«GLOSSARY OF TERMS The following Glossary of Terms is not intended to be legal definitions, but rather a lay expression or explanation of how the ...»
GLOSSARY OF TERMS
The following Glossary of Terms is not intended to be legal definitions, but rather a lay expression
or explanation of how the words are used in the field of Real Estate.
ABATEMENT: (1) A reduction or decrease. (2) The removal of a nuisance.
ABOVE BUILDING STANDARD: Materials or excess quantities not included in the work letter
which are subject to negotiation between the landlord and tenant.
ABSOLUTE NET: Tenant is responsible for any and all expenses incurred regarding the property.
Io n r ge s oa s mea y o t w as e e, wl o b c si da a “b o t n t f w e a re t su n c s h t v ri in t e l si s n a s l e e” s o tl af e u.
ABSORPTION, GROSS: The sum of all leased and sold buildings. At Allard Commercial Brokerage we exclude investment sales from this number because the building sold is not vacant.
ABSORPTION, NET: The change in occupied space. Can be positive or negative. At Allard Commercial Brokerage we calculate net absorption as the sum of the net change in previously occupied space plus the total of all lease and sale transactions completed during the period in new building shells, including build-to suits, planned buildings or buildings under construction.
Different from the net change in available space, as net change does not include the aforementioned new building shells that are not available at the beginning of the period.
A S R C O J D ME T S mmay f C ut od rWh nrc re i rae ag n rl B T A T F U G N :u r o a o rs re. e e od d t e ts e ea ‟ c lien upon real and personal property of a judgment debtor in the county where recorded.
OF TITLE: Summary or digest of documents affecting title to real estate. A condensed history disclosing items of public record (i.e., grants, conveyances, wills, records, judicial proceeding, liens, encumbrances, etc.). Does not guarantee or ensure validity of title;
does not reveal encroachments or forgeries.
ABSTRACTER: A person who, historically, searches recordings or registrations with the county recorder, county registrar, circuit court and other official sources to find anything affecting the title to real property and summarizes the information in the findings.
ABUTTING: Land that touches or borders the land of another.
ACCELERATION/ALIENATION CLAUSE: A provision within the loan documents reserving to the lender the right to declare the entire unpaid principal balance of the loan immediately due and payable if title to the property changes during the life of the loan. An acceleration clause does not require a lender to declare the loan due and payable, but merely gives him the right to make such a declaration. An acceleration clause, in effect, gives the existing lender the right to approve (or disapprove) any proposed purchaser who desires to assume the loan. In many cases an acceleration clause is also used to increase an existing interest rate to what may be market at the time title to the property changes. (Also known as Call Provision).
ACCEPTANCE: An unqualified agreement to the terms of an offer.
ACCESSION: The acquisition of title to additional land or to improvements as a result of annexing fixtures or as a result of natural causes such as alluvial deposits along the banks of streams by accretion.
Allard Commercial Brokerage –Glossary of Terms Page 1 of 1 ACCORD AND SATISFACTION: The settlement of an obligation. An accord is an agreement by a creditor to accept less than bargained for from a debtor. The creditor's acceptance of the accord constitutes satisfaction of the debt.
ACCOUNTING: The agent must be able to report the status of all funds received from, or on behalf of, the principal. Most state real estate license laws require a broker to give accurate copies of all documents to all parties affected by them and to keep copies on file for a specified period of time. Most license laws also require the broker to deposit immediately, or within 24 to 48 hours, all funds entrusted to the broker (such as earnest money deposits) in a special trust, or escrow, account. Commingling such monies with the broker's personal or general business funds is strictly illegal.
ACCRETION: A buildup of soil by natural causes on property bordering a river, lake or ocean.
This soil becomes the property of the riparian or littoral owner and becomes subject to any existing mortgages.
ACCRUAL METHOD OF REPORTING INCOME: Income and expense is included and reported only in the year in which it is earned regardless of when payment is received or made.
ACCRUED: Accumulated over a period of time.
