Archive for July, 2010
L.S. – An abbreviation for “Locus sigilli”, the place of the seal. At one time, individuals had seals, and documents were invalid unless the seal was affixed. Modernly, signatures are notarized and only corporations, in certain circumstances, must affix a seal.
LABOR – (1) Work as opposed to materials. (2) A land measure of 177 1/7 acres. Used in Mexico.
LACHES – An unreasonable delay by a party making a claim or bringing an action, so that the rights of said party are waived. Laches are not controlled by a statute of limitations.
LAISSEZ-FAIRE – Leave alone, let proceed. French expression made popular by Adam Smith, and used to describe a theory that free trade promotes a better business climate than government controls.
LALLY COLUMNS – Load-bearing steel columns, which are filled with concrete (lally).
LAMINATE – The word means both to split into thin layers and to combine thin layers, as well as to cover with a thin layer.
LAMINATED WOOD – Wood such as plywood, which is constructed in sheets, or veneered wood, such as cheaper softwood, covered with a layer of more expensive hardwood, and glued together.
LAND – A general term which includes the ground and those things of a permanent nature such as trees, crops, oil and minerals in the ground, unless specifically excepted.
LAND BANK – An accumulation of land held for future use.
LAND CERTIFICATE – A certificate given by the federal government enabling one to obtain land by following certain registration processes. Used in the late 1800′s.
LAND CONTRACT – An installment contract for the sale of land. The seller (vendor) has legal title until paid in full. The buyer (vendee) has equitable title during the contract term.
LAND DEVELOPMENT LOAN – A loan secured by a mortgage or deed of trust to prepare raw land for construction of structures. (See: Manufactured Lot).
LAND GRANT – A gift of public land by the federal government to a state or local government, corporation, or individual.
LAND LOAN – A loan with collateral security of unimproved land. Usually the loan to value ratio is less than on improved land.
LAND PATENT – See: Patent.
LAND RECLAMATION – Giving land a higher (more commercial) use by physically changing it (drainage, irrigation, fill, etc.).
LAND RESIDUAL TECHNIQUE – An appraisal technique by which land value is determined by first determining the net return attributable to the building only; and deducting it from the total return to the property (may be estimated); the residual amount is capitalized to find the land value. The building value may be determined by construction costs (new building), depreciated construction costs (if only a few years old), or estimated present construction costs (if an older building).
LAND USE MAP – A map of a given area, showing the different land uses in the area.
LAND USE PLANNING – The development of long range plans for the use of land in a given area, such as through zoning plans.
LAND USE REGULATION – A general term encompassing any regulation of land, whether pubic (zoning) or private (restrictive covenants).
LAND VALUE MAP – An appraisal map showing the value of property in given areas, either in acres, square footage, or front footage.
LAND WARRANT – See: Warrant.
LAND, TENEMENTS, AND HEREDITAMENTS – Originally used to describe freehold estates only, it has come to mean the most technical and all-inclusive description of real estate.
LAND-POOR – Being short of money because of owning an excess of property which does not produce income.
LAND-SERVICE ROAD – An access road between parcels of land and another public road or highway.
LANDING – (1) A place for loading and unloading people or cargo from a boat, train, etc. (2) A flat surface adjoining a staircase at the top, bottom, or between flights.
LANDLOCKED PARCEL – A parcel of land surrounded entirely by privately owned land, with no access to a public right of way (road). Condemnation for a limited access highway is a major cause of such parcels.
LANDLORD – An owner of leased real estate.
LANDLORD’S WARRANT – A warrant enabling a landlord to levy upon a tenant’s personal property (furniture, etc.) and to sell this property at a public sale to collect delinquent rent.
LANDMARK – Originally, a monument on a boundary line. Modernly, boundary lines are usually established by walls or fences, and these are the landmarks.
LANDOWNER’S ROYALTY – In oil and gas leases, the portion of the value of each barrel of oil which goes to the property owner.
LANDSCAPE – A picture or single view of inland scenery. In real estate terms, the surroundings of a structure which provide the setting for that structure. To landscape is to modify the natural setting.
LANDSCAPE ARCHITECT – One who, as a profession, plans and designs landscaping. Colleges now offer a degree as a landscape architect.
LANDSCAPE ARCHITECTURE – The designing and planning of landscaping by a landscape architect.
LANDSCAPING – The act of modifying a landscape, or features used in such modifications, such as trees, lawns, grade changes, etc.
LAP JOINT – The connection (joint) formed by overlapping two ends or edges and attaching them together.
LAP SIDING – A siding applied in a similar manner to clapboard siding, but utilizing longer boards, usually of better quality.
LARGER PARCEL – A term used in eminent domain proceedings, signifying that the parcel taken is not a complete parcel but part of a “larger parcel”; the owner, therefore, is entitled to damages from the severance as well as the value of the parcel taken. Unity of ownership use, and contiguity must be present, although federal courts and some states do not require contiguity where there is a strong unity of use.
LATE CHARGE – A penalty for failure to pay an installment payment on time. Usually not allowed as interest for tax deductions. May or may not be included as usury. If not, the amount of late charge is either set by statute or must be “reasonable”.
LATENT DEFECT – A hidden or concealed defect. One which could not be discovered by inspection, using reasonable care. In legal descriptions, a latent defect may be corrected, and a totally new description not necessary.
LATERAL – Proceeding from, situated at, directed to, or pertaining to a side. A line branching from a main line (such as a sewer line) is called a lateral line. See also: Lateral Support.
LATERAL SUPPORT – The right of a landowner to the natural support of his land by adjoining land. The adjoining owner has the duty not to change his land (such as lowering it) so as to cause this support to be weakened or removed. See also: Subjacent Support.
LATH – The support upon which wet plaster is spread. May be metal (usually a course wire screen) or a solid, cement-like substance (called rock lath).
LATITUDE – North-South distance above a meridian as measured from the equator.
LAUNDROMAT – A business which provides, at its location, laundry equipment (coin operated) for self service use by the public.
