«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 ...»
DISINTERMEDIATION: The process of individuals investing their funds directly instead of placing their savings with banks, savings and loan associations, and similar institutions for investment by such institutions. Occurs when proportionately higher yields are available on secure investments than can be obtained on savings deposits.
DIVISIBLE CONTRACT: A contract that consists of separate agreements which are not dependent on each other. The illegality of one part will not void the balance of the contract.
DOCK HIGH: Refers to design of building that provides loading through doors at truck level.
Normal height would be between 42 and 52 inches. See also recessed dock, truck well.
DOCK LEVELER: A device, adjustable in height, which bridges space between truck floor and dock.
DOCK-HIGH BUILDING: A building in which the main floor is elevated to a height sufficient so that materials, equipment, products, etc., can be moved directly out loading doors onto trucks parked on the ground level outside the building (for a contrast, see Truck Well).
DOCTRINE OF CORRELATIVE USER: Owner may use only a reasonable amount of the total underground water supply for his or her beneficial use.
DOCUMENTARY TRANSFER TAX: A method of taxing real property transfers. Most California counties require that a tax be paid prior to recording the deed.
DOMINANT TENEMENT: The property that benefits from an easement.
DOOR FRAME: Made of either wood or hollow metal. A frame includes the following components: (a) head--the horizontal top portion of the door frame; (b) jamb--either the left or right vertical portion of the frame; (c) sill--the bottom of the door at floor level; (d) stop--continuous projection around frame to resist the door from traveling beyond a closing point; and (e) buck--the subframe of wood or pressed metal to which the door case is fixed.
DRILL TRACK: A rail track serving industrial property. Individual industry tracks depart from it to serve plant sites.
DROPPED CEILING: A suspended ceiling attached to the underside of the floor above.
DUAL AGENCY DISCLOSED: Real estate licensing laws may permit dual agency only if both parties (e, u e a ds lr re s r n l s e aei ome a dc n e totebo e‟ i.b y r n ee o l o a d e e ) r n r d n o s n t h rk r. l s s f s representation of both parties in the same transaction. Although the possibility of conflict of interest still exists, disclosure is intended to minimize the risk for the broker by ensuring that both principals are aware of the effect of dual agency on their respective interests and that they may have to assume greater responsibility for protecting their interests than they would if they had independent representation. The broker must reconcile how, as agent, he or she will discharge the fiduciary duties on behalf of both principals, particularly providing loyalty and protecting confidential information.
DUAL AGENT: An agency relationship in which the agent acts concurrently for both principals in a real estate transaction.
DUCT: A pipe, tube, channel, or any other unit necessary for conveying gases, liquids or solid units from one point to another. The term is also applicable to under-floor duct systems for conveyance of telephone line and other electrical conductors.
DURESS: The use of force to get agreement in accepting a contract. A contract entered into under duress is voidable.
EARNEST MONEY: The cash deposit (including initial and additional deposits) paid by the prospective buyer of real property as evidence of good-faith intention to complete the transaction;
called bargain money, caution money, hand money, or a binder in some states.
EASEMENT: A right to use the land of another for a specific purpose, such as a right-of-way or for utilities (see Incorporeal Interest). An easement appurtenant passes with the land when it is sold.
EASEMENT BY CONDEMNATION: An easement created by the government or government agency that has exercised its right under eminent domain.
EASEMENT BY PRESCRIPTION: An easement acquired by continuous, open and hostile use of property for the period of time prescribed by state law.
EASEMENT IN GROSS: An easement that is a personal right that is not transferable by its owner; it is not appurtenant to any one parcel; for example, public utilities.
