«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 ...»
TRUCK WELL: A ramp and/or level area below ground level which creates loading at truck height. A pump is required to clear water from the well following rains.
TRUST: An arrangement whereby legal title to property is transferred by the grantor (the trustor) to a person called a trustee, to be held and managed by that person for the benefit of another, called a beneficiary.
TRUST ACCOUNT: A special account where money is deposited by an agent for the account of a principal and is to be kept intact and not commingled.
Allard Commercial Brokerage –Glossary of Terms Page 83 of 83 TRUST DEED: Also called a deed of trust. A document where title to property is transferred to a third party trustee as security for a debt owed by the trustor (borrower) to the beneficiary (lender).
A trust deed is similar to a mortgage--the main difference is that it involves three parties. When a borrower repays the note secured by a trust deed, the trustee must reconvey title back to the borrower by way of a deed of reconveyance.
TRUST DEED LIEN: A lien on the property of a trustor that secures a deed of trust loan. (See Lien) TRUST FUNDS: Money or things of value received by the broker or the salesperson on behalf of his principal or any other person in the performance of any acts for which a real estate license is required and not belonging to the broker but being held for the benefit of others.
TRUSTEE: (1) One who holds property in trust for another as a fiduciary and is charged with the duty to protect, preserve and enhance the value and the highest and best use of the trust property. (2) One who holds property in trust for another to secure the performance of an obligation. In those states using trust deeds as security devices, the trustee holds bare legal title to the property pending the borrower/trustor paying off the underlying debt or promissory note.
The trustee is usually a lending institution, trust company or title insurance company.
TRUSTOR: The person who creates a trust and gives the instructions to the trustee. The borrower under a deed of trust.
TURN-KEY: Refers to industrial, commercial, office, etc. alike in that it refers to a space ready for occupancy.
UNCOLLECTED RENT: Uncollected rent or vacancy is subtracted from gross scheduled income.
Uncollected rent is an estimate expressed as a percentage and then converted to dollars.
UNDER FLOOR DUCT SYSTEM: A system of ducts permanently located in floors to assist in the installation of telephone and electrical wiring.
Allard Commercial Brokerage –Glossary of Terms Page 84 of 84 relationship like attorney-client or broker-seller. When a person has been unduly influenced to sign a contract, that person can void the contract.
UNENFORCEABLE CONTRACT: A contract that was valid when made, but cannot now be proved or will not be enforced by a court; not merely void or illegal, but unenforceable because it is not in writing, as may be required under the state statutes of frauds, or the statue of limitations has run.
UNILATERAL CONTRACT: A one-sided contract wherein one party makes a promise so as to induce a second party to do something. The second party is not legally bound to perform;
however, even if the second party does not comply, the first party is obligated to keep the promise.
UNILATERAL RESCISSION: Legal action taken to repeal a contract by one party when the other party has breached a contract.
UNITY OF OWNERSHIP: The four unities that are traditionally needed to create a joint tenancy:
unity of title, time, interest and possession.
UNLAWFUL DETAINER ACTION: Lawsuit to evict a tenant who unlawfully remains in possession of real property rightfully obtained.
UNREINFORCED MASONRY BUILDING: A building that does not meet current seismic code requirements.
UNSECURED: No specific property is available to satisfy a lien; a debt instrument backed only by ted bo‟po s t p y h e tr rmi o a.
s e USABLE AREA: A measure of the office space actually occupied by a tenant for its sole and exclusive use. The usable area on a single floor of a building may vary depending upon corridor configurations, whether the floor is a single tenant or multiple tenant occupancy, etc. Usable area on a floor can be converted to rentable area by the use of a conversion factor.
USURY: The act of charging a rate of interest in excess of that permitted by law.
USURY CEILING: The maximum legal rate of interest which may be charged for the use of money. This ceiling may vary depending on the type of loan and upon the borrowing entity (i.e., corporation vs. individual). (Certain loans may be exempt in some states, such as FHA-VA loans.) Each state has its own usury ceiling.
UTILITY VALUE: The value in use to an owner-user, which includes the value of amenities attaching to a property.
VACANCY & RENT LOSS: Vacancy refers to any type of rental property or unit thereof which is unrented. In the estimate of the gross income of the property, an allowance or discount for vacancy is usually made. Rent loss can result for a number of reasons, such as: (1) loss in rental income during periods of remodeling or rehabilitation of the project, (2) rent loss because of the tn n‟i bi t pay, (3) other such occurrences.
e a t n iy o s al t VALID CONTRACT: A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it.
VALUE: The worth of a thing in money or goods at a certain time.
VARIABLE AIR VOLUME BOX: A sheet metal box containing a modulating damper controlled by a wall thermostat designed for installation in a duct to vary air flow to a specific zone.
VARIABLE COSTS: Operating expenses that fluctuate with occupancy, such as utilities and maintenance costs.
VARIABLE LEASE: Allows for increases in the rental charges during the lease period. One of the more common is the graduated lease. A graduated lease provides for specified rent increases at set future dates. Another is the index lease, which allows rent to be increase or decreased periodically based on changes in the consumer price index or some other indicator.
VARIANCE: Permission obtained from governmental zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning lows; an exception from the zoning laws. A variance gives some measure of elasticity to the zoning game.
VAV (Variable Air Volume Conditioning System): A central heating and cooling system capable of varying the amount of supply air to accommodate the needs of multiple zones through the use of thermostatically controlled dampers.