LAVATORY – (1) A basin or sink for washing one’s hands and face. (2) A room containing a sink and toilet.
LAW DAY – (1) The day (date) in a note, mortgage, etc., when the debt is to be paid. (2) A holiday honoring the law and legal profession.
LAYOUT – (1) The arrangement or plan of any given area, such as the rooms within a structure. (2) The plans (drawings) showing the arrangement of a given area.
LEACHING – Removal of liquid waste material from sewage by filtration through sand, gravel, tiles, stones, etc.
LEACHING TRENCHES – Ducts, either dug in ground having filtration qualities (gravel, sand, etc.), or in which filtration materials are placed to remove the liquid waste from sewage.
LEADER – The metal conduit carrying rainwater from a roof to a sewer or the ground.
LEAN-TO – (1) A shed, abutting the wall of another structure, with three walls and a sloping roof. (2) A free standing structure of three walls and a sloping roof, the open side of which is sheltered from the prevailing winds. Used as a camping shelter.
LEASE – An agreement by which an owner of real property (lessor) gives the right of possession to another (lessee), for a specified period of time (term) and for a specified consideration (rent).
LEASE WITH OPTION TO PURCHASE – A lease under which the lessee has the right to purchase the property. The price and terms of the purchase must be set forth for the option to be valid. The option may run for the length of the lease or only for a portion of the lease period.
LEASE-PURCHASE AGREEMENT – See: Lease with Option to Purchase.
LEASE-PURCHASE MORTGAGE LOAN – A financing method allowing a tenant to make payments on a mortgage plus an amount set aside to be used as a down payment for purchase of the property. Usually offered to low income buyers by local governments or community organizations.
LEASEBACK – See: Sale-Leaseback.
LEASED FEE – The lessor’s interest in the property.
LEASEHOLD – An estate in realty held under a lease; an estate for a fixed term. Considered in many states to be personal property.
LEASEHOLD IMPROVEMENTS – Improvements made by the lessee. The term is used in condemnation proceedings to determine the portion of the award to which the lessee is entitled. See also: Tenant Improvements.
LEASEHOLD INTEREST – The interest which the lessee has in the value of the lease itself in condemnation award determination. The difference between the total remaining rent under the lease, and the rent lessee would currently pay for similar space for the same time period.
LEASEHOLD LOAN – A loan secured by the lessee’s interest in the property.
LEASEHOLD VALUE – The value of a leasehold interest. Usually applied to a long term lease when market rental for similar space is higher than rent paid under the lease. Some states allow the lessee to claim the leasehold value against the landlord in eminent domain proceedings, unless specifically prohibited by the lease itself. Other states, by statute, do not allow for such a claim. See also: “No Bonus” Clause.
LEAVES – The panel-like parts of a door, window, table top, etc., which may be removed or moved to a different position by sliding or by hinge attachments.
LEGAL AGE – See: Majority.
LEGAL DESCRIPTION – A method of geographically identifying a parcel of land, which is acceptable in a court of law.
LEGAL NAME – First and last name. Middle name included, omitted or incorrect will not matter. Today full names (for identification purposes) are required in many instances, but only for identification purposes (to distinguish between two men named John Smith, for example).
LEGAL NOTICE – The notice required by law in a particular case. May be actual notice, constructive notice, etc.
LEGAL OWNER – The term has come to be used as a technical difference from the equitable owner, and not as opposed to an illegal owner. The legal owner has title to the property, although the title may actually carry no rights to the property other than a lien.
LEGAL RATE OF INTEREST – A rate of interest established by law, rather than by agreement (contract).
LEGAL TITLE – Usually title without ownership rights, such as the title placed in a trustee under a deed or trust, or the title in a vendor under a land contract.
LEGATEE – (1) One who receives personal property by will. (2) One receiving any property by will, real or personal.
LENDER – Any person or entity advancing funds which are to be repaid. A general term encompassing all mortgagees, and beneficiaries under deeds of trust.
LENDER’S LOSS PAYABLE CLAUSE – See: Loss Payable Clause.
LENDER’S POLICY – See: Loan Policy.
LESSEE – The party to whom a lease (the right to possession) is given in return for a consideration (rent).
LESSEE’S INTEREST – In appraising the value of a lessee’s interest to determine the value of a potential sublease of assignment (sale) of the lease, the value is the market value of the property, less the interest of the lessor. The lessor’s interest would be largely determined by the ratio of the return on the lease to the market value without the lease.
LESSOR – The party (usually the owner) who gives the lease (right to possession) in return for a consideration (rent).
LESSOR’S INTEREST – The present value of the future income under the lease, plus the present value of the property after the lease expires (reversion).
LETTER APPRAISAL – A brief report giving only conclusions, as opposed to a narrative report detailing how the conclusions were reached.
LETTER OF ATTORNMENT – A letter from a grantor to a tenant, stating that the property has been sold, and directing rent to be paid to the grantee (new owner).
LETTER OF CREDIT – A letter, usually from a bank, requesting a person or company to extend credit to a certain person or company, and guarantying payment. Most commonly used in the purchase of goods from another country. The letter may be revocable or irrevocable, but most parties insist on the irrevocable.
LETTER OF INTENT – A formal method of stating that a prospective developer, buyer, or lessee, is interested in property. Not an offer and creates no obligation. However, a builder who wants to build an office building, for example, may influence a lender by showing letters of intent from major prospective tenants.
LETTERS OF ADMINISTRATION – A probate court order appointing an administrator.
LETTERS PATENT – An instrument from the government (federal or state) granting land to an individual.
LETTERS TESTAMENTARY – Order of a probate court granting authority to an executor.
LETTING – A synonym for leasing.
LEVEE – An embankment constructed along a river or stream to prevent flooding.See also: Causeway.
LEVEL PAYMENT LOAN – See: Interest Included Note.
LEVERAGE – The use of financing to allow a small amount of cash to purchase a large property investment.
LEVY – A collection, seizure, assessment, etc., such as to levy (assess and collect) taxes.
