Glossary

A B C D E F G H I J L M N O P Q R S T U V W Z
 
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A.L.T.A. TITLE POLICY

A title insurance policy issued by title insurance companies that expands the risks insured against under the standard type of policy to include unrecorded physical easements, facts a physical survey would show, water and mineral rights, and rights of parties in possession (such as tenants and buyers under unrecorded instruments). ALTA POLICY The title insurance policy issued to institutional lenders. The initials stand for American Land Title Association, an organization that regulates and standardizes the provisions within title policies.

ABSTRACT OF JUDGMENT

A summary of money judgment. The summary is usually prepared so that it may be recorded, thereby
creating a (judgment) lien on real estate owned by the judgment debtor.

ABSTRACT OF TITLE

A summary of the instruments affecting title to a parcel of real property as shown b y the public records.

ACCELERATE

To make a note all due and payable at one time.

ACCELERATION CLAUSE

A clause in a deed of trust or mortgage giving the lender the right to call all sums owing him or her to be immediately due an d payable upon the occurrence of a certain event. It is also a clause that permits a debtor to pay off a loan before the due date.

ACCELERATION CLAUSE

A clause in a promissory note, deed of trust, or mortgage that provides that upon default of a payment or some other stated event, the entire unpaid balance becomes immediately due and payable.

ACCEPTANCE

An essential element of every contract, it is the consent to be bound by the offer. In deeds, it is the consent to accept a grant of real property.

ACCESS RIGHT

The right of an owner to go into and out of his or her property.

ACCOMMODATION PARTY

A person who, without receiving value, signs a promissory note to help another person borrow money or get credit.

ACCORD AND SATISFACTION

The discharge of an existing contract by accepting the performance under a substitute contract. Generally, consideration under the new contract is different from and of lesser value than under the original contract, and satisfaction is the performance of that contract; the combination discharges the original con tract.

ACCRETION

A gradual addition to land from natural causes; for example, from gradual action of ocean or river waters.

ACCRUED DEPRECIATION

(1) The difference between the cost of replacement new as of the date of the appraisal and the present appraised value. (2).The accumulated loss in value that has affected the improvements on real property.

ACKNOWLEDGMENT

A formal declaration before an officer duly authorized as a notary public by a person who has executed an instrument, stating that the execution is his or her ac t and deed . A formal statement (usually before a notary public) by the person signing a deed or document that the instrument was actually and freely signed.

ACOUSTICAL TILE

Blocks o f fiber, mineral, o r metal with small holes or a rough-textured surface to absorb sound, used as covering for interior walls and ceilings.

ACQUISITION

The act or process by which a person procures property.

ACRE

A measure of land equaling 160 square rods, 4840 square yards, 43,560 square feet, or a tract about 208.71 feet square.

ADJACENT

Located next to or near an object or parcel of property.

ADJOINING

Located so as to touch an object or share a common property line.

ADJUSTED CO ST BASIS

For tax purposes it is the cost of the property plus improvements and minus depreciation, amortization, and depletion.

ADMINISTRATOR

A person appointed by the pro bate court to administer the estate of a deceased person. His or her duties include making an inventory of the assets, managing the property, paying the debts and expenses, filing necessary reports and tax returns, and distributing the assents as ordered by the probate court.

AD VALOREM

According to value.

ADVERSE POSSESSION

A method of acquiring property based o n open an d notorio us possession, under a claim of right, color of title, continuous use for five years, and the payment of taxes. A method of acquiring property through continuous use of that property while paying taxes on it.

AFFIDAVIT

A statement or declaration reduced to writing, sworn to o r affirmed be fore some officer who ha s authority to administer an oath or affirmation, such as a notary public or a commanding officer in the service.

AFFIRM

To confirm, swear, ratifying , verity.

AGENCY

A special relationship of trust by which one person (agent) is authorized to conduct business, sign papers, or otherwise act on behalf of another person (principal).

