stating that a trust deed is in default and that the holder has chosen to have the property sold. The trustor (property owner) has three months after the date of recording to reinstate the loan. Recorded notice that a trustor has defaulted on his secured debt.
NOTICE OF NONRESPONSIBILITY - A notice provided by law designed to relieve a property owner from responsibility for the cost of work done on the property or materials furnished for it when the work or materials were ordered by a person in possession. Notice relieving an owner from possession. Notice relieving an owner from mechanic's liens for work on property not ordered by that owner.
NOTICE TO PAY OR QUIT - A notice to a tenant to vacate rented property. Also called a three-day notice. Notice given to a tenant in default of his lease terms or on his rent, which directs him either to cure the default or to vacate the premises.
NOVATION - The acceptance of a new contract in substitution for the old contract, with the intent that the new contract will extinguish the original contract. Sometimes encountered in transfers of deeds of trust, where the new owner assumes the debt and the lender, through novation, releases the former owner from any liability under the original promissory note and deed of trust.
NUISANCE - Anything that is injurious to health or indecent or offensive to the senses, or any obstruction to the free use of property so as to interfere with the comfortable enjoyment of life or property or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake or river, bay, stream, canal, or basin, or any public park, square, street, or highway. A legal wrong arising from acts or use of one's property in a way that unreasonably interferes with another's use of hid property.
OBLIGEE - A promisor; a person to whom another is bound by a promise or another obligation.
OBSOLESCENCE - Loss in value due to reduced desirability and usefulness of a structure because its design and construction become obsolete; loss because of becoming old-fashioned and not in keeping with modern needs.
OFFER - A proposal to create a contract, which signifies the present intent of the offeror to be legally bound by his proposal.
OFFEREE - A person to whom an offer is made.
OFFEROR - A person who makes an offer.
OFFSET STATEMENT - Statement by owner of a deed of trust or mortgage against the property, setting forth the present status of the debt and lien. Also called a beneficiary statement.
OPEN HOUSE - Is an opportunity for a licensee to meet potential buyers and sellers, and therefore is considered to be in the best interest of the licensee and not the seller. This is NOT the most effective way to method to advertise a piece of rental property.
OPEN LISTING - An authorization given by a property-owner to a real estate agent in which the agent is given the nonexclusive right to secure a purchaser. Open listings may be given to any number of agents without liability to compensate any except the one who first secures a buyer ready, willing, and able to meet the terms of the listing or who secures the acceptance by the seller of a satisfactory offer.
OPEN-END MORTGAGE OR DEED OF TRUST - A mortgage containing a clause that permits the mortgagor or trustor to borrow additional money without rewriting the mortgage or deed of trust.
OPERATING EXPENSES - Include fixed and variable expenses, including Maintenance, Insurance, Taxes, Utilities, and Management (MITUM).
OPTION - A right to have an act performed in the future; a right given for a consideration to purchase or lease a property upon specified terms within a specified time; a contract to keep an offer open for a particular period of time. The right of a person to buy or lease property at a set price at any time during the life of a contract.
OPTION LISTING - A listing that also includes an option, permitting the broker to buy the property at the stated price at any time during the listing period.
ORAL CONTRACT - A verbal agreement, one not reduced to writing.
ORDINANCE - A law passed by a political subdivision of the state (such as a town, city, or county).
ORDINARY INCOME - Any income that does not qualify for capital gains tax.
ORIENTATION - Placement of a house on its lot with regard to its exposure to the rays of the sun, prevailing winds, privacy from the street, and protection from outside noises.
OR-MORE CLAUSE - A simple prepayment clause that permits the borrower to make a normal payment or any larger amount, up to and including the entire outstanding balance, without a prepayment penalty.
OSTENSIBLE AGENCY - An agency implied by law because the principal intentionally or inadvertently caused a third person to believe someone to be his agent, and that third person acted as if that other person was in fact the principal's agent.
OVER IMPROVEMENT - An improvement that is not the highest and best use for the site on which it is placed, by reason of excessive size or cost.
OVERAGES IN TRUST ACCOUNT - Any unexplained overages in the trust account must be held in trust by the licensee and must be maintained in a separate record.
OVERHANG - The part of the roof that extends beyond the walls and that shades buildings and covers walks.
OWNERSHIP - The right of a person to use and possess property to the exclusion of others.
PACKAGE LOANS - A package loan utilizes not only the property or buildings as collateral, but also the fixtures attached to the property and/or any personal property (such as a vehicle) necessary to secure the loan.
PARITY WALL - A wall erected on the line between two adjoining properties that are under different ownership for the use of both owners.
PAROL - Oral or verbal.
PAROL EVIDENCE RULE - A rule of courtroom evidence that once the parties make a written contract, they may not then introduce oral agreements or statements to modify the terms of that written agreement. An exception exists for fraud or mistake, which will permit the parties to offer evidence to vary the terms of the writing.
PARQUET FLOOR - Hardwood flooring laid in squares or patterns.
PART TIME STATUS - Many real estate agents have other full-time jobs. A part time agent cannot devote a full time effort to represent a client; therefore the failure to disclose a part time status is considered unethical real estate practice.
PARTIAL RECONVEYANCE - In a deed of trust or mortgage, a clause that permits release of a parcel or part of a parcel from the effects and lien of that security instrument. The release usually occurs upon the payment of a specified sum of money.
PARTITION ACTION - A legal action by which co-owners seek to sever their joint ownership. The physical division of property between co-owners, usually through court action.
PARTNERSHIP - An association of two or more persons to unite their property, labor or skill, or any one or combination thereof, in prosecution of some joint business, and to share the profits in certain proportions. An agreement of two or more individuals jointly to undertake a business enterprise. If it is a general partnership, all partners have unlimited liability and, absent other agreements, share equally in the management and profits of the business.
PATENT - Conveyance of title to government land.
PATENT DEFECTS - Defects in a property, which are not considered harmful. These defects may or may not be visible to the untrained eye.
PAYMENT CLAUSE - A provision in a promissory note, deed of trust, or mortgage, permitting the debtor to pay off the obligation before maturity.
PENNY - The term, applied to nails, that serves as a measure of nail length and is abbreviated by the letter d.
PERCENTAGE LEASE - A lease on property, the rental for which is determined by the amount of business done by the tenant, usually a percentage of gross receipts from the business, with provision for a minimum rental.