LIABILITY – A general term encompassing all types of debts and obligations.
LIABILITY INSURANCE – Coverage to protect the insured against claims of negligence resulting in injury or property damage to the claimant.
LIABLE – Obligated, responsible.
LIBER – The latin word for book. Used instead of the word book in some states when referring to the book and page of a recorded document.
LICENSE – A permission, either express or implied.
LICENSEE – (1) Regarding classifications of people entering upon another’s land, a licensee is distinguished from a trespasser, and so has greater legal rights. (2) One who holds a real estate license (a salesperson).
LICENSING ACTS – Laws regulating the granting of real estate licenses. Because these are state laws, the requirements (education, testing, etc.), are not of equal severity. However, generally they are similar, requiring testing and granting exceptions, such as trustees, executors, owners selling property themselves, etc.
LIEN – An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances but all encumbrances are not liens.
LIEN THEORY – A theory followed in several states that assumes a mortgage has only a lien on the mortgage property, and the mortgagor has legal title. See: Title Theory.
LIEN WAIVER (WAIVER OF LIENS) – For our purposes, a waiver of mechanic’s lien rights, signed by subcontractors so that the owner or general contractor can receive a draw on a construction loan.
LIFE – The length of time an improvement will last, either in relation to its physical utility or as an accounting procedure.
LIFE BENEFICIARY – One who receives payments or other rights from a trust for his or her lifetime.
LIFE ESTATE – An estate in real property for the life of a living person. The estate then reverts back to the grantor or on to a third party (remainderman).
LIFE IN BEING – The remaining life of someone already alive. An expression used in rules against perpetuities.
LIFE INTEREST – An interest in real estate for a period of the life of the one having the interest, or the life of another.
LIFE TENANT – One who holds land for the length of his, or another’s life.
LIFETIME MONTHLY ADVANCE REVERSE MORTGAGE – Monthly payments to the borrower under this reverse mortgage continue until the borrower’s death, even if the borrower sells the mortgaged property. Because the lender’s collateral security is lost if the property is sold, the borrower must purchase an annuity at the origination of the loan.
LIFETIME PAYMENT CAP – See: Payment Cap.
LIFETIME RATE CAP – The limit (cap) that the interest rate can adjust over the life of an adjustable rate loan.
LIGHT – A single window pane, or opening for a single window pane.
LIGHT AND AIR EASEMENT – An easement restricting the servient tenement from obstructing the light and air (usually the view) of the dominant tenement. For example: A developer builds a resort hotel. He may wish to obtain a light and air easement from adjoining owners so that they may not build tall structures and block the sun from the hotel’s swimming pool.
LIGHT INDUSTRY – Encompassing most light manufacturing, as opposed to factories which tend to produce heavy pollution (air, water, noise, etc.). A zoning designation.
LIGHT WELL – (1) An open space around a basement window, the top of which is at ground level. (2) A shaft designed to provide light and ventilation to inside rooms of a building.
LIGHTER – A flat bottomed boat or barge, used to unload ships not at a quay, and for transporting goods within the harbor.
LIKE IN KIND PROPERTY – A tax term used in exchanges. Property may be exchanged for like in kind property and the tax postponed. The term does not refer to the physical similarity of the properties but the purpose and intent (investment) of the taxpayer.
LIKE-KIND PROPERTY – Property that satisfies the requirements of a 1031 exchange. Most real property can qualify, such as unimproved property for improved property. Section 1031 of the Internal Revenue Code sets out the requirements.
LIME – A white powder, formed by burning limestone, used in making bricks, mortar, plaster and similar materials, and for treatment of sewage, soil, etc.
LIMESTONE – A sedimentary rock, formed mainly from sea shells and coral, and which, when burned, forms lime.
LIMING – To apply lime and water to wood (whitewash), limestone to ground, or in other ways apply lime.
LIMITATION OF ACTION – The time in which a law suit may be begun before it is barred by statute. See also: Statute of Limitations.
LIMITED ACCESS HIGHWAY – A highway with access only at spaced intervals, usually by the use of ramps. Abutting property occupants have no access other than at the regular stated intervals. Also called a controlled access highway.
LIMITED FEE – See: Defeasible Title.
LIMITED PARTNER – See: Limited Partnership.
LIMITED PARTNERSHIP – Used in many real estate syndications; a partnership consisting of one or more general partners who conduct the business and are responsible (liable) for losses, and one or more special (limited) partners, contributing capital and liable only up to the amount contributed.
LINE FENCE – A fence erected along the property lines of a ranch or farm.
LINE OF CREDIT – An amount of money a borrower may obtain from a bank without a special credit check. The money is generally for business purposes and the amount would not include the borrower’s own home loan and other personal secured loans.
LINEAL – Concerning a line. A lineal measure is a distance measure rather than an area measure.
LINING – The covering on the interior of a building, as distinguished from the exterior, or casing.
LINK – In surveying, a length of 7.92 inches.
LINOLEUM – A floor covering used in heavy traffic areas (kitchens, bathrooms, entrances, etc.), made of cork, linseed oil, resins and pigments on a canvas or burlap backing, and applied from a roll. A quality material superior to many “tiles”.
LINTEL – A horizontal member spanning above an opening, such as a doorway, and usually bearing the load above it.
LIQUID ASSETS – Cash, or assets immediately convertible to cash.
LIQUIDATED DAMAGES – A definite amount set forth in a contract to be paid by the party breaching the contract. It must be a reasonable estimate of damages or else it is considered a penalty and unenforceable. If the parties intend this to be the only remedy, it should be so stated.
LIQUIDATION – The settling of financial affairs of a business or individual, by liquidating (turning to cash) all assets for distribution to creditors, heirs, etc.
LIQUIDATION PRICE – A price paid for property sold to liquidate a debt. Usually less than market value since there is pressure to sell or a forced sale, either of which does not often bring the highest price.
