Abstract of title
The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete
Acceleration clause
The clause in a mortgage or trust deed that can be enforced to make the entire debt due immediately if the mortgagor defaults on an installment payment or other covenant.
Acceptance
A promise by the offeree to be bound by the exact terms proposed by the offeror.
Accession
Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams
Accretion
The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake, or sea.
Accrued depreciation
Loss in value resulting from the properties physical deterioration, external depreciation (decrease in price), and functional obsolescence.
Accrued items
On a closing statement, expense items that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property
Acknowledgment
A formal declaration made before a duly authorized officer, usually a notary public, by a person who has signed a document
Actual eviction
The result of legal action, originated by a lesser, whereby a defaulted tenant is physically ousted from the rented property pursuant to a court order
Actual notice
Express information or fact; that which is known; direct knowledge
addenda
Additional material attached to and made part of a document, as in a supplement added to an agreement of sale.
Adjustable-rate mortgage (ARM)
A loan characterized by fluctuating interest rate, usually one tied to a bank or savings and loan association cost-of-funds index.
ad valorem tax
A tax levied according to value; generally used to refer to real estate tax. Also called the general text
Adverse possession
The actual, visible, hostile, notorious, exclusive, and continuous possession of another's land under a claim of title. Possession for a statutory period may be a means of acquiring title
Agency
The relationship between a principal and an agent, wherein the agent is authorized to represent the principal in certain transactions.
Agency coupled with an interest
An agency relationship in which the agent is given an estate or interest in the subject of the agency
(the property)
Agent
One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a principle authorizes a licensed real estate broker to be the principal's agent
Agreement of sale
An offer to purchase that has been excepted by the seller and has become a binding contract
Affiliated business arrangement (AfBA)
A package of business arrangements between real estate brokerage firms and affiliated mortgage companies or other settlement service providers, when there is more than 1% common ownership between the companies. RESPA requires that consumers be informed of
Air lot
A designated airspace over a piece of land. An air lot, like surface property, may be transferred
Air rights
The right to use the open space above a property, generally allowing the surface to be used for another purpose
Alienation clause
The clause in a mortgage that states that the balance of the secured debt becomes immediately due and payable at the mortgagee's option if the mortgagor sells the property. The effect, this clause prevents the mortgagor from assigning the debt without the
Amendment
A change to the existing content of a contract (i.e. if words or provisions are added to or deleted from the body of the contract). Must be initialed by all parties
Americans With Disabilities Act (ADA)
A federal law passed in 1990 to open doors, both figuratively and literally, for people with disabilities to become part of the economic and social mainstream of society. The law mandates equal access to employment and goods and services. Title I prohibit
amortized loan
A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan
Annexation
The process of converting personal property into real property
Anticipation
The appraisal principle that holds that value can increase or decrease based on the expectation of some future benefit detriment produced by the property
Antitrust laws
Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Violations of antitrust laws in the real estate business generally involve group boycotti
Appraisal
An estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.
Appraiser
A person who prepares a professional opinion of estimated value. By state licensing law, only persons who are properly qualified and certified are permitted to engage in appraisal activities of real estate and prepare appraisal reports.
Appurtenance
A right, privilege, or improvement belonging to, and passing with, the land
Appurtenant easement
An easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor's land
Area preference
People's desire for one area over another, based on a number of factors such as history, reputation, convenience, scenic beauty and location.
Asbestos
A mineral once used in insulation and other materials that can cause respiratory diseases
Assemblage
The combining of two or more adjoining lots into one large tract to increase total value
Assessment
The imposition of a tax, charge, or levy, usually according to established rates.
Assignment
The transfer in writing of interest in a bond, mortgage, lease, or other instrument
Associate broker
A person licensed as a real estate broker who chooses to work under the supervision of another broker
Attachment
The act of taking a person's property into legal custody by writ or other judicial order to hold it available for application to that person's debt to a creditor
Attorney's opinion of title
An abstract of title that an attorney has examined and certified to be, in the attorney's opinion, an accurate statement of the facts concerning the property ownership
Bargain and sale deed
A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warrantees to the deed at his or her discretion.
Base line
The main imaginary line running east and west and crossing a principal meridian at a definite point, used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.
Benchmark
A permanent reference mark or point established for use by surveyors in measuring differences in elevation
Bilateral contract
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see definition in the word "contract"
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Blanket lone
A mortgage covering more than one parcel of real estate, providing for each parcel's partial release from the mortgage lien upon repayment of a definite portion of the debt.
Blockbusting
The illegal practice of attempting, for profit, to induce homeowners to sell their properties by making representations about the entry or prospective entry of persons in the protected classes into the neighborhood. Also known as panic selling.
Breach of contract
Violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due
Broker
One who buys and sells for another for a commission. In real estate, a program must be properly licensed to perform certain activities specified in the real estate license laws and collect compensation.
Brokerage
The bringing together of parties interested in making a real estate transaction.
Broker/ appraiser
A real estate broker who is licensed by the Certified Appraisers Act in Pennsylvania to perform appraisals on properties for nonfederally related transactions under $250,000.
Broker of record
The individual broker responsible for the real estate transactions and activities of licensees in a partnership or corporation
Broker price opinion (BPO)
An opinion of real estate value commissioned by a bank or an attorney and provided by a broker; not an appraisal
Brownfields
Contaminated properties that have long sat idle because of significant pollution associated with their prior industrial use
Budget comparison statement
Compares actual results with the original budget, often giving either percentages or a numerical variance of actual versus projected income and expenses.