PERIMETER HEATING - Baseboard heating or any system in which the heat registers are located along the outside walls of a room, especially under the windows.
PERIODIC TENANCY - A leasehold estate that continues indefinitely for successive periods of time, until terminated by proper notice. When the periods are one month in duration, it is often called a month-to-month lease.
PERSONAL INJURY - A term commonly used in tort (e.g. negligence cases) indicating an injury to one's being or body (for example, cuts or broken bones) as opposed to injury to his property.
PERSONAL PROPERTY - Any property that is not real property. (See Real Property) Property that is movable, as opposed to real property, which is immovable; also includes intangible property and leasehold estates.
PETITIONER - A person who petitions the court on a special proceeding or a motion.
PIER - A column of masonry used to support other structural members.
PIGGYBACK LOAN - Acts as if it is two separate loans, but it is not. Think of it as a first trust deed and a second trust deed wrapped into one loan. Usually one lender will take one portion of the loan, while a second lender will take the other portion.
PITCH - The incline or rise of a roof.
PLAINTIFF - The party who initiates a lawsuit; the person who sues another.
PLATE - A horizontal board placed on a wall or supported on posts or studs to carry the trusses of a roof or rafters directly; a shoe or base member, as of a partition or other frame; a small flat board placed on or in a wall to support girders and rafters, for example.
PLEDGE - Deposition of personal property by a debtor with a creditor as security for a debt or engagement.
PLEDGEE - One who is given a pledge as security. (See Security Party)
PLEDGOR - One who gives a pledge as security. (See Debtor)
PLOTTAGE INCREMENT - The appreciation in unit value created by joining smaller ownerships into one large single ownership.
PLYWOOD
1. Laminated wood made up in panels.
2. Several thickness of wood glued together with grains at different angles for strength.
POCKET LISTING - When a real estate licensee convinces a seller that he can procure a buyer for the property and wants to withhold the information from the multiple listing services. This is considered unethical.
POINTS - Points paid for refinancing must be spread out over the life of the loan to be deductible on a person's income tax.
POLICE POWER - The right of the state to enact laws and regulations and its right to enforce them for the order, safety, health, morals, and general welfare of the public. The power of the state to prohibit acts that adversely affect the public health, welfare, safety, or morals. (Zoning and building codes are examples of exercise of the police power)
POWER OF ATTORNEY - An instrument authorizing a person to act as the agent of the person granting it. A special power of attorney limits the agent to a particular or specific act, as a landowner may grant an agent special power of attorney to convey a single and specific parcel of property. Under a general power of attorney, the agent may do almost anything for the principal that the principal could do himself or herself. A document authorizing a person (an attorney-in-fact) to act as an agent.
POWER OF TERMINATION - The future interest created whenever there is a grant of a fee simple subject to a condition subsequent estate. The future interest matures into a present interest estate only if the holder timely and properly exercises his right upon a breach by the current holder of the fee estate.
PREFABRICATED HOUSE - A house manufactured, and sometimes partly assembled, before delivery to the building site.
PREJUDGEMENT ATTACHMENT - An attachment of property made before the trial, with the intent of holding that property as security, to have an asset to sell if the court judgment is favorable to the attaching party.
PRELIMINARY PUBLIC REPORT - An initial public report regarding details of a property and development allowing a developer to take deposits and reservations on properties. Preliminary reports do not allow the developer to enter into any contracts.
PREPAYMENT PENALTY - Penalty for the payment of a note before it actually becomes due. A fee or charge imposed upon a debtor who desires to pay off his loan before its maturity. Not all prepayment clauses provide for a penalty, and in many real estate transactions the law regulates the amount of penalty that may be charged.
PREQUALIFY - A preliminary qualifying process, to get an idea of the amount of money a person will be able to spend on a home.
PRESCRIPTION - Securing of an easement by open, notorious, and uninterrupted use, adverse to the owner of the land for the period required by statute, which, in California, is five years. A method of obtaining an easement by adverse use over a prescribed period of time.
PRESENT INTEREST - An estate in land that gives the owner the right to occupy his property immediately; as opposed to a future interest, which grants only the right to occupy the premises at some future date.
PRESUMPTION - That which may be assumed without proof. A conclusion or assumption that is binding in the absence of sufficient proof to the contrary.
PRIMA FACIE
1. Presumptive on its face.
2. Assumed correct until overcome by further proof. Facts, evidence, or documents that are taken at face value and presumed to be as they appear (unless proven otherwise).
PRIMARY FINANCING - Financing referring to a first trust deed.
PRIMARY RESIDENCE – For tax purposes condominiums, mobile homes or any other form of housing qualify as a primary residence.
PRINCIPAL - The (client) employer of an agent. Someone who hires an agent to act on his behalf. The term also refers to the amount of an outstanding loan (exclusive of interest).
PRINCIPLE OF CHANGE - Land use is constantly changing, i.e. from agricultural to commercial or residential.
PRINCIPLE OF CHOICE - Land will be used for the “highest and best” use, i.e. the most profitable and competitive use possible.
PRINCIPLE OF COMPETITION - When one area of real estate or property use is making a lot of money, there will be people moving into that area to try to capitalize on the profits.
PRIORITY - That which comes first in point of time or right. Superior, higher, or preferred rank or position.
PRIVITY - Closeness or mutuality of a contractual relationship.
PROBATE - Court supervision of the collection and distribution of a deceased person's estate. This takes place in Superior Court within the county where the property is located.
PROCEDURAL LAW - The law of how to present and proceed with legal rights (for example, laws of evidence, enforcement of judgments). It is the opposite of substantive law.
PROCURING CAUSE - That event originating from another series of events that, without a break in continuity, results in an agent's producing a final buyer. Proximate cause. A broker is the procuring cause of a sale if his or her efforts set in motion an unbroken chain of events that resulted in the sale.
PROFIT A PRENDRE - An easement coupled with a power to consume resources on the burdened property.
PROMISSORY NOTE - A written promise to pay a designated sum of money at a future date.
PROPERTY - Anything that may be owned. Anything of value in which the law permits ownership.
PROPOSITION 13 - Took effect in 1978 and limits tax on property to 1 percent of a property's original purchase price, or base year value, with a maximum 2 percent increase in the base year value allowed per year.
PROPOSITION 60 - Homeowners 55 years of age or older may sell their home and transfer their current base year value to their new property with some limitations. It took effect as of March 1, 1975.
