Abandonment occurs when a person with a right
or interest in a property voluntarily gives up that right or interest,
either by physically "abandoning" the property or by showing
the intention to give up the right or interest.
A decrease or reduction in the price of a property
(or in rent chargeable to a tenant). Usually occurs as a result of
the discovery of a negative fact about the property which decreases
its value from the price originally agreed upon by the parties.
Quite literally, being capable. A Purchaser
is ready, willing and able to complete a transaction when she has
funds and has signed the documents required to transfer title to
a property. If the Vendor is not ready, willing and able to complete
the transaction on the date set for completion, the Purchaser may
tender upon the Vendor and sue as a result of the failure to complete
the transaction.
An owner of a property who lives elsewhere,
leaving tenants in control and occupation of the property.
Expressed as a percentage, the number of
properties that can be bought or sold in a particular market. May
be broken down as to types and sizes of properties.
A summary listing of the documents registered
in the local land registry office and which affect title (ownership)
of a particular property.
See Title Plant.
A method by which the value of land may be
established. Uses comparable, improved properties and establishes
a ratio of their original land value to their value after they have
been developed.
Adjoin or share a common boundary, or share
even a small portion of a boundary.
Depreciation is the reduction of the value
of a property or chattel as a result of the passing of time (i.e.
a new car may be worth $20,000.00, $18,000.00 after one year, $16,000.00
after two years etc.). Usually used for tax purposes, the depreciation
in the value of a property may be used as a tax deduction. If a
property or chattel loses its value quickly, this depreciation rate
may be accelerated so that most of the value is lost in the first
few years and then the depreciation rate decreases later in the
property's life span. Also known as "Writing down" the
value of a property (or a chattel).
A clause in a mortgage or loan. If the borrower
fails to live up to her obligations under the mortgage, the lender
has the legal right to demand that the full principal of the mortgage
may become due and payable immediately upon the failure.
A positive response to an offer or a counter-offer
that creates a binding agreement between the parties. Acceptance
may be conditional upon the occurrence of certain events.
The right to enter a property. Access may
be restricted to certain times, to certain persons and to certain
purposes (i.e. access for the purpose of inspection).
The ease with which one can reach a certain
place, person or thing. A property may be inaccessible because it
is located far back along a winding, mountainous road that is often
blocked in winter. A property may also be said to have good accessibility
to highways, shopping, schools etc.
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A structure on a property that serves a specific
purpose, complementing the home or main building. A garage or storage
shed.
A professional designation. A property evaluator
who has achieved the requirements of the International Association
of Assessing Officers.
A professional designation. A person who
has met the requirements of the Realtors Land Institute to aid in
the marketing of real property.
A professional designation for a person trained
to manage residential properties. A person who has earned the designation
by fulfilling the requirements of the Institute of Real Estate Management
(IREM), which is an affiliate of the National Association of Realtors.
The growth in size of a parcel of land as
a result of the actions of such natural forces as wind or water.
An adjective describing something that has
come into existence but has not yet been claimed by or distributed
to its rightful owner.
From a tax standpoint, the amount of value
of a property or chattel which has already accumulated (but has
not been claimed) as a result of the decrease in the value of that
property due to the passage of time and the use of the property
or chattel.
Interest which has already been earned but
has not yet been paid.
A statement by a person to the effect that
they are aware of a certain fact. May also be a sworn document to
the same effect, which further states that the person signing the
document did so voluntarily.
The process of taking title to or ownership
of something.
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The cost to the purchaser of obtaining title
to anything, including real property. Acquisition cost includes
the cost of the transaction of obtaining title, including legal
fees and expenses, interest charges on mortgages, land transfer
tax, etc.
An imperial measure for land. Equals 43,560
square feet; 4,047 square meters; or 0.047 hectares.
When used in insurance policies, an event
caused by natural forces such as rain, lightning, floods or earthquakes
which results in damage to property or chattels.
A legal proceeding begun for the purpose
of settling competing claims to property and establishing clear
legal title in one party.
