Archive for December, 2010
A HORIZON – Surface horizon (layer) of soil, the composition of which is effected by water which percolates through it.
A-FRAME – A type of construction usually found in resort areas. The exterior framing of the building is shaped like the letter A.
A.B.A. (AMERICAN BAR ASSOCIATION) – A national organization composed of member state and local bar associations, which control the licensing of attorneys.
A.I.R. (AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION) – A specialized association of real estate brokers and salesmen who deal primarily in industrial properties. The goal of the association is to further the knowledge and effectiveness of its members.
A.L.T.A. (AMERICAN LAND TITLE ASSOCIATION) – An organization, composed of title insurance companies, which has adopted certain insurance policy forms to standardize coverage on a national basis.
AAA TENANT – See: Prime Tenant
ABA NUMBER – Originated by the American Bankers Association, it is the number (usually in the upper right hand portion of the check) which identifies the bank upon which the check is drawn.
ABANDONMENT – The voluntary relinquishment of rights of ownership or another interest (such as an easement) by failure to use the property, coupled with an intent to abandon (give up the interest).
ABANDONMENT OF HOMESTEAD – A recorded document, executed by those claiming a homestead exemption, giving up said homestead. Not applicable to all states and procedure must be according to local statutes.
ABATEMENT – A reduction or decrease. Commonly used to describe a decrease of assessed valuation of property for ad valorem taxes. When used regarding wills, it refers to a reduction of gifts to one or more beneficiaries when the assets left in the will are insufficient to pay all creditors and beneficiaries. There is usually a different formula used for debts than for priorities of gifts. See also: Contribution.
ABC SOIL – Soil having distinct A (upper), B (middle), and C (lower) horizons (layers of soil).
ABSCISSA – The horizontal axis of a curve; the vertical axis being the ordinate. The terms are used in connection with charts and graphs.
ABSENTEE LANDLORD – A lessor of real property (usually the owner) that does not occupy all or a portion of the property.
ABSENTEE OWNER – An owner of property who does not occupy said property.
ABSORPTION – The filling of space, such as the rental of units or sale of a tract. The time or rate must be estimated and considered as part of the owner’s (usually the builder) costs.
ABSTRACT – A summary; an abridgement. Before the use of photostatic copying, public records were kept by abstracts of recorded documents.
ABSTRACT CONTINUATION – See: Supplemental Abstract.
ABSTRACT EXTENSION – See: Supplemental Abstract.
ABSTRACT OF JUDGEMENT – A summary of the essential provisions of a court judgement, which when recorded in the county recorder’s office, creates a lien upon the property of the defendant in that county, both presently owned or after acquired.
ABSTRACT OF TITLE – A compilation of the recorded documents relating to a parcel of land, from which an attorney may give an opinion as to the condition of title. Still in use in some states, but giving way to the use of title insurance.
ABSTRACTER’S CERTIFICATE – A certificate contained in an abstract which shows the time period and scope of the search of public records done by the abstracter.
ABSTRACTION – A method for appraising a site (land) by estimating the depreciated value of the improvements and deducting that amount from the total value (improved value) of the property. See: Allocation.
ABUT – To touch, border on, or be contiguous to.
ABUTMENTS – The vertical members (walls or heavy columns) which bear the load or pressure of the cross member, such as an arch, pier, or similar structure.
ABUTTING OWNER – One whose land is contiguous to (abuts) a public right of way.
ACCELERATED COST RECOVERY SYSTEM (ACRS) – A portion of the Economic Recovery Act of 1981 which allowed shorter depreciation of both real and personal property, did not distinguish between new and used property, and disregarded salvage value.
ACCELERATED DEPRECIATION – A general term including any method of depreciation greater than straight line depreciation (see which).
ACCELERATION – The immediate right to possession of a remainder interest upon the failure of a life estate.
ACCELERATION CLAUSE – Clause used in an installment note and mortgage (or deed of trust), which gives the lender the right to demand payment in full upon the happening of a certain event, such as failure to pay an installment by a certain date, change of ownership without the lender’s consent, destruction of the property (see Waste), or other event which endangers the security of the loan. See also: Alienation Clause.
ACCEPTANCE – Voluntary agreement to an offer. (1) Real property acceptance must be unequivocal See: Mirror Image Rule. (2) Acceptance for goods, according to the Uniform Commercial Code, need not be unequivocal. Offer, acceptance, and consideration form a contact.
ACCESS RIGHT – A right to ingress and egress to and from one’s property. May be express or implied.
ACCESSIBILITY – The location of a site in terms of how easily it may be reached by customers, employees, carriers, and others necessary to the intended use of the property.
ACCESSIBLE – A residential building of more than one unit that can be entered and used by people who are physically handicapped.
ACCESSION – The right of an owner to an increase in his property by natural means (such as a riparian owner’s right to an abandoned river bed, rights of alluvion and reliction, etc.) or artificially, by improvements.
ACCESSORY BUILDINGS – Structures used for the benefit of a central or main building, such as a tool shed, garage, or similar structure.
ACCOMMODATED ROOM NIGHT DEMAND – The annual number of hotel (or motel) rooms occupied in a given market area.
ACCOMMODATION PARTY – Person who lends his name to help secure credit for another, by signing a note or other obligation without receiving consideration.
ACCOMMODATION RECORDING – The recording of documents with the county recorder by a title insurance company, without liability (no insurance) on the part of the company, but merely as a convenience to a customer.
ACCOMMODATOR – One who acts to facilitate an exchange under the rules of Section 1031 of the Internal Revenue Service Code. The proper terminology is a Qualified Intermediary, but accommodator, facilitator or intermediary are the common terms used.
ACCORD – An agreement by which one accepts something different (usually less) from what is owed as full satisfaction. The amount owed may be in dispute or simply accepted as full satisfaction by the creditor or claimant. The agreement and acceptance is called “Accord and Satisfaction”.
ACCORD AND SATISFACTION – The agreement (accord) and acceptance (satisfaction) by creditors of less than the full amount owing on a debt.
ACCOUNTS PAYABLE – Money owing. The term is generally used in business rather than personal finances. Usually represents services or materials, such as wood, bricks, payment of subcontractors, etc., to a builder.
ACCOUNTS RECEIVABLE – Money owed to a business for goods or services. Accounts receivable may be sold or borrowed against. Many times the sale of accounts receivable is for less than face value (discounted).
ACCREDITED LAND CONSULTANT – A designation conferred by the REALTORS Land Institute. See: REALTORS LAND INSTITUTE.
ACCRETION – The gradual addition to the shore or bank of a waterway. The land generally becomes the property of the owner of the shore or bank, except where statutes specify otherwise.
ACCRUAL ACCOUNTING – An accounting method under which income and expenses are charged to the periods for which they are applicable, rather than when payment is received or made. The method calling for income and expenses to be based on payment being received or made is cash accounting.
ACCRUE – To grow or mature.
ACCRUED DEPRECIATION – Accumulated depreciation. See: Depreciation.
ACCRUED INTEREST – Interest on a note, bond, etc. which has been earned but not yet paid. Since interest is usually paid in arrears, accrued interest does not necessarily indicate a delinquency in payment. See also: Accumulated Interest.
ACCRUED ITEMS – Expenses owing but not yet payable. An example is mortgage interest which is paid at the end of the month or property taxes which may be paid after the tax year begins. On a closing statement for a sale, the buyer would be credited with these amounts and would be responsible for their payment.
ACCUMULATED DEPRECIATION – See: Accrued Depreciation.
ACCUMULATED INTEREST – Unpaid interest which is past due. See also: Accrued Interest.
ACID SOIL – A soil with an acid rather than an alkaline base. This can determine its suitability for farming.
ACID TEST RATIO – A formula used by lending institutions to determine if a business can meet its current obligations. The formula adds cash plus receivables plus marketable securities and then divides by liabilities. A ratio of one to one is considered acceptable.
ACKNOWLEDGEMENT – A written declaration by a person executing an instrument, given before an officer authorized to give an oath (usually a notary public), stating that the execution is of his own volition.
ACM’S (ASBESTOS CONTAINING MATERIALS) – (See which)
ACOUSTICAL MATERIALS – Materials which absorb sound. Usually installed in walls and ceilings and composed of fiberglass, cork, special plaster, or similar materials.
ACOUSTICAL TILE – Tile which absorbs sound.
ACQUISITION AND IMPROVEMENT LOAN – A loan for the dual purpose of purchasing and improving or repairing property.