AGENT

One who represents another called a principal and has authority to act for the principal in dealing with third parties. The relationship is referred to as a n agency. Someone authorized to act for another (called the principal) in business matters.

AGREEMENT

A mutual understanding or compact between parties. Al thought often used a synonymous with contract, technically it denotes mutual promise that fail as a contract for lack of consideration..

AGREEMENT OF SALE

(1) A written contract between a buyer and seller setting out the terms of sale. (2) An installment sales contract covering real property, especially a long-term contract.

ALIENATION

The transferring of property to another. Conveyance or transfer of title to real estate fro m one person to another person.

ALIENATION CLAUSE

In a deed of trust or mortgage, a provision that if the secured property is sold or transferred, the lender has the option of accelerating the loan and declaring the entire unpaid balance immediately due and payable. Also called a "due-on-sale" clause.

ALL-INCLUSIVE DEED OF TRUST

A financing device whereby a lender makes payments on the existing trust deeds of a borrower and takes from the borrower a junior trust deed with a face value in an amount equal to the amount outstanding on the old trust deeds and the additional amount of money borrowed.

ALLUVION (ALLUVIUM )

Soil that has been deposited by accretion o n the shore o f a river or body of water an d that increase s the real property.

ALTER EGO

A doctrine which hold s that a corporation is really owned by shareholders as their own property, and therefore it should no be considered as a separate entity. Usually used to try to hold shareholders liable for corporate debts.

AMBULATORY

Capable of being changed or revoked. In wills, it refers to the concept that a will may be revoked or modified at any time up to the testator's death.

AMELIORATING WASTE

Improvements to property that, while not damaging the value of the property, technically qualify as waste. For example, an apartment building constructed on property designated only for single-family structures is considered ameliorating waste.

AMENITIES

As used in the real estate business, the features that make a piece of real property, especially a home, enjoyable.

AMORTIZATION

(1) The liquidation of a financial obligation on an installment basis, which includes both principal and interest. (2) Recovery of cost or value over a period of time. The method or plan for the payment of a debt, bond, deed of trust, etc., by installments or sinking fund.

ANNUAL PERCENTAGE RATE (APR)

The cost of credit as determined in accordance with Regulation Z of the Board of Governors of the Federal Reserve System for implementing the Federal Truth in Lending Act.

ANNUITY

A sum of money received or paid yearly or at other fixed periods.

ANTICIPATION

Affirms that value is created by the anticipated benefits to be derived in the future.

ANTICIPATORY BREACH

Advance notice of intention to violate the terms of a contract.

APPEAL

The review or rehearing by a higher court of a low (inferior) court's decision..

APPELLANT

The party appealing a court decision. Either p arty may appeal; hence, the appellant could have been either the plaintiff or the defendant in the trial court.

APPRAISAL

An estimate and opinion of value. An opinion or estimate of the fair market value of a property.

APPRAISER

One qualified by education, training, and experience, who is hired to estimate the value of real and personal property on the basis of experience, judgment, facts, and use of formal appraisal processes.

APPURTENANT

Attached to or considered part of land, because of being considered necessary and incidental to the use of that land. Commonly applied to easements that are considered part of property.

ASSESSED

value placed on property as a basis for taxation. A value used by the tax assessor before July 1978. It represented 25 percent of the assessor's fair market value. After deducting any exemptions from assessed value, one applied the tax rate to the net figure to determine annual property taxes.

ASSESSMENT

The valuation of property for the purpose of levying a tax, or the amount of tax levied.

ASSESSOR

The official who has the responsibility of determining the assessed values.

ASSIGNEE

One to whom property is assigned or transferred.

ASSIGNMENT

A transfer to another of any property or right. The transfer of one 's entire interest in property. Generally, the term is limited to intangible personal property (that is, stocks, bonds, promissory notes) and to leasehold estates.

ASSIGNMENT OF RENTS

An assignment of future rents form property a s security for a debt.

