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.ack to Top
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.ck to Top
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).
:
Latin meaning "according to
value." Taxes that are said to be ad val orem 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
.ADEQUATE
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.Bac
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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).
:
A person appointed by a Court to
deal with the estate of a deceased person who died without
leaving a will (who dies "interstate"). 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.
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.
ack
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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 favorable lease.
The total amount required to service
a loan in a given year.
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.
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