ACQUISITION APPRAISAL – An appraisal to determine market value of a property to be taken by eminent domain, in order to justly compensate the owner.
ACQUISITION COSTS – Costs of acquiring property other than purchase price: escrow fees, title insurance, lenders fees, etc.
ACRE – A measure, usually of land, equal to 160 sq. rods (43,560 sq. ft.) in any shape.
ACRE FOOT – A volume of water, sand, coal, etc., equal to an area of one acre with a depth of one foot (43,560 cubic ft.). If a liquid, 325,850 gallons.
ACRE-INCH – A cubic measure of one acre in area with a depth of one inch.
ACREAGE – Most commonly refers to vacant land, but may refer to any parcel which may be measured in acres. The term is also used to describe land which has not been subdivided.
ACREAGE CONTROL – Federal control setting the number of acres which may be planted with crops which have federal price supports.
ACT OF GOD – Damage caused by nature (floods, winds, etc.) rather than by people.
ACTION TO QUIET TITLE – Modernly used to describe any court action to establish ownership or remove a cloud on title. See also: Cloud on Titlel.
ACTIVE CAPITAL – Capital used on a regular basis for profit-making activities.
ACTUAL AGE – The chronological age of a structure as opposed to its effective or economic age.
ACTUAL CASH VALUE – See: Market Value.
ACTUAL EVICTION – The removal of an occupant or real property through legal action. See also: Constructive Eviction
ACTUAL NOTICE – Notice actually and expressly, or by implication, given and received. See also: Constructive Notice; Statutory Notice.
ACTUAL RECEIPT – Direct receipt of funds from the sale of a relinquished property in a 1031 exchange. The taxpayer will lose the tax free benefit if the funds are received rather than directly reinvested in the replacement property.
AD – By, for, relating to, concerning.
AD HOC – Latin meaning “for this”. For a single purpose only.
AD LITUM – For the suit. Example: A guardian “Ad Litum” is one who is appointed to prosecute or defend a suit on behalf of a minor or one who is otherwise incapacitated.
AD VALOREM – “According to value”. A method of taxation using the value of the thing taxed to determine the amount of tax. Taxes can be either “Ad Valorem” or “Specific”. Example: A tax of $5.00 per $1000.00 of value per house is “Ad Valorem”. A tax of $5.00 per house (irrespective of value) is “Specific”.
ADD-ON INTEREST – A method of computing interest by adding the total interest for the life of the loan to the amount borrowed (principal) and then deducting the full amount of each payment as made. This method creates a higher yield than computing interest on the declining balance of principal.
ADDENDUM – Something added. A list or other material added to a document, letter, contractual agreement, escrow instructions, etc. See also: Amendment.
ADDITION – (1) A portion of a building added to the original structure. (2) A synonym for subdivision in certain legal descriptions.
ADDITIONAL DEPOSIT – A buyer of real property will generally give a small deposit with an offer, and a more substantial deposit after the offer has been accepted. The second deposit is the “additional deposit”.
ADDITIONAL PRINCIPAL PAYMENT – A payment of principal above the required amount. Some loans limit the amount that a borrower may pay and impose a penalty for reducing the principal balance in too short a time.
ADJACENT – Close to. May or may not be contiguous (touching).
ADJOINING – Touching or contiguous to.
ADJUDICATION – A judgement or decision by a court.
ADJUSTABLE MORTGAGE LOANS (AML’S) – Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable Rate Mortgages (ARM’s), Flexible Rate Loans, Variable Rate Loans. See also: Indexing, Rate Index.
ADJUSTABLE RATE LOANS – See: Adjustable Mortgage Loans.
ADJUSTABLE RATE MORTGAGE (ARM) – See: Adjustable Mortgage Loan’s (ARL’S).
ADJUSTED BASIS – See: Book Value.
ADJUSTED GROSS INCOME – Total income of property if fully rented, less an adjustment for estimated vacancies and uncollectible rent.
ADJUSTED MORTGAGE – A mortgage released after a company has undergone reorganization.
ADJUSTED SALE PRICE – An appraisal term used when a comparable property’s sale price is adjusted to reflect the value of the subject property. The adjustment is made based on the differences between the subject property and comparable property in time of sale, terms of sale, location, and physical characteristics.
ADJUSTMENT DATE – The date for changing the interest on an Adjust-able Rate Mortgage.
ADJUSTMENT PERIOD – The time between adjustment dates for an adjustable rate mortgage. If the rate adjusted monthly, for example, one month would be the adjustment period.
ADJUSTMENTS – See: Proration.
ADMINISTRATOR – A person given authority by a proper court to manage and distribute the estate of a deceased person when there is no will. See also: Administrator C.T.A..
ADMINISTRATOR C.T.A. – Administrator when there is a will but no executor is named or the executor named is unable or unwilling to serve. The C.T.A. stands for Cum Testamento Annexo (with the will attached).
ADMINISTRATOR’S DEED – A conveyancing instrument used by an Administrator to transfer property from an estate. See: Administrator.
ADMINISTRATRIX – Female administrator.
ADOBE CONSTRUCTION – A structure built of adobe blocks. Adobe blocks are made from adobe mud mixed with straw or a straw-like substance, and then baked. Considered a very good but expensive material.
ADR (THE CLASS LIFE ASSET DEPRECIATION RANGE SYSTEM) – A flexible set of guide lines for depreciation which sets up an “asset depreciation period”, rather than using the “useful life” of an asset.
ADULT – A person old enough to vote and to make contracts. The age in most states is 18, except for contracts to purchase alcohol, for which all states classify an adult as a person over the age of 21.
ADVANCE FEE – A fee charged by a broker to a seller to cover all or a portion of the broker’s costs of promoting the property. The fee is generally credited against commissions but is not refunded if no commissions are received. Most frequently used in connection with large offerings which require a substantial outlay of funds for promotion.
ADVANCE PAYMENTS – Payments made to a contractor before performance. Not the usual method and when made by HUD or GNMA, there must special approval. See also: Progress Payments; Provisional Payments.
ADVANCEMENTS – Gifts made prior to death to one who would inherit the property. The value of the gifts is deducted from the donee’s (recipient’s) inheritance upon the death of the donor.
ADVANCES – Money advanced by a lender (mortgagee or beneficiary under a deed of trust) to pay the borrower’s (mortgagor’s or trustor’s) obligations of taxes, insurance, or other items necessary to protect the secured property. The amounts advanced are then added to the balance owing on the mortgage or trust deed.
ADVERSE LAND USE – A use which causes surrounding property to lose value, such as an industrial development in a residential area.
ADVERSE POSSESSION – A method of obtaining ownership rights by the open, notorious, exclusive, and hostile possession of private real property for a statutory period which varies from state to state (from 5 to 30 years). Some states have additional requirements, such as payment of property taxes by the adverse possessor. The true owner is then barred (statute of limitations) from asserting his/her rights. The adverse possessor has no evidence of title without court action.
ADVERTISING – Usually done by signs on the property and newspaper ads. Ads for the sale of real estate have modernly been required to conform to certain standards regarding disclosure of complete financing information if any financing information is contained in the ad.
AEOLIAN SOIL – Soil composed of materials deposited by the wind.
AERATION ZONE – The surface soil to a depth from which plants draw moisture.
AESTHETIC VALUE – The value of a property attributable to the beauty of the improvements or surroundings.
AFFIANT – One who makes an affidavit. Also called a deponent, although technically not the same.
AFFIDAVIT – A written statement or declaration, sworn to before an officer who has authority to administer an oath.
AFFIDAVIT OF ALIMONY AND CHILD SUPPORT – A sworn statement of a separated or divorced person showing the amount (if any) of alimony or child support.
AFFIDAVIT OF TITLE – An affidavit by a seller of real property that, as of a certain date, no defects of title exist except those which have been disclosed in the sales contract or deed.
AFFINITY – (1) Relationship not of the blood. Related by marriage. (2) Any group for a specific purpose is called an affinity group, such as clubs, people in the same school, etc.
AFFIRMATION – A substitution for an oath when a person objects to taking an oath (Quakers, atheists, etc.). A lie after an affirmation is still perjury.
AFFIRMATIVE EASEMENT – An easement described from the benefited estate (dominant tenement). Also called a parcel 2 easement. The same easement described from the burdened estate (servient tenement) would be a negative easement.
AFFORDABILITY ANALYSIS – A method to determine the right purchase price and mortgage for a potential home buyer. The price of the home and its future expense, cost to obtain the loan and its future expense, as well as buyers income, expenses and assets are used to determine the financial feasibility of the purchase.