ASSIGNMENT FO RENTS CLAUSE

A clause in a deed o f trust or mortgage, providing that in the event of default, all rents and income fro m the secured property will be paid to the lender to help reduce the outstanding loan balance.

ASSIGNOR

One who assigns or transfers property.

ASSUMPTION

Acceptance of personal liability for another's debt or obligation. In the case of the sale of real estate, the buyer personally accepts and promises to pay off the existing deed of trust.

ASSUMPTION OF AGREEMENT

A contract by which a person agrees to pay a debt or obligation owed by someone else.

ASSUMPTION OF MORTGAGE OR DEED OF

The taking of title to property by a grantee in which he or she

TRUST

assumes liability for payment of existing note secured by a mortgage or deed of trust against the property.

ATTACHMENT

Seizure of property by court order before judgment, usually done to have it available in the event a judgment is obtained in a pending law suit. The actual or constructive seizure of property by court order during a lawsuit. The usual purpose is to hold the assents as security for the satisfaction of a judgment.

ATTACHMENT LIEN

A lien on property arising because of an attachment of that property.

ATTEST

(1) To affirm to be true or genuine. (2) An official act establishing authenticity.

ATTORNEY-IN-FACT

An agent authorized to perform certain acts for another under a power of attorney. (See Power of Attorney.)

AVULSION

The sudden tearing away or removal of land by the action of water flowing over or through it.
 
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CAL-VET LOAN

(CALIFORNIA VETERANS A program administered by the State Department of Veterans LOAN) Affairs for the direct financing of farms and homes for veterans who qualify.

CAPITAL ASSENTS

Assets of a permanent nature used in the production of income. Examples would include land, buildings, and equipment.

CAPITAL GAIN

The gain recognized for federal and state income tax purposes when a tax payer disposes of a cap ital asset.

CAPITALIZATION

In appraising, a method of determining value of property by considering net income and a reasonable percentage of return on the in vestment.

CAPITALIZATION RATE

The percentage rate or rate of interest considered a reasonable return on the investment. It is used in the capitalization method of determining value based upon net return.

C.A.R.

Abbreviation for the California Association of Realtors.

CARET

California Association o f Real Estate Teachers; a division of the California Association of Realtors.

CASEMENT WINDOW

Windows set in frames of wood or metal that swing outward.

CASH FLOW

The new amount of cash a property produces when all cash income and other cash generated are added together and all cash expenses and other cash payments are deducted. CAUSE OF ACTION A legal right; facts giving rise to an enforceable claim.

CAVEAT EMPTOR

A Latin phrase meaning " let the buyer beware"; the legal maxim stating that the buyer must examine the goods or property and buy at his or her own risk. C.C. & R. Abbreviation for covenants, conditions, and restrictions. Often used synonymously with general plan restrictions on a subdivision.

CERTIFICATE OF REASONABLE VALUE

The Veterans Administration's written appraisal of the value.(CRV) of a property.

CHAIN OF TITLE

A series of conveyances, encumbrances, and other instruments affecting the title from the time original patent was granted, or as far back as re cords are available. A history of the recorded ownership of real estate and claims against title to real estate.

CHATTEL

The old name for personal property.

CHATTEL MORTGAGE

A personal-property mortgage. (See Security Agreement.)

CHATTEL REAL

In real estate, an estate less than a freehold estate, such as a lease.

CHATTELS

(1) Personal property. (2) This term is sometimes used in a law to describe any interest in real o r persona l property other than a freehold.

CIVIL CODE

One of the 25 California codes containing the statutes passed by the state legislature. The most important code relating to contracts and real estate, the Civil Code defines the nature and requirements for contracts and real estate transactions, among its many other pro visions.

CIVIL LAW

A system of jurisprudence, sometimes called Roman law, wherein all the laws are set forth in advance to regulate conduct (as opposed to common law, where the principles o f law develop on a case-b y-case basis). In California the term also refers to the law relating to and between individuals, as opposed to criminal law.