LIQUIDATION SALE – Any sale of property to liquidate a defaulted loan secured by the property. This would include a foreclosure sale, trustee’s sale and sale to the lender to avoid foreclosure. See: Deed In Lieu Of Foreclosure.
LIQUIDATION VALUE – See: Liquidation Price.
LIQUIDITY – Having liquid assets (see which).
LIS PENDENS – A legal notice recorded to show pending litigation relating to real property, and giving notice that anyone acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation.
LISTING – An agreement between an owner of real property and a real estate agent, whereby the agent agrees to secure a buyer or tenant for specific property at a certain price and terms in return for a fee or commission.
LISTING AGENT – A real estate agent obtaining a listing (see which), as opposed to the selling agent.
LISTING SAVING (OR SAVING’S) CLAUSE – A clause in a listing agreement by which the principal (seller) agrees to pay the agent (broker) a commission for a sale of the property for a specified time after the listing has expired. The agent must have offered the property to the buyers during the listing period. The agent registers the potential buyers with the seller during the listing period.
LITER (LITRE) – A metric measure of volume, equal to 61.02 cubic inches (slightly more than one quart) liquid measure.
LITERAGE LIMITS – Area in a harbor which is serviced by lighters on a regular basis and standard charge.
LITTORAL – Concerning the shore of lakes and oceans, as opposed to rivers and streams, for which the word riparian is used.
LITTORAL RIGHTS – Rights concerning properties abutting an ocean or lake rather than a river or stream (riparian). Littoral rights are usually concerned with the use or enjoyment of the shore.
LIVABILITY – Minimum standards set by local government for the quality of residential structures (especially rental units).
LIVE – Having force or containing energy, such as a live volcano (one capable of eruption), live wire (one carrying electric current), etc.
LIVE LOAD – (1) Variable weight in a building, such as furniture and people, as opposed to the fixed weight of a building itself (dead load). (2) The weight of cargo in a truck which is taxed by weight. (3) The weight of traffic over a bridge.
LIVING TRUST – A trust which is in effect during the life of the settlor, rather than upon his death (testamentary trust).
LOAD – (1) A weight carried or supported by something, such as supported by “load-bearing” members of a building, or the weight carried in a ship, truck, etc. (2) The power of an electrical charge.
LOAD-BEARING – Supporting weight in addition to its own vertically, or supporting pressure laterally.
LOAD-BEARING WALL – See: Bearing Wall.
LOAN – A lending of a principal sum of money to one who promises to repay said sum, plus interest.
LOAN APPLICATION – The form on which the borrower supplies the lender’s required information to determine if the applicant is qualified to receive a loan. It normally identifies the property involved and details the applicant’s income, expenses and assets. Credit and property value are determined separately by a credit report and appraisal.
LOAN BROKER – See: Mortgage Broker.
LOAN COMMITMENT – See: Commitment (2).
LOAN CONSTANT – The yearly percentage of interest which remains the same over the life of an amortized loan, based on the monthly payment in relation to the principal originally loaned. For example: A $1000 loan at 9% interest for 20 years can be amortized at $9.00 per month. A constant interest rate is figured by finding one year’s payments ($9.00 X 12 months = $108.00), and expressing this amount as a percentage of the principal originally borrowed (10.8% of $1000).
LOAN ORIGINATION FEE – A one time set up fee charged by the lender.
LOAN PACKAGE – The file of all items necessary for the lender to decide to give or not give a loan. These items would include the information on the prospective borrower (loan application, credit report, financial statement, employment letters, etc.), and information on the property (appraisal, survey, etc.). There may be a charge for “packaging” the loan.
LOAN POLICY – A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss of priority of the mortgage or deed of trust.
LOAN SERVICING – The bookkeeping and collection of a loan. It may be done by the lender or by another for the lender.
LOAN TO VALUE RATIO – The ratio, expressed as a percentage, of the amount of a loan to the value or selling price of real property. Usually, the higher the percentage, the greater the interest charged. Maximum percentages for banks, savings and loans, or government insured loans, is set by statute.
LOBBY – An open area immediately inside a building entrance. Most commonly associated with hotels and theaters.
LOCAL GOVERNMENT – City, county, or other governing body at a level smaller than a state. Local government has the greatest control over real property.
LOCATION – The geographical position of real property in relation to its intended use. It is impossible to have a good or bad location without knowing the intended use.
LOCK BOX – A small container attached to a listed property that contains the keys to enter the property, allowing real estate agents to show the property when no one is at home. The modern box is computerized and records the identity of the agent and time of entry. A code is used to enter the box.
LOCK-IN – (1) A guaranteed interest rate provided the loan is funded within an agreed upon period. (2) The prohibition against prepayment of a loan for a set period of time. The borrower is “locked in” to the mortgage for this period.
LOCK-IN PERIOD – The time during which a loan rate is guaranteed not to change or a loan cannot be paid off. See: Lock-In.
LOCUS SIGILLI – See: L.S..
LODGING – A seldom used term meaning a temporary place to stay (lodge).
LOFT BUILDING – A building containing an attic-like upper floor, usually open (without partitions).
LONG TERM CAPITAL GAIN – Gain on the sale of a capital asset which has been held for a specified time or longer. Long term capital gain is taxed at a special rate and not as ordinary income.
LONG TERM FINANCING – A mortgage or deed of trust for a term of ten years or more, as distinguished from constructions loans or interim loans.
LONG TERM LEASE – A general term which may refer to a lease 10 years or longer in term, or in some areas, 5 years or longer.
LONG-LIFE PARTS – The most permanent parts of a structure, such as the foundation or bearing walls, as opposed to hot water heaters, roofs, etc.
LONGITUDE – The East-West circle around the Earth, measured in relation to the meridian or latitude (North-South circle). It is measured from the Greenwich Meridian.
LONGITUDINAL – Pertaining to the length of anything which is measured.
LOSS MITIGATION – Any of several methods to help a borrower avoid foreclosure, such as Special Forbearance, partial Claim and Modification.