PROPOSITION 90 - Similar to Proposition 60, however, it allows homeowners who are selling a home in one county to purchase a home in select other counties in California.
PRORATION OF TAXES - Division of the taxes equally or proportionately between buyer and seller on the basis of time of ownership.
PUBLIC REPORT - An official report regarding details of a property and development, allowing all real estate contracts to close through escrow.
PUFFING - Making a statement that exaggerates a property’s benefits. An agent should never misrepresent a material fact. Putting things in their best perspective is not subject to disciplinary action.
PUNITIVE DAMAGES - Money awarded by the court for the sole purpose of punishing the wrongdoer, and not designed to compensate the injured party for his damages.
PURCHASE CONTRACT - Also called the purchase agreement, it is a written offer accompanied with a deposit (earnest money deposit) made when a buyer would like to make an offer on property.
PURCHASE MONEY INSTRUMENT - A loan for specific purchases, such as a car or a house. For those people receiving a loan specifically to purchase property, exemption from a deficiency judgment applies. A mortgage or deed of trust that does not permit a deficiency judgment in the event of foreclosure and sale of the secured property for less than the amount due on the promissory note. It is called purchase money since the deed of trust and mortgage was used to buy all or part of the property.
PURCHASE-MONEY MORTGAGE OR PURCHASE-MONEY DEED OF TRUST- A mortgage or deed of trust given as part or all of the consideration for the purchase of property or given as security for a loan to obtain money for all or part of the purchase price.
QUARTER ROUND - A molding whose profile resembles a quarter of a circle.
QUASI - Almost as if it were.
QUASI-CONTRACT - A contract implied by law; that is, the law will imply and consider certain relationships as if they were a contract.
QUIET ENJOYMENT - The right of an owner to the use of property without interference with his or her possession or use.
QUITE TITLE - A court action brought to establish title and to remove a cloud from the title.
QUIET TITLE ACTION - A lawsuit designed to remove any clouds on a title to property. It forces the claimant of an adverse interest in property to prove his right to title; otherwise he will be forever barred from asserting it.
QUITCLAIM DEED - A deed to relinquish any interest in property that the grantor may have, but implying no warranties. A deed that transfers only whatever right, title, or interest, if any, the grantor owns, without implying any warranties.
RADIANT HEATING - A method of heating, usually consisting of coils or pipes placed in the floor, wall, or ceiling.
RAFTER - One of a series of boards of a roof designed to support roof loads.
RANGE - A strip of land six miles wide, determined by a government survey, running in a north-south direction.
RATIFICATION - The adoption or approval of an act performed on behalf of a person without previous authorization. Approval and confirmation of a prior act performed on one's behalf by another person without previous authority.
READY, WILLING, AND ABLE BUYER - A purchaser of property, who is willing to buy on terms acceptable to the seller, and who further possesses the financial ability to consummate the sale. Producing such a buyer sometimes earns the broker a commission, even though a sale is not forthcoming.
REAL ESTATE BOARD - An organization whose members consist primarily of real estate brokers and salespersons.
REAL ESTATE INVESTMENT TRUST - A specialized form of holding title to property that enables investors to pool their resources and purchase property, while still receiving considerable tax advantages, without being taxed as a corporation. Also known as REIT.
REAL ESTATE LICENSEE - Can be a good source to find first trust deeds that can be purchased at a discount.
REAL ESTATE TRANSFER DISCLOSURE STATEMENT - A statement to inform any buyer of property about the condition of that property. This will cover both defects and problems that are readily seen, and problems or conditions that may not be immediately seen.
REAL ESTATE TRUST - A special arrangement under federal and state law whereby investors may pool funds for investments in real estate and mortgages and yet escape corporation taxes.
REAL PROPERTY - Land and anything affixed, incidental, or appurtenant to it, and anything considered immovable under the law. Land, buildings, and other immovable property permanently attached thereto.
REALTOR - A real estate broker holding active membership in a real estate board affiliated with the National Association of Realtors.
REASSESSMENT EVENT - An occurrence such as the sale of a property or an addition, improvement or renovation causing a re-evaluation of the property’s value for tax purposes.
REBUTTABLE PRESUMPTION - A presumption that is not conclusive and that may be contradicted by evidence. A presumption that applies unless proven inapplicable by the introduction of contradictory evidence.
RECAPTURE
1. The rate of interest necessary to provide for the return of an investment.
2. A provision in tax laws that reduces certain benefits from claiming depreciation.
RECEIVER - A neutral third party, appointed by the court to collect the rents and profits from property, and distribute them as ordered by the court. Often used as a remedy when mere damages are inadequate.
RECONVEYANCE - A conveyance to the landowner of the legal title held by a trustee under a deed of trust. The transfer of property back from a lender who holds an interest as security for the payment of a debt. In a deed of trust, the beneficiary reconveys property upon satisfaction of the promissory note.
RECORDATION - Filing of instruments for record in the office of the county recorder. The act of having a document filed for record in the county recorder's office. Once recorded, the instrument gives constructive notice to the world.
RECOVERY PROPERTY - A property that can be depreciated for income tax purposes, with the cost of the property deducted from the income over a stated period.
REDEMPTION - Buying back one's property after a judicial sale. The repurchasing of one's property after a judicial sale.
REDLINING - The act of denying financing to people based on the location or neighborhood
of the property being purchased (done by financing firms).
REFORMATION - A legal action to correct a mistake in a deed or other document.
REGULATION Z - The Federal Reserve Board created the Truth in Lending Act (also called Regulation Z), which requires creditors to disclose various credit terms to the borrower. Under Regulation Z, certain borrowers of property have three days after accepting a loan to rescind without cost or liability.
REINSTATEMENT - A right available to anyone under an accelerated promissory note secured by a deed of trust or mortgage on property. If a deed of trust is foreclosed by trustee's sale, the debtor may have up to three months from the recording of the notice of default to pay the amount in arrears plus interest and costs, thereby completely curing the default (reinstating) without penalty. A notice of trustee sale will be given, no later than three months after the notice of default, and the trustor has until five days before this sale to clear the overdue payments on the note.
REJECTION - Refusal to accept an offer. Repudiation of an offer automatically terminates the offer.
RELEASE - To give up or abandon a right. The release of rights may be voluntary, as when one voluntarily discharges an obligation under a contract. The release may be involuntary, by operation of the law; for example, one's wrongful conduct may bar him from asserting his rights. In deeds of trust a partial release clause frees certain property from the security of the deed of trust upon the payment of specified sums of money.
