«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 ...»
MARKET INDICATION OF VALUE: The market value estimate predicated upon prices paid in actual market transactions. A process of analysis and correlation of similar, recently sold properties. The reliability of this technique is dependent upon: (a) the degree of comparability of each property with the property under appraisal, (b) the time of sale, (c) the verification of the sale date, (d) the absence of unusual conditions affecting the sale, and (e) the terms of the sale.
MARKET RENT: The rental income that real estate can command in an open, competitive market at any given time, as contrasted with contract rent, or the income actually received under a lease agreement.
MARKETABLE TITLE: Good or clear saleable title reasonably free from risk of litigation over possible defects.
MASONRY: Any construction material involving bricks/blocks and mortar or related materials.
MASTER DEED: The principal conveyance document used by the owners of land on which condominiums are located.
MATERIAL FACT: Any fact that is relevant to a person making a decision. Agents must disclose all material facts to their clients. Agents must also disclose to buyers material facts about the condition of the property, such as known structural defects, building code violations and hidden dangerous conditions. Brokers are often placed in a no-win situation of trying to evaluate whether a certain fact is material enough that it needs to be disclosed to a prospective buyer. It is sometimes difficult to distinguish between "fact" and "opinion." Even though brokers act in good Allard Commercial Brokerage –Glossary of Terms Page 50 of 50 faith, they may still be liable for failure to exercise reasonable care or competence in ascertaining and communicating pertinent facts that the broker knew or "should have known."
MEAN: The average of all items included within a group, calculated by dividing the sum of the individual items, or variates, by the number of variates.
MEDIAN: The middle figure in a set of numbers.
MEDIATION: A process by which a neutral third party works with the parties in a dispute to reach a satisfactory solution.
MENACE: Using threat of violence to get agreement in accepting a contract.
MENTOR PROGRAM: A training program in a real estate office wherein newly-hired agents assist successful, knowledgeable salespersons for a period of time.
MERGER: The joining of a lesser right with a greater right so that the lesser right is lost.
MERIDIAN: One of a set of imaginary lines running north and south and used by surveyors for reference in locating and describing land under the government survey method of property description.
METAL PAN: An architectural term for a preformed sheet metal unit, which is set in place to receive a plastic material (concrete, terrazzo, etc.). It is frequently used for ceiling or stair construction.
METAL ROOF DECK: Ribbed metal supported across roof joists and girders, onto which insulation and roofing material are laid.
METAL SIDING: A steel or aluminum pre-painted wall, ribbed for rigidity, insulated or uninsulated.
METES AND BOUNDS: A method of legally describing a parcel of land in which the dimensions of the property are measured by distance and direction from a well marked point.
MEZZANINE: An intermediate floor placed between the floor and ceiling of a single story. A mezzanine has a low ceiling height and covers only a small portion of the main floor area.
MEZZANINE STEEL: The heavier live load design for floor occupancy that results in a heavier steel design than that for a roof load.
MILLWORK: Finished carpentry work; wood processing done in the mill or factory, as distinguished from handwork on the job.
MISREPRESENTATION: A false, incorrect or misleading statement, account or explanation. Also concealment of a material fact. Made or omitted with the intention of inducing some action by another party.
Allard Commercial Brokerage –Glossary of Terms Page 51 of 51 MISTAKE: An error or misunderstanding. A contract is voidable if there is a mistake that is mutual, material, unintentional and free from negligence. Innocent mistakes seldom serve to void a contract. A party cannot claim "mistake" to get out of a contract on the basis that he or she did not read the contract he or she signed and was therefore mistaken as to its material terms;
neither ignorance nor poor judgment is a mistake of fact. Nor can a party claim mistake in not knowing the legal consequences upon signing the contract (mistake of law). When there is an ambiguity known by one party who fails to explain the mistake to the innocent party, the innocent party's interpretation generally will prevail.
MITIGATION: To make less severe, as in the "mitigation" of environmental hazards.
MIXED-USE DEVELOPMENT (MUD): MUDs combine office space, stores, theaters and apartment units in a single community. MUDs usually contain and offer laundry facilities, restaurants, food stores, valet shops, beauty parlors, barbershops, swimming pools and other attractive and convenient features.
MODIFIED NET: Each and every expense must be identified as to where the responsibility for payment lies. Taxes are always paid for by the tenant; all other expenses may be negotiated.
MONTH-TO-MONTH TENANCY: A periodic tenancy under which the tenant rents for one month at a time. In the absence of a rental agreement (oral or written) a tenancy is generally considered to be month to month.
MONUMENT: A fixed natural or artificial object used to establish real estate boundaries in a metes and bounds land description.
MORATORIUM: 1. A temporary suspension of payments due under a financial obligation in order to help a distressed borrower recover from financial difficulties and avoid default and foreclosure.
2. A temporary suspension of issuing building permits.
MORTGAGE BANKER: A person, corporation or firm not otherwise in banking and finance that normally provides its own funds for mortgage financing as opposed to savings and loan associations or commercial banks that use other people's money; namely that of their depositorsto originate mortgage loans. Although some mortgage bankers do supply permanent long-term financing, the majority specialize in supplying short-term and interim financing, either through their own resources or by borrowing from commercial sources.
MORTGAGE BROKER: A person or firm that acts as an intermediary between borrower and lender; one who, for compensation or gain, negotiates, sells or arranges loans and sometimes continues to service the loans; also called a loan broker. Loans originated by the mortgage broker are closed in the lender's name and are usually serviced by the lender. This is in contrast to mortgage bankers, who not only close loans in their own names but continue to service them as well. Many mortgage brokers are also licensed as real estate brokers and provide these financing services as supplements to their realty services.