Buffer zone
A strip of land, usually designated as a park or for a similar use, separating land dedicated to one use from land dedicated to another use (e.g. residential from commercial)
Builder-owner salesperson
An individual who is a full-time employee of the owner or builder of single-family or multifamily residences who is licensed to perform certain acts on behalf of the builder-owner
Building codes
Ordinances that specify minimum standards of construction for buildings to protect public safety and health
Building permit
Written governmental permission for the construction, alteration, or demolition of an improvement, showing compliance with building codes and zoning ordinances
Bundle of legal rights
The concept of land ownership that includes ownership of all legal rights to the land - for example, possession, control within the law, right of enjoyment, right of exclusion, and right of disposition
Business name
The name in which the broker's license is issued. Anytime the name of the business appears, it must be represented exactly as it appears on the broker's license
Buydown
A financing technique used to reduce the monthly payments for the first few years of a loan. Funds in the form of discount points are given to the lender by the builder or seller to buy down or lower the effective interest rate paid by the buyer, thus red
Buyer agency agreement
A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of the agency
Campground membership
An interest, other than a fee simple or by lease, that gives the purchaser the right to use a unit of real property for the purpose of locating a recreational vehicle, trailer, tent, camper or other similar device on a periodic basis pursuant to a members
Campground membership salesperson
A licensee who, either as an employee or an independent contractor, sells campground memberships under the supervision of a broker
Capital gain
Profit earned from the sale of an asset
Capitalization rate
The rate of return a property will produce on the owner's investment
Carbon monoxide (CO)
A colorless, odorless gas that occurs as a natural by-product of combustion that in high concentrations can cause serious health problems and even death. Malfunctioning or improperly ventilated fuel burning equipment (furnaces, stoves, and fireplaces) are
Cash flow report
A monthly statement that details the financial status of the property
Cemetery associate broker
A licensed cemetery broker employed by another cemetery broker or broker
Cemetery broker
An individual or entity licensed to engage exclusively in the sale of cemetery lots, plots, and mausoleum spaces or openings
Cemetery salesperson
A licensee employed by a broker or cemetery broker to sell cemetery lots exclusively
Certificate of occupancy
Permission by the municipal inspector to occupy a completed building structure after it has been inspected and complies with building codes
Certificate of reasonable value (CRV)
A form indicating the appraised value of a property being financed with a VA loan
Certificate of title
A statement of opinion on the status of the title to a parcel of real property based on an examination of specified public records
Certified general real estate appraiser
An individual who is certified under the state Certified Appraisers Act to perform appraisals of any type or value of property for federally related real estate transactions
Certified residential real estate appraiser
An individual who is certified under the state Certified Appraisers Act to perform residential (one - to four - unit dwellings) appraisals for federally related real estate transactions
Chain of title
The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title
chattel
Personal property
Chlorofluorocarbons (CFCs)
Non-toxic, nonflammable chemicals used in air conditioners and refrigerators. CFCs are safe in application but cause ozone depletion
Civil Rights Act of 1866
An act that prohibits racial discrimination in the sale and rental of housing
Client
The person who is the principal who hires the agent and delegates to the agent the responsibility of representing the principal's interest. In a real estate transaction, the client may be the seller/property owner or buyer/tenant who has an agency relatio
Closing
An event where promises made in a sales contract are fulfilled and mortgage loan funds (if any) are distributed to the buyer
Comprehensive Loss Underwriting Exchange (CLUE)
A database of consumer claims history that allows insurance companies to access prior claims information in the underwriting and rating process
Code of ethics
A written system of standards for ethical conduct
Coinsurance clause
A clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage generally equal to at least 80% of the property's actual replacement cost
Commission
Payment to a broker for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property
Common elements
Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all the condominium residents. Each condominium owner has an undivided ownership interest in the common elemen
Community property
A system of property ownership based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage. A holdover of Spanish law, found predominantly in western states, the system was unknown un
Community Reinvestment Act (CRA)
A federal law established in 1977 that prescribes certain activities for financial institutions to help meet the needs in their communities for low and moderate income housing
Comparative market analysis (CMA)
A written analysis, opinion, or conclusion by a contracted buyer's agent, transaction licensee, or an actual or potential seller's agent the relating to the probable price of a specified piece of real estate. A CMA is a comparison of the prices of recentl
Competition
The appraisal principle that states that excess profits generate competition
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
A law administered by the Environmental Protection Agency that established a process for identifying waste sites, forcing liable parties to clean up toxic sites, bringing legal action against responsible parties, and funding the abatement of toxic sites
Comprehensive plan
A plan to guide the long-term physical development of a particular area
Conciliation
The resolution of a fair housing complaint by HUD by obtaining assurance that the person against whom the complaint was filed (the respondent) will remedy any violation that may have occurred and will take steps to limit eliminate and or prevent discrimin
Condemnation
A judicial or administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and compensates the owner
Conditional-use permit
Written governmental permission allowing a use inconsistent with zoning but necessary for the common good, such as locating an emergency medical facility in a predominantly residential area
Condominium
The absolute ownership of the unit in a multiunit building based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with other condominium unit own
Conformity
The appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value
Consideration
That received by grantors in exchange for their deed. Something of value that induces a person to enter into a contract
Construction loan
A short-term loan usually made during the construction phase of a building project (may be called interim financing)
Constructive eviction
Actions of the landlord that so materially disturb or impair a tenant's enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent
Constructive notice
Notice given to the world by recorded documents. All people are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered constructive notice that the person in
Consumer
A person who is the recipient of any real estate service, as defined by Pennsylvanians licensing law. This person may receive client or customer services, depending on the nature of the relationship established with the real estate broker.
Consumer notice
A special form adopted by the State Real Estate Commission in Pennsylvania to disclose information about permitted business relationships and specific agency procedures in real estate transactions. This notice must be presented at an initial interview to
Contingency
Provisions in a contract that require a certain act to be done or a certain event to occur before the contract becomes binding
Contract
A legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all p
Contribution
The appraisal principle that states that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from that value
Conventional loan
A loan that is not in insured or guaranteed by government or private source
Cooperative
A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of persons living within the building, who are the beneficial owners of the trust or stockholders of the corporation, each possess
Co-ownership
Title ownership held by two or more persons
Corporation
An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures
Corrective maintenance
Corrects problems after they have occurred
Cost approach
The process of estimating the value of a property by adding to the estimated land value the appraiser's estimate of the reproduction or replacement cost of the building, less depreciation
Counteroffer
A new offer made as a reply to an offer received. It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror.