RELEASE CLAUSE - A stipulation in a deed of trust or mortgage that upon the payment of a specific sum of money to the holder of the deed of trust or mortgage, a particular lot or area shall be removed from the blanket lien on the whole area involved.
RELICTION - The gradual lowering of water from the usual watermark.
REMAINDER - An estate that vests after the termination of the prior estate, such as after a life estate. Example: A life estate may be granted to Adams, with the remainder granted to Baker. Most commonly, an estate (future interest) that arises in favor of a third person after a life estate.
REMAND - To send back to a lower court for further action.
REMEDY - The means by which a right is enforced, preserved, or compensated. Some of the more common remedies are damages, injunctions, rescission, and specific performance.
RENT - The consideration paid by a tenant for possession of property under a lease.
RENT CONTROL - Laws passed by local government to control the rents that landlords may charge for rental property, frequently tied to inflation.
RENTAL PROPERTY - Renting property to the first person that comes along can be a costly mistake. Rental income from a smaller property may show a higher rate of profit than from a more expensive property.
RENUNCIATION - Is the cancellation of an agency relationship by the real estate agent requiring written notice to the principal.
REPLACEMENT RESERVES - The portion of the annual income set aside for the replacement of wasting assets, such as mechanical and electrical equipment, roofing, carpeting, paint and other impermanent building components.
RESCISSION - The unmaking of a contract, and the restoring of each party to the same position each held before the contract arose.
RESCISSION OF CONTRACT - The canceling of a contract by either mutual consent of the parties or legal action.
RESCISSION RIGHTS - The rights of a buyer to back out of a contract for non-disclosure, or other facts making the property less desirable than originally thought.
RESERVATION - A right or interest retained by a grantor when conveying property; also called an exception.
RESIDENTIAL RENTAL PROPERTY - Property where 80% or more of the profits come from residential units.
RESIDUE - That portion of a person's estate that has not been specifically devised.
RESPA - The Real Estate Settlement Procedures Act requires that lenders make certain disclosures to borrowers utilizing a federal mortgage loan or loan program and prohibits the giving and receiving of kickbacks and unearned fees.
RESPONDEAT SUPERIOR - This Latin phrase, "let the master answer," means that an employer is liable for the tortuous acts of an employee, and a principal is liable for the acts of an agent. To be liable, the acts must be within the "course and scope" of the agency or employment. For example, an employer would not be liable for the acts of an employee while at home and not doing work for the employer.
RESPONDENT - The person against whom an appeal is taken; the opposite of an appellant.
RESTRICTION - A limitation on the use of real property arising from a contract or a recorded instrument. An encumbrance on property that limits the use of it; usually a covenant or condition.
RETALIATORY EVICTION - A landlord's attempt to evict a tenant from a lease because the tenant has used the remedies available under the warranty of habitability.
REVERSION - The right a grantor keeps when he or she grants someone an estate that will or may end in the future. Examples: The interest remaining with a landlord after he or she grants a lease, or the interest an owner of land has after he or she grants someone a life estate. Any future interest (estate) left in the grantor. The residue of an estate left in the grantor after the termination of a lesser estate.
REVOCATION - Withdrawal of an offer or other right, thereby voiding and destroying that offer or right. It is a recall with intent to rescind.
RIDGE - The horizontal line at the junction of the top edges of two sloping roof surfaces. (The rafters at both slopes are nailed at the ridge.)
RIDGE BOARD - The board placed on edge at the ridge of the roof to support the upper ends of the rafters; also called rooftree, ridge piece, ridge plate, or ridgepole.
RIGHT OF ENTRY - The right of a landlord to enter into the rental property to make necessary repairs or to check on the safety and well-being of a tenant.
RIGHT OF SURVIVORSHIP - The right to acquire the interest of a deceased joint-owner. It is the distinguishing feature of a joint tenancy.
RIGHT OF WAY - The right to pass over a piece of real property or to have pipes, electrical lines, or the like go across it. An easement granting a person the right to pass across another's property.
RIPARIAN RIGHTS - The right of a landowner with regard to a stream crossing or adjoining his or her property.
RISER
1. The upright board at the back of each step of a stairway.
2. In heating, a riser is a duct slanted upward to carry hot air from the furnace to the room above.
ROLLOVER LOANS - Are partially amortized loans with a maturity of five or seven years. Once the loan is due, the borrower can refinance. These loans have payments as if they were structured on a 30-year mortgage.
RULE AGAINST PERPETUITIES - A complex set of laws designed to prevent excessive restrictions on the transferability of property. The rule holds that "no interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest." In essence, the rule prevents a person from putting qualifications and criteria in his will that will continue to control or affect the distribution of assets long after he has died. Although the rule primarily revolves around wills and trusts, the rule also applies to any future dispositions of property, including options.
RUMFORD ACT - Prohibits discrimination in employment and housing. Is enforced by the Department of Fair Employment and Housing.
SAFETY CLAUSE - In a listing agreement, a provision that if anyone found by the broker during his listing period purchases the property within a specified time after the expiration of the listing, the broker receives his full commission.
SALE-LEASEBACK - A situation in which the owner of a piece of property sells it and retains occupancy by leasing it from the buyer.
SALES CONTRACT - A contract between buyer and seller setting out the terms of sale.
SALESPERSON - An individual licensed to sell property, but who must at all times be under the supervision and direction of a broker.
SANDWICH LEASE - A leasehold interest that lies between the primary lease and the operating lease. Example: A leases to B; B subleases to C; C subleases to D. C's lease is a sandwich lease.
SASH - A wood or metal frame containing one or more windowpanes.
SATISFACTION - Discharge of a mortgage or deed of trust lien from the records upon payment of the secured debt. Discharge of an obligation or indebtedness by paying what is due.
SAVINGS ACCOUNT - An investor should not place money in a savings account if he wants to have financial freedom.
SCHEDULED INCOME - The amount of income generated from income property through rent when all units are occupied.
SEAL - An impression mark or stamp made to attest to the execution of an instrument.
SECONDARY FINANCING - A loan secured by a second mortgage or a second deed of trust.
SECONDARY MONEY MARKET - Where loans are purchased and sold.
SECTION - A square mile of land, as established by government survey, containing 640 acres.
SECURED DEBT - An obligation that includes property held as security for the payment of that debt; upon default, the property may be sold to satisfy the debt.