LOSS OF ACCESS – Taking away the right of an owner of property abutting a public road, to come and go to and from said road and his pro- perty. Usually happens in condemnation when the abutting road becomes a limited access highway.
LOSS PAYABLE CLAUSE – A clause in a fire insurance policy, listing the priority of claims in the event of destruction of the property insured. Generally, a mortgagee or beneficiary under a deed of trust is the party appearing in the clause, being paid to the amount owing under the mortgage or deed of trust before the owner is paid.
LOT – Generally, any portion or parcel of real property. Usually refers to a portion of a subdivision.
LOT AND BLOCK DESCRIPTION – See: Recorded Map.
LOT BOOK – See: Plat Book.
LOT LINE – The boundary line of a lot in a subdivision.
LOT, BLOCK AND TRACK DESCRIPTION – A legal description which refers to the recorded subdivision map. See: Parcel Map.
LOUVER – Affixed or adjustable formation of slats in a wall, ceiling, door, etc., to let in light and air, allow ventilation of fumes from within, yet keep out rain.
LOVE AND AFFECTION – Loosely called consideration. However, only valid where a valuable consideration is not required, such as a gift. Most contracts to be binding require “valuable consideration”.
LOW DOC LOANS – Loans requiring less documentation than is usually required from the borrower. For example: The borrower would provide a statement of income but not be required to provide tax returns to prove said income. These loans are sometimes call “no qualifying loans”.
LOW WATER LINE – Line on the shore marking the lowest ebb of the tide.
LUMBER – A general classification of wood after it passes from the sawmill.
LUMINOUS CEILING – A ceiling emitting light from its entire surface, through the use of fluorescent light above translucent glass or plastic.
LUMP SUM REVERSE MORTGAGE – Under this type reverse mortgage, the borrower receives a lump sum which is repaid when the borrower sells the property or dies. The proceeds are used to make home repairs, pay off an existing mortgage, or pay off consumer debt. Since the reverse mortgage requires no periodic payments, the borrower’s monthly expenses can be reduced. See also: Reverse Mortgage.
Posted in MERGER – The combining of two or more entities (businesses) into one surviving entity.
MERGER OF TITLE – A lesser interest in real property being merged (absorbed) into a greater interest. For example: A lessee purchases the property being leased. The interest as a lessee is merged into the interest as an owner, thus ending the leasehold interest.
MERIDIAN – A circle or semicircle around the Earth in a North and South direction, always touching or passing through the poles. Used as a guide in surveying, being placed twenty-four miles apart and running from a base line.
MESNE – Intermediate, intervening.
MESNE ASSIGNMENT – Assignment from A to B to C to D would be described as passing from A by “mesne assignments” to D.
METAL LATH – A heavy coarse screen or slit sheet of metal which is used as a base upon which plaster is spread.
METAL VALLEY – See: Flashing.
METAMORPHIC ROCK – One of the three major types of rock. A rock formed by metamorphosis (change) caused by heat and/or pressure.
METER – (1) A metric unit of measurement, equal to 39.37 inches. (2) A device for measuring the use of public utilities, such as electricity, gas, etc.
METES AND BOUNDS – Description of land by boundary lines, with their terminal points and angles. Originally metes referred to distance, bounds to direction; modernly, the words have no individual meaning of practical significance.
METROPOLITAN AREA – A major city and surrounding area. The extent of the surrounding area is usually determined by the extent of the influence of the city (commuters for work, shopping, etc.), on the surrounding area.
METROPOLITAN SHOPPING CENTER – See: Regional Shopping Center.
MEZZANINE – (1) A partial floor between two floors (usually between the first and second). (2) The partial balcony of a theater between the orchestra floor and first balcony.
MICRORELIEF – Minor surface changes, such as channels, dunes, or low hummocks, rather than hills or mountains. The term is used by farm appraisers.
MILE – A linear measurement equal to 5280 feet on land and 6076 feet across water (nautical mile). See also: Knot (2).
MILKING – See: Equity Skimming.
MILL – Equal to one tenth of a cent. Used in expressing a tax rate. Ten mills would be the same as ten dollars per thousand.
MILL CONSTRUCTION – A type of construction specifically to retard fire. Relies on heavy timbers instead of normal size lumber, extensive use of brick, masonry, and other fire resistant materials.
MILLWORK – Parts of a building produced in a mill, such as doors, window sashes, etc. Differs from cabinet work, which is the work of a finish carpenter, done at a construction site, or precision work done by a cabinet maker, on or away from the construction site.
MINER’S INCH – An indefinite measure of a flow of liquid. Generally agreed to be 1/40th or 1/50th of a cubic foot per second, but which fraction is used depends on area of the country.
MINERAL RIGHTS – The ownership of the minerals (coal, gold, iron, etc.) under the ground, with or without ownership of the surface of the land. See also: Subsurface Rights.
MINERAL WOOL – A fibrous material produced by the action of steam on molten rock, under pressure, and used as an insulating material. (Also called rock wool).
MINERALS – In real estate terms, those minerals of value which may be taken by mining, such as coal, iron, copper, gold, silver, etc. Mineral rights, as well as oil rights, may be sold or leased separately from the land itself.
MINIMUM LOT – The smallest allowable lot size for development, as stipulated by local zoning laws.
MINIMUM RENTAL – A fixed rental in a lease which contains some formula for a possibly higher rental, such as a percentage lease, overrides, etc.
MINING LEASE – A right to extract (mine) minerals (coal, silver, etc.). See also: Oil and Gas Lease; Profit a Prendre.
MINOR – Any person under the age of 18, or under age 21 with regard to alcoholic beverages.
MINUTE – See: Degree (1).
MIRROR IMAGE RULE – A term used to describe acceptance of certain types of contracts, such as contracts involving real estate. The term means that the offer must be unequivocally accepted to create the contract. If you looked at the offer and the acceptance, they would be the “mirror image” of each other.
MISNOMER – A wrong name or mistake in name.
MISPLACED IMPROVEMENTS – An appraisal term indicating an improvement on land which is not the highest and best use.