Covenants, conditions, and restrictions (CC&Rs)
Private agreements that affect the land use. They may be enforced by an owner of real estate and included in the seller's deed to the buyers
Credit
On a closing statement, an amount entered in a person's favor - an amount the party has paid or an amount for which the party must be reimbursed
Credit scores
Computer-generated analysis of factors characteristic or indicative of repayment; the most common one was developed by Fair, Isaac, and Company (FICO)
Customer
A person who is a consumer of real estate services, who is not a client of the real estate licensee. A customer receives customer-level services rather than the client-level services, which means the customer is not being represented by the licensee as th
Datum
A horizontal plane from which heights and depths are measured
Debit
On a closing statement, an amount charged; that is, an amount that the debited party must pay
Dedication
The voluntary transfer of private property by its owner to the public for some public use, such as for streets or schools
Deed
A written instrument that, when executed and delivered, conveys title to or an interest in real estate
deed in lieu of foreclosure
A deed given by the mortgagor to the mortgagee when the mortgagor is in default under the terms of the mortgage. This is a way for the mortgagor to avoid foreclosure
Deed in trust
An instrument that grants a trustee full power to sell, mortgage, and subdivide a parcel of real estate. The beneficiary controls the trustee's use of these powers under the provisions of the trust agreement
Deed of trust
An instrument used to create a mortgage lien by which the borrower conveys title to a trust, which holds it as security for the benefit of the note holder (the lender); also called a trust deed
Deed restriction
A clause in a deed limiting the future use of the property. They may impose a vast variety of limitations and conditions - for example, they may limit the density of buildings, dictate the types of structures that can be erected, or prevent buildings from
defeasance clause
A clause used in leases and mortgages that cancels a specific right upon the occurrence of a certain condition, such as cancellation of a mortgage upon a repayment of the mortgage loan
Defeasible fee estate
An estate in which the holder has a fee simple title that may be divested upon the occurrence or not occurrence of a specific event. There are two categories: fee simple on condition precedent (fee simple determinable) and fee simple on condition subseque
Deficiency judgment
If personal judgment levied against the borrower when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full
Demand
The amount of goods people are willing and able to buy at a given price; often coupled with supply
Density zoning
Zoning ordinances that restrict the average maximum number of houses per acre that may be built within a particular area, generally a subdivision
Depreciation
In appraisal, a loss of value in property due to any cause, including physical deterioration, functional obsolescence, external obsolescence. In real estate investment, an expense deduction for tax purposes taken over the period of ownership of income pro
Designated agency
The process wherein one or more licensees are designated by the employing broker to act exclusively as agent(s) on behalf of the principal to the exclusion of all other licensees within the broker's employ.
Developer
One who attempts to put land to its most profitable use through the construction of improvements
Devise
A gift of real property by will. The donor is the devisor, and the recipient is the devisee.
Disability
A physical or mental impairment that substantially limits one or more major life activities
Discount points
Units of measurement used for various loan charges; one point equals 1% of the amount of the loan
Doctrine of prior appropriation
A governing principle of water rights law whereby the right to use water is controlled by the state rather than the landowner adjacent to the water
Dual agency
Representing both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in many states
Earnest money
Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed; also known as hand money
Easement
A right to use the land of another for a specific purpose, such as for a right-of-way or utilities; an incorporeal interest in land
Easement by condemnation
An easement created by the government or governmental agency that has exercised its right under eminent domain
Easement by necessity
An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, the right of ingress and egress over a grantor's land
Easement by prescription
An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law. In Pennsylvania, it is 21 years
Easement and gross
An easement that is not created for the benefit of any land owned by the owner of the easement but that attaches personally to the easement owner. For example, a right granted by woman to a man to use a portion of her property for the rest of his life wou
Economic life
The number of years during which an improvement will add value to the land
Electronic contracting
A process of integrating information electronically in a real estate transaction between clients, lender, and title and closing agents
Electromagnetic fields (EMFs)
The movement of electrical currents, especially noticeable around high-voltage lines, secondary transmission lines, and transformers, that some people assert as a health hazard.
Elevation certificate
A form supplied by a licensed surveyor certifying building elevations and required to show compliance with community floodplain regulations and determine appropriate insurance rates
Emblements
Growing crops, such as grapes and corn, which are produced annually through labor and industry also called fructose industriales
Eminent domain
The right of a government or municipal quasi-public body to acquire property for public use through the legal process called condemnation
Employee
Someone who works as a direct employee of an employer and has employee status. The employer is obligated to withhold income taxes and Social Security taxes from the compensation of employees.
enabling acts
State legislation that confers zoning powers on municipal governments
Encapsulation
A method of controlling environmental contamination by sealing off a dangerous substance
Encroachment
A building or some portion of it - a wall or a fence, for instance - that extends beyond the land of the owner and illegally intrudes on some land of an adjoining owner or a street or alley
Encumbrance
Anything such as a mortgage, a tax, judgment lien, an easement, a restriction on the use of the land, or an outstanding dower right - may diminish the value of a property
Environmental impact statement (EIS)
A statement that details the effect a federally funded project will have on the environment
Environmental site assessment (ESA)
An evaluation of property to show that due care was exercised in the determination of environmental impairments
Equal Credit Opportunity Act (ECOA)
The federal law that prohibits discrimination in the extension of credit because of race, color, religion, national origin, sex, age, or marital status
Equalization factor
A factor (number) by which the assessed value of a property is multiplied to arrive at the value for the property that is in line with statewide tax assessments. The ad valorem tax would be based on this adjusted value
Equitable lien
A lien that arises out of common law
Equitable right of redemption
The right of a defaulted property owner to recover the property prior to its sale by paying the appropriate fees and charges
Equitable title
The interest held by a vendee under an installment contract or agreement of sale; the equitable right to obtain absolute ownership to property when legal title is held in another's name
Equity
The interest or value that an owner has in property over and above any indebtedness
Erosion
The gradual wearing away of land by water, wind, and general weather conditions; the diminishing of property caused by the elements
Escheat
The reversion of property to the state or county, as provided by state law, in cases where a decedent dies interstate without heirs capable of inheriting, or when the property is abandoned
Escrow account
The trust account established by a broker under the provisions of the license law for the purpose of holding funds on behalf of the broker's principal or some other person until the consummation or termination of a transaction
Estate at sufferance