ECONOMIC LIFE: The estimated period over which an improved property may be profitably utilized so that it will yield a return over and above the economic rent attributable to the land itself;
the period during which an improvement has value in excess of its salvage value. In the case of an older structure or improvement, economic life refers to the remaining period during which the improvements to the real property (not land) are depreciated for tax purposes, and is normally shorter than their acta p yi lv s S ea o“ s fl i.
u l h s a le. e l U eu L e” ci s f ECONOMIC OBSOLESCENCE: Impairment of desirability or useful life or loss in the use and value of property arising from economic forces outside of the building or property, such as changes in optimum land use, legislative enactment's that restrict or impair property rights, and changes in supply-demand relationships.
ECONOMIZER CYCLE: The system of controls and ducts to use cooler outside air for costless cooling in mild weather.
EFFECTIVE AGE: The years or age shown by the condition and utility of a structure, rather than its actual or chronological age.
EFFECTIVE GROSS INCOME: Scheduled gross annual income plus any reasonably expectable miscellaneous income, less vacancy and rent collection losses.
EFFECTIVE RENT: Total rental dollars divided by the period of occupancy. This is expressed as a dollar per square foot per month figure, which the tenant pays, on an average over the term of the lease. This would be the average of specified rents in a stair-stepped lease as well as the average of a lease with a substantial free rent period.
EFFICIENCY: The percentage of rentable area which is usable area, i.e. a 90% efficient building offers 900 usable square feet for every 1000 rentable square feet. (Note: Efficiency and load factor are not the same.) EGRESS: A way to exit from a property; the opposite of ingress.
Amperage: A term indicating the amount or consumption of electrical current.
Kilovolt-Ampere (K.V.A.): A unit of electro-motive forces equal to 1,000 volt amperes.
Three Phase Power: A three-wire electrical service used to power machinery.
Voltage: 110, 208, 240, 480 type service.
ELEVATOR BANKS: A series of elevators that serve only certain floors in a building. A major building may have as many as 3 or 4 elevator banks.
Allard Commercial Brokerage –Glossary of Terms Page 25 of 25 EMINENT DOMAIN: The right of a government or municipal quasi-public body to acquire private property for public use. It is acquired through a court action called condemnation, in which the court determines that the use is a public use and determines the price or compensation, which is generally fair market value, to be paid to the owner.
ENCUMBER: To place a lien or charge on land.
ENCUMBRANCE: Any claim, lien, charge or liability attached to and binding on real property that may lessen its value or burden, obstruct or impair the use of a property but not necessarily prevent transfer of title; a right or interest in a property held by one who is not the legal owner of the property. There are two general classifications of encumbrances: those that affect the title, such as judgments, mortgages, mechanics' liens and other liens, which are charges on property used to secure a debt or obligation; and those that affect the physical condition of the property, such as restrictions, encroachments and easements.
ENDANGERED SPECIES ACT: Passed by the United States Congress in 1973, the Act was originally intended to protect endangered species on federal lands. Since passage, the Act has been used to prohibit development or other land use in habitats of protected species.
ENERGY CHARGE: The surcharge per kilowatt hour used to reimburse power companies for higher fuel costs.
ENFORCEABLE: A contract or agreement in which the party (parties) can be compelled to perform.
ENTITY RULE: Three entities can hold property: individuals, partnerships and corporations. In the case of a property exchange, the way an exchanger holds property going into an exchange is the way they must hold the property coming out of the exchange.
ENTREPRENEURIAL BUILDING: A building where the landlord is not a major tenant and which is built primarily for its investment return potential.
ENVIRONMENTAL IMPACT REPORT (EIR): A report required by the California Environmental Quality Act that projects the impact a project may have on the environment. The reports includes relevant data and an analysis of its effects on the environment.
ENVIRONMENTAL SITE ASSESSMENT: An independent investigation and assessment of a property, usually performed by an outside environmental engineering firm, to determine if any existing or potential environmental problems or hazards exist on a property which might affect the use or market value. Sometimes referred to as the due diligence audit.