MISREPRESENTATION – A statement or conduct by a person which represents to another a fact which is not true. A seller, broker, or builder may have a duty to disclose certain defects in property to a buyer or tenant. Failure to disclose is also misrepresentation. The misrepresentation may be deliberate (known to be wrong), negligent (should have known), or innocent (reasonably believed to be true). Depending on the facts and extent of misrepresentation, there may be a suit for damages, recision of a contract, punitive action against the broker (loss of license), etc.
MISSION ARCHITECTURE – A Spanish style of architecture resembling those features of California missions.
MISTAKE – An unintentional, non-negligent error or misunderstanding. A mistake may be of the facts (mistake of fact) or their legal effect (mistake of law).
MITER – To cut two pieces (usually wood) at an angle, to form a joint.
MOBIL HOME – Originally, a trailer pulled behind a car or truck cab. Now includes large homes which are not truly mobil but are constructed in the same manner as trailers, as opposed to conventional on-site construction.
MOBILE HOME PARK – Originally, a trailer park, having electrical hookups, and water. Modernly, a park-like area having facilities such as complete plumbing and utilities, a recreation center, security guards at the entrance, and mobil homes which are usually attached to foundations and are permanent structures.
MODEL HOME – A home, often decorated, which is shown by a builder to prospective buyers of homes yet to be built. An identical home to the model is then constructed on a lot in the subdivision. The model home is generally sold last.
MODERNIZATION – To make changes to the interior or exterior of a structure for the purpose of reflecting developments of function or design which were not available at the time of the original construction.
MODIFICATION – Any change made to a document.
MODULAR HOUSE – See: Prefabricated House.
MOISTURE BARRIER – Insulating materials used to prevent the build up of moisture (condensation) in walls and other parts of a building.
MOLDING – Long, narrow strips of wood or synthetic material, used as a finish piece to cover the crack between the meeting of a wall with a floor or ceiling. Also used for decoration only.
MONEY MARKET – A general term referring to the availability of money for short or long term loans.
MONEY MARKET MUTUAL FUNDS – Funds which invest in the “Money Market”, a variety of interest bearing securities such as treasury bills and bank certificates of deposit. None is invested directly into real property or real property securities.
MONOLITHIC SLAB – A concrete slab foundation where the slab and supporting beams are poured together. See: Floating Slab.
MONTH TO MONTH TENANCY – A tenancy where no written lease is involved, rent being paid monthly. Some obligations as to notice of moving or eviction may exist by statute.
MONTHLY ADVANCE REVERSE MORTGAGE – A mortgage under which the borrower receives monthly payments which are repaid in a lump sum, either at a specified time, when the borrower sells the property, or when the borrower dies. See also: Reverse Mortgage.
MONTHLY FIXED INSTALLMENT – A monthly payment of principal and interest not subject to change.
MONUMENT – A visible, permanent object, marked by a surveyor, to indicate the boundaries of land. May be artificial, such as a post, or natural, such as a tree or large stone.
MORATORIUM – A period of suspension of legal rights or remedies. In real estate terms, most commonly used by governmental agencies (usually local) to suspend construction in certain areas until studies are completed to determine the best use for the land involved.
MORTAR – A material used in masonry work as the “glue” holding stones or bricks together. It is composed of lime, cement, sand, and water, and hardens when it dries.
MORTGAGE – (1) To hypothecate as security, real property for the payment of a debt. The borrower (mortgagor) retains possession and use of the property. (2) The instrument by which real estate is hypothecated as security for the repayment of a loan.
MORTGAGE BANKER – A company providing mortgage financing with its own funds rather than simply bringing together lender and borrower, as does a mortgage broker. Although the mortgage banker uses its own funds, these funds are generally borrowed and the financing is either short term or, if long term, the mortgages are sold to investors (many times insurance companies) within a short time.
MORTGAGE BONDS – Bonds issued by corporations, which offer first mortgages on real property of the corporation as security for the payment of the bonds.
MORTGAGE BROKER – One who, for a fee, brings together a borrower and lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security. Also called a loan broker.
MORTGAGE CLAUSE – See: Loss Payable Clause.
MORTGAGE COMPANY – A company authorized to arrange real estate loans, charging a fee for this service.
MORTGAGE CREDIT CERTIFICATE PROGRAM (MCC) – A federal program authorized by the Tax Reform Act of 1984. The program allows a tax credit to a home buyer of a portion of the amount that would be paid in income tax. This enables a lender to raise the borrower’s income when attempting to qualify the buyer for a home purchase.
MORTGAGE DISCOUNT – See: Discount Points.
M & M LIEN – See: Mechanic’s Lien.
M ROOF – A roof constructed of two double pitched roofs, forming a shape similar to the letter M. Utilizes shorter rafters, making construction easier, and allows a lower overall height.
MADE-LAND – Artificially formed land, either by filling or dredging.
MAGISTRATE – Any civil public officer. Most commonly used to designate an inferior judicial officer, such as a justice of the peace, police justice, etc.
MAGISTRATE’S COURT – Court having jurisdiction over minor matters (small claims), and usually not a court of record.
MAGNESITE FLOORING – A synthetic floor, floated approximately 1 1/2 inches thick, over a concrete floor. Composed of powdered magnesite, magnesium- chloride solution and fillers. Also used for outside steps in areas where cold is not severe.
MAH – See: Multifamily Affordable Housing
MAI – A designation conferred by the Appraisal Institute upon member appraisers who are qualified to appraise all types of property as well as give real estate investment advice. See also: RM; SRA; SREA; SRPA.
MAIN – A large conduit or pipe, carrying electricity, sewage, gas, etc., to or from branch lines.
MAIN CIRCUIT – The principal circuit which feeds electric current into smaller circuits (branches) for distribution where needed.
MAINTENANCE – Keeping a property in condition to efficiently serve its intended purpose.
MAINTENANCE FEE – As applied to condominiums and planned developments, the amount charged each unit owner to maintain the common area. Usually a monthly fee paid as part of the budget.