The tenancy of a lessee who lawfully comes into possession of a landlord's real estate but continues to occupy the premises improperly after the lease rights have expired
Estate at will
The estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite
Estate for years
An interest for a specified time in property leased for a specified consideration
Estate from period to period
An interest in leased property that continues from period to period - week to week, month to month, or year to year
Estate in land
The degree, quantity, nature, and extent of interest that a person has in real property
Ethics
The system of moral principles and rules that becomes the standards for professional conduct
Exclusive-right-to-sell listing
A listing contract under which owners appoint a real estate broker as their exclusive agent for a designated period, to sell the property on the owners' stated terms, and agree to pay the broker a commission when the property is sold, whether by the broke
Executed contract
A contract in which all parties have fulfilled their promises and thus performed the contract
Executory contract
A contract under which something remains to be done by one or more of the parties
Express agency
An agency relationship based on a formal agreement between the parties
External depreciation
Reduction in a property's value caused by outside factors (those that are off the property)
Factory-built housing
Dwellings that are built off-site and trucked to a building lot where they are installed or assembled
Fair and Accurate Credit Transactions Act (FACTA)
The federal law that requires each of the three major credit bureaus to provide a free credit report every 12 months upon request. Agencies are required to assist consumers and to correct mistakes
Fair Housing Act
The federal law that prohibits discrimination in housing based on race, color, religion, sex, disability, familial status, and national origin
Familial status
One or more individuals under age 18 living with a parent or guardian. It also includes pregnant women and anyone in the process of assuming custody of a child under 18
Fannie Mae
A government-sponsored enterprise established to purchase any kind of mortgage loans in the secondary mortgage market from the primary lenders; formally known as the Federal National Mortgage Association (FNMA)
Farm Service Agency (FSA)
An agency of the federal government that provides credit assistance to farmers and other individuals who live in rural areas; formally known as the Farmers Home Administration
Federal Reserve System (the Fed)
The country's central banking system, which is responsible for the nation's monetary policy by regulating the supply of money and interest rates
Fee simple
The maximum possible estate or rights of ownership of real property, continuing forever; also known as fee simple absolute
Fee simple determinable
The fee simple estate qualified by a special limitation; language used to describe limitation includes the words so long as, while, or during
Fee simple subject to a condition subsequent
If an estate is no longer used for the purpose conveyed, it reverts to the original grantor by the right of reentry
FHA loan
A loan insured by the Federal Housing Administration and made by an approved lender in accordance with FHA's regulations
Fiduciary duties
The common-law duties that an agent owes a principal in a fiduciary relationship: care, obedience, accounting, loyalty, disclosure, and notice
Fiduciary relationship
A relationship between trustee and beneficiary, attorney and client, or principal and agent
Fixture
An item of personal property that has been converted to real property by being permanently affixed to the realty
Flood insurance
The governmental-subsidized insurance policy that is always separate from homeowners' insurance. It covers physical damage to a building or personal property directly caused by flooding (rising water). The Federal Emergency Management Agency (FEMA) admini
Foreclosure
A legal procedure whereby property is used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document. This procedure brings the rights of all parties to a
Formaldehyde
A colorless chemical air pollutant used to manufacture building materials and many household products, such as particleboard, hardwood plywood paneling, and urea-formaldehyde foam insulation
Fraud
Deception intended to cause a person to give up property or a lawful right
Freddie Mac
A government-sponsored enterprise established to purchase mortgage loans in the secondary mortgage market
Freehold estate
An estate in land in which ownership is for an indeterminate length of time, in contrast to a lease-hold estate
Functional obsolescence
A loss of value to an improvement to real estate arising from functional problems, often caused by age or poor design
Future interest
A person's present right to an interest in real property that will not result in possession or enjoyment until sometime in the future, such as a reversion or right of reentry
General agent
One who is authorized by a principal to represent the principal in a range of matters
General lien
The right of a creditor to have all of the debtor's property - both real and personal - sold to satisfy a debt
General partnership
A typical form of joint venture partnership in which each partner shares in the administration, profits, and losses of the operation
General warranty deed
A deed to the premises. It is used in most real estate deed transfers and offers the greatest protection of any deed
Ginnie Mae
A governmental agency that plays an important role in the secondary mortgage market. It sells mortgage- backed securities that are backed by pools of FHA and VA loans; formally known as the Government National Mortgage Association (GNMA)
Good Faith Estimate (GFE)
The form used provide an estimate of all closing fees to a borrower within three days of the loan application as required by the Real Estate Settlement Procedures Act (RESPA)
Grantee
A person who receives a conveyance of real property from a grantor
Granting clause
Words in a deed of conveyance that state the grantor's intention to convey the property at the present time. This clause is generally worded as
"convey and warrant", "grants", "grants, bargain, and sell", or the like.
Grantor
The person transferring title to or an interest in real property to a grantee
Gross income multiplier (GIM)
A figure used as a multiplier of the gross annual income of a property to produce an estimate of the property's value
Gross lease
A lease of property according to which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance premiums, and operating expenses. Most residential leases are gross leases
Gross rent multiplier (GRM)
The figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property's value
Ground lease
A lease of land only, on which the tenant usually owns a building or is required to build as specified in the lease. Such leases are usually long-term net leases; the tenant's rights and obligations continue until the lease expires or terminates through d
Groundwater
Water that exist under the earth's surface within the tiny spaces or crevices in geological formations
Growing equity mortgage (GEM)
A loan in which the monthly payments increase annually, with the increased amount being used to reduce directly the principal balance outstanding and thus shorten the overall term of the loan
Habendum clause
The part of a deed beginning with the words "to have and to hold", following the granting clause, and defining the extent of ownership the grantor is conveying
Highest and best use
The possible use of a property that would produce the greatest net income and thereby develop the highest value
Holdover tenancy
A tendency whereby a lessee retains possession of leased property after the lease has expired and the landlord, by continuing to accept the rent, agrees to the tenant's continued occupancy as defined by state law
Home equity loan
A loan (sometimes called a line of credit) under which property owners use their residence as collateral and can then draw funds up to a prearranged amount against the property
Homeowners' insurance policy
A standardized package insurance policy that covers a residential real estate owner against financial loss from fire, theft, public liability, and other common risks
Housing for Older Persons Act (HOPA)
A federal law that repealed the requirement that 55- and-older housing have "significant facilities and services" designated for seniors. HOPA still requires that at least 80% of occupied units have one person age 55 or older living there.