CLAPBOARD

Boards that are used for siding and that are usually thicker at one edge.

CLIENT

A person represented by a broker or an attorney.

CLOUD ON TITLE

A claim or document that affects title to real estate. The actual cloud may ultimately prove invalid, but its existence mars the title.

CLTA POLICY

The title insurance policy issued to homeowners and non-institutional lenders. The initials stand for the California Land Title Association, an organization that regulates and standardizes the provisions within title policies.

CODE OF CIVIL PROCEDURE

One of the 25 California codes that contain the statutes passed by the state legislature. It contains most of the procedural requirements for enforcing rights granted by other codes, including the procedures for evictions, foreclosures, and lawsuits.

CODICIL

An amendment to a will COLLAR BEAM A beam that connects the pairs of opposite roof rafters above the attic floor.

COLLATERAL

Property subject to a security interest; property used as security for a debt. (See Security Agreement.)

COLLATERAL SECURITY

The transfer of property of other valuables to ensure the performance of a principal agreement; an obligation attached to a contract to guarantee its performance. COLLUSION A secret agreement between two or more persons wishing to defraud another for a wrongful purpose or to obtain an object forbidden by law.

COLOR OR TITLE

That which appears to be a good title but, in fact, is not; for example, a forged deed. A document that appear s to convey title, but in fact is ineffective, conveying no title at all. It is one of the requirements for adverse possession and easement by prescription.

COMMERCIAL ACRE

A term applied to the remainder of an acre of land after the area devoted to streets, sidewalks, curbs, and so on has been deducted from the acre.

COMMINGLING

The mixing of different funds so that they can no longer be distinguished. In domestic law it refers to the combination of separate property and community property, so that the separate property and community funds can no longer be distinguished; in such cases all property is considered community property. For brokers it refers to the mixing o clients' money with the broker's separate bank accounts.

COMMISSION

An agent's compensation for performing the duties of his or her agency agreement. In the real estate business, it is usually a percentage of the selling price or a percentage of the lease or rents, for example.

COMMITMENT

A pledge or a promise; a firm agreement.

COMMON LAW

The body of law that grew from customs and practices developed and used in England. A body of unwritten law that developed in England from the general customs and usage. It was adopted in the United States and exercised by court decisions following the ancient English principles and the re-notified law of a state.

COMMUNITY PROPERTY

All property acquired by a husband and wife living together, except separate property. (See Separate Property.) Property owned in common by a husband and wife as a kind of marital partnership.

COMPACTION

Packing or consolidation of soil. W hen soil is added to a lot to fill in low places or to raise the level of the lot, it is often too loose to sustain the w eight of buildings. There fore, it is necessary to compact the added soil so that it will carry the weight of the building without danger of settling or cracking.

COMPARATIVE MARKET ANALYSIS

One of three method s in the appraisal process. A means of comparing similar type properties, which have recently sold, to the subject property.

COMPETENT

Legally qualified or capable.

COMPOUND INTEREST.

Interest paid on the original principal and also on the accrued and unpaid interest that has accumulated as the debt matures.

CONDEMNATION

(1) The act of taking private property for public use by a political subdivision. (2) A declaration by proper governmental authorities that a structure is unfit for use. The taking of private property for public use through the exercise of the power of eminent domain.

CONDITION PRECEDENT

A condition that must occur before an estate is created or enlarged, or before some other right or obligation occurs.

CONDITION SUBSEQUENT

A condition that, upon its failure or nonperformance, causes the defeat or extinguishment of an estate, right, or obligation.

CONDITIONAL COMMITMENT

A loan commitment for a definite amount under certain terms and conditions. It is subject to an unknown purchaser's satisfactory credit rating.

CONDITIONAL SALE CONTRACT

A contract for the sale of property whereby the seller retains legal title until the conditions of the contract have been fulfilled. The buyer has an equitable interest in the property. (See Security Agreement.) A contract for the sale of property by which possession is delivered to the buyer, but title remains with the seller until full payment or the satisfaction of other stated conditions.