MAINTENANCE RESERVE – Money reserved to cover anticipated maintenance costs.
MAJORITY – The age at which a person is no longer a minor, and is legally entitled to contract and enjoy civic rights, such as voting.
MAKER – One who executes (signs) as the maker (borrower) of a note.
MALL – (1) A shaded walkway or promenade. Modernly, the pedestrian area of a shopping center. May be open or enclosed. (2) A strip between two travelways; may be landscaped or paved. Also called a median strip.
MANAGEMENT – See: Property Management.
MANAGEMENT AGREEMENT – See: Property Management Agreement.
MANAGEMENT FEE – The amount paid for property management or the estimated value of such management if owner managed or the building is not yet built.
MANDAMUS – Latin for “we command”. A writ issued by a superior court ordering an inferior court, corporation, or individual, to do or refrain from doing specific acts. The main importance to real estate is that it is a writ commanding a governmental body to do something, such as issue a building permit.
MANSARD ROOF – A four sided roof, each side having two separate slopes of different degree; the lower slope is at a much steeper angle than the upper slope.
MANTEL – (1) The lintel of a fireplace opening, constructed by a post and lintel method. May be of stone, a heavy beam, or other material of strength. (2) A decorative shelf above a fireplace opening, not load- bearing.
MANUFACTURED HOME – A structure built in a factory and assembled at the site. The term is also used to describe a mobile home. See also: Stick Built Home. A manufactured home is built using more metal and less wood and brick than a stick built home. Manufactured homes are less expensive than comparable stick built structures.
MANUFACTURED LOT – A lot upon which construction of a building may begin. Having all off-site improvements and approvals of government agencies.
MAPS AND PLATS – See: Plat.
MARBLE – A hard, single or multicolored limestone. In construction, used in place of tile in more expensive structures.
MARGIN – In an adjustable rate loan, the difference between the index rate and the interest rate of the loan. Example: The borrower’s interest rate is 2 points (percent) over the prime rate. The 2 points is called the margin.
MARGIN OF SECURITY – See: Equity (2).
MARGINAL – An investment not considered strong. One which barely supports itself.
MARGINAL LAND – (1) Any income producing land which barely covers expenses. (2) Land which is clearly not the best for an intended purpose, but may be adequate.
MARINA – A small harbor or basin, having docks, supplies, and maintenance services for boats.
MARK – An “X” or other symbol used by one who cannot write his or her name. Modernly not used often and laws as to the validity of using a mark should be checked.
MARKET DATA APPROACH – Appraising the value of a property by comparing the price of similar properties (comparables) recently sold. The degree of similarity (physical characteristics and locations) of the properties and the circumstances of the sale (time and terms) are the important considerations.
MARKET PRICE – The price a property brings in a given market. Commonly used interchangeably with market value, although not truly the same. See also: Market Value.
MARKET RENT – See: Economic Rent.
MARKET VALUE – The highest price a willing buyer would pay and a willing seller accept, both being fully informed, and the property exposed for a reasonable period of time. The market value may be different from the price a property can actually be sold for at a given time.
MARKET VALUE APPROACH – See: Market Data Approach.
MARKETABILITY – Salability. The probability of selling property at a specific time, price and terms.
MARKETABLE TITLE – Title which can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.
MARQUEE – A canopy-like projection over the entrance to a building, but not supported by posts or columns. Most commonly found on theaters and hotels.
MARSH – A grassy area of ground which is always soft and wet. Usually distinguished from a swamp by the absence of trees in the marsh.
MASONRY – Anything constructed of the materials used by a mason, such as brick, stone, cement, adobe, etc; anything constructed by a mason of these materials.
MASONRY WALL – A wall, constructed by a mason, of stone, brick, cement, or similar materials.
MASS APPRAISING – Appraising a whole district or area at the same time, in order to adjust property taxes.
MASSACHUSETTS TRUST – An unincorporated association, not a partnership, doing business through a trustee. The name comes from authorization of such a trust under the laws of the state of Massachusetts.
MASTER ASSOCIATION – In a multi phase condominium or planned unit development project there may be homeowners’ associations that are concerned with specific areas of the project. The Master Association oversees these associations and handles matters affecting the entire project.
MASTER FORM INSTRUMENT – See: Fictitious Instrument.
MASTER LEASE – A lease controlling subsequent leases. May cover more property than subsequent leases. For example: “A” leases an office building, containing ten offices, to “B”. “B” subsequently leases the ten offices individually. The ten leases from “B” as lessor are controlled by the lease from “A” to “B” (master lease).
MASTER PLAN – A zoning plan for an entire governmental subdivision, such as a city. A comprehensive plan to allow a city to grow in an orderly and sound manner, both economically and ecologically.
MASTER POLICY – An insurance policy to a lender covering property in more than one location. If more than one state is involved, underlying policies may be issued to meet state requirements.
MATCHED BOARDS – See: Tongue and Grove.
MATERIAL FACT – A fact upon which an agreement is based, and without which, said agreement would not be made.
MATERIALMAN – One who supplies construction materials. See also: Mechanic’s Lien.
MATURITY – (1) Termination period of a note. For example: A 30 year mortgage has a maturity of 30 years. (2) In sales law, the date a note becomes due.
MEAN – A middle point between two extremes; or an average, having an intermediate value between two extremes or between several successive values of variable quantity, such as mean low tide and mean high tide.
MEAN HIGH WATER MARK – The point on the shore which the average high tide will reach.
MEAN LOW WATER MARK – The point on the shore which the average low tide will reach.
MEANDER – To follow a winding or flexuous course, usually referring to a river or stream.
MEANDER LINES – Lines run in surveying lands which border navigable rivers to determine the sinuosities of the river.
MECHANIC’S & MATERIALMAN’S LIEN – See: Mechanic’s Lien.
MECHANIC’S LIEN – A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.
MECHANIC’S LIEN SURETY BOND – A bond, from a bonding company, indemnifying a title insurer against loss from writing a policy before expiration of the mechanic’s lien period.