Hypothecation
The pledge of property as security for a loan
Impact fees
Charges assessed developers by a municipality that relate to expenses incurred by the municipality for additional improvements necessitated by increased development
Implied agency
An agency that arises by conduct or inference from other acts or circumstances, often creating an agency relationship when none was intended
Implied contract
A contract under which the agreement of the parties is demonstrated by their acts and conduct (also called an implied agreement)
Improvement
Any structure, usually privately owned, erected on a site to enhance the value of the property - for example, building a fence or a driveway. A publicly owned structure added to or benefiting land, such as a curb, sidewalk, street, or sewer
Income approach
The process of estimating the value of an income- producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life
Independent contractor
Someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. Unlike an employee, they must pay all expenses and Social Security,
Index
An objective economic indicator to which the interest rate for an adjustable-rate mortgage is tide
Index method
The appraisal method of estimating building cost by multiplying the original cost of the property by a percentage factor to adjust for current construction costs
Installment contract
A contract for the sale of real estate whereby the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though title is retained by the seller until future date, which may not be until final payment;
Interest
A charge made by a lender for the use of money
Internet advertising
A powerful computer tool for providing information about properties, relocation services and particular communities; however, state laws do apply
Interstate Land Sales Full Disclosure Act
A federal law that regulates the sale of certain real estate in interstate commerce
Interstate
The condition of the property owner who dies without leaving a valid will. Title to the property will pass to the decedent's heirs as provided in the state law of descent
Inverse condemnation
An action brought by a property owner seeking just compensation for land taken for public use when the taker of the property does not intend to bring eminent domain proceedings. Property is condemned because its use and value have been diminished due to a
Involuntary alienation
The act of involuntarily transferring property to another, such as through eminent domain or adverse possession
Involuntary lien
Placed on property without the consent of the property owner
Joint tenancy
Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon the death of a joint tenant, the decedent's interest passes to the surviving joint tenant or tenants by the right of survivorship
Judgment
The formal decision of a court upon the respective rights and claims of the parties to an action or suit. After a judgment has been entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant.
Land
The earth's surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water
Latent defect
A hidden structural defect that is not discovered by ordinary inspection and that threatens the property's soundness or the safety of its inhabitants. Sellers and licensees have a duty to inspect for and disclosed latent defects
Lead
An element found in oil-based paint and plumbing systems that when ingested in sufficient quantities over time can pose significant health problems. Real estate licensees and certain others are required to comply with the federal Residential Lead-Based
Pa
Lease
A written or oral contract between a landlord (the lessor) and a tenant (lessee) that transfers the right to exclusive possession and use of the landlord's real property to the lessee for a specified period and for a stated consideration (rent). By state
Leasehold estate
A tenant's right to occupy real estate during the term of the lease, generally considered to be a personal property interest
Lease purchase
The purchase of real property, the consummation of which is preceded by a lease, usually long-term; typically done for tax or refinancing purposes
Legal description
A description of a specific parcel of real estate complete enough for an independent surveyor to locate and identify it
License
A privilege or right granted to a person by a state to operate as a real estate broker or salesperson. The revocable permission for a temporary use of land-a personal right that cannot be sold
Lien
A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale
Lien theory
Some states interpret a mortgage as being purely a lien on real property. The mortgagee thus has no right of possession but must foreclose the lien and sell the property if the mortgagor defaults
Life estate
An interest in the real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons
Limited liability company (LLC)
An alternative, hybrid business entity with the combined characteristics and benefits of a limited partnership and an S corporation that is established according to the laws of the state in which the LLC is chartered
Limited partnership
Is a business arrangement whereby the operation is administered by one or more general partners and funded, by and large, by limited or silent partners, who are by law responsible for losses only to the extent of their investments
Liquidated damages
An amount predetermined by the parties to a contract as the total compensation to an injured party should the other party breach the contract
lis pendens
A recorded legal document giving constructive notice that an action affecting a particular property has been filed in either state or federal court
Listing agreement
A contract between an owner (as principal) and a real estate broker (as agent) by which the broker is employed as agent to find a buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission
Littoral rights
Landowners' claim to use water in large navigable lakes and oceans adjacent to their property. The ownership rights to land bordering these bodies of water up to the high-water mark
Loan origination fee
A fee charged to the borrower by the lender for making a mortgage loan. The fee is usually computed as a percentage of the loan amounts
Loan-to-value (LTV) ratio
The relationship between the amount of the mortgage loan and the value of the real estate being pledged as collateral
Lock-and-block (recorded plat) description
A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as specified on a recorded subdivision plat
Management agreement
A contract between the owner of income property and a management firm or individual property manager that outlines the scope of the manager's authority
Management plan
A highly detailed plan that lays out the owners objectives with the property, as well as what the property manager wants to accomplish and how, including all budgetary information
Manufactured housing
Dwellings built to HUD specifications that are at least 320 square feet and on a permanent chassis
Margin
A premium added to the index rate representing the lender's cost of doing business
Market data approach
An estimate of value obtained by comparing property being appraised with recently sold comparable properties; also known as the sale comparison approach
Marketable title
Good or clear title, reasonably free from the risk of litigation over possible defects
Market value
The most probable price a property would bring in an arm's-length transaction under normal conditions on the open market
Material fact
Information that is significant to a person and that person's ability to make an informed decision
Mechanic's lien
A statutory lien created in favor of contractors, laborers, and material men who have performed work or furnished materials in the erection or repair of the building
Megan's Law
Federal legislation that promotes the establishment of state registration systems to maintain residential information on every person who kidnaps children, commits sexual crimes against children, or commits sexually violent crimes
Metes-and-bounds description
A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using directions and distances around the tract, back to the place of beginning (POB)
Mill
One-tenth of one cent. Some states use this ______ rate to compute real estate taxes; for example a rate of 52 _____ would be $0.052 tax for each dollar of assessed valuation of a property
Mine subsidence
The process of downward land shifts due to the collapse of underground mine shafts and ground-water flows, usually resulting in sinkholes and troughs. The damage to structures may be functional, cosmetic, or structural
Misrepresentation
The unintentional misstatement or omission; does not have to be intentional to result in broker liability
Month-to-month tenancy
A periodic tenancy under which the tenant rents for one month at a time. In the absence of a rental agreement (oral or written), a tenancy is generally considered to be month to month
Monuments
Fixed natural or artificial objects used to establish real estate boundaries for a metes-and-bounds description
Mortgage