CONDITIONAL USE PERMIT

An exception to or relief from the application of a zoning ordinance, because of special authorization granted by the zoning authorities. The issuance rests on public policy benefits and prior authorization in the zoning ordinance.

CONDOMINIUM

A system of individual ownership of units in a multifamily structure, combined with joint ownership of common areas of the structure and the land. The ownership of an individual unit in a multi-unit structure, combined with joint ownership of common walkways, land, and other portions of the property.

CONDUIT

Usually a metal pipe in which electrical wiring is installed.

CONFESSION OF JUDGMENT

Any entry of judgment upon the debtor's voluntary admission or confession.

CONFIRMATION O F SALE

A court approval of the sale of property by an executor,. administrator, guardian, or conservator.

CONSIDERATION

Anything of value, or that is legally sufficient, given to induce someone to enter into a contract. The inducement for entering into a contract; usually money, services, or a promise, although it may consist of a legal benefit to the promissory or any legal detriment to the promises. CONSTRUCTION The interpretation of an ambiguous term or provision in a statute or agreement.

CONSTRUCTIVE EVICTION

A breach of the landlord 's warranty of quiet enjoyment. Any acts by the landlord that substantially interfere with the tenant's use and enjoyment of the premises.

CONSTRUCTIVE NOTICE.

Notice given by the public records; that which is considered equivalent to actual notice even though there is not actual notice. (1) Notice given by a recorded document. (2) Notice imputed by a law because a person could have discovered certain facts upon reasonable investigation, and a "reasonable man" in the same situation would have conducted such an investigation.

CONSUMER CREDIT PROTECTION ACT

A federal law that includes the truth-in-Leading L aw.

CONSUMER GOODS.

Goods sold or purchased primarily for personal, family, or household purposes.

CONTINGENT

Conditional, uncertain, conditioned upon the occurrence or nonoccurrence of some uncertain future event.

CONTINUATION STATEMENT

A statement filed to extend the time limit on a financing statement that had been filed earlier.

CONTRACT OF SALE

(See Conditional Sa le Contract.)

CONVENTIONAL LOAN

A loan that is made that is not federally insured or guaranteed.

CONVERSION

The wrongful appropriation of an other's good s to one's own use; to change from one character or use to another. (1) In tort, an unauthorized claim of ownership over another's personal property. (2 ) In property the change o f character o f property from real to personal , or vice versa.

CONVEYANCE

(1) The transfer of the title of real property from one to another. (2) An instrument that transfers an interest in real property fro m one person to another. The transfer of title to real estate from one person to another.

COOPERATIVE APARTMENT

A form of ownership in which each individual apartment owner shares in a cooperative venture that entitles the owner to use, rent, or sell a specific apartment unit.

CORPORATION

A group or a body of persons recognized by law as an individual person with rights and liabilities distinct from those of the persons comprising it. Since the corporation is created by law, it may continue for any length of time that the law prescribes. An artificial entity given authority to conduct business and possess many of the rights of natural persons. One of the key characteristics is that of perpetual existence..

COST BASIS

See Adjusted Cost Basis.

CO-TENANCY

Any form of joint ownership.

COUNTER FLASHING

Flashing used on chimneys at roof-line to cover shingle flashing and prevent moisture entry.

COUNTER-OFFER

The rejection of an offer by the submission of another offer ,different in terms from the original offer. Any purported acceptance of an offer that introduces new terms is a rejection of that offer, and amounts to a counter-offer.

COVENANT

An agreement or a promise to do or not to do a particular act. Covenant: A contractual agreement whereby one of the parties promises to per form or to refrain from doing certain acts.

CPM

Certified Property Manager; a member of the Institute of Real Estate Property management of the National Association of Realtors.

