«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 ...»
SATISFACTION OF MORTGAGE: When all mortgage loan payments have been made and the Note has been paid in full, a satisfaction of mortgage (also known as a release of mortgage or mortgage discharge) returns to the mortgagor all interest in the real estate conveyed to the mortgagee by the original recorded mortgage document.
SECONDARY FINANCING: A loan taken out in addition to a first loan; usually obtained from an individual lender.
SECONDARY MORTGAGE MARKET: A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for selling mortgages.
SECOND MORTGAGE: A mortgage that is junior or subordinate to a first mortgage; typically, an additional loan imposed on top of the first mortgage, taken out when the borrower needs more money. Because the risk involved to the lender is greater with the second mortgage, the lender's conditions are usually more stringent, the term is shorter and the interest rate is higher than for the first mortgage.
SECOND TRUST DEED: The evidence of a debt that is recorded after a first trust deed; or a junior trust deed.
SECRET PROFIT: Refers to a broker making an undisclosed profit at the seller's expense; for example, when the broker has an undisclosed relative buy the listed property and then resell it to a buyer whose earlier offer was never presented to the seller.
SECTION: An area of land, as used in the government survey method of land description; a land area of one square mile or 640 acres; 1/36 of township.
SECURITIZATION: The pooling of real estate mortgages and trust deeds to act as collateral for the sale of securities to public and private investors.
SECURITY: Evidence of obligations to pay money or of rights to participate in earnings and distribution of corporate, trust or other property. A security is usually found where an investor subjects his or her money to the risks of an enterprise over which he or she exercises no managerial control.
SECURITY AGREEMENT: The device commonly used to secure a loan on personal property.
SECURITY DEPOSIT: The sum of money, or equivalent, deposited by the lessee with the lessor or a trustee, as guarantee for performance under the lease terms.
SELLER CARRYBACK FINANCING: A sale of real property where the seller receives a portion of the sales price in the form of a promissory note secured by the real property purchased. An extension of credit by the seller.
SENIOR LOAN: A real estate loan in the first priority position.
SEPARATE PROPERTY: Property owned by husband or wife which is not community property.
Property acquired by either prior to marriage. Property acquired by deed, will or gift. Personal injury damages or compensation. Earnings of wife and minor children while living separate from her husband.
SERVICING AGREEMENT: Signed documentation as to who will service the loan.
SERVIENT TENEMENT: The property that is burdened by an easement. If property A has a rightof way across property B, property B is the servient tenement. The servient owner may not use the property in such a way as to interfere with the reasonable use of the dominant owner.
SETBACK: The amount of space local zoning regulations require between a lot line and a building line.
SEVERALTY: Ownership of real property by one person or entity.
SEVERANCE: Changing an item of real estate to personal property by detaching it from the land.
Example: cutting down a tree.
SHARED APPRECIATION MORTGAGE (SAM): A mortgage loan in which the lender, in exchange for a loan with a favorable interest rate, participates in the profits (if any) the borrower receives when the property is eventually sold.
SHARED TENANT SERVICES: Services provided by a building to allow tenants to share the costs and benefits of sophisticated telecommunications and other technical services.
S E IFSD E : d e g e t abuyer when property is sold through court action in order to H RF ‟ E D A e d i n o v satisfy a judgment for money or foreclosure of a mortgage.
SHINGLES: Roofing material characterized by short, rectangular sections, nailed to the roof decking in an overlapping pattern. Asphalt shingles are the most common type.
SIGNATORY: A signer, or one of the signers, of a document.
Allard Commercial Brokerage –Glossary of Terms Page 74 of 74 SIMPLE INTEREST: Interest computed on the principal balance only and not additionally on unpaid but previously earned interest.
SINGLE AGENCY: The practice of representing either the buyer or the seller but never both in the same transaction. The single-agency broker may be compensated indirectly through an authorized commission split or directly by the principal who employed the agent to represent him or her.
SINKING FUND: A fund aside from the income of property which, with accrued interest, will pay for the replacement of improvements.