A conditional transfer or pledge of real estate as security for the payment of a debt; also, the document creating a mortgage lien
Mortgage Disclosure Improvement Act (MDIA)
A federal law that dictates the timeliness of certain disclosures that affect the date of closings
Mortgage insurance premium (MIP)
The FHA insurance that the borrower is charged with a percentage of the loan as a premium
Mortgagee
A lender in a mortgage loan transactions
Mortgage lien
A lien or charge on the property of a mortgageor that secures the underlying debt obligations
Mortgagor
A borrower in a mortgage loan transaction
Multiperil policies
Insurance policies that offer protection from a range of potential perils, such as those of a fire, hazard, public liability, and casualty
Multiple listing services (MLS)
A marketing organization composed of member brokers who agree to share their listing agreements with one another in hopes of procuring ready, willing, and able buyers for their properties more quickly than they could on their own
National Do Not Call Registry
A national registry, managed by the Federal Trade Commission, which lists the phone numbers of consumers who have indicated their preference to limit the telemarketing calls they receive
Net lease
A lease requiring the tenant to pay not only rent but also cost incurred in maintaining the property, including taxes, insurance, utilities, and repairs
Net listing
A listing based on the net price the seller will receive if the property is sold. Under a net listing, the broker can offer the property for sale at the highest price obtainable to increase the commission. This type of listing is illegal in many states
Nonagent
An intermediary between a buyer and a seller, or a landlord and a tenant, who assists one or both parties with a transaction without representing either; also known as a facilitator, transaction broker, transaction coordinator, and contract broker
Nonconforming use
A use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for that area
Novation
Substituting a new obligation for an old one or substituting new parties for an existing obligation
Offer
A promise made by one party requesting something in exchange for that promise with the intention that the offeror will be bound to the terms if the offer is accepted
Open-end loan
A mortgage loan that is expandable by increments up to a maximum dollar amount, the full loan being secured by the same original mortgage
Open listing
A listing contract under which the broker's commission is contingent on the brokers producing a ready, willing, and able buyer before the property is sold by the seller or another broker
Operating budget
A guide of the property's financial performance in the present and future. It gives the owner a sense of expected profit
Option
An agreement to keep open for a set period an offer to sell or purchase property
Package loan
A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings, and major appliances
Partition
The division of cotenants' interests in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through court procedures
Partnership
An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law, a partnership is regarded as a group of individuals rather than a single entity
Party wall
A wall that is located on or at a boundary line between two adjoining parcels of land and is used or is intended to be used by the owners of both properties
Pennsylvania Human Relations Act (PHRA)
The state law that prohibits discrimination in the sale or rental of real estate, both housing and commercial properties, on the basis of race, color, religion, ancestry, national origin, sex, familial status, disability, or use of guide or support animal
Pennsylvania Uniform Condominium Act
The state law adopted from the national model act that governs the development and operation of condominiums. The law also provides for certain disclosures to purchasers of condominium units
Percentage lease
A lease, commonly used for commercial property, whose rental is based on the tenant's gross sale at the premises; it usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount
Personal assistant
An individual who is employed to perform certain activities to assist real estate licensees in the course of their business. He/she may be licensed or unlicensed; this status determines the scope of the activities that are permitted and whether the broker
Personal property
Items, called chattels, that do not fit into the definition of real property; movable objects
Physical deterioration
A reduction in a property's value resulting from a decline in physical condition; can be caused by action of the elements or by ordinary wear and tear
PITI
The basic cost of owning a home - mortgage principal and interest, real estate taxes, and hazards insurance
PITT
Joint tenancy; where tenants enjoy the four unities: possession, interest, time, and title
Planned unit development (PUD)
A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision
Plat
A detailed map that illustrates the geographic boundaries of individual lots
Plat map
A map of a town, section, or subdivision indicating the location and boundaries of individual properties
Plottage
The increase in value or utility resulting from the consolidation (assemblage) of two or more adjacent lots into one larger lot
Point of beginning (POB)
In the metes-and-bounds legal description, the starting point of the survey, situated in one corner of the parcel; all metes-and-bounds descriptions must follow the boundaries of the parcel back to the point of beginning
Police power
The government's right to impose laws, statutes, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, and welfare
Polychlorinated biphenyls (PCBs)
Used as an insulating material in dielectric oil. It can linger in the environment for long periods and can cause health problems
Power of attorney
A written instrument authorizing a person, the attorney-in-fact, to act as agent for another person to the extent indicated in the instrument
Prepaid items
On closing statements, items that have been paid in advance by sellers, such as insurance premiums and some real estate taxes, for which they must be reimbursed by the buyer
Prepayment penalty
A charge imposed on a borrower who pays off the loan principal early. The penalty compensates the lender for interest and other charges that would otherwise be lost
Preventive maintenance
Small repairs that help prevent bigger problems and expenses
Primary mortgage market
The mortgage market in which loans are originated and which consist of lenders such as commercial banks, savings and loan associations, and mutual savings banks
Principal
(1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. (2) The original amount (as in a loan) of the total due and payable at a certain date. (3) A main party to a transaction - the person from whom the agent
Principal meridian
The main imaginary line running north and south and crossing a base line at a definite point, used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description
Priority
The order of position or time. The priority of liens is generally determined by the chronological order in which the lien documents are recorded; tax liens, however, have priority even over previously recorded liens
Private mortgage insurance (PMI)
Insurance provided by a private carrier protecting a lender against a loss in the event of a foreclosure and deficiency
Probate
A legal process by which a court determines who will inherit a decedent's property and what the estate's assets are
Procuring cause
The effort that brings about the desired result. Under an open listing, the broker who is the procuring cause of the sale receives the commission
Profit and loss statement
A general financial picture based on the monthly cash flow reports; does not include itemized information
Progression
An appraisal principle that states that, between dissimilar properties, the value of the lesser-quality property is favorably affected by the presence of the better-quality property
Promissory note
A financing instrument that confirms the debt, is signed by its maker, and is negotiable (transferable to a third-party)
Property manager
Someone who manages real estate for another person for compensation. Duties include collecting rents, maintaining the property, and keeping up all accounting
Prorations
Expenses, either prepaid or paid in arrears, that are divided or distributed between buyer and seller at the closing
Protecting Tenants at Foreclosure Act (PTFA) of 2009
Federal legislation that requires new owners of foreclosed properties to follow certain requirements with regards to tenants who are current with their rental payments
Puffing
Exaggerated or superlative comments or opinions
Pur autre vie
French for "for the life of another". A life estate pur autre vie is a life estate that is measured by the life of a person other then the grantee
purchase-money mortgage (PMM)
A note secured by a mortgage or deed of trust given by a buyer, as borrower, to a seller, as lender, as part of the purchase price of the real estate
Purchase option