As opposed to effective age. The objective
age in years of a building measured simply by the passage of time
since it was constructed. Effective age is a subjective measurement
of the condition of a building, influenced mostly by the maintenance
and upkeep carried out on the building over the years.
With reference to an agent or representative.
The limits of the power the agent or representative has to bind
her principal to an agreement or to a statement.
An insurance term, the value of a building
calculated by subtracting the decrease in value caused by age and
wear and tear from the cost of replacing the building entirely.
An award of the court to compensate an injured
party for losses incurred as a result of the actions or omissions
of another party.
Wrongful removal of a tenant from possession
of a premises, usually by a landlord, contrary to the terms of the
lease.
As opposed to constructive possession. When
the owner of a property occupies the property on a day-to-day basis.
Constructive possession is when the owner takes actions to establish
and maintain his ownership of a property without actually occupying
it himself (i.e. leasing it to tenants, removing squatters, hiring
a security firm).
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Latin meaning "according to value."
Taxes that are said to be ad valorem are assessed according to the
value of the property.
A loan that finances the three major phases
of a land development project: (i) acquisition, (ii) development
and (iii) construction.
An addition to a document that forms part
of it. Similar to a Schedule to an Agreement of Purchase and Sale.
May be used to add specific and detailed information material to
the contract or upon which contractual terms are based.
A one-time or lump-sum payment made by a
borrower in addition to the regular payments on a loan or mortgage
which reduces the principal owing on the debt.
An ordinance by the local level of government
controlling development by requiring that infrastructure works (roads,
sewers, hydro lines) be completed prior to or concurrent with the
building of dwellings or commercial buildings in a new development.
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An inexact term used to described any property
which is situated near or abutting a certain piece of property.
Note, an abutting property will always be adjacent but an adjacent
property may not be abutting.
Also known as a Variable Rate Mortgage, a
loan secured against land which has an interest rate that changes
according to some outside index -- such as the federal prime rate
or the interest rate paid on government bonds -- over the term of
the mortgage. The change in interest rate will result in a change
in the periodic payments due under the mortgage.
For the purposes of determining capital gains
or losses. The acquisition cost of a property or chattel, plus the
cost of any improvements to the property.
The result of estimating the value of a property
by comparison to comparable properties. Take the actual sale price
of a property comparable to the subject property, then add the value
of any extras which the subject property has but the comparable
property did not, then subtract the value of any deficiencies in
the subject property not shared by the comparable property.
Mortgage term usually preceded by the word
"Interest" (i.e. "Interest Adjustment Date").
The date soon after the completion of a purchase and mortgage transaction
on which the borrower must make a payment of accumulated interest
only, usually used to place the periodic payment dates for the mortgage
at the first day of the month (i.e. you borrow on March 18, your
interest adjustment date is April 1 and your first regular monthly
payment is May 1).
Also known as Adjustment Period. The period
of time (i.e. week, month, year) between changes in the interest
rate charged on a adjustable-rate mortgage.
See Adjustment Interval.
In real estate sales, the changes made to
the selling price to account for the advantages and disadvantages
of the subject property, market conditions etc. When closing a real
estate transaction, the changes to the purchase price made as a
result of realty taxes over- or under-paid by the Vendor, fuel oil
provided, tenant's rental payments etc. (Contained on the Statement
of Adjustments).
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A person appointed by a Court to deal with
the estate of a deceased person who died without leaving a will
(who dies "intestate"). Note, an executor is a person
who is named in a will to deal with the estate of a deceased person.
Verb: to deliver a portion of money borrowed
under a mortgage or loan before the loan instrument requires the
money to be delivered.
Noun: the money so delivered.
A method of acquiring or claiming title (ownership)
to a piece of land owned by another by occupying it in defiance
of the other's title. Most jurisdictions have statutes that set
out a certain period of time throughout which the person claiming
adverse possession must occupy the land before title passes to that
person by operation of law.