CURTAIL SCHEDULE

A list of the due dates and amounts by which the principal sum of an obligation will be reduced by partial payments.

 
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GABLE ROOF

Pitched roof with sloping sides.

GAMBREL ROOF

A curb roof, having a steep lower slope with a flatter upper slope above.

GARNISHMENT

A legal process to seize a debtor's property or money in the possession of a third party.

GENERAL PLAN RESTRICTIONS

Covenants, conditions, and restrictions placed on a subdivision or other large tract of land, design ed to benefit and burden each lot in the tract.

GIFT

A voluntary transfer of property without consideration.

GIFT DEED

A deed for which there is no material consideration.

GIRDER

A beam used to support other beams, joists, and partitions.

GOVERNMENT NATIONAL MORTGAGE

A federal corporation that assists in financing special assistance

ASSOCIATION (GNMA)

programs for federally aided housing. The corporation is also known as Ginny Mae.

GRADE

Ground level at the foundation.

GRADUATED LEASE

Usually a long-term lease that provides for adjustments in the rental rate on the basis of some future determination. For example, the rent may be based upon the result of appraisals to be made at predetermined times in the future.

GRANT

(1) To transfer. (2) A deed. (3) When used in a de ed, a technical term implying certain warranties. A transfer or conveyance of real estate.

GRANT DEED

In California, a deed in which the word grant is used as a work of conveyance and there fore by law implies certain warranties deed us ed to transfer property in California. By statute it impliedly contains only two limited warranties.

GRANTEE

The buyer; a person to whom a grant is made.

GRANTOR

The seller; one who signs a deed. The seller or person who executes a grant.

GRID

A chart used in rating the borrower, property, and neighborhood.

GROSS RENT MULTIPLIER

A number that reflects the ratio between the sales price o f a property and its gross monthly rents. It is used in the income approach of appraising property.

GROUND LEASE

An agreement leasing land only, without improvements, ordinarily with the understanding that improvements will be placed on the land b y the tenant.

 
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HAZARD INSURANCE

Insurance that protects the owner and lender against physical hazards to property such as fire and windstorm damage.

HEIRS

Persons who succeed to the estate of someone who dies intestate (without a will). It sometime s indicates anyone who is entitled to inherit a decedent's property.

HEREDITAMENT

A term usually referring to real estate and all that goes with it as being incidental.

HIGHEST AND BEST USE

An appraisal phrase that means that use of real property that is most likely to produce the greatest net return on land or buildings, or both, over a given period of time.

HIP ROOF

A pitched roof with sloping side s and ends.

HOLOGRAPHIC WILL

A will that is entirely written, dated, and signed by the testator in the testator's handwriting. No witnesses are needed.

HOMESTEAD

(1) A home upon which the owner or owners have recorded Declaration of Homestead , as provide d by California statutes, that protects the home against judgments up to a specified amount. (2 ) A probate homestead is a similarly protected home property set aside by a California probate court for a widow or minor children. A special, limited exemption against certain judgments available to qualified homeowners.

HUNDRED PERCENT LOCATION

A retail business location considered the best available for attracting business.

HYPOTHECATE

To give something as security without giving up possession of it. To pledge property; to p ledge a security interest in property without the transfer of possession.

 
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JOINT NOTE

A note signed by two or more persons who have
equal liability for payment.

JOINT TENANCY

Joint ownership by two or more persons with right of survivorship .Four unities must be present: time, title, interest, and possession property held by two or m ore people with right of survivorship.

JOINT VENTURE

In legal effect it is a partnership for a limited, specific business project.

JOISTS

One of a series of parallel beams to which the boards of floor and ceiling laths or plaster board s are nailed and supported in turn by larger beams, girders, or bearing walls.

JUDGMENT AFFIRMED

A decision by an appellate court reaffirming, approving, and agreeing with an inferior court's decision.

JUDGMENT DEBTOR

A person who has an unsatisfied money judgment levied against him or her.