ACCRUED DEPRECIATION: Depreciation that has accumulated over a period of time. For appraisal purposes, the difference between the cost to reproduce the property (as of the appraisal date) and the property's current value as judged by its "competitive condition." In this context, accrued depreciation is often called diminished utility.
ACCRUED ITEMS OF EXPENSE: Incurred expenses that are not yet payable. In a closing statement accrued expenses of the seller are credited to the purchaser (taxes, wages, interest, etc.) ACKNOWLEDGMENT: A declaration before a notary public or other officer by a party executing a legal document that the execution is his free and voluntary act and deed. Designed to prevent forged and fraudulently induced documents from taking effect.
ACQUISITION COST: The amount of money or other valuable consideration expended to obtain title to a property. Includes purchase cost, plus such items as appraisal fees, closing costs, finance charges, mortgage loan origination fees and title insurance. (See title) ACRE: A measure of land equal to: 43,560 square feet; 4,840 square yards; 4,047 square meters; 160 square rods; or, 0.4047 hectares.
ACTION: A lawsuit brought to court.
ACTUAL AGE: The real age of a building.
ACTUAL DEPRECIATION: That depreciation occurring as a result of physical, functional or economic forces, causing loss in value to a building.
ACTUAL NOTICE: Knowledge gained based on an actual observance or direct knowledge, as opposed to Constructive Notice.
ADDENDUM: Additional material attached to and made part of a document. If there is space insufficient to write all details of a transaction on the contract form, the parties will attach an addendum to the document which is incorporated into the contract by reference and is signed or initialed by all parties.
ADJUSTABLE RATE MORTGAGE (ARM): A loan which allows for the interest rate and terms to adjust periodically in relationship to a predetermined index based on the maintenance of a preestablished margin.
ADJUSTED COST BASIS: The value on the books of a taxpayer which is original cost plus capital improvements and assessments, less allowable depreciation, depletion allowances and uncompensated property losses.
ADMINISTRATOR/ADMINISTRATRIX: A person appointed by the court to handle the affairs of a deceased person when there is no one mentioned in a will to do so.
ADVERSE POSSESSION: The possession, by one person, of land belonging to another in a manner deemed adverse to the interest of the owner. In most states, by operation of law, title to the land becomes vested in such person after a fixed number of years if the owner fails to assert his or her rights.
AESTHETIC ZONING: Zoning for beauty. May regulate architectural styles, colors or signage.
AFFIDAVIT: A written statement of facts sworn to or affirmed before an authorized official (usually a notary public).
AFTER ACQUIRED TITLE: Title or interest acquired by the grantor after a property has been conveyed. Any benefits that come to a property after a sale must follow the sale and accrue to the new owner.
AGENCY: The relationship of trust in which one person (the agent) represents another (the principal) in dealing with third parties, as authorized by the principal.
AGENT: An agent is one who is authorized to represent another, called the principal, in dealing with third persons. Such representation is called agency. The agent, if within the scope of authority, may bind the principal by contract.
AGGREGATE FACING: A decorative finish on plywood, concrete or plaster.
AGREEMENT OF SALE: A written contract between buyer and seller in which they reach a meeting of the minds on the terms and conditions of the sale, but do not pass title. (See
CONDITIONAL SALES CONTRACT)AIR CONDITIONING ZONES: The identified portions of an area served by the HVAC system which have separate thermostatic and temperature controls.
AIR RIGHTS: The rights to the use of the space above the physical surface of the land.
Governments and airport authorities often purchase air rights adjacent to an airport, called an Allard Commercial Brokerage –Glossary of Terms Page 3 of 3 avigation easement, to provide glide patterns for air traffic. The air itself is not real property, but airspace is when described in three dimensions with reference to a specific parcel of land.
AIR HANDLER: A blower with a cooling or heating coil to move and condition air.
ALIENATE: To transfer the title to real property from one person to another.
ALIENATION CLAUSE: A special type of acceleration clause that demands payment of the entire loan balance upon sale or other transfer of the title. Such as: All Encompassing Deed of Trust;
Armistead Deed of Trust; Hold Harmless Deed of Trust; or, Over-Riding Deed of Trust.