AFFORESTATION – The growing of a forest where none previously existed, as opposed to reforestation (the replanting of a harvested or destroyed forest).
AFTER ACQUIRED PROPERTY – As applied to a judgement lien, it means that the lien will attach to property of the debtor acquired after the judgement. See also: After Acquired Title.
AFTER ACQUIRED TITLE – Legal doctrine by which property automatically vests in a grantee when the grantor acquires title to the property after the deed has been executed and delivered.
AGE-LIFE METHOD OF DEPRECIATION – Estimating depreciation by using the ratio of the effective age of improvements to the Economic Life (Economic Age-Life Method) or Physical Life (Physical Age-Life Method).
AGENCY – Any relationship in which one party (agent) acts for or represents another (principal) under the authority of the latter. Agency involving real property should be in writing, such as listings, trusts, powers of attorney, etc.
AGENCY AGREEMENT (AGENCY LISTING) – In some states, the term describing a listing under which the broker’s commission is protected against a sale by other agents but not by a sale by the principal. Called a “non-exclusive” listing in some states.
AGENCY BY ESTOPPEL – An agency created by operation of law when one who is not an agent acts as an agent or an agent oversteps his/her authority, but action (or failure to act) by the principal leads one to believe that the authority exists. See also: Apparent Authority; Ostensible Agency.
AGENCY COUPLED WITH INTEREST – A contractual relationship with consideration going from agent to principal; the agency is given as return consideration. Example: A broker agrees to work to obtain property for a builder in return for a listing after the builder has completed the project. The broker would be entitled to (have an interest in) the listing (agency), provided the broker did obtain the property for the builder.
AGENT – One who is authorized to act for or represent another (principal), usually in business matters. Authority may be express or implied.
AGRARIAN – Relating to land, or to a division or distribution of land.
AGREEMENT – A general term usually describing a common view of two or more people regarding the rights and obligations of each with regard to a given subject. Not necessarily a contract, although all contracts are agreements.
AGREEMENT FOR DEED – See: Land Contract.
AGREEMENT OF SALE – Has two separate meanings, depending on area of the country. In some states it is synonymous with a purchase agreement (See: Purchase Agreement). In other states, it is synonymous with a land contract. See: Land Contract.
AGRICULTURAL LIEN – A lien against crops (only), to secure money or payment for materials used to grow the crop.
AGRICULTURAL PROPERTY – (1) Land which is zoned agricultural, (2) Land used for growing of agricultural products or raising of livestock.
AIR LOT – Any bounded air space which has been legally subdivided into a lot, such as a condominium.
AIR RIGHTS – The right to the use of the air space above property without the right to use the surface of the property. However, air rights may restrict surface rights, especially height of improvements.
ALC – See: Accredited Land Consultant.
ALCOVE – A recessed part or addition to a room.
ALIAS – Latin for “otherwise”. Commonly meaning that a person is known by more than one name. In some states, indicated by the letters AKA (also known as).
ALIENATION – Transfer of property from one owner to another.
ALIENATION CLAUSE – A type of acceleration clause, calling for a debt under a mortgage or deed of trust to be due in its entirety upon transfer of ownership of the secured property. Also called a “due-on-sale” clause.
ALKALI – The chemical opposite of acid. Heavy concentrations of alkaline salts in soil may damage crops.
ALKALINE SOIL – Soil which has an alkali, rather than an acid base.
ALL-INCLUSIVE DEED OF TRUST – See: Wrap-Around Mortgage.
ALLEGATION – The assertion or statement of a party to an action, setting forth that which the party expects to prove.
ALLEY – A narrow right of way, either public or private, used for access (usually to garages, loading platforms, etc.).
ALLEY INFLUENCE – In appraising, the effect upon value of a property, because of an adjoining side or rear alley.
ALLOCATION – A method for appraising a site (land) by comparing other site values as a percentage of total value. Example: An area has a typical land value of 35% of the total value of a site (including improvements). Property X has a total (improved) value of $100,000. The land is worth $35,000. The term is often (and incorrectly) used synonymously with abstraction See: Abstraction.
ALLODIAL SYSTEM – See: Allodium.
ALLODIAL TENURE – See: Allodium.
ALLODIUM – Land owned by individuals, as opposed to the feudal system of ownership of all land by a king or ruler.
ALLOTMENT – A small parcel of land, sold or given to a farm worker for cultivation as a supplementary source of income. Popular in the 1900′s before World War II.
ALLUVION (ALLUVIUM, ALLUVIAL) – Deposits formed by accretion.
ALTERATIONS – Changes in the interior or exterior of a building, but without changing the exterior dimensions.
AMELIORATING WASTE – See: Waste.
AMENDMENT – A change, either to correct an error or to alter a part of an agreement without changing the principal idea or essence.
AMENITIES – Those things which enhance the enjoyment (and therefore the value) of real estate but are not necessary for its intended use. Examples: a scenic view, swimming pool, etc.
AMERICAN BANKERS ASSOCIATION – A national organization formed in 1875 as a professional association for banks and other financial institutions.
AMERICAN BANKERS ASSOCIATION NUMBER – See: ABA Number.
AMERICAN BOND – A process in bricklaying by which every 5th, 6th, or 7th layer of bricks is laid with the wide length facing the wall; the other layers have the narrow length facing the wall.
AMERICAN INSTITUTE OF BANKING – The educational arm of the American Bankers Association.
AMERICAN SOCIETY FOR TESTING AND MATERIALS – Former name for ASTM. (See which).
AMORTIZATION – Payment of a debt in equal periodic installments of principal and interest. See also: Balloon Note; Straight Note; Negative Amortization.
AMORTIZATION SCHEDULE – A schedule showing each payment of a loan to be amortized (see Amortization) and breaking down the payment into the amount applied to principal and the amount applied to interest.
AMORTIZATION TERM – The time required to pay off a mortgage if no additional principal payments are made and all payments are made on schedule. A ten year loan, for example, would have an amortization term of 120 months (ten years).
AMORTIZE – To reduce a debt by regular payments of principal and interest. Modernly, the word has been qualified as fully amortized, partially amortized, and negatively amortized. See: Balloon Note; Straight Note; Negative Amortization.
AMORTIZED LOAN – A loan repaid in periodic (most commonly monthly) payments of principal and interest. See also: Amortize, Interest Extra Note, Interest Included Note.
AMPERE – A measure of electrical current equal to the current produced by the force of one volt through a resistance of one ohm. See also: Coulomb.
ANCESTOR – May denote lineal descent, such as a parent or grand parent, or collaterals, such as an older brother being the ancestor of a younger brother. May also mean one from whom a person inherits. Differs from predecessor in that an ancestor must be a person.
ANCHOR BOLTS – A bolt set (anchored) in concrete or other masonry foundation and then attached to the superstructure to prevent movement (anchor it).
ANCHOR TENANT – The most reliable, and usually the largest, tenant in a shopping center. The strength of the anchor tenant greatly affects the availability of financing for the shopping center. The term may also be used to describe a tenant in an office building, industrial park, etc.
ANCILLARY – Subordinate, aiding.
ANNEX – To add or attach. Usually to join a smaller or subordinate thing to a larger or more dominant thing.
ANNEXATION – Permanently affixing to real property, such as a city adding additional land to increase its size.
ANNUAL – By the year.
ANNUAL DEBT CONSTANT – See: Loan Constant.
ANNUAL DEBT SERVICE – Yearly amount of principal and interest payments of debt service. See: Debt Service.
ANNUAL MORTGAGE STATEMENT – The yearly statement sent to a borrower showing the remaining loan balance and the interest paid over the year. Used primarily for income tax purposes.
ANNUAL PERCENTAGE RATE (A.P.R.) – The yearly interest percentage of a loan, as expressed by the actual rate of interest paid. For example: 6% add-on interest would be more than 6% simple interest, even though both would say 6%. The A.P.R. is disclosed as a requirement of federal truth in lending statutes.
ANNUITY – (1) A payment of money yearly for life or a given period of years. (2) A fixed amount given or left by will, paid periodically, not necessarily yearly.
ANNUITY METHOD – Appraisal method for determining present value by future anticipated net income before depreciation, which is then discounted.
ANNUM – Year.
ANTE – Prefix meaning before.
ANTENUPTIAL AGREEMENT – An agreement made by a man and woman in contemplation of marriage, setting forth the property rights of each during the marriage, and in the event of divorce or death.
ANTICIPATION – Appraisal method using the principle that value is created by anticipated future benefits.