SECURED PARTY - The party having the security interest in personal property. The mortgagee, conditional seller, or pledgee is referred to as the secured party.
SECURITY AGREEMENT - An agreement between the secured party and the debtor that creates a security interest in personal property. It replaced such terms as chattel mortgage, pledge, trust receipt, chattel trust, equipment trust, conditional sale, and inventory lien.
SECURITY DEPOSIT - The amount a tenant pays a landlord at the beginning of the tenancy. This money is to be held in an account to make necessary or routine repairs once the tenant vacates the property. If the entire deposit is not used in repairs, the landlord must return any remaining amount to the tenant within 21 days of the tenant’s vacating the premises, accompanied by an itemized statement of how the deposit was utilized.
SECURITY INTEREST - A term designating the interest of a secured creditor in the personal property of the debtor.
SEIZIN (or Seisin) - The possession of land under a claim of freehold.
SELLER FINANCING ADDENDUM AND DISCLOSURE - Sellers who plan on carrying back a note on financing the property they are selling must disclose this fact to the buyer. The person arranging the financing is responsible for making this disclosure.
SELLER’S AGENT - An agent representing only the seller in a property transaction.
SENIOR LIEN - A lien that is superior to or has priority over another lien. Also, the first deed of trust or lien on a property.
SEPARATE PROPERTY - Property that is owned by a husband or wife and that is not community property. It is property acquired by either spouse prior to marriage or by gift or inheritance after marriage; also, in California, it is the income from separate property after marriage.
SEPTIC TANK - An underground tank in which sewage from the house is reduced to liquid by bacterial action and drained off.
SERVIENT ESTATE - That parcel of property, which is burdened by and encumbered with an easement.
SERVIENT TENEMENT - An estate burdened by an easement.
SET-BACK ORDINANCE - An ordinance prohibiting the erection of a building or structure between the curb and the set-back line. (see Building Line)
SETTLEMENT STATEMENT - A document provided to both the buyer and seller in a real estate transaction that indicates all profit or expenses of the transaction.
SEVERALTY - Sole ownership of property. Ownership by one person.
SEVERALTY OWNERSHIP- Ownership by only one person; sole ownership.
SHAKE - A hand-split shingle, usually edge-grained.
SHEATHING - Structural covering, such as boards, plywood, or wallboard, placed over the exterior studding or rafters of a house.
SHERIFF'S DEED - A deed given by court order in connection with the sale of property to satisfy a judgment.
SICK BUILDING SYNDROME (SBS) - A condition that is caused by the air quality in buildings. Most modern high-rises, expansive commercial buildings, or other large buildings rely on fresh air being brought in through the ventilation system. When a building is experiencing SBS, the people using the space may experience fatigue, dizziness, nausea, headaches, eye, nose and throat infections, cough, itchy or dry skin, or have sensitivity to odors.
SILL - The board or piece of metal forming the lower side of an opening, such as a doorsill or windowsill.
SINKING FUND
1. A fund set aside from the income from property that, with accrued interest, will eventually pay for replacement of the improvements.
2. A similar fund set aside to pay a debt.
SMALL CLAIMS COURT - A branch of the Municipal Court. The rules of this court forbid parties to be assisted by attorneys dispense with most formal rules of evidence, and have all trials heard by judges. The monetary limit of cases before the court is generally $1,500. In California, an individual cannot ask for more than $7,500 in a claim. Corporations and other entities (like, government entities) cannot ask for more than $5,000. You can file as many claims as you want for up to $2,500 each. But you can only file 2 claims in a calendar year that ask for more than $2,500. You can only sue a guarantor for up to $4,000 ($2,500 if they don't charge for the guarantee). But, if you are a natural person filing against the Registrar of the Contractors' State License Board you can sue a guarantor for up to $7500.
SMOKE DETECTOR DISCLOSURE - A statement saying that the property is in compliance with current California regulations regarding smoke detectors.
SOIL PIPE - Pipe carrying waste from the house to the main sewer line.
SOLD TO THE STATE - A bookkeeping entry on the county tax rolls indicating that the property taxes are delinquent. The entry begins the five-year redemption period, after which the property may be physically sold to the public for back taxes.
SOLE OR SOLE PLATE - A structural member, usually two-by-four inches, on which wall and partition studs rest.
SPAN - The distance between structural supports, such as walls, columns, piers, beams, and girders.
SPECIAL ASSESSMENT - Legal charge against real estate by a public authority to pay the cost of public improvement, as distinguished from taxes levied for the general support of government.
SPECIFIC PERFORMANCE - A legal action to compel performance of a contract; for example a contract for the sale of land. A contract remedy by which one party is ordered by the court to comply with the terms of the agreement.
SPOUSE - A person's husband or wife.
SQUARE FOOTAGE OF BUILDING - An appraiser always uses the exterior dimensions to calculate the square footage of a building.
SRA - The Society of Real Estate Appraisers.
STARE DECISIS - A fundamental principle of law, which holds that courts should follow prior decisions on a point of law. A proper decision is a binding precedent on equal or lower courts having the same facts in controversy.
STATUTE - A written law.
STATUTE OF FRAUDS - The state law that provides that certain contracts must be in writing in order to be enforceable in the courts. Examples: real property leased for more than one year or an agent's authorization to sell real estate. A law that requires certain contracts (including most real estate contracts) to be in writing to be enforceable.
STATUTE OF LIMITATIONS - A statute that requires lawsuits to be brought within a certain time to be enforceable. The basic periods are one year for personal injury, two years for oral contracts, three years for damages to real or personal property, four years for written contracts, and three years from date of discovery for fraud.
STEERING - An illegal procedure where individual buyers, who are usually minorities, are only shown properties in specific neighborhoods.
STEPPED-UP BASIS - A higher, increased tax value of property given as the result of most sales or taxable transfers. The tax basis is used in computing capital gains and losses on the transfer of property.
STIGMATIZED PROPERTY - Tainted property because of an event or previous owner. A house involved in a murder, crime or satanic worship would be an example of this type of property.
STOP NOTICE - A notice served on the owner of property or custodian of funds. It requests, with certain penalties for noncompliance, that any funds due to a general contractor be paid to the claimant, laborer, or materialman.
STRAIGHT MORTGAGE OR DEED OF TRUST - A mortgage or deed of trust in which there is no reduction of the principal during the term of the instrument. Payments to interest are usually made on an annual, semiannual, or quarterly basis.