A subjective element in the overall market
value of a property created by the physical presentation of the
land or buildings.
One who swears an affidavit.
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A sworn statement setting out facts which
the affiant states are true. Sworn before a Commissioner for swearing
Oaths, Notary Public or other public official.
A Vendor's statement to the effect that title
is good and marketable and subject to no defects other than those
set out in the Agreement of Purchase and Sale or the Vendor's Deed.
Instead of a sworn oath, a solemn and formal
declaration regarding the truth of a statement of facts. Often used
when a person's religious convictions preclude swearing an oath.
In an initiative sponsored by the Department
of Housing and Urban Development (HUD) to foster integration of
races in new housing projects, such a Plan is required before a
project becomes eligible for certain U.S. programs.
The net proceeds from an income-producing
property, after all costs (taxes, mortgage interest, maintenance
costs etc.) of owning and operating the property have been deducted.
The net proceeds from the sale of a property.
The sale price minus legal fees and expenses, realty commission,
any taxes paid, mortgage payout etc.
The relationship between a person (the Principal)
and another person (the Agent) who was appointed, selected, empowered,
given authority by the Principal to represent the interests of the
Principal in dealings with third parties and to bind the Principal
to statements, warranties or contracts.
An agency relationship created by the actions,
behavior or statements of the Principal and/or the Agent upon which
a third party relies. Ostensible Agency may be found by a court
where no agency relationship was intended by the Principal.
An agency relationship where the authority
to represent is imputed to the Agent as a result of an emergency
situation to protect the interests of the Principal.
An agency relationship which is created after
the fact when the Principal agrees to be bound by the actions of
another person who was acting without authority.
A person empowered by a Principal to act
on behalf of the Principal in dealings with third parties. The third
party is entitled to rely upon the agreement, assurances or statements
of the Agent as being binding on the Principal.
Also known as Purchase Agreement, Agreement
of Purchase and Sale, Land Agreement etc. A legal contract in which
one party agrees to buy and another agrees to sell a property or
chattel. Contains terms and conditions of the transaction and is
signed by the parties.
A legally binding contract between two or
more people, representing a meeting of minds on one or more issues.
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Land zoned for agricultural or farming activities.
A saleable commodity, the right to occupy
or use the air space above a specific property.
A term of a mortgage which allows the creditor
to demand payment in full of principal and interest due upon the
sale of the property.
Estimating the value of land only by deducting
the value of the buildings etc. on the land from the actual market
value of the property as a whole.
The system of ownership of property in the
United States, meaning free from any claims or rights of a monarch
or a feudal lord.
A change made to an executed contract which
has not been approved by the parties to the contract. An alteration
may constitute fraud if it has the impact of significantly affecting
the rights of a party to the contract and was intentionally carried
out by another party. If fraud is found, the innocent party may
void the contract.
Positive features of a particular property
(such as a pool, central air conditioning, etc.) or attractions
located near a particular property (highways, school, shopping,
etc.) which have the effect of enhancing the property's value.
Trade association of American title insurance
companies, with a view to standardizing the policies nationwide.
A Professional Designation. Awarded by the
American Society of Farm Managers and Rural Appraisers.
A Professional Society, for persons involved
in the appraisal of both real and personal property.
A Professional Trade Organization, for persons
specializing in the inspection of the physical condition of homes.
A Professional Society, for persons specializing
in helping people buy and sell homes.
The preparation of a payment plan for a loan
which allows for equal payments to be made to the creditor at consistent
intervals over the life of the loan (the amortization period). Each
payment covers interest accrued over the interval period with the
remainder of the payment being applied to reduce the principal owed.
If every payment is made on time and in full over the amortization
period, the loan will be completely repaid at the end of the amortization
period.
The printed table of the payments to be made
on an amortized loan showing the date and amount of each payment,
the amount of each payment which will be applied to interest and
to principal and the balance of principal still outstanding on the
loan after the payment is made.