SITE: The position, situation or location of a piece of land in a neighborhood.
SITUS: The personal preference of people for one area over another, not necessarily based on objective facts and knowledge.
SLAB: A flat piece of concrete, typically used as a walking surface, but may also serve as a load bearing device in concrete tilt-up construction.
SMART BUILDING: A building which has additional technical capabilities to provide enhanced building management and operating efficiency.
SMOKE VENTS: Vents in roof which open automatically to allow the escape of hot gases and smoke. Used in conjunction with Draft Curtains.
SOFT MONEY LOAN: A loan where credit not cash is extended. Usually by the seller carrying all or part of the financing.
SOLE PROPRIETORSHIP: A method of owning a business in which one person owns the entire business and reports all profits and losses directly on his or her personal income tax return, as contrasted with corporate, joint or partnership ownership. A sole or individual proprietorship is easy to organize and flexible to operate. It is frequently used in real estate brokerage. An individual proprietor may run a brokerage company if he or she has a valid broker's license. The proprietor may use his or her own name or a fictitious name previously registered as required by state law. There is a growing tendency for sole proprietors to incorporate and thus take advantage of certain tax and fringe benefits, such as those provided by pension and profit-sharing plans.
SOLID CORE DOOR: A door where the inner material (core) is made of solid wood. This type door is usually used for doors to the outside.
SPACE PLAN: A plan created by a space planner/interior architect showing locations of tenant improvements and the utilization of the space by the tenant.
SPECIAL AGENT: One authorized by a principal to perform a particular act or transaction, without contemplation of continuity of service as with a general agent. The real estate broker is ordinarily a special agent appointed by the seller to find a ready, willing and able buyer for a particular property. An attorney-in-fact under a limited power of attorney is a special agent.
SPECIAL ASSESSMENT: A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement, as opposed to a general tax on the entire community. Because the improvement will enhance the value of the affected Allard Commercial Brokerage –Glossary of Terms Page 75 of 75 buildings, only those affected owners must pay this special lien. Examples: Sidewalks, parks, recreational facilities, etc.
SPECIAL STUDIES ZONE: A specific area where an investigation is taking place regarding seismic or geologic considerations.
SPECIFIC LIEN: A lien affecting or attaching only to a certain, specific parcel of land or piece of property.
SPECIFIC PERFORMANCE: A doctrine of contract law by which a party is compelled by the court to perform his agreement.
SPENDABLE FROM INVESTMENT: Take home pay from investment. Net Spendable Income.
SPIN OFF EXCHANGE: In a spin-off, a corporation exchanges part of its assets to a new corporation in exchange for stock in the new corporation. This stock is immediately distributed to its shareholders who do not surrender any of their stock in the original corporation.
SPLASH BLOCK: A small, specially designed portable concrete pad. Oriented downhill, splash blocks direct water from rain gutters down drains or under outside hose faucets to flow away from the building.
SPLIT OFF EXCHANGE: Corporation transfers part of its assets to a new corporation in exchange for the stock of the new corporation. This stock is immediately distributed to the shareholders and they, in turn surrender part of their stock in the original corporation.
SPLIT UP EXCHANGE: Corporation is split into two or more corporations.
SPOT ZONING: Zoning of parcels not in conformance with the general zoning of an area.
SPRINKLERS: A fire suppression system designed into many buildings to avoid compartmentalization and to provide additional fire protection.
STAIR-STEPPED RENT: A rental rate which increases by fixed amount during the period of the lease term.
STANDARD COVERAGE TITLE INSURANCE POLICY: Insures risks against imperfect title (except matters disclosed from search of public records), lack of capacity of parties (forgers, minors, incompetents), lack of authority of parties and lack of delivery of instruments of title.
STANDBY FEE: A sum of money, generally 1% or 2% of the loan amount, which is held by the lender until all the conditions of its commitment letter have been satisfied and the loan is funded.