MORTGAGE LIEN: The lien or charge on real estate given to the mortgagee when the mortgagor
MORTGAGE LOAN CORRESPONDENT: A mortgage banker who originates and services loans for an investor, as an agent of the investor, according to terms specified in the Correspondent Contract between the investor and the mortgage banker.
MORTGAGE LOAN DISCLOSURE STATEMENT: A statement that informs the buyer of all charges and expenses related to a particular loan, disclosure of which is mandated by Article 7 of the Real Estate Law.
MORTGAGE TERM: The length of time (specified in the loan documents) in which the mortgage loan must be paid off.
MORTGAGEE: In a mortgage transaction, the party who receives and holds a mortgage as security for a debt. The lender.
MORTGAGEE'S TITLE INSURANCE: An insurance policy protecting the lender for the amount of the loan in the event of a future title dispute.
MORTGAGOR: In a mortgage transaction, the buyer/borrower is the mortgagor. The mortgagor is required to sign a promissory note for the amount borrowed and to execute a mortgage to secure the debt. The mortgage note creates a personal liability for payment on the part of the mortgagor.
MOTIVATION: Reason why property owner wants to sell, exchange or lease his property.
MULTI-TENANT: The term multi-tenant preceding any of the above definitions qualifies each in that provisions are incorporated in each lease which address the common expenses and the administrative procedure for controlling same.
MUST-BUY BUYERS: Buyers looking for properties that meet specific needs.
MUST-SELL SELLERS: Highly motivated or desperate sellers.
MUTUAL CONSENT: Both parties approve or assent to the terms of a contract freely.
NAKED LEGAL TITLE: Bare title to the property lacking the rights and privileges commonly associated with ownership. A trustee in a deed of trust securing instrument may hold the title to a secured property, but only such title as is needed to carry out the terms of the lien document.
Allard Commercial Brokerage –Glossary of Terms Page 53 of 53 NEGATIVE AMORTIZATION: A financing arrangement in which the monthly payments are less than the true amortized amounts and the loan balance increases over the term of the loan rather than decreases. An interest shortage that is added to unpaid principal.
NEGATIVE DECLARATION: A declaration by a developer that a project will not have a negative impact on the environment.
NEGATIVE EASEMENT: An easement where the owner of a servient estate is prohibited from doing something on his or her estate that is otherwise lawful, because it will affect the dominant estate.
NEGLIGENCE: The failure to use ordinary or reasonable care under the circumstances.
NEGLIGENT MISREPRESENTATION: A negligent misrepresentation occurs when the broker should have known that a statement about a material fact was false. The fact that the broker may actually be ignorant about the issue is no excuse.
NEGOTIABLE INSTRUMENT: A promissory note or check that meets certain legal requirements allowing it to circulate freely in commerce.
NET EFFECTIVE EQUITY: Gross effective equity minus selling costs. Equity plus available cash minus selling costs.
NET INCOME: The difference between the effective gross income and the expenses, including taxes and insurance. Usually the terms are qualified as net income before debt service.
NET OPERATING INCOME (NOI): The income projected for an income-producing property after deducting losses for vacancy, collection and operating expenses.
NET PROCEEDS: The cash received after paying all liens and expenses.
STORE AREAS –Measured from the building line in the case of street frontages, and from the inner surface of other outer building walls and from the inner surface of corridor and other permanent partitions from adjoining rentable areas. No deduction should be made for vestibules inside the building line or for columns or projection necessary to the building. No addition should be made for bay windows extending outside the building lines. If the rentable area is entirely inside the building line, measure from the inner surface of the building walls and from the inner surface of the corridor and other permanent partitions and to the center of partitions that separate the premises from adjoining rentable areas. No deduction should be made for columns, projections, or footing stones necessary to the building.
BASEMENT AREA –If the rentable area extends beyond the building line under the sidewalk, measure from the curtain wall or finished surface of the retaining wall and from the inner surface of corridor and other permanent partitions and to the center of partitions that separate the premises from adjoining rentable areas. If the rentable area is entirely inside the building line, measure from the inner surface of building walls and from the inner surface of corridor and other permanent partitions and to the center of partitions that separate the premises from adjoining rentable areas. No deduction should be made for columns, projections, or footing stones necessary to the building.
NET TO THE SELLER: Unless otherwise specified, this means only less real estate commission.
Escrow fees, title insurance policy, etc. are assumed to be per county custom.
NET SPENDABLE: The cash remaining from the gross income after deducting operating expenses, principal and interest payment, and income taxes.
NET WORTH: In a financial statement, total assets less total liabilities = net worth (TA-TL = NW) NEUTRAL DEPOSITORY: an escrow business conducted by someone who is a licensed escrow holder.
Allard Commercial Brokerage –Glossary of Terms Page 55 of 55 NOMINAL INTEREST RATE: The stated interest rate in a note or contract, which may differ from the true or effective interest rate, especially if the lender discounts the loan and advances less than the full amount.
NON-CONFORMING USE: A use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area.
NON-CUMULATIVE ZONING: Zoning that allows only the stated use and not more restrictive uses.
NON-INSTITUTIONAL BUILDING: (See Entrepreneurial Building) Note: IRS also includes cash asboot; however, exchanges keep cash separate from other boot in order to keep track of it.
NON-JUDICIAL FORECLOSURE: The process of selling real property under a power of sale in a mortgage or deed of trust that is in default. One disadvantage is that the lender cannot obtain a deficiency judgment. Also, some title insurance companies are reluctant to issue a policy unless a court has judicially foreclosed the mortgagor's interest.
NOTE: A document signed by the borrower of a loan and stating the loan amount, the interest rate, the time and method of repayment and the obligation to repay. The note serves as evidence of the debt. When secured by a mortgage, it is called a mortgage note, and the mortgagee is named as the payee. In a trust deed, the note is usually made payable to the bearer or holder.