MEDIAN STRIP – A divider, being a strip of land rather than a fence or barrier, between oncoming lanes of a roadway.
MEETING OF THE MINDS – A legal term meaning the mutual agreement necessary to form a contract. It is not based on what may actually be in the minds of the parties, but rather based on whether the acts of the parties and circumstances of the contract indicate that the parties agree.
MEGALOPOLIS – Modern work describing a heavily populated continuous urban area including many cities.
MERGE – To combine two or more entities, so that one survives, the other or others becoming part of the surviving entity, and losing their identity.
MERGE LINE – An appraisal term. The line which arbitrarily splits a lot which fronts on two parallel streets, so that each portion will have the highest value.
MERGED CREDIT REPORT – A credit history that is compiled from all three of the major credit bureaus and combined into one report.
MORTGAGE INSURANCE – Insurance written by an independent mortgage insurance company (referred to as an +MIC’) protecting the mortgage lender against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage of the sales price. The Federal Government writes this form of insurance through the FHA and the VA.
MORTGAGE INSURANCE PREMIUM (MIP) – The amount paid for FHA mortgage insurance. When paid to a private company, it is commonly referred to as Private Mortgage Insurance (PMI).
MORTGAGE LIFE INSURANCE – A term life insurance policy for the amount of the declining balance of a loan secured by a mortgage or deed of trust. The beneficiary under the policy is the mortgagee. In the event of death (some policies also cover disability) of the insured (mortgagor), the mortgage is paid in full.
MORTGAGE MODIFICATION – A refinancing plan to help a mortgagor in default. The payment may be reduced if the amount refinanced is lower than the original mortgage amount or the term is extended. A mortgagor may qualify if he/she has recovered from a financial problem and can afford the new payment amount.
MORTGAGE OUT – To finance the total cost of a property or project.
MORTGAGE POLICY (MORTGAGEE’S POLICY) – See: Loan Policy.
MORTGAGE POOL – A group or “pool” of mortgages, an interest in which can be purchased through a securities dealer. Because of market changes in interest rates and points (discounts), early payoffs, and foreclosures, pools have different returns and, therefore, different investment values. The rate of payoffs and foreclosures is called the “speed” of the pool.
MORTGAGE REVENUE BONDS – Bonds sold on a state or local level (tax exempt) to finance real estate sales, construction, or refurbishing. Used in many instances to create affordable housing.
MORTGAGE SAVING (OR SAVINGS) CLAUSE – A clause in the CC&R’s (covenants, conditions, and restrictions) which states that a violation of the CC&R’s shall not defeat a subsequent mortgage made in good faith and for value.
MORTGAGE SERVICING – Controlling the necessary duties of a mortgagee, such as collecting payments, releasing the lien upon payment in full, foreclosing if in default, and making sure the taxes are paid, insurance is in force, etc. Servicing may be done by the lender or a company acting for the lender, for a servicing fee.
MORTGAGE WAREHOUSING – A system whereby a mortgage company will hold loans which would ordinarily be sold, in order to sell later at a lower discount. These mortgages are used as collateral security with a bank to borrow new money to loan.
MORTGAGE-BACKED CERTIFICATES – See: Mortgage-backed Securities.
MORTGAGE-BACKED SECURITIES – Securities similar to bonds, but having their value based on a pool of mortgages or trust deeds (usually government insured). The rate of return is based on the interest rate of the mortgages, plus early payoffs, which increases the value of any discounts. The price of the securities will vary as comparative (current) interest rates rise and fall. See: Collateralized Mortgage Obligation.
MORTGAGEE – The party lending the money and receiving the mortgage. Some states treat the mortgagee as the “legal” owner, entitled to rents from the property. Other states treat the mortgagee as a secured creditor, the mortgagor being the owner. The latter is the more modern and accepted view.
MORTGAGOR – The party who borrows the money and gives the mortgage.
MORTISE – A rectangular opening, cut in wood or other material, to receive a bar of wood or other material for the purpose of securing the two parts in a mortise joint.
MOTEL – Originally, a building near a major highway to accommodate travelers, offering a place to sleep and park. Over the years, motels have come to offer most of the features of hotels, such as restaurants, recreation, etc.
MULLION – A vertical bar separating panes of a window or panels of a door. Also an upright framing member of panels or wainscoating.
MULTIFAMILY AFFORDABLE HOUSING (TARGETED AFFORDABLE HOUSING) – Multifamily property with a certain percentage of the units set aside for low income families. The rental amount is based on a percentage of the median income of the area, adjusted for family size. Appropriate units meet FNMA’s Multifamily Affordable Housing lending requirements.
MULTIFAMILY DWELLING – (1) A building occupied by more than one family. (2) A building designed as a dwelling for more than four families at the same time.
MULTIFAMILY MORTGAGE – A loan secured by a mortgage on a residence consisting of more than four units.
MULTIFAMILY PROPERTY – To meet the FNMA definition it is a residential property of not less than five dwelling units with not more than 20 percent of the net rentable area rented or set aside for rent to non-residential tenants.
MULTIPLE DWELLING – See: Multifamily Dwelling.
MULTIPLE LISTING – An exclusive listing, submitted to all members of an association, so that each may have an opportunity to sell the property.
MUNICIPAL CORPORATION – A town, city, or village, incorporated as a political corporation under state statutes. Would not include a county, or such political divisions as a district.
MUNICIPAL ORDINANCE – See: Ordinance.
MUNIMENTS OF TITLE – Written evidence (documents) which an owner possesses to prove his title to property.
MUNTIN – A horizontal bar, dividing window panes in a window.
MUTUAL SAVINGS BANK – An institution owned by its depositors, as evidenced by certificates of deposit rather than stock. These institutions are active in long term real estate financing, as opposed to commercial banks, which concentrate more on short term loans.
MUTUAL WATER COMPANY – A company in which the owners are the customers. Stock is issued to the users, who are the organizers of the company.