A specific kind of mortgage. Contains a clause
that states that it secures all debts owed to the mortgagee by the
mortgagor and applies to rules of the mortgage to all such debts.
Clause is also known as a Mother Hubbard clause.
Description of a tenant in a shopping mall
or center. A "name" store that will draw shoppers to the
mall and, therefore, benefit the other mall stores. Usually receives
a favourable lease.
The total amount required to service a loan
in a given year.
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Ratio of Annual Debt Service to original
principal of the loan. Also known as a mortgage constant.
Document sent by the lender to the mortgagor
each year which sets out amounts paid for principal, interest and
taxes in the given year and the amount still owing on the principal
of the mortgage at the end of the year.
A rate designed to allow for the comparison
of one type of loan to another. The annual cost of borrowing under
a given form of loan (includes in the calculation compounded interest,
cost of borrowing etc.). Required to be disclosed by the lender
under the American Truth in Lending Act, Regulation Z.
A form of periodic payment. Payments are
made at the beginning of each payment period rather than at the
end of each period, as with a normal annuity.
A form of periodic payment. Made to the recipient
at consistent periodic intervals either for life or for a fixed
period of time.
An approach to assessing the future value
of land based on possible contingencies (positive or negative).
Laws requiring competition and a free market,
outlawing monopolies in certain businesses.
A short form used by agents to designate
that an offer to purchase has been accepted by the offeree.
Where an agent compels, by actions, omissions
or statements, a third party to believe the agent has the authority
to bind a principal. The authority to bind is apparent due to the
behavior of the agent but may not actually exist.
A form filled out in order to allow a lender
to consider a person for a mortgage or loan. Will contain personal
and financial and personal information on the applicant.
The fees the lender charges the applicant.
May include costs of a property appraisal and a credit report on
the applicant. May be payable by applicant even if loan is not approved.
Chattels or decorative touches that may affect
the value of a property.
A clause in a policy of insurance. Allows
the payment of compensation for a loss to be divided between insurers
holding different policies on the same property.
Also known as adjustment. The division of
responsibility for certain costs between the parties to a transaction,
such as realty taxes. In many U.S. jurisdictions, the vendor is
responsible for the day of closing and all days prior to it.
An estimation of the value of a property
on a certain date given by a qualified person, usually after an
inspection of the property.
Elements to be considered by an appraiser
in appraising the value of a property, such as competition, supply
and demand.
A standardized approach to appraising a property,
to allow for accuracy and consistency.
Documentation to support an appraisal of
a property. Varies in length but sets out elements considered, positive
and negative aspects of property etc.
The estimated market value of a property
on a given date, given by a qualified person as a result of an inspection
of the property and a consideration of other market forces.
A professional who has been trained to assess
the value of property.
The increase over time in the value of a
property caused by many factors: market conditions, inflation, changes
to area around the property, etc.
Different methods by which appraisers estimate
the value of a property. Include: (1) cost approach, (2) comparison
approach, and (3) income approach.
A lawyer who meets the requirements of title
insurance companies to be able to complete transactions involving
title insurance and to render title opinions.
A right or entitlement which forms part of
the ownership of a property and which passes to a new owner when
title passes (i.e. an easement or right of way over another property).
An Alternative Dispute Resolution method.
Allows an objective third party to settle disputes between parties
without resorting to court. Binding arbitration involves the parties
agreeing to be bound by the decision of the arbitrator.
A colloquial description of a transaction
where none of the parties are related to each other or have common
interests -- they have each other at "arm's length". An
arms-length transaction is generally at fair market value; in a
"non-arm's-length" transaction, the relationship between
the parties may cause one or the other to accept less than they
are entitled or pay more than fair market value.
Money which is not paid when due, under a
payment plan or amortization schedule. Could lead to enforcement
of loan agreement by lender
A main thorough fare or through road, one
which is designed to carry traffic through an area where that area
is not the destination of the traffic.
As opposed to a natural person. A corporation
of other legal entity which has at least some of the legal rights
of a human being.