EQUAL CREDIT OPPORTUNITY ACT (ECOA): A federal law passed in 1974 that requires lenders to assure that credit is available with fairness, impartiality and without discrimination on the basis of race, color, religion, national origin, sex or marital status, age, receipt of income from public assistance programs, and ensure good-faith exercise of any right under the Consumer Allard Commercial Brokerage –Glossary of Terms Page 26 of 26 Credit Protection Act. Applies to real estate brokers if they routinely assist sellers/lessors in determining whether a proposed buyer/lessee is creditworthy.
EQUALIZATION: The raising or lowering of assessed values for tax purposes in a particular county or taxing district to make them equal to assessments in other counties or districts. Used to achieve uniformity in state wide tax assessments.
EQUITABLE LIEN: A lien arising out of common law. Contrast with a statutory lien, which is imposed on property by statute.
EQUITABLE REDEMPTION: A defaulted property owner recovers their property prior to its sale by curing the default.
EQUITABLE TITLE: The interest held by the trustor or vendee under a contract for deed or an installment contract; the equitable right to obtain absolute ownership to property when legal title is h l i a oh r n me e n n te‟ a.
d s EQUITY: The value of real estate over and above the liens against it. It is obtained by subtracting the total liens from the value.
EQUITY OF REDEMPTION: Also known as the right of redemption; the right of a debtor, before a foreclosure sale, to reclaim property that had been given up due to mortgage default.
EROSION: The gradual wearing away of land by natural processes; i.e., currents, tides or winds.
ESCALATION CLAUSE: Provision in lease providing for automatic adjustment in rent, maintenance or taxes, in the future by formula or by prescribed amount.
ESCAPE CLAUSE: A contract provision relieving a party of liability for failure to perform, as where a stated contingency does not occur. Alternately, a clause in a proprietary lease of a tenant-stockholder that permits the tenant to surrender the stock and lease back to the cooperative association and thereby terminate continuing liability for payments due under the lease.
ESCHEAT: The reversion of property to the state or county, as provided by state law, in cases where a decedent dies intestate and there are no heirs capable of inheriting or when the property is abandoned. In some states, bank accounts that are unused for more than seven years will escheat to the government.
ESCROW: A transaction, usually a sale, wherein one person delivers evidence of title to a third person to be held by such third person until the happening of the performance of a prescribed condition, when the evidence of title is then delivered to the buyer.
ESCROW HOLDER: A third party, usually a corporation, who acts as the stakes holder for a buyer and seller. Escrow holder acts as an agent for buyer and seller.
ESCROW INSTRUCTIONS: Written directions, signed by a buyer and seller, detailing the procedures necessary to close a transaction and directing the escrow agent how to proceed.
ESTATE AT SUFFERANCE: A tenancy created when one is in wrongful possession of real estate even though the original possession may have been legal. Example: A tenant continuing to occupy the real estate after the lease term has expired.
ESTATE AT WILL: The tenancy may be ended by the unilateral decision of either party; no agreed upon termination date, however, and either party must give 30 days notice before ending the tenancy.
ESTATE FOR YEARS: A leasehold estate with a definite end date; must be renegotiated;
commonly used for commercial leases.
ESTATE FROM PERIOD TO PERIOD: A leasehold estate that is automatically renewed for the same term; a conveyance for an indefinite period of time; does not need to be renegotiated upon each renewal; commonly a month to month rental.
ESTATE IN LAND: The degree, quantity, nature and extent of interest a person has in real property.
ESTATE PLANNING: An investment program, which is geared to the establishment of an estate in accordance with the wishes of the investor, and takes into account his age, educational background, marital status, hopes, aims, ambitions, managerial ability, ability to stick to an organized plan of acquisition and management of investments.
ESTATE TAXES: Federal estate taxes and state inheritance taxes (as well as the debts of decedents) are general, statutory, involuntary liens that encumber a deceased person's real and personal property. These are normally paid or cleared in probate court proceedings.
ESTIMATED BUYER'S COSTS: An estimate of the buyer's total cash requirements to purchase real property. A realistic estimate of all costs and payments based on the buyer's offer.