STRAIGHT NOTE - A promissory note that is unamortized. The principal is paid at the end of the term of the note.
STRAIGHT-LINE DEPRECIATION - An accounting procedure that sets the rate of depreciation as a fixed percentage of the amount to be depreciated; the percentage stays the same each year.
STRATIFIED MARKETPLACE - The market may be divided, or lopsided, based on the available supply of homes in specific price ranges and the number of qualified buyers in that price range. For instance, it may be a Buyer’s Market for homes in the $300,000 range and a Seller’s Market for homes in the $750,000 range and vice versa.
STRING, STRINGER
1. A timber or other support for cross-members.
2. In stairs, the support on which the stair treads rest.
STUDS OR STUDDING - Vertical supporting timbers in walls and partitions.
SUBCHAPTER-S CORPORATION - A corporation that, for federal tax purposes only, is taxed similarly to a partnership. The corporate entity is disregarded for most federal tax purposes, and the shareholders are generally taxed as individual partners.
SUBDIVIDING - Smaller single-family plots bring in more money than a larger undivided plot.
SUBJACENT SUPPORT - Support that the soil below the surface gives to the surface of the land.
SUBJECT TO
1. Burdened by and liable for an obligation.
2. A method of taking over a loan without becoming personally liable for its payment "SUBJECT TO" MORTGAGE OR DEED OF TRUST- A seller may sell a home, with the buyer agreeing to purchase the property subject to the existing loan. This means that the buyer will take possession of the property and make all payments on the note. However, the original owner, or the person selling the property will remain responsible for the loan. If the buyer of the property should happen to default on the property, the home will be sold to satisfy the debt to the lender. The original borrower’s credit will be adversely affected by this action.
(See also Assumption of Mortgage or Deed of Trust.)
SUBLEASE - A lease given by a tenant.
SUBORDINATE - To make subject or junior to.
SUBORDINATION AGREEMENT - In a mortgage or deed of trust, a provision that a later lien shall have a priority interest over the existing lien. It makes the existing lien inferior to a later lien, in effect exchanging priorities with that later lien.
SUBORDINATION CLAUSE - Senior lien that makes it inferior to what would otherwise be a junior lien.
SUBROGATE - To substitute one person for another's legal rights to a claim or debt.
SUBROGATION - The substitution of another person in place of the creditor with regard to an obligation. The purpose of subrogation is to compel the ultimate payment of a debt by the party who, in equity and good conscience, should pay it. This subrogation is an equitable device used to avoid injustice.
SUBSTANTATIVE LAW - The laws describing rights and duties. Differs from procedural law, which only describes how to enforce and protect rights.
SUCCESSION - The inheritance of property.
SUCCESSOR IN INTEREST - The next succeeding owner of an interest in property. The transferee or recipient of a property interest.
SUPERIOR COURT - The principal trial court of the state; a court of unlimited monetary and subject matter jurisdiction, and an appeal court for decisions of municipal courts and small claims courts.
SUPREME COURT - The highest court in the California and the federal court structure. This court is almost exclusively an appeals court, accepting (by certiorari) only those cases that, in the court's discretion, involve issues of significant magnitude and social importance.
SURETY - One who guarantees the performance by another, a guarantor.
SURRENDER - The process by which a tenant voluntarily gives up control of a property.
SURVEY - The process by which a parcel of land is located on the ground and measured.
SWING LOAN - This is a short-term equity loan. A homeowner may take out a temporary loan against the equity in the home to be sold, use that money to purchase another home, and then pay back the loan upon sale of the original house.
SWITCH PROPERTY - A property within 20% of the asking price of a property a buyer inquires about.
SYNDICATION - A group of individuals pooling their resources to purchase property through the holding vehicle of a partnership, corporation, or other association. Each individual owns shares in the legal entity formed to acquire and hold title to the property. This is an alternative method to finance and purchase real estate. This allows an investment in real estate without having to do any of the work.
TAX - A compulsory charge on property or individuals, the payment of which supports a government.
TAX BASIS - The tax value of property to the taxpayer. It is a figure used to compute capital gains and losses.
TAX DEED - The type of deed a successful bidder will receive for property gained at a tax auction.
TAX-DEFERRED EXCHANGES - A tax-deferred exchange, also called a 1031 Exchange, occurs when an investor exchanges property for a like property of equal value, and defers any taxes until the property being exchanged is sold.
TAX SALE - Sale of property after a period of nonpayment of taxes.
TAX SHELTER - A special consideration provided for by the tax code to the real estate investor who de-sires to take advantage of allowable depreciation schedules, capital gains privileges, tax-deferred exchanges and other benefits. Commonly used to refer to the real property that has provided the tax consideration and not actually the tax consideration itself.
TENANCY - A leasehold estate. (For specific types of leases see Estates)
TENANCY-IN-COMMON - Ownership by two or more persons who hold an undivided interest in real property, without right of survivorship; the interests need not be equal.
TENANT - One who leases real property from the owner.
TENEMENTS - All rights in real property that pass with a conveyance of it.
TENTATIVE MAP - The Subdivision Map Act requires sub-dividers initially to submit a tentative map of their tract to the local planning commission for study. The approval or disapproval of the planning commission is noted on the map. Thereafter, the planning commission requests a final map of the tract embodying any changes.
TENURE IN LAND - The manner in which land is held.
TERMITE SHIELD - A shield, usually of non-corrodible metal, placed on top of the foundation wall or around pipes to prevent passage of termites.
TERMITES - Antlike insects that feed on wood.
TESTAMENT - The written declaration of one's last will.
TESTAMENTARY DISPOSITION - A gift passing by will.
TESTATE - Describes a person who dies leaving a will.
TESTATOR - A person who makes a will. Technically, a testator is a male and a testatrix is a female, although in common use testator refers to anyone who makes a will.
THE VOLUNTARY AFFIRMATIVE MARKETING AGREEMENT - Is a voluntary commitment by real estate licensees to promote fair housing by using methodology that is fairer than government regulations.
THIRTY-DAY NOTICE - A notice terminating a periodic tenancy without cause, by ending a tenancy thirty days from date of service.
THREE-DAY NOTICE - A notice giving a tenant three days in which to cure a default or quit the premises. It is the first step in an unlawful detainer action, as the means of terminating a lease for cause. When rent is delinquent, it is sometimes called a notice to quit or pay rent.
THRESHOLD - A strip of wood or metal beveled on each edge and used above the finished floor under outside doors.