Some leases grant the lessee the option to purchase the leased premises. This option normally gives the tenant the right to purchase the property at a predetermined price within a certain period, possibly the lease term
Quitclaim deed
A conveyance by which grantors transfer whatever interest they have in the real estate, without warranties or obligations
Race
Ancestral and ethnic characteristics, including certain physical, cultural, or linguistic traits that are shared by a group with a common national origin
Radon
A naturally occurring gas that is suspected of posing a health hazard, especially causing lung cancer
Ready, willing, and able buyer
One who is prepared to buy property on the seller's terms and is ready to take possessive steps to consummate the transaction
Real estate
Land; a portion of the earth's surface extending downward to the center of the earth and upward infinitely into space, including all things permanently attached to it, whether naturally or artificially
Real Estate Licensing and Registration Act
The Pennsylvania law that protects the public interest by governing real estate practices and the activities of licensees
Real Estate Recovery Fund
A fund established for aggrieved parties who have obtained uncollectible judgments against real estate licensees for fraud, deceit, or misrepresentation
Real Estate Seller Disclosure Act
A Pennsylvania state law that requires the seller of a residential property to disclose to a buyer all known material defects about the property being sold that are not readily observable; such disclosure is not a substitute for any inspections or warrant
Real Estate Settlement Procedures Act (RESPA)
The federal law that requires certain disclosures to consumers about mortgage loan settlements. The law also prohibits the payment or receipt of kickbacks and certain kinds of referral fees
Real property
The interest, benefits, and rights inherent in real estate ownership
reconciliation
The final step in the appraisal process, in which the appraiser combines the estimates of value received from the sales comparison, cost, and income approaches to arrive at a final estimate of market value for the subject property
Recording
The act of entering or recording documents affecting or conveying interests in real estate in the recorder's office established in each county. Until it is recorded, a deed or mortgage ordinarily is not effective against subsequent purchasers or mortgagee
Rectangular survey system
A system established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines
Redemption
The right of defaulted property owners to recover their property by curing the default
Redlining
The illegal practice of a lending institution denying loans or restricting their numbers for certain areas of of a community
Regression
An appraisal principle stating that, between dissimilar properties, the value of the better-quality property is affected adversely by the presence of the lesser quality property
Regulation Z
Implements the Truth in Lending Act requiring credit institutions to inform borrowers of the true cost of obtaining credit
Remainder interest
The remnants of an estate that is conveyed to take effect and be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one party and the remainder to another
Rental listing referral agent
A licensee who owns or manages a business that collects rental information for the purpose of referring tenants to rental units or locations
Replacement cost new
The construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original
Reproduction cost
The construction cost at current prices of an exact duplicate of the subject property
Rescission
The practice of one party canceling or terminating the contract, which has the effect of returning the parties to their original positions before the contract was made
Restrictive covenants
A clause in a deed that limits the way the real estate ownership may be used
Reverse annuity mortgage (RAM)
A loan under which homeowners receive monthly payments based on their accumulated equity rather than a lump sum. Such loans must be repaid at a prearranged date or upon the death of the owner or the sale of the property
Reversionary interest
The remnant of an estate that the grantor holds after granting a life estate to another person
Reversionary right
The return of the rights of possession and quiet enjoyment to the lessor at the expiration of a lease or life estate
Right of first refusal
A clause allowing the tenant the opportunity to buy the property before the owner accepts an offer from another party
Rights of survivorship
A characteristic of joint tenancy - upon one owner's death his share passes to surviving co-owners. Heirs have no claim on the property
Riparian rights
And owner's rights in land that borders on or includes a stream, river, or Lake. These rights include access to and use of the water
Risk management
Evaluation and selection of appropriate courses of action to minimize legal liability; also the selection of appropriate insurance coverage
Routine maintenance
Day-to-day duties such as cleaning common areas, performing minor carpentry and plumbing adjustments, and providing regularly scheduled upkeep of heating, air-conditioning, and landscaping
Rules and regulations
Real estate licensing authority orders that govern licensees' activities; they usually have the same force and effect as statutory law
Sale and leaseback
A transaction in which an owner sells improved property and, as part of the same transaction, signs a long-term lease to remain in possession of the premises
Sales comparison approach
The process of estimating the value of a property by examining and comparing actual sales of comparable properties
Salesperson
A person who performs real estate activities while employed by or associated with a licensed real estate broker
Satisfaction of mortgage
A document acknowledging the payment of the mortgage debt
Secondary mortgage market
A market for the purchase and sale of existing mortgages designed to provide greater liquidity for mortgages; also called the secondary money market. Mortgages are first originated in the primary mortgage market
Section
A portion of township under the rectangular (government) survey system. A township is divided into 36 sections, numbered 1 through 36. A section is a square with mile-long sides and area of one square mile, or 640 acres
Security deposit
A payment by tenant, held by the landlord during the lease term, and kept (wholly or partially) on default or destruction of the premises by the tenant
Separate property
Under community property law, property owned solely by either spouse before the marriage, acquired by gift or inheritance after the marriage, or purchased with separate funds after the marriage
severalty
Ownership of real property by one person only, also called sole ownership
severance
Changing an item of real estate to personal property by detaching it from the land; for example, cutting down the tree
Short sale
The sale of the property in the marketplace that is in some stage of foreclosure. The term arises when the proceeds from the sale are "short" the amount needed to fully satisfy the balance of the mortgage loan
Single agency
The broker acts as the agent of one principal, either the seller / landlord or the buyer/ tenant, in a transaction. The broker may practice exclusive single agency or may represent sellers and buyers, but never both in a transaction
Situs
The personal preference of people for one area over another, not necessarily based on objective facts and knowledge
Small Business Liability Relief and Brownfields Revitalization Act
Federal legislation allowing certain contaminated industrial or commercial properties to become economically viable by allowing prospective purchasers and their lenders relief from liability for past contamination that they did not cause. Also known as th
Special Agent
One who is authorized by principal to perform a specified single act on behalf of a principal
Special assessment
A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement like a street or sewer
Special flood hazard areas (SFHAs)
A categorization of risk associated with floods determined by flood history and location used to determine the cost of flood insurance. The Federal Emergency Management Agency (FEMA) uses A to indicate inland areas and V for coastal areas
Special warranty deed
A deed in which grantors warrant, or guarantee, the title only against defects arising during the period of their tenure and ownership of the property and not against defects existing before that time, generally using the language, "by, through or under t
Specific lien
A lien affecting or attaching only to a certain, specific parcel of land or piece of property
State Real Estate Commission
The agency established by the Pennsylvania Real Estate Licensing and Registration Act to administer this law and supervise the activities of licensees
Statutory lien
Aileen imposed on a property by statute- a tax lien, for example
Statute of frauds
That part of a state law that requires certain instruments, such as deeds, real estate sales contracts, and certain leases to be in writing to be legally enforceable
Steering