JUDGMENT LIEN

A money judgment that, because it has been recorded, has become a lien against the judgment debtor's real property.

JUDGMENT REVERSED

A decision by an appellate court disagreeing with an inferior court's decision and modifying the decision to conform with its findings.

JUNIOR LIEN

A lien lower in priority or rank than another or other liens.

JUNIOR MORTGAGE

A mortgage second in lien to a previous mortgage.

JURISDICTION

The authority of a court to hear and decide a particular type of case. The power of a court to hear and decide a case or issue ..

 
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LAND CONTRACT

A contract used in the sale o f real property when the seller wishes to retain legal title until all or a certain part of the purchase price is paid by the buyer. It is also referred to as an installment sales contract or an agreement of sale.

LANDLOCKED

Property totally surround ed by other property with no means of ingress or egress.

LAND SALES CONTRACT

A contract for the sale of property, b y which possession is delivered to the buyer, but title remains with the seller until full payment or the satisfaction of other stated conditions.

LATE CHARGE

A charge made by a lender against a borrower who fails to make loan installments when due

LATE SUPPORT

The support that the soil of an adjoining owner gives to his or her neighbor's land.

LEASE

A contract between owner and tenant, setting forth conditions upon which the tenant may occupy and use the property and the term of the occupancy.

LEASEHOLD ESTATE

The estate of a tenant under a lease. (See Estate for Years.)

LEGACY

A gift of money by will.

LEGAL DESCRIPTION

A description recognized by law; a description by which property can be definitely located by reference to government surveys or approve d recorded maps.

LESSEE

A tenant; the person who is entitled to possession of property under a lease. LESSOR A landlord; the property owner who executes a lease.

LETTER OF INTENT

An expression of intent to invest, develop, or purchase without creating any firm legal obligation to do so.

LEVY

To exe cute upon ; to seize and s ell property to obtain money to satisfy a judgment.

LIABILITIES

Debts or claims that creditors have against assists.

LICENSE

Personal, non-assignable authorization to enter and perform certain acts on another's land.

LICENSEE

Under the law before 1968, which classified persons who entered upon others' land, a licensee was someone who entered upon land with the owner's express or implied permission for a business purpose.

LIEN

A lien makes the debtor's property security for the payment of a dept or the discharge of an obligation. A charge or claim against property as security for payment of a debt or obligation.

LIFE ESTATE

An estate in real property that continues for the life of a particular person. The "life" involved may be that of the owner or that of some other person. An estate in property whose duration is limited to and measured by the life of a natural person or persons.

LIMITED PARTNERSHIP

A partnership composed of some partners whose contribution and liability are limited. There must always be one or mo re general partners with unlimited liability and one or more limited partners with limited liability. A special partnership composed of limited and general partners. The general partners have un limited liability and total management, whereas the limited partners have to voice in the management and their only financial expo sure is to the extent of their investment. In some ways the limited partners' interest is similar to that of stockholder s in a corporation. LINTEL A horizontal board that supports the load over an opening such as a door or window.

LIQUIDATED DAMAGES CLAUSE

An agreement between the parties that in the event of a breach, the amount of damages shall be liquidated (set or fixed). The amount is set before the breach, usually at the time of making the contract, on the assumption that the exact amount of dam ages is difficult to determine because o f the nature of the contract.

LIS PENDENS

A notice of pending litigation recorded to give constructive notice of a suit that has been filed. A recorded notice that a lawsuit is pen ding, the outcome of which may affect title to property.

LISTING

An employment contract between a broker and his principal (client).

LISTING AGREEMENT

An employment contract authorizing a broker to sell, lease, or exchange an owner's property.

LITIGATION

A civil lawsuit; a judicial controversy.

LOAN COM MITTEE

The committee in a lending institution that reviews and approves or disapproves the loan applications recommended by a loan officer.

LOAN CORRESPONDENT

A loan agent usually used by distant lenders to help the lender make real estate loans.