"TIME IS OF THE ESSENCE" - These words, when placed in an agreement, make it necessary that all time limitations and requirements be strictly observed.
TITLE - Evidence of the owner's right or interest in property.
THE RIGHT OF OWNERSHIP - The evidence of a person's ownership or interest in property.
TITLE COMPANY - Firm that verifies ownership of real property, often done in connection with a conveyance of real property from buyer to seller. The valid owner is determined through a thorough examination of property records in a Title Search. The company issues a title certificate, based on its examination.
TITLE INSURANCE - Insurance written by a title company to protect a property-owner against loss if title is defective or not marketable. A special policy of insurance issued by a title company, insuring the owner against loss of or defects in title to the insured property. The policy may be either a CLTA policy, issued to the property owner and to non-institutional lenders, or an ALTA policy, issued to institutional lenders.
TOPOGRAPHY - Nature of the surface of the land. Topography may be level, rolling, or mountainous.
TORRENS TITLE - A title included in a state-insured title system no longer used in California.
TORT
1. A wrongful act.
2. A wrong or injury.
3. Violation of a legal right. A civil wrong, not arising from a breach of contract. Most torts lie in negligence, although they could also be intentional torts (such as assault and battery, trespass) or strict liability torts.
TORTFEASOR - A person who commits a tort.
TORTIOUS - Conduct which amounts to a tort. In order to establish that a particular act was tortious, a plaintiff must prove that an actionable wrong existed and that damages ensued from that wrong.
TOWNSHIP - A territorial subdivision that is six miles long and six miles wide and that contains 36 sections, each one mile square.
TRADE FIXTURES - Articles of personal property that are annexed to real property but that are necessary to the carrying on of a trade and are removable by the owner. Fixtures installed to further one's trade, business, or profession. They are an exception to the general rule that fixtures are part of a building. Such fixtures installed by a tenant may be removed before the expiration of the tenancy.
TRADE-IN - Method of guaranteeing an owner a minimum amount of cash on the sale of his or her present property to permit him or her to purchase another. If the property is not sold within a specified time at the listed price, the broker agrees to arrange financing to purchase the property at an agreed-upon discount.
TRANSFER - Conveyance; passage of title.
TRANSFER DISCLOSURE STATEMENT - It is the responsibility of the seller (transferor) to issue the statement.
TRANSFEREE - The person to whom a transfer is made.
TRANSFEROR - The person who makes a transfer.
TREADS - Horizontal boards of a stairway.
TRESPASS - An invasion of an owner's rights in his or her property.
1. Unauthorized entry onto another's land.
2. Invasion of another's rights or property.
TRESPASSER - One who trespasses. The importance of this classification of individuals on property is created by the methods for removal and the liability of the property owner if the trespasser is injured on his property.
TRIM - The finish materials in a building, such as moldings applied around openings (window trim, door trim) or at the floor and ceiling (baseboard, cornice, picture molding).
TRUST - A right of property, real or personal, held by one party called the trustee for the benefit of another party called the beneficiary. Arrangement whereby one person holds property for the benefit of another under fiduciary (special confidential) relationship.
TRUST DEED - Deed given by a borrower to a trustee to be held pending fulfillment of an obligation, which is usually repayment of a loan to a beneficiary. A deed of trust. Foreclosure of this deed may be at a foreclosure or at a trustee's sale. The lender in the trust deed is referred to as the beneficiary. Trust deed investments should be on improved property rather than on unimproved property. There are three parties to consider in a trust deed situation: the trustor (or person borrowing money to purchase the property); the beneficiary (or person making the loan); and the trustee (or neutral third party who holds the deed until the note has been paid in full).
TRUST FUNDS - Consists of money or property received by a real estate licensee on behalf of others. Cannot be given to the seller without the permission of the buyer. Must be in writing. It is against the law to commingle these funds. Brokers may, however, keep up to $200 of personal money in a trust account, to pay for any charges the bank may issue against the account. Protects the money in case a legal action is taken against the broker. These records are subject to audit and examination by the D.R.E. All records and corresponding instruments must be kept for a period of (3) three years.
TRUSTEE - One who holds property in trust for another. In a deed of trust, the person who holds bare legal title in trust.
TRUSTEE'S DEED - The deed issued by the beneficiary after the foreclosure and sale under a deed of trust.
TRUSTEE'S SALE - The private sale of property held by a trustee under a deed of trust as part of the foreclosure proceedings. This sale must be conducted in approximately four months.
TRUSTOR
1. One who conveys his or her property to a trustee.
2. The borrower or debtor under a deed of trust.
TRUSTOR'S REINSTATEMENT RIGHTS - These rights continue for five business days prior to the date of the trustee's sale.
TRUTH IN LENDING LAW - A complex set of federal statutes designed to provide a borrower with a means of discovering and comparing the true costs of credit. Under Regulation Z of the act, certain borrowers of property have three days after accepting a loan to rescind without cost or liability.
UNDUE INFLUENCE - A compulsory charge on property or individuals, the payment of which supports a government. Taking any fraudulent or unfair advantage of another's necessity or weakness of mind. Using a position of trust and confidence improperly to persuade a person to take a course of action. By relying on the trusted confidant, the decision maker fails to exercise his free will and independent judgment.
UNEARNED INCREMENT - An increase in value of real estate due to no effort on the part of the owner, often due to an increase in population.
UNENFORCEABLE - Incapable of being enforced at law. An example of an unenforceable contract is an oral listing agreement to pay a broker a commission.
UNIFORM COMMERCIAL CODE - A group of statutes establishing a unified and comprehensive scheme for regulation of security transactions in personal property and other commercial matters, superseding the existing statutes on chattel mortgages conditional sales, trust receipts, assignment of accounts receivable, and other similar matters.
UNILATERAL - One-sided, ex parte.
UNJUST ENRICHMENT - A legal doctrine that prevents a person from inequitably benefiting from another's mistake, poor judgment, or loss. In a land sales contract the vender may no longer keep both the property and the buyer's excess payments (over his damages) in the event of breach, because to do so would unjustly enrich him at the buyer's expense.
UNLAWFUL DETAINER - An action to recover possession of real property. A lawsuit designed to evict a defaulting tenant, or anyone unlawfully in possession of property, from premises. It is summary in nature, entitled to a priority court trial, and litigates only the right to possession of property (and damages resulting there from).
UNLAWFULL - Illegal.