The standby fee is usually returned concurrently with funding the loan. In some cases, a portion or all of the standby fee may be negotiated as a non-refundable standby fee and, in this case, would be retained by the lender as additional interest for making the loan.
STANDBY TAKEOUT COMMITMENT: An agreement by an interim lender to advance funds to take out a construction lender.
Allard Commercial Brokerage –Glossary of Terms Page 76 of 76 STATUTE OF FRAUDS: A state law which requires that certain contracts must be in writing and contain certain essential elements in order to be legally enforceable.
STATUTE OF LIMITATIONS: The law that specifies the time limits in which legal action must be instigated to be enforceable in court. The theory behind the statute of limitations is that there must be some end to the possibility of litigation. It is said that stale witnesses and stale records produce little trust and result in accidental justice, if any.
STATUTORY: Regarding laws created by the enactment of legislation as opposed to law created by court decisions.
STATUTORY LIEN: A lien imposed on property by statute--a tax lien, for example--in contrast to an equitable lien, which arises out of common law.
STATUTORY REDEMPTION: The right of a defaulted property owner to recover the property after its sale by paying the appropriate fees and charges.
STEERING: Illegal practice of only showing clients property in certain areas.
STEP-DOWN LEASE: A lease which provides for a certain rent for an initial period, followed by a decrease in rent over stated periods.
STEP-UP LEASE: A lease which provides for a certain rent for an initial period, followed by an increase in rent over stated periods.
STIGMATIZED PROPERTY: A property that has acquired an undesirable reputation due to an event that occurred on or near it, such as violent crime, gang related activity, illness or personal tragedy.
STOP DATE: Date on a term loan when the balloon payment is due.
STRAIGHT LINE METHOD: A method of depreciation, also called the age life method, that is computed by dividing the adjusted basis of a property by the number of years of estimated remaining useful life. The cost of the property is thus deducted in equal annual installments.
STRAIGHT NOTE: A promissory note evidencing a loan in which payments of interest only are made periodically during the term of the note, with the principal payment due in one lump sum upon maturity. It may also be a note with no payments on either principal or interest until the entire sum is due. A straight note is usually a non-amortized note made for a short term, such as three to five years, and is renewable at the end of the term.
STRICT FORECLOSURE: In a strict foreclosure procedure, after a delinquent borrower has been notified and the proper papers have been filed, the court designates a specific period during which the balance of the default must be paid in full. If the payment is not made, the borrower's equitable and statutory redemption rights are waived and the court awards full legal title to the lender. There is no deficiency judgment in strict foreclosure cases.
SUBAGENT: An agent of a person who is already acting as an agent for a principal. The original agent can delegate authority to a subagent where such delegation is either expressly authorized or customary in the trade.
Allard Commercial Brokerage –Glossary of Terms Page 77 of 77 SUBDIVIDED LANDS ACT: A state law protecting purchasers of property in new subdivisions from fraud, misrepresentation or deceit in the marketing of subdivided property; concerned with financial aspects of a development. A public report is required for subdivisions of five or more parcels.
SUBDIVIDER: One who buys undeveloped land, divides it into smaller, usable lots and sells the lots to potential users.
SUBDIVISION: Any land that is divided or is proposed to be divided for the purpose of disposition into two or more lots, parcels, units or interests. Subdivision refers to any land, whether contiguous or not, if two or more lots, parcels, units or interests are offered as part of a common promotional plan of advertising and sale.
SUBDIVISION MAP ACT: Outlines City and County rules for filing subdivision maps to create subdivisions; concerned with physical aspects of a development.
SUBJECT PROPERTY: A reference to the real property under discussion or under appraisal.
SUBJECT TO: Method of taking over a loan without taking on the responsibility of a deficiency judgment. The grantee takes title but is not responsible for mortgage beyond the value of his equity in the property.
SUBLESSOR –SUBLESSEE –SUBLEASE: Sometimes a tenant is permitted to lease all or part of its interest in the premises to a third party. The original lessee thereby becomes a sublessor.