ANTICIPATORY BREACH – One party to a contract informing the other of his or her intent not to perform before performance is due. A legal action may be brought even though the original contract (not yet due for performance) has not been breached. Example: The buyer informs the seller before the closing date of his or her intent not to buy.
ANTITRUST LAWS – Laws enacted to promote free competition by prohibiting agreements to limit competition. In real property businesses, for example, setting a “standard” commission for all brokers to charge would be a violation.
APARTMENT – One or more rooms of a building used as a place to live, in a building containing at least one other unit used for the same purpose. Usually has, at least, cooking facilities, a bathroom, and a place to sleep. Those who live in these units pay rent for their use, usually on a monthly basis.
APARTMENT HOTEL – A building combining the features of an apartment building and a hotel. The units are furnished and may offer hotel facilities such as maid service, a restaurant, etc., but whose residents may stay for months or years, paying on a weekly or monthly basis.
APARTMENT HOUSE – A building containing two or more separate residential units, which is under one ownership. The residents of the units pay rent.
APPARENT AUTHORITY – Action (or failure to act) by a principal which leads one to believe that an agent of said principal has authority which in fact the agent does not have.
APPEL LOAN (ACCELERATING PAYOFF PROGRESSIVE EQUITY LOAN) – A residential property loan which calls for a payment increase over the first 6 years. Level payments are made for the remaining years and the loan paid off during the 15th year. There is no prepayment penalty and P.M.I. is required.
APPLICATION – The first step in the official loan approval process; the form records information about the potential borrower necessary to the underwriting process.
APPLICATION SCORING – Using a formula to evaluate credit applications and credit bureau data. See also: Fico Score; Scoring Model.
APPOINTMENTS – Furnishings (mostly thought of as decorative) and equipment in a building.
APPORTIONMENT – A proper allocation of income and expenses of property, especially after a division of ownership.
APPRAISAL – An opinion of value based upon a factual analysis. Legally, an estimation of value by two disinterested persons of suitable qualifications.
APPRAISAL FEE – The amount of money charged by an appraiser. There is no set amount since the work necessary varies with each property.
APPRAISAL INSTITUTE – A trade organization designed to establish standards of competency in the appraisal industry. The designations MAI (competent by the institute’s standards to appraise all types of real property) and SRA (competent to appraise residential property) are prestigious and heavily relied upon by real estate agents, lenders, governments and others who utilize appraisers. The American Institute of Real Estate Appraisers and the Society of Real Estate Appraisers combined in 1991 to form the Appraisal Institute.
APPRAISAL METHODS – Generally, three major methods of appraisal: Cost Approach, Income Approach, Market Value (comparables) Approach.
APPRAISAL REPORT – A written report by an appraiser containing an opinion as to the value of a property and the reasoning leading to this opinion. The factual data supporting the opinion, such as comparables, appraisal formulas, and qualifications of the appraiser, will also be set forth.
APPRAISED VALUE – An opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings.
APPRAISER – One who is trained and educated in the methods of determining the value of property through analysis of various factors which determine said value.
APPRECIATION – An increase in value to real property due to positive changes or the elimination of negative elements in the surrounding area. Although not within the original meaning, the word has been incorrectly used so often that it is now acceptable to describe an increase in value for any reason, including inflation.
APPROPRIATION – The private taking and use of public property, such as water from a river or lake. Not to be confused with condemnation or expropriation.
APPROVED ATTORNEY – In states where attorneys examine the chain of title before title insurance is issued, the title company will approve certain attorneys as those whose opinion it will accept for the issuance of a title policy.
APPURTENANCE – Something belonging to something else, either attached or not, such as a barn to a house, or an easement to land. The appurtenance is part of the property and passes with it upon sale or other transfer.
APPURTENANT – Belonging to, accessory to, or incidental to.
APPURTENANT EASEMENT – See: Easement.
APR – See: Annual Percentage Rate.
APRON – Any structure resembling the shape of the apron worn as clothing, such as a protruding lower inside part of a window, the portion of a driveway which connects it to the street, the entrance to a loading dock, and similar structures.
AQUATIC RIGHTS – Individual rights to the use of the sea and rivers, for the purpose of fishing or navigation, and to the soil in the sea and rivers.
AQUEDUCT – A large pipe, conduit, or trench to bring water or carry it away.
ARABLE – Land capable of being cultivated for farming.
ARBITRAGE – The buying and selling of money or securities in different markets at a profit. For example: The value of 1 pound sterling is selling in New York for $2.00 and in London for $1.98. If one buys in London for dollars and sells in New York, there is a profit of $.02 per pound sterling. The term has come to be used with regard to the interest rate spread between wrap-around and underlying financing.
ARBITRARY MAP – A map drawn by a title company to be used in locating property in areas where legal descriptions are difficult and complex. Areas are arbitrarily subdivided usually by ownership at a given time, into lots which are numbered. Recorded documents are then posted to these arbitrary lots by the same “arb” number.
ARBITRATION CLAUSE – A clause in a lease calling for the decision of a third party (arbiter) regarding disputes over future rents based on negotiation. Also used in construction contracts, disputes between brokers, etc.
ARCADE – A seldom used term describing a series of colonnaded arches, covering a walkway with retail stores on one or both sides. A forerunner of the present shopping center.
ARCH – A concave curved span which may be over a doorway or an entire room or building, such as an arched ceiling or roof.
ARCH BIB ROOF – A roof used primarily in industrial buildings, and having the shape of an arch or crescent. It is supported by a bow-string truss which spreads the roof load evenly.
ARCHITECTURAL CONCRETE CONSTRUCTION – Concrete poured into a form to produce a design, giving the affect of stone masonry.
ARCHITECTURE – The design and construction plans for a structure. Recently the design for landscaping has become known as landscape architecture.
ARCHITRAVE – The surrounding molding of a doorway or similar wall opening.
AREA – The surface (plane) space of land or a building. Also describes a neighborhood, or large land section (such as the Southern California area). The term may also indicate a use, such as a work area, living area, play area, etc.
AREA ZONING – Mainly residential zoning which regulates the ratio of improvements to land, setbacks, etc. Also called bulk zoning.
AREAWAY – An old term referring to a cellar or room under the sidewalk.
ARM (ADJUSTABLE RATE MORTGAGE) – See: Adjustable Mortgage Loans.
ARM’S LENGTH – Legal slang meaning that there existed no special relationship between the parties involved in any manner which would taint the result.
ARM’S LENGTH TRANSACTION – A transaction without collusion or duress between the parties involved.
ARPENT – French land measure of area used in parts of the South, approximately .84625 acre.
ARREARS – (1) Payment made after it is due is in arrears. (2) Interest is said to be paid in arrears since it is paid to the date of payment rather than in advance, as is rent. Example: A rental payment made July 1 pays the rent to August 1. An interest payment made July 1 pays the interest to July 1.
ARTERIAL HIGHWAY – Any major highway or thoroughfare.
ARTESIAN WELL – A well bored into a subterranean body of water, which, being under pressure, rises naturally to the surface without artificial pumping.
ARTICLES OF INCORPORATION – Documentation filed with the state which sets forth general information about a corporation. More specific rules of the corporation would be contained in the by-laws.
ARTIST’S CONCEPTION (RENDERING) – A drawing of a proposed real estate project. Not necessarily to scale and generally used to promote the sale of vacant land or the leasing of proposed buildings.
AS IS CONDITION – Premises accepted by a buyer or tenant in the condition existing at the time of the sale or lease, including all physical defects.
ASBESTOS – A fire and heat resistant material used in insulation, roofing, etc.
ASBESTOS CONTAINING MATERIALS – An environmental term referring to any material containing more than one percent asbestos.
ASHLAR (ASHLER) – A stone which is cut in squares and used both as a facing for masonry walls, and in foundations.
ASKING PRICE – The price at which the seller is offering property for sale. The eventual selling price may be less after negotiation with a buyer.
ASPECT – A position or direction. Exposure.
ASSEMBLAGE – The acquisition of contiguous properties into one ownership for a specific use.
ASSEMBLAGE COST – The cost above the value of individual properties because of assemblage rather than periodic individual sales.
ASSESS – To fix a value; to appraise. Most commonly used in connection with taxes.
ASSESSED VALUE – Value place upon property for property tax purposes by the tax assessor.
ASSESSMENT – (1) The estimating of value of property for tax purposes. (2) A levy against property in addition to general taxes. Usually for improvements such as streets, sewers, etc.
ASSESSMENT BASE – The total assessed value of all property in a given assessment (tax) district.