Implied in most Agreements of Purchase and
Sale, suggests the Purchaser is accepting the property in its current
condition and releases the Vendor from any liability for problems
found before or after closing.
A statement in the Agreement of Purchase
and Sale that confirms that the Purchaser shall accept the property
and all chattels included in the Purchase in the condition in which
they are found at the time the Agreement is signed.
The price at which the Vendor advertises
a property. When used in the advertisement, may suggest flexibility
on the part of the Vendor regarding the price.
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The value assigned to a given property by
the municipality for the purpose of establishing realty taxes payable
by the owner of the property.
Generally, the apportionment of liability
of a general cost among individuals. The act of estimating the value
of land for tax purposes or the method by which municipalities raise
taxes (property tax assessment).
The total of the assessed values of all properties
in a municipality.
Assessed value as compared to full market
value for a particular property or for all properties as set by
the municipality.
Public record of the assessed values of properties.
Also includes Assessment Roll Number for each property, the number
by which the property is identified in the municipal records.
A person who is employed by the municipality
to estimate the value of properties for the purpose of taxes.
A thing of value.
To transfer interest in a property, contract,
right etc..
The person to whom an interest is transferred.
An assignee of an Agreement of Purchase and Sale may buy the property
and enforce the contract in the same fashion as the original party.
The transfer of any right, claim or interest
to another person or corporation. Often used to refer to the transfer
of a mortgage from one lender to another. Also a noun describing
the document which represents the assignment of the right etc.
Subject to the terms of the lease, a transfer
of either the lessor's or the lessee's interest in a lease.
The person who assigns a right or interest
to another person.
A qualified real estate broker who works
with or for another broker.
A mortgage that can be taken over ("assumed")
by the buyer when a home is sold. If interest rates have risen,
an assumable mortgage at a low rate may prove a selling point for
the property.
The paragraph in the mortgage which sets
out the borrower's right to have the mortgage assumed by a purchaser.
A charge levied by the lender (usually against
the party assuming the mortgage) for the privilege of assuming a
mortgage. May be a fixed amount or a percentage of outstanding principal
on the mortgage at the time of the assumption.
The agreement of a purchaser to take on personal
liability for a mortgage already registered on title to the property
and to make payments under the mortgage. Purchaser takes the place
of the vendor in the contract with the lender.
A limitation of the amount an investor can
claim on his incomes taxes as a result of losses from real estate
investments, under the Tax Reform Act of 1986.
Duplex, triplex, row housing, or townhouses.
Two or more dwellings that are attached physically but are owned
and/or occupied by different people.
The binding by a court of a piece of property
(real or personal) as security for a debt.
A statement by a person who has witnessed
another person signing a document to the effect that they did in
fact witness the document. May include statements to the effect
that the witness knew the person who signed personally, that the
person who signed understood the contents of the document when he
signed etc. Required in some states for deeds.
A person who has met the requirements to
practice law in a particular state of the United States.
:
A person who holds a POWER OF ATTORNEY for
another person, which gives the Attorney the power to act on behalf
of that other person and bind that other person.
A statement of a lawyer's conclusions with regard to the state of
the legal title of a property, issued after
the lawyer has completed the appropriate investigations of title.
"Attractive" refers to the response
of children to a feature of land (whether natural or man-made) which
has the potential to be harmful (an uncovered well, a swimming pool,
a swift moving stream).
The process of selling property to the highest
bidder.
A professional (real estate broker or auctioneer,
depending on local laws) who sells property at public auctions.
Usually paid a percentage of the sale price.
The assets of a deceased person against which
a surviving spouse may claim an interest. Can include property which
the deceased person disposed of while still living if the disposal
was in the form of a gift or was not for value.
The right of an agent, conferred by his principal,
to bind the principal in dealings with third parties. See actual
authority, implied authority, apparent authority, ostensible authority,
inherent authority.
A contract between an property owner and
a real estate broker or agent which allows the broker to list the
property for sale and which codifies the rights and obligations
of the two parties
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