The illegal practice of channeling homeseekers to particular areas to maintain the homogeneity of an area or to change the character of an area in order to create a speculative situation
Stigmatized property
A property that has acquired an undesirable reputation due to an event that occurred on or near it, such as a violent crime, gang-related activities, illness, or personal tragedy
Straight loan
A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment; also called a term alone
Subagency
An agency relationship in which the broker-agent appoints other brokers as subagents to help perform client-based functions on behalf of the principal. The subagent assumes the same fiduciary responsibilities as the agent. In Pennsylvania, the principal m
Subagent
One who is employed by a person already acting as an agent - typically a reference to a salesperson licensed under a broker (agent) who is employed under the terms of a listing agreement
Sublease
The leasing of premises by a lessee to a third party for part of the lessee's remaining term
Subordination agreement
A written agreement between holders of liens on a property changes the priority of mortgage, judgment, and other liens under certain circumstances
Subrogation
The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of the original claimant. Subrogation is used by title insurers to acquire from the injured party rights to sue in order to recover any cla
Substitution
An appraisal principle that states that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property, assuming that no costly delay is encountered in making the substitution
Subsurface rights
Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property
Suit for possession
A court suit initiated by a landlord to evict a tenant from leased premises after the tenant has breached one of the terms of the lease or has held possession of the property after the lease's expiration
Suit for specific performance
A court suit initiated by a buyer when the seller breaches a real estate sales contract, asking the court to force the seller to go through with the sale and convey the property as previously agreed
Suit to quiet title
A court action intended to establish or settle the title to a particular property, especially when there is a cloud on the title
Superfund Amendments and Reauthorization Acts (SARA)
An amendatory statute that contains stronger cleanup standards for contaminated sites, increased funding for the Superfund, and clarifications of lender liability and innocent landowner immunity
Supply
The amount of goods available in the market to be sold at a given price. The term is often coupled with demand
Supply and demand
The appraisal principle that follows the interrelationship of the supply of and demand for real estate. Because appraising is based on economic concepts, this principle recognizes that real property is subject to the influences of the marketplace just as
Surface rights
Ownership rights in a parcel of real estate that are limited to the surface of the property and do not include the air above it (air rights) or the minerals below the surface (subsurface rights)
Survey
The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and position of a house on a lot, including the determination of any existing encroachments or easements
Taxation
The process by which a government or municipalities quasi-public body raises monies to fund its operation
Text lien
A charge against property, created by operation of law. Tax liens and assessments take priority over all other liens
Tenancy by the entirety
The joint ownership, recognized in some states, of property acquired by husband and wife during marriage. Upon the death of one spouse, the survivor becomes the owner of the property
Tenancy in common
A form of co-ownership by which the owners individually hold an undivided interest in real property as a sole owner. Each individual owner has the right to partition. Unlike joint tenants, tenants in common have right of inheritance
Tenant improvements
Alterations to the interior of the building to meet the functional demands of the tenant
Testate
Having made and left a valid will
Testator
A person who is made a valid will. A woman is often called a testatrix, although testator can be used for either gender
Time is of the essence
A phrase in a contract that requires the performance of a certain act within a stated period
Time-share
A form of ownership interest that may include an estate interest in property or a contract for use, which allows use of the property for a fixed or variable time
Time-share salesperson
A licensee who, either as an employee or independent contractor, sells time-shares under the supervision of a broker
Title
The right to or ownership of land. The evidence of ownership of land
Title insurance
A policy ensuring the owner or the mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters specifically excluded by the policy
Title search
The examination of public records relating to real estate to determine the current state of the ownership
Title theory
Some states interpret a mortgage to mean that the lender is the owner of mortgaged land. Upon full payment of the mortgage debt, the borrower becomes the landowner
Title VIII of the Civil RIghts Act of 1968
Prohibits discrimination in housing based on race, color, religion, or national origin
Township
The principal unit of the rectangular (government) survey system. A township is a square with 6 mile sides and an area of 36 square miles
Trade fixture
An article installed by tenant under the terms of the lease and removable by the tenant before the lease expires. Example: pizza oven, bowling alleys, etc
Transaction licensee
A licensee who provides services to a consumer without an agency relationship
Transfer tax
Tax stamps required to be affixed to a deed by state and/or local law
Trust
A fiduciary arrangement whereby property is conveyed to a person or institution, called a trustee, to be held and administered on behalf of another person, called a beneficiary. The one who conveys the trust is called the trustor
Trustee's deed
A deed executed by a trustee conveying land held in a trust
Underground storage tanks (USTs)
Commonly found on sites where petroleum products are used or where gas stations and auto repair shops are located. In residential areas, UST's are used to store heating oil. Over time, neglected USTs may leak hazardous substances into the environment
Underwriting
The process by which a lender analyzes the extent of risk in connection with a mortgage loan; considers the value of the collateral being pledged and the capacity and creditworthiness of the borrower
Unenforceable contract
A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it. For example, an unsigned contract is generally unenforceable
Uniform Settlement Statement (HUD-1)
A special HUD form that itemizes all charges to be paid by a borrower and a seller in connection with the settlement; also called the HUD-1 form
Uniform Standards of Professional Appraisal Practice (USPAP)
A set of standards the details information required of an appraisal of residential property. The Uniform Residential Appraisal Report is required by many government agencies
Unilateral contract
A one-sided contract wherein one party makes a promise to induce a second party to something. The second party is not legally bound to perform; however, if the second party does comply, the first party is obligated to keep the promise
Urea-formaldehyde foam insulation (UFFI)
Insulating foam that can release harmful formaldehyde gases
usury
Charging interest at a higher rate than the maximum rate established by the state
Universal agent
A person empowered to do anything the principal could do personally
Valid contract
A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it
VA loan
A mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the Department of Veterans Affairs in order to limit the lender's possible loss
Variance
Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances
Vendor's lien
A lien that belongs to a vendor for the unpaid purchase price of land, where the vendor has not taken any other lien or security beyond the personal obligation of the purchaser
Void contract
A contract that has no legal force or effect because it does not meet the essential elements of a contract
Voidable contract
A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties
Voluntary alienation
At the act of voluntarily transferring property to another such as by gift or sale
Voluntary lien
A lien placed on property with the knowledge and consent of the property owner
Water rights
Common law rights held by owners of land adjacent to rivers, lakes, or oceans; includes restrictions on those rights and land ownership
Water table
The natural level at which the ground is saturated. The water table may be several hundred feet underground or near the surface
Will
A written document, properly witnessed, providing for the transfer of title to property owned by the deceased, called the testator
Zoning ordinances
An exercise of police power by a municipality to regulate and control the character and use of property