ASSESSMENT DISTRICT – An area, the boundaries of which are set for tax assessment purposes only; these boundaries may cross city boundaries.
ASSESSMENT PERIOD – Taxable period. The period during which the tax assessment must be completed.
ASSESSMENT RATIO – The assessed value of a property expressed as a fraction in comparison to market value.
ASSESSMENT ROLL – The list of taxable persons and property in a given area as compiled by the assessor.
ASSESSOR – One who estimates value of property for tax purposes.
ASSETS – Everything owned by a person or corporation which can be used for the payment of debts.
ASSIGN – To transfer property, or an interest in property.
ASSIGNEE – One who receives an assignment (pl. assigns).
ASSIGNMENT – A transfer to another of any property, real or personal, or of any rights or estates in said property. Common assignments are of leases, mortgages, deed of trust, but the general term encompasses all transfers of title.
ASSIGNMENT OF LEASE – The transfer by a lessee to a third party of the exact interest of said lessee. Differs and should not be confused with sublease (see which). A lease may legally contain certain restrictions of assignments and/or subleasing.
ASSIGNOR – One who makes an assignment.
ASSUMABLE MORTGAGE – A mortgage that allows the obligation of the borrower to be transferred to the buyer of the borrower’s property secured by the mortgage. If the loan is truly assumable and the transfer is done properly, the originally borrower is relieved of further obligation. See also: “Subject To” Clause; Alienation Clause.
ASSUMPTION CLAUSE – The part (clause) of an assumable mortgage making it assumable. See: Assumable mortgage.
ASSUMPTION FEE – Lender’s charge for paperwork involved in processing records for a new buyer assuming an existing loan.
ASSUMPTION OF DEED OF TRUST – See: Assumption of Mortgage.
ASSUMPTION OF MORTGAGE – Agreement by a buyer to assume the liability under an existing note secured by a mortgage or deed or trust. The lender usually must approve the new debtor in order to release the existing debtor (usually the seller) from liability.
ASTM (AMERICAN SOCIETY FOR TESTING AND MATERIALS) – An organization which helps establish environmental standards in products and property.
ATELIER – A craftsman’s workshop or artist’s studio.
ATRIUM – An interior court, centrally located in a structure, which is either uncovered or covered with a transparent or translucent material to admit light.
ATTACHMENT – An act of seizing persons or property by judicial order to bring them within the custody of the court. Most commonly the seizure of property to furnish security for a debt in connection with a pending action.
ATTEST – To witness, to affirm to be true or genuine; to certify.
ATTESTATION CLAUSE – The clause in a document (deed, mortgage, etc.) in which the witnesses certify that the document has been properly executed.
ATTIC – The space under the roof of a structure but before the top story. May be simply an air space or improved and used.
ATTORN – To turn over; to transfer to another. To agree to recognize a new owner of a property and pay rent to him. See also: Letter of Attornment.
ATTORNEY AT LAW – An advocate, counsel, or official agent employed in preparing, managing, and trying cases in court. Must be licensed by the state.
ATTORNEY’S OPINION OF TITLE – A statement placed in an abstract of title giving the opinion of the condition of title by an attorney who has examined the abstract. The attorney may be personally liable for mistakes he or she has made. Most abstract examination has modernly been replaced by title insurance.
ATTORNEY-IN-FACT – One who is appointed to act (as agent) for another (principal) under a power of attorney. The scope of the agent’s authority is limited to that given by the power of attorney, which may be limited to one specific act or may be broader. See also: Power of Attorney.
ATTORNMENT AGREEMENT – See: Letter of Attornment.
ATTRACTIVE NUISANCE – Anything on a property which may attract small children and is dangerous to them. Reasonable care must be used to prevent injury to children.
AUCTION – A public sale of land or goods to the highest bidder.
AUTOMATIC EXTENSION – A clause in a document such as a lease or listing agreement stating that the terms are extended beyond the expiration date unless cancelled by one of the parties. The clause is usually required to be in large or bold type and, with regard to listings, is not enforceable in some states.
AUTOMATIC LENDER – A lender that may process a loan or assumption without submitting the credit package to the insurer or guarantor for underwriting review. Limited to lenders that are regulated and examined by a government agency unless specifically approved by the insurer or guarantor.
AUXILIARY LANE – A paved shoulder of a highway, usually designed for emergency stopping.
AVENUE – Originally, a broad passageway bordered by trees. Now synonymous with street or road, and of no special significance.
AVERAGE DAILY BALANCE – The sum of the daily balances in a bank account over a monthly period divided by the number of days in a month.
AVERAGE DAILY COLLECTED BALANCE – The average daily balance (see which) less the float (uncollected funds).
AVERAGE DAILY TRAFFIC – The number of vehicles passing a given point in one day. Usually obtained by finding the number for several days and averaging.
AVIGATION EASEMENT – An easement over private property abutting an airport runway, which limits the height of crops, trees, structures, etc., in the aircraft’s take off and landing path.
AVULSION – A sudden and substantial tearing away of land by water and the deposit of said land as an addition to the land of another owner. The original boundaries apply and ownership of the land in questions remains in the original owner.
AWARD – In condemnation, the amount paid for the property taken.
AWNING – Canvas, metal or other material, which protrudes out over a window or doorway to provide protection from the sun, rain, etc.
AWNING WINDOW – A window which, being hinged at the top, forms an awning when open.
AZIMUTH – Distance in degrees from North to an object, or, in the Southern hemisphere, from South to an object. A surveying term.
AZONAL SOIL – Soil which does not contain distinct horizons (layers).
Posted in B HORIZON – The horizon (layer of soil) beneath the top layer. The composition of the B horizon is changed by the action of percolating water.
B.T.U. – See: British Thermal Unit.
BACK POINTS – Points paid to a mortgage broker by a lender which exceed the points paid by the borrower.
BACK TITLE LETTER – In states where attorneys examine title for title insurance purposes, this letter is given by a title insurance company to an attorney, giving to said attorney the condition of title as of a certain date. The attorney then begins his examination as of that date. Also called a starter or back title certificate. See also: Starter.
BACKFILL – To replace ground removed by excavation for construction. Used to brace a structure (especially a foundation or footings).
BACKUP OFFER – A secondary offer to buy property, used in case the first (primary) offer fails. A backup offer is especially useful when the primary offer contains difficult contingencies.
BACKWATER – Water in a stream or river which, because of a dam or other obstruction, is stopped in its course or flows back toward its source.
BACKWATER VALVE – A valve set in a lateral sewer line which automatically prevents sewage from flowing back to its source (a building).
BALANCE – An appraisal term meaning that value of real property is best sustained when opposite influences (e.g. supply and demand) are equal.
BALANCE DUE DATE – See: Installment Note, Balance Due Date.
BALANCE SHEET – A statement of the assets and liabilities of a company to determine its net worth (equity).
BALANCED EXCHANGE – A tax free exchange of properties under Section 1031 of the Internal Revenue code. To be tax free the taxpayer must invest all of the profit from the relinquished property into the replacement property. See also: Boot.
BALCONY – (1) A balustrade, railed, elevated platform projecting from the face of a building. (2) An upper floor seating area in a theater.
BALLOON – (1) The final payment of a balloon note (see which). (2) A landlocked parcel of land.
BALLOON FRAME CONSTRUCTION – A term describing the framing used in a two story wood construction where the studs extend from the sill (ground level) to the ceiling of the second floor. See: Platform Frame Construction; Post and Beam Frame Construction.
BALLOON MORTGAGE – A mortgage that has a final payment larger than the other payments. For example, a thirty year loan due in five years would have a payment that would amortize it (pay it off) over thirty years. However, the loan would be due in five years, making the final payment (the balloon payment) greater than the previous payments.
BALLOON NOTE – A note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as a “balloon” is due at maturity.
BALLOON PAYMENT – The final payment (balance due) of a balloon note.
BALTIMORE RULE – An appraisal method for setting a value on a corner lot. The lot is appraised as an inside lot for its front footage on both streets. The two values are then added to find the value of the corner lot. For example: Lot 1 fronts 100′ on street A and 100′ on street B. The value of a 100′ inside lot on street A is added to the value of a 100′ inside lot on street B to find the value of lot 1. Also called the Bernard Rule.
BALUSTER – The supporting posts of a handrail in a staircase.
BALUSTRADE – A row of balusters supporting a handrail.
BANK – (1) The elevated land on each side of a river or stream which keeps the water in its natural channel. (2) See: Commercial Bank.