ALL-INCLUSIVE TRUST DEED: A purchase money deed of trust subordinate to, but still including, the original loan.
ALLUVIAL DEPOSIT: Sand or mud, carried by water and deposited on land.
ALLUVIUM: Soil that builds up as a result of accretion.
ALQUIST-PRIOLO SPECIAL STUDY ZONE: A California law requiring a real estate agent or owner to disclose to prospective buyers that a property is located within a special study zone (geological hazard zone). "Special study zones" cover an area 660 feet on each side of fault lines and are indicated on maps prepared by the California Department of Mines and Geology.
A.L.T.A.: American Land Title Association
AMENDMENT: A change to the existing content of a contract. Any time words or provisions are added to or deleted from the body of the contract, the contract has been amended.
AMERICANS WITH DISABILITIES ACT (ADA): Signed into law July 26, 1990 ("ADA"), a federal law which prohibits discrimination against individuals with disabilities. The ADA addresses discrimination in four general areas: 1. Employment (Title I); 2. Public services (Title II); 3. Public accommodations and commercial facilities (Title III); and, 4. Telecommunications (Title lV). The purpose of the ADA is to give individuals with disabilities civil rights protection against discrimination similar to those afforded to individuals on the basis of race, color, national origin, sex, and religion.
AMORTIZATION: (1) The gradual repayment of a loan, normally by equal periodic payments in which the interest is at a pre-determined rate and is charged only on the unpaid balance, so that at the end of the period there is a zero balance. Some loans are not fully amortized and require a balloon payment at the end of the term. (2) In accounting, the reduction of the amount of a debt or the value of an asset over a period of time.
AMORTIZED LOAN: A loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal.
AMPERAGE: A term indicating the amount or consumption of electrical current.
AMPERE: A measure of the quality of electricity carried by a wire. It is the rate of flow, or current.
ANALYSIS OF A PROPERTY: A collection of and summary of all the known factors pertaining to a particular parcel of property for the purpose of forming an opinion as to its fair market value and future benefits.
ANCHOR TENANT: The key tenant in a proposed commercial property. Since the quality of the tenant usually dictates the size of the mortgage that can be secured for development purposes, a large national firm is most desirable.
ANNEXATION: An addition to property by the act of attaching a smaller thing to the larger property. Usually attaching personal property to real property.
ANNUAL PERCENTAGE RATE (A.P.R.): A term used in the Truth in Lending Act. It represents the relationship of the total finance charge (interest, discount points, origination fees, loan broker commission) to the amount of the loan.
ANNUITY: A series of assured equal or nearly equal payments to be made over a period of time or it may be a lump sum payment to be made in the future. The installment payment due to the landlord under a lease is an Annuity. So are the installment payments due to a lender.
APPRAISAL: An estimate or opinion of the monetary value of a property, supported by factual information as of a certain date.
APPRAISED VALUE: The valuation opinion of an appraiser, based upon an interpretation of facts and beliefs into an estimate of value, as of a stated date.
APPRECIATION: An increase in the worth or value of a property, due to economic causes.
APPROACHES TO VALUE: Employed by an appraiser to estimate the value of real estate: cost approach, income approach, and market data approach.
APPURTENANCE: A right or privilege that is a part of the ownership of property, such as a right of way to a highway across the land of another. Water rights are also an example.
ARCH RIB ROOF: A roof design resulting in arched or crescent shaped silhouette. Roof support is accomplished by a bow-string truss system, which is engineered to spread the roof load.
ASBESTOS/HAZARDOUS MATERIALS: Materials, which may exist in building structures, which may p s ad tme totn n‟occupancy.
o e er n t e a t i s ASSESSED VALUE: The value placed on land and buildings by a township or a county assessor for use in levying annual real estate taxes.
ASSESSMENT: A tax against real estate by a public authority to pay the cost of public improvements for the property such as sewers, streetlights, etc.
ASSESSMENT ROLL OR TAX ROLL: A list of all taxable property showing the assessed value of each parcel; establishes the tax base.
ASSIGN: To transfer over to another a claim, right, interest or title to property.