UNRUH CIVIL RIGHTS ACT - Deals with equal rights in business establishments, prohibits age limitations in housing, and sets age limitations necessary for senior housing. It states that all persons within California are free and equal no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation, they are entitled to full and equal accommodations.
UNSECURED DEBT - A debt not backed by specific property to satisfy the indebtedness in case of default.
UNTENABLE DWELLING - Property lacking necessary utilities, or one that is in poor condition, causing it to fall under the minimum property standards and making it uninhabitable for tenants.
URBAN PROPERTY - City property; closely settled property.
USURY - Claiming a rate of interest greater that that permitted by law. Charging a greater rate of interest on loans than the rate allowed by law (10 percent in many cases).
VA (Department of Veteran Affairs) LOAN - For veterans, the government set up the VA, which authorizes first and second trust deeds for up to 25% of a property’s value. The VA will guarantee payment of the remaining value of the mortgage debt, up to a certain maximum amount. The VA guarantees the lender that they will pay the lender’s net loss up to the amount of money guaranteed. This value will decrease over time, as the loan value is repaid. This loan does not contain a "due on sale" clause.
VACANCY FACTOR - Refers to vacancies and uncollectible rents when analyzing income properties.
VALID
1. Legally sufficient and authorized by law.
2. Having force or binding force. Fully effective at law; legally sufficient.
VALLEY - The internal angle formed by the junction of two sloping sides of a roof.
VALUATION
1. Estimated worth or price.
2. The act of valuing by appraisal.
VARIABLE INTEREST RATE - An interest rate that fluctuates in a set proportion to changes in an economic index, such as the cost of money. Extensive regulations cover use of VIRs in loans on residential property.
VARIANCE - An exception or departure from the general rule. An exception granted to a property owner, relieving him from obeying certain aspects of a zoning ordinance. It’s granting is discretionary with the zoning authorities and is based on undue hardship suffered by the property owner because of unique circumstances affecting his property.
VENDEE - Purchaser or buyer of real property.
VENDOR - Seller of real property.
VENEER - Thin sheets of wood placed over another material.
VENT - A pipe installed to provide a flow of air to or from a drainage system or to provide a circulation of air within such system to protect trap seals from siphonage and backpressure.
VENUE - The location in which a cause of action occurs; it determines the court having jurisdiction to hear and decide the case. For real estate, the court having proper venue is one in the county in which the property is located.
VERIFICATION - A sworn statement before a duly qualified officer as to the correctness of the contents of an instrument. Written certification under oath and/or penalty of perjury, confirming the truth of the facts in a document.
VERSUS - Against (abbreviated v. or vs.). Used in case names, with the plaintiff's name given first.
VESTED - Bestowed upon someone, such as title to property. Absolute, not contingent or subject to being defeated.
VETERAN'S EXEMPTION - Veterans qualify for an additional exemption of $4,000 on property not already filed for exemption under the homeowner’s exemption rule. So, any vacation properties or other properties not eligible for the homeowner’s exemption may qualify for the veteran’s exemption. There are, however, rules about which properties qualify. For example, property worth only $5,000, or property owned by a husband and wife worth $10,000 or less is ineligible for the homeowner’s exemption.
VOID - To have no legal force or effect; that which is unenforceable. Unenforceable, null, having no legal effect.
VOIDABLE - An instrument that appears to be valid and enforceable on its face but is, in fact, lacking some essential requirement. May be declared void, but is valid unless and until declared void.
VOLUNTARY LIEN - Any lien placed on property with the consent of the owner or as a result of the voluntary act of the owner.
WAIVE - To give up a right.
WAIVER - Giving up of certain rights or privileges. The relinquishment may be voluntary and knowing, or it may occur involuntarily through action of the parties. The action resulting in the waiver is unilateral, and requires no action or reliance by the other party.
WARRANTY - An absolute undertaking or promise that certain facts are as represented. Occasionally used interchangeably with guarantee.
WARRANTY DEED - It is commonly used in other states, but in California the grant deed has replaced it. Used predominantly in states that do not have title insurance companies. This deed contains six full warranties of protection to the buyer, including warranties that the seller owns the property, that it is unencumbered, and that the seller will defend title against any defects. A deed that is used to convey real property and that contains warranties of title and quiet possession.
WARRANTY OF HABITABILITY - Implied warranty in residential leases. The landlord covenants by implication that the premises are suitable for human occupancy. The implied warranties are found in the statutes and implied by common law.
WASTE - The destruction, or material alteration of or injury to premises by a tenant-for-life, or tenant, or tenant-for-years. Example: a tenant cutting down trees or mining coal. The destruction, injury, material alteration, or abusive use of property by a person rightfully in possession, but who does not own the fee or entire estate (for example, by a lessee or life tenant).
WATER TABLE - Distance from the surface of the ground to a depth at which natural groundwater is found.
WILL - A document that directs the disposition of one's property after death.
WILL-BUY - A buyer who is looking to buy a home, but has plenty of time to find the best deal for the most desirable home on the market that will fit his or her individual needs.
WILL-SELL - A seller who is willing to sell his or her home if the right price was offered. This person does not have to sell and can take as much time as desired until satisfied with an offer.
WITNESSED WILL - A formal will, signed by the testator in the presence of two or more witnesses, each of whom must also sign the will.
WRAP AROUND MORTGAGE (DEED OF TRUST) - A sophisticated financing package that permits the seller to sell his property without paying off the outstanding deed of trust. The buyer's larger loan, which is used to purchase the property, includes provisions for paying off the seller's existing loan. (See All-Inclusive Deed of Trust)
WRIT - A process of the court under which property may be seized. An order from the court to the sheriff or other law enforcement officer directing and authorizing a specific act.
WRIT OF ATTACHMENT - A writ authorizing and directing the physical attachment (seizure) of property.
WRIT OF EXECUTION - An order directing the sheriff to seize property to satisfy a judgment.
WRIT OF IMMEDIATE POSSESSION - An order authorizing a landlord to obtain immediate possession of a tenant's premises, pending the outcome of an unlawful detainer action or other court proceeding.
YIELD - The amount the investor makes on the capital invested during the time the investment is held.
ZONE - The area set off by the proper authorities in which the real property can be used for only specific purposes.
ZONING - Act of city or county authorities specifying the type of use to which property may be put in specific areas. A government's division of a city or other geographic area into districts, and the regulation of property uses within each district.
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