BANKRUPT – One who is adjudicated a bankrupt by a court having proper jurisdiction. The bankruptcy may be voluntary (petitioned by the bankrupt) or involuntary (petitioned by the creditors of the bankrupt).
BANKRUPTCY – Proceedings under federal bankruptcy statutes to relieve a debtor (bankrupt) from insurmountable debt. The bankrupt’s property is distributed by the court to the creditors as full satisfaction of the debts. In accordance with certain priorities and exemptions. Voluntary bankruptcy is petitioned by the debtor; involuntary by the creditors.
BARGAIN AND SALE DEED – A contract or deed which conveys a “use” in the buyer under the Statute of Uses. Although the deed may also convey legal title, there are no warranties by the seller that title is good unless specified. See also: Grant Deed; Quit Claim Deed; Warranty Deed.
BARGE COUPLE – Either of the two rafters supporting the part of a gable roof which extends beyond the supporting wall.
BARGE COURSE – Tiling on a gable roof projecting beyond the supporting wall.
BARGE-BOARD – A board (often carved or ornamented) which hangs from the projecting edge of a sloping roof. Also called a vergeboard.
BARN – A farm building used to store hay, grain, farm equipment, and to house livestock.
BARREL – A unit of solid or liquid measure, varying with each trade. For example: A barrel of water if 31 1/2 gallons, oil 42 gallons.
BASE – The lowest part of a construction member. That which bears the load. See also: Base Title.
BASE AND MERIDIAN – See: Base Line; Meridian.
BASE LINE – (1) A survey line used in the government survey to establish township lines. The base line runs East and West through a principal meridian (line running North and South). (2) A horizontal elevation line used as the centerline in a survey for a highway route.
BASE MAP – A map having background information, such as state, county, or city boundaries, upon which more detailed data is plotted.
BASE MOLDING – Molding installed along the top of the baseboard.
BASE PROPERTY – Private property owned by a cattle owner, required before a permit will be issued to allow the cattle to graze on public land.
BASE RENT – A specific amount used as a minimum rent in a lease which uses a percentage or overage for additional rent.
BASE SHOE MOLDING – Molding installed along the bottom of a baseboard (junction with floor). Also called carpet molding or carpet strip.
BASE TITLE – The result of an examination of title for the internal use of a title insurance company. Usually covers a large area and is done in anticipation of future sales or subdividing of the area.
BASE YEAR – The year upon which a direct expense escalation of rent is based. See also: Escalation Clause (3).
BASEBOARD – Generally, any board or molding covering an interior wall where it meets the floor.
BASEBOARD HEATING – A system of perimeter heating in which the baseboard is replaced by the heating units. May also be panels rather than baseboard units.
BASEMENT – Generally, the story of a building below ground level.
BASIC CAPACITY – In connection with highway use, the greatest number of cars per hour which can pass a given point under ideal driving conditions will give the basic capacity of a lane or road.
BASIC CROPS – Crops usually subject to government price supports and considered the basis of our agricultural economy, such as wheat, corn, oats, rice, and similar crops.
BASIS – The purchase price of a property, including all expenses related to the purchase.
BASIS FOR DEPRECIATION – The value of property for purposes of depreciation. For example: A purchased asset The basis is cost, whether fully paid for or not. The method for determining the basis is different for gift, inheritance, etc.
BASIS POINT – A finance term meaning a yield of 1/100th of 1%.
BATHROOM – A room containing a toilet, sink, and bathtub or bathtub-shower combination. In appraisal for federally insured mortgages, a toilet and sink (no bathtub or shower) equal a half bathroom; a toilet, sink and stall shower equal a three quarter bathroom.
BATT – A strip of insulation fitting closely between the studs of a wall.
BATTEN – A narrow strip (usually of wood), used to cover seams between siding boards.
BATTER – The slope of a structure, such as a wall or bank; expressed in terms of the vertical rise per horizontal distance, such as 3 inches (vertical) per 10 feet (horizontal).
BATTURE LAND – The land between a river bank and the water’s edge when the water level is lower than normal.
BAUHAUS – (1919-1933) A school of design (most noted for its architecture) founded by Walter Gropius in Germany.
BAY – (1) The opening between two columns, walls, etc., which forms a room-like space. May be industrial space, parking space, barn space, or other use. (2) A bending or curving of the shoreline so as to form a partially enclosed body of water.
BAY WINDOW – A window which projects in a curve out from a wall, giving a bay- like effect to the interior.
BEACH – That portion of the shore between ordinary low and high water marks. Commonly used to describe any sandy area adjacent to a body of water.
BEAM – A vertical or horizontal member of a structure; may be of wood, steel, concrete, or other strong material, and, unless decorative only, is a load-bearing part of the structure.
BEAMED CEILING – A ceiling having one or more of its beams exposed. See: Beam.
BEARER – One holding commercial paper.
BEARER INSTRUMENTS – Checks, notes, drafts, bonds, etc., payable to whomever has possession of the instruments: i.e. the bearer.
BEARING – (1) Relative position or direction of one object to another or to a compass point. (2) Supporting a load, such as a bearing wall.
BEARING VALUE – In construction, the ability of soil to bear the weight of the structure to be built.
BEARING WALL – A wall which supports the weight of a part of a structure in addition to its own weight.
BED A TREE – Preparing a path (bed) on which a tree is to fall so that it will not be damaged.
BEDROCK – Solid rock beneath the soil, as distinguished from rocks or boulders.
BEDROOM COMMUNITY – An area primarily residential. The people living there commute to work.
BEFORE AND AFTER METHOD – An appraisal method used in both condemnation and modernization. In condemnation the method is used in a partial taking. The value of the total land owned by A, for example, is $1.00 per sq. ft. After a partial taking, the remaining land of A is worth $.75 per sq. ft. A should receive $1.00 per sq. ft. for the property taken plus $.25 per sq. ft. for the remaining parcel. In the event the remaining property is worth $1.25 after the taking (increased value), the payment to A could be less than the value of the property taken. In modernization, an appraiser may take the value of property before and after remodeling to determine if the value increased more than modernization costs.
BELT HIGHWAY – A limited access highway carrying traffic around an urban area, with entrances and exits to principal streets. Also called a by- pass.
BELVEDERE – See: Gazebo.
BENCH MARK – Surveying mark made in some object which is permanently fixed in the ground, showing the height of that point in relation to sea level. Used in topographic surveys and tidal observations.
BENEFICIAL ESTATE – An estate, the right to possession of which has been postponed, such as a devise under a will. More commonly, an estate, the legal ownership of which has not yet vested, as under a land contract. An equitable estate.
BENEFICIAL INTEREST – The equitable, rather than legal ownership of property, such as under a land contract.
BENEFICIAL USE – The doctrine, applicable in some areas, pertains to water rights, giving priority to those who would use the water most beneficially.
BENEFICIARY – (1) One for whose benefit a trust is created. (2) In states in which deeds of trust are commonly used instead of mortgages, the lender (mortgagee) is called the beneficiary.
BENEFICIARY’S DEMAND – Written instructions by a beneficiary under a deed of trust stating and demanding the amount necessary for issuance of a reconveyance, whether a full or partial amount.
BENEFICIARY’S STATEMENT – A statement by a lender under a deed of trust, setting forth the pertinent information necessary to assume said deed of trust, such as the unpaid balance, monthly payment, and interest rate.
BENEFIT OF THE BARGAIN – A rule of damages under which a defrauded purchaser may recover the difference between the actual and misrepresented value of the property purchased, even though greater than the actual loss suffered.
BENEFITS – A term used in eminent domain, referring to the increase in value to land not taken, which is produced by the taking. See also: General Benefits; Special Benefits.
BENEVOLENT ASSOCIATIONS – Non-profit groups having a philanthropic or charitable purpose.
BENT – A transverse frame of a building or bridge, designed to support horizontal or vertical loads.
BEQUEATH – To give personal property by will.
BEQUEST – Traditionally, a gift of personal property in a will. Modernly, a gift of personal or real property. See also: Devise.
BERM – (1) A bench, ledge, or other resting place part way up a hill or slope. (2) A mound used to control drainage by diverting all or part of the flow.
BERNARD RULE – See: Baltimore Rule.
BETTERMENT – An improvement to a structure which is not a repair, restoration, or enlargement. For example: the addition of aluminum siding over a frame wall; paving a street adjoining the structure; adding a fireplace or some similar improvement which increases the value of the property.
BETWEEN SIDEWALLS – See: Balloon Frame Construction; Platform Frame Construction.