VENDEE: The buyer under a contract of sale (land contract).
VENDOR: The seller under a contract of sale (land contract).
VESTED: Owned by.
VOID: To have no force or effect. A nullity. Unenforceable.
VOID CONTRACT: A contract that has no legal force or effect because it does not meet the essential elements of a contract.
VOIDABLE: That which is capable of being made void, but is not void unless action is taken to make it so.
VOIDABLE CONTRACT: A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties.
VOLUNTARY CONVEYANCE: Voluntarily signing over to a lender the property pledged as collateral on a defaulted loan. (See Deed in Lieu of Foreclosure) VOLUNTARY LIEN: A lien placed on property with the knowledge and consent of the property owner. (See Lien) WAIVER: The intentional or voluntary relinquishment of a known right, essentially a unilateral act.
Allard Commercial Brokerage –Glossary of Terms Page 86 of 86 WAREHOUSING: The process of assembling into one package a number of mortgage loans, prior to selling them to an investor.
WARM SHELL: Although it varies by Owner, a warm shell generally includes the installation of restrooms, HVAC mounted, electrical to the building panel, stairwell and stairs, and elevator.
WARRANTY: In a broad sense, an agreement or undertaking by a seller to be responsible for present or future losses of the purchaser occasioned by deficiency or defect in the quality, condition or quantity of the thing sold. In a stricter sense, the provision or provisions in a deed, lease or other instrument conveying or transferring an estate or interest in real estate under which the seller becomes liable to the purchaser for defects in or encumbrances on the title. A warranty is different from a representation in that a representation is a statement made in the course of negotiations leading up to the sale, but not incorporated into the contract. A warranty, on the other hand, is a statement in the contract asserting the truth of certain things about the property.
(See Title Covenants.) WARRANTY DEED: A deed in which the grantor fully warrants good clear title to the premises;
also called a general warranty deed. The usual covenants of title are covenant of seisin (possession), covenant of quiet enjoyment, covenant against encumbrances, covenant of warranty forever and covenant of further assurance. A warranty deed warrants the title, not the quality of construction of the real property. A warranty deed is used in most real estate deed transfers and offers the greatest protection of any deed.
WASTE: An improper use or an abuse of a property by a possessor who holds less than fee ownership, such as a tenant, mortgagor or vendee. Such waste ordinarily impairs the value of the land or the interest of the person holding the title or the reversionary rights.
WATER TABLE: The natural level at which water is located in a particular area, be it above or below the surface of the earth.
WILL: A written instrument whereby a person makes a disposition of his property to take effect after his death.
WINDOW MULLIONS: Those divisions on large windows which can accept tenant partitioning to create offices.
WITNESSED WILL: Will usually prepared by an attorney and signed by the maker and two witnesses.
WORKING CAPITAL: In a financial statement, the difference between CURRENT assets and CURRENT liabilities (CA – = working capital).
CL WORKING DRAWINGS: Drawings necessary to obtain a building permit and the construction of tenant improvements.
WORKLETTER: That part of the lease, usually attached to the back as an exhibit, which delineates all work that is to be done for the tenant by the landlord (sometimes called a construction rider).
WORKOUT: The various ways to offset a foreclosure. (See moratorium, waiver) WRAPAROUND MORTGAGE: A method of financing in which the new mortgage is placed in a Allard Commercial Brokerage –Glossary of Terms Page 87 of 87 secondary or subordinate position; the new mortgage includes both the unpaid principal balance of the first mortgage and whatever additional sums are advanced by the lender. Sometimes called an all-inclusive loan, an overriding loan or an overlapping loan. In essence, it is an additional mortgage in which another lender refinances a borrower by lending an amount over the existing first mortgage amount, without cashing out or disturbing the existence of the first mortgage. The entire loan combines two or more debts and is treated as a single obligation, and the wrap, or secondary, mortgagee pays the obligations of the first mortgage from the total payments received. While the wraparound lender makes the debt service payments on the first mortgage, the lender does not assume liability for this first lien. A default on the wraparound mortgage would usually result in a default on the underlying mortgage.
WRIT OF EXECUTION: A court order authorizing and directing an officer of the court to levy and sell property of the defendant to satisfy a judgment.
WRIT OF POSSESSION: A court order directing the sheriff to remove the tenant and his or her possessions within five days.
YIELD: The return on an investment or the amount of profit, stated as a percentage of the amount invested; the rate of return. In real estate, yield refers to the effective annual amount of income that is being accrued on an investment. The yield on income property is the ratio of the annual net income from the property to the cost or market value of the property. The yield, or profit, to a lender is the spread or differential between the cost of acquiring the funds lent and the interest rate charged.
ZERO COUPON BONDS: A single-payment bond that grows to its face value over a prescribed time period at a specific interest rate. All compound interest is tax-deferred until the bond is cashed.
ZONE: A portion of a building controlled by one thermostat. In air conditioning design, zones are created to maximize environmental comfort by grouping together area with similar conditions, i.e.
all exterior offices with a western exposure would constitute a zone.
ZONING: The regulation of structures and uses of property within designated districts or zones.
Zoning regulates and affects such things as use of the land, lot sizes, types of structure permitted, building heights, setbacks and density (the ratio of land area to improvement area).
ZONING ORDINANCE: An exercise of police power by a municipality to regulate and control the character and use of property.
ZONING VARIANCE: A zoning variance permits a change in the specifications required by the zoning ordinance.