BEVELED SIDING – See: Clapboard.
BI – A prefix meaning both “every two” or “twice in”. Biannual, for example, is twice in one year. Biennial is once every two years.
BI-LEVEL – Two levels. Commonly refers to construction of a house. Also called “split” level.
BIANNUAL – Twice per year. Semiannual.
BID – (1) An offer, usually in competition with others, such as at auction. A builder may bid for the right to do construction (especially for a government contract). (2) Used in some states to describe an offer to purchase real estate.
BIENNIAL – Every two years.
BILATERAL (RECIPROCAL) CONTRACT – A contract formed by an exchange of promises. Performance of the contract takes place at a later time. The standard real estate sale’s agreement or lease is a bilateral contract. See also: Unilateral Contract.
BILL DISCOUNTED – A promissory note from which the interest is deducted in advance.
BILL OF SALE – An instrument by which one transfers personal property.
BILLBOARD – A Structure annexed to land for the purpose of posting advertising.
BINDER – (1) A report issued by a title insurance company setting forth the condition of title to certain property as of a certain date, and also setting forth conditions which, if satisfied, will cause a policy of title insurance to be issued. Also called a commitment. See also: Preliminary Title Report. (2) A policy of title insurance (used primarily by investors) calling for a reduced rate for a future policy if the property is sold within a specified period.
BIRD DOGGING – Obtaining the initial lead regarding property, buyers, investors, potential home improvement customers, etc. The lead is then followed up by one empowered to make the deal.
BIRTH RATE – The number of births in a given area during a given period of time, based on per thousand population.
BIWEEKLY ACCELERATED MORTGAGE – A mortgage repaid by biweekly payments. A biweekly payment is equal to one-half the regular monthly payment. This reduced payment is then paid biweekly or 26 times per year. Under this accelerated plan, the borrower pays off more principal than a borrower making monthly payments. Example: A $100,000.00, 30 year loan at 12% interest would have a monthly payment of $1,028.62. Making biweekly payments of $514.31 pays off the 30 year loan in 19 years and 2 weeks and saves $115,975.18 in interest.
BLACK ACRE – Fictitious name used by legal writers to describe a specific property without a more complete description.
BLACKTOP – A black paving surface composed of a coal or asphalt material.
BLANKET DEED OF TRUST – See: Blanket Mortgage.
BLANKET INSURANCE POLICY – A policy covering more than one property. Commonly used by builders of a tract.
BLANKET MORTGAGE – (1) A mortgage covering more than one property of the mortgagor, such as a mortgage covering all the lots of a builder in a subdivision. (2) A mortgage covering all real property of the mortgagor, both present and future. When used in this meaning, it is also called a “general mortgage”.
BLENDED RATE – An interest rate used in refinancing that is higher than the original loan but less than the current market rate.
BLIGHT – To wither and decay. Applied both to diseased plants and to neighborhoods where normal real estate maintenance has stopped.
BLIGHTED AREA – A term popular in urban renewal, referring to a run-down area.
BLIND AD – An ad (usually in a newspaper or magazine) which does not identify the party placing the ad. Often used in an ad for a job, asking that a resume be sent to a post office box.
BLIND CORNER – A corner where building or vegetation (trees, shrubs, etc.) extends to the property line and so obstructs the vision of motorists to right angle traffic.
BLIND NAILING – Nailing so that the nails are sunk into the wall and covered with putty so the nail heads do not show.
BLOCK – (1) In a city, a square or rectangular area enclosed by streets. (2) In some states, a part of a subdivision legal description, such as Lot 1, Block 1, Tract 1. (3) A pulley in a frame. (4) An auctioneer’s platform.
BLOCK BUSTING – An illegal method of obtaining houses at below fair market value by telling the inhabitants that people of a different race or religion, moving into the area, will cause property values to fall.
BLUE LAWS – Actually, laws adopted in some New England colonies regarding religious and personal conduct. Later came to mean any laws regarding the conducting of business on Sunday. Do not confuse with Blue Sky Laws.
BLUE SKY LAWS – Laws to regulate the sale of securities to avoid investment in fraudulent companies or high risk investments without disclosure of the risks to the investor.
BLUEPRINT – A plan of a building in such detail as to enable workmen to construct it from the print. The name comes from the photographic process which produces the plan in white on a blue background.
BOARD – (1) A term which, in the lumber trade, refers to a piece of lumber less than 2 inches thick, and 8 or more inches wide. (2) A group of persons authorized by law to exercise management and control, either of a public function, such as a board of supervisors, board of health, etc., or a private corporation, as a board of directors.
BOARD AND BATTEN – A siding constructed of wide boards (usually one foot wide) placed 1/2 inch apart; the seams are covered by 3 inch wide battens.
BOARD OF ALDERMEN – The governing body of a municipal corporation. Equivalent to a city council.
BOARD OF EQUALIZATION – State board charged with the duty to bring equitable uniformity to the various local property tax assessments.
BOARDFOOT – A unit of measurement for lumber. One boardfoot equals 144 cubic inches or 12″ X 12″ X 1″.
BOARDING HOUSE – A house where one can rent a room and receive board (meals), the cost of which is included in the rent. Not common today.
BOATEL – A name given to a hotel or motel adjacent to a marina and catering to boat travelers.
BOILER PLATE – The form language (generally printed) which is contained in deeds, deeds of trust, CC&R’s, and other documents and contracts. The specifics for each instance are then filled in.
BOILER PLATING – Using form language for a contract, CC&R’s (restrictions), etc.
BOLE – A tree trunk.
BOMA – See: Building Owners And Managers Association.
BONA FIDE – A legal term which refers to any actions, situations, or persons that are honest, in good faith, and without fraud.
BONA FIDE PURCHASER – A purchaser in good faith, for valuable consideration, without notice or knowledge of adverse claims of others. Sometimes abbreviated to B.F.P.
BOND – (1) An insurance agreement by which one is insured against loss by acts or defaults of a third party. In construction, a performance bond insures that the builder will finish his project. The insured could be a lender, purchaser, or other interested party. (2) A method of financing long term debt, issued by a government or private corporation, which bears interest and has priority over stock in terms of security.
BOND FOR DEED – See: Land Contract.
BOND FOR TITLE – See: Land Contract.
BONUS CLAUSE – See: “No Bonus” Clause.
BOOK COST – The actual cost as carried in the account ledger.
BOOK DEPRECIATION – Depreciation reserved (on the books) by an owner for future replacement or retirement of an asset.
BOOK VALUE – The value of a property as a capital asset (cost plus additions to value, less depreciation).
BOOM – (1) A barrier forming an enclosure for logs or timber. (2) A beam of a crane or derrick , used for guiding whatever it lifts.
BOOT – Something given in addition to. Generally used in exchange to refer to something given other than the major properties to be exchanged, in order to equalize value.
BORING TEST – Study of soil by boring holes and removing samples.
BOROUGH – A part of a city, having authority over certain local matters. The best known boroughs are the five boroughs of New York City.
BORROW – Material such as sand or gravel used for grading, which is brought from another location.
BORROW BANK – The place from which borrow material is taken.
BORROW PIT – The pit left after the removal of borrow material. The pit is sometimes filled as a lake and even stocked by some states for fishing.
BORROWER – 1. The party receiving funds that must be repaid, usually with interest. 2. One who uses anything belonging to another with the agreement to return it.
BOTTOM LAND – Low land along a river formed by alluvial deposits. Also low lying ground such as a valley or dale.
BOULEVARD – A wide street, usually having a median or promenade, and lined with trees.
BOUNDARY – A separation, natural or artificial, which marks the division of two contiguous properties.
BOUNDS – Boundaries.
BOURN – A brook. Also called a bourne or burn.
BOURNE – See: Bourn.
BOWSTRING TRUSS – A structural truss with a top member which curves at each end to meet the bottom member, thus resembling a bow.
BRACED FRAMING – Framing reinforced with post and braces, forming a frame more rigid than balloon framing.
BRADLEY FOUNTAIN – See: Bradley Sink.
BRADLEY SINK – A circular lavatory, usually found in industrial buildings, capable of use by several persons at the same time by utilization of a center column containing multiple water jets operated by foot pedals. Also called a Bradley Fountain.
BREACH OF CONTRACT – Failure to perform a contract, in whole or part, without legal excuse.
BREACH OF COVENANT – The failure to do or to refrain from doing that which was covenanted. See also: Covenant; Condition; Restriction.
BREACH OF WARRANTY – In real property, the failure of the seller to pass title as either expressed or implied (by law) in the conveyancing document. See also: Warranty Deed; Grant Deed; Quitclaim Deed.
BREAK EVEN POINT – In income property, where there is neither a positive nor a negative cash flow.
BREAKDOWN METHOD – Estimating accrued depreciation by using all three reasons (physical deterioration, functional obsolescence, economic obsolescence) for loss in value.
BREAST-HEIGHT – The height at which the diameter of a tree is measured. A height of 4 1/2 feet above the ground level. The abbreviation D.B.H. (diameter-breast-height) is usually used.
BREATHER ROOF – A storage tank roof which rises or lowers depending on the level of the stored gas or liquid.
BREEZEWAY – (1) In construction of a house with no garage, a canopy which extends from the house over the driveway as a protection from the weather for an automobile and for those people going between the house and the automobile. (2) A covering over a porch or patio, connecting two sections of a house or a house and garage. Open on two sides, allowing air circulation (breeze).
BRICK – A building material made from clay, which is molded and heated. The effect of the heat on the iron in the clay gives a red color. Addition of lime or magnesia produces a yellow color.
BRIDGE – A structure over a waterway, highway, or other obstruction, to facilitate passage and for the benefit of travelers.
BRIDGE FINANCING – A form of interim loan, generally made between a short term loan and a permanent (long term) loan, when the borrower needs to have more time before taking the long term financing.
BRIDGING – Floor joist bracing, usually of wood or metal.
BRIDLE PATH (ROAD) – Technically a private road designated as a bridle road without specific use. More modernly, a road designated for equestrian use.
BRITISH THERMAL UNIT (B.T.U.) – Unit of heat required to raise one pound of water one degree Fahrenheit. Used to express the capacity of heating and cooling systems.
BROKER, REAL ESTATE – One who is licensed by the state to carry on the business of dealing in real estate. A broker may receive a commission for his or her part in bringing together a buyer and seller, landlord and tenant, or parties to an exchange.
BROKERAGE – The act of bringing together principals (buyer-seller; landlord- tenant; etc.) for a fee or commission, rather than acting as a principal.
BROKERAGE COMMISSION – See: Commission.
BROOM CLEAN – A term used to describe the condition of a building, delivered to a buyer or tenant. As the term indicates, the floors are swept and free of debris.
BUCKED – A tree, cut into logs.
BUDGET – As the word is applied to condominiums and planned developments, the common expenses shared by the unit owners. This will determine the amount each unit will be charged (usually monthly) for expenses of the common area (taxes, insurance, maintenance, etc.).
BUFFER STRIP (BUFFER ZONE) – A parcel of land separating two other parcels or areas, such as a strip of land between an industrial and residential area.
BUILD TO SUIT – A method of leasing property whereby the lessor builds to suit the tenant (according to the tenant’s specifications). The cost of construction is figured into the rental amount of the lease, which is usually for a long term.
BUILDER – One whose occupation is the construction of structures (buildings).
BUILDER BOND – See: Performance Bond.
BUILDING – A structure built to shelter people, animals, or goods. May be a residence, business, or meeting place, such as a church.
BUILDING AND LOAN ASSOCIATION – An organization for the purpose of accumulating a fund by subscription and savings of its members, to assist them with loans for building or purchasing real estate.
BUILDING CODE – A comprehensive set of laws which control the construction of buildings, including design, materials used, construction, use, repair, remodeling, and other similar factors.
BUILDING CONTRACT – A contract setting forth the terms under which construction is to be undertaken. Price may be set, or based on the builder’s cost plus a profit.
BUILDING LINE – A line beyond which there can be no construction. Set by law, the purpose of such a line is to keep buildings from being built too close to the street, both for safety and aesthetic reasons.
BUILDING ORIENTATION – See: Orientation.
BUILDING OWNERS AND MANAGERS ASSOCIATION (BOMA) – An association of owners and managers of commercial (mainly office) buildings. The association shares information on management techniques as well as setting standards for things such as floor measurement of office buildings.
BUILDING PAPER – An insulation. A waterproof, heavy paper used in the construction of a roof or wall.
BUILDING PERMIT – A permit given by a local government to construct a building, or make improvements.
BUILDING RESIDUAL TECHNIQUE – An appraisal technique by which building value is determined by first determining the net return attributable to the land only, and deducting it from the total return to the property (may be estimated). The residual amount is capitalized to find the building value. Best used when land value is easy to estimate and building value difficult to estimate. See: Land Residual Technique; Property Residual Technique.
BUILDING RESTRICTIONS – Prohibition by a governmental body (zoning restriction) or a private party (a former owner) against construction of certain structures on a property.
BUILDING SITE – See: Site (2).
BUILT-IN’S – Commonly stoves, ovens, dishwashers, and other appliances, framed into the building construction and not movable.
BUILT-UP ROOF – A level roof composed of layers of roofing materials (tars and waterproof paper), covered with fine gravel.
BULK SALE – A transfer in bulk, not in the ordinary course of business, of all or substantially all of the inventory and fixtures of a business.
BULK SALES ACT – Laws to protect creditors against secret sale of all or substantially all of the merchant’s goods. Requires certain notice before sale, and sets forth methods of voiding improper sales. See also: Uniform Commercial Code.
BULK ZONING – See: Area Zoning.
BULKHEAD – (1) A partition in a ship. (2) A retaining wall to hold back water and thereby extend the shoreline.
BULKHEAD LINE – A line established in navigable waters beyond which no solid fill can be used. The Army Corps of Engineers establishes the bulkhead line and also the pier line, beyond which no pier can be constructed.
BUNDLE OF RIGHTS – A theory comparing property rights to a bundle of sticks. Each of the usual property rights (possession, alienation, etc.) is represented by a stick and is, therefore, considered separately.
BURN – See: Bourn.
BUS – A copper bar through which electrical current flows.
BUS DUCT – A metal clad enclosure containing a bus.
BUSINESS – Unqualified, the word has no definite meaning, but has come to be understood to be any activity by which people earn money.
BUSINESS CYCLE – The economic cycle of prosperity, followed by a decline, and then a return to prosperity.
BUSINESS OPPORTUNITY – The sale of a business (may or may not include the sale of real estate). Some states require a real estate license for these sales even when real estate is not involved. The Uniform Commercial Code, state statutes, and special laws for alcoholic beverage licenses (when applicable) should be studied by the business opportunities broker.
BUTT JOINT – The meeting end to end (butting) of two members to form a connection (joint).
BUTT LOG – The log immediately above the stump of a tree.
BUTT LOT – See: Key Lot 2.
BUTTE – A steep hill, usually standing alone.
BUTTERFLY ROOF – A roof formed by two gable roofs concave to a center ridge. The roof resembles the shape of a butterfly’s wings.
BUTTRESS – A support for a wall. A prop. If the buttress projects from the wall and supports by lateral pressure, it is called a “flying buttress”.
BUTTS AND BOUNDS – See: Metes and Bounds.
BUY-SELL OFFER – An offer by one owner of a business or real estate to buy out the interest of another owner of the same business or real estate (a partner or other shareholder), or to sell the offeror’s interest at the same price or proportionate price if unequal ownership. Example: A and B each own a 1/2 interest in lot 1. A offers to buy B’s interest for $10,000, or to sell A’s interest to B for $10,000. Theoretically, very fair, since B has the option to buy or sell. However, B’s interest may be worth $12,000, but B is financially unable to buy A’s interest (also worth $12,000).
BUYDOWN – A payment to the lender from the seller, buyer, third party, or some combination of these, causing the lender to reduce the interest rate during the early years of a loan. The buydown is usually for the first 1 to 5 years of the loan. See also: Certificate Backed Mortgage.
BUYDOWN ACCOUNT – The account holding funds to be used to pay additional amounts during the buydown period. See: Buydown.
BUYER – AGENCY AGREEMENT – An agreement by a real estate broker to represent a buyer of property. A broker’s agreement to represent a seller is commonly called a listing agreement. See: Agency.
BUYER’S MARKET – A market condition favoring the buyer. In real estate, when more homes are for sale than there are interested buyers.
BUYERS BROKER – A real estate agent representing the interests of the buyer. Rules of confidentially between buyer and agent are stricter than if the agent represented both buyer and seller.
BX CABLE – The main conduits coming into a home. Electrical wiring run through metal conduits.
BY-LAWS – Rules and regulations, adopted by an association or corporation, which govern its activities.
BY-PASS – A road designed to avoid or pass by a high density area, such as a business section of a city, in order to ease traffic congestion. Also called a belt highway.