LOAN PACKAGE

A group of documents prepared along with a loan application to give the prospective lender complete details about the proposed loan.

LOAN VALUE

The lender's appraised value of the property.

LOUVER

An opening with a series o f horizontal slats se t at an angle to permit ventilation without admitting rain, sunlight, or vision.

 
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NAR

National Association o f Realtors.

NAREB

National Association of Real Estate Boards. This trade organization is now know n as the National Association of Realtors.

NEGATIVE AMORTIZATION

Occurs when normal payments on a loan are insufficient to cover all interest then due, so that unpaid interest is added to principal. Thus, even though payments are timely made, the principal grows with each payment.

NEGLIGENCE

Either the failure to act as a reasonable, prudent person, or the performance of an a ct that would not be done by a reasonable, prudent person.

NEGOTIABLE INSTRUMENT

A check or promissory note that meets specified statutory requirements an d is therefore easily transferable in somewhat the same manner as money. The negotiable instrument can be passed by endorsement and delivery (or in some cases by me re delivery), an d the transferee takes title free of certain real defenses (such as failure of consideration, fraud in the inducement) that might exist against the original maker of the negotiable instrument.

NEPA

Abbreviation for the National Environmental Protection Act, a federal statute requiring all federal agencies to prepare an Environmental Impact Statement an d meet other requirements whenever a major federal action is anticipated that could significantly affect the environment.

NET LISTING

A listing that provides that the agent may retain as compensation for his or her services all sums received over and above a stated net price to the owner. An employment agreement that entitles the broker to a commission only in the amount, if any, that the sales price of the property exceeds the listing price.

NONFREEHOLD ESTATE

A lease tenancy. (See under Estates for the four types o f leasehold e states.)

NONJUDICIAL FORECLOSURE

foreclosure and sale of property without resort to court action, by private sale. For deeds of trust the foreclosure provisions are outlined by the statutes and the requirements in the security instrument, which include a notice of default, right to reinstate, publication of sale, and trustee's sale.

NOTARY PUBLIC

An individual licensed by the state to charge a fee for acknowledging signatures o n instruments.

NOTE

A signed written instrument promising payment of a stated sum of money . Shortened name for a promissory note.

NOTICE OF COMPLETION

A notice recorded after termination of work on improvements, limiting the time in which mechanic's liens can be filed against the property.

NOTICE OF DEFAULT

A notice that is recorded in the county recorder's office stating that a trust deed is in default and that the holder has chosen to have the property sold. The trustor (property owner) has three months after the date of recording to reinstate the loan . Recorded notice that a trustor has defaulted on his secured debt.

NOTICE TO QUIT

A notice to a tenant to vacate rented property. Also called a three-day notice. Notice given to a tenant in default of his lease terms or on his rent, which directs him either to cure the default or to vacate the premises.

NOVATION

The acceptance of a new contract in substitution for the old contract, with the intent that the new contract will extinguish the original contract. Some times encountered in transfers of deeds of trust, where the new owner assumes the debt and the lender, through novation, releases the former owner from any liability under the original promissory note an d deed o f trust.

NUISANCE

Anything that is injurious to health or indecent or offensive to the senses, or any obstruction to the free use of property so as to interfere with the comfortable enjoyment of life or property or unlawfully obstructs the free passage or use, in the customary manner, o f any navigable lake or river, b ay, stream, canal, or basin, or any public park, square, street, or highway. A leg al wrong arising from acts o r use of one's property in a way that unreasonably interferes with another's use of hid property.

 
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PAROL EVIDENCE RULE

A rule of courtroom evidence that once the parties make a written contract they may not then introduce oral agreements or statements to modify the terms of that written agreement. An exception exists for fraud or mistake, which will permit the parties to offer evidence to vary the terms of the writing.

PARTIAL RECONVEYANCE

In a deed of trust or mortgage, a clause that permits release of a parcel or part of a parcel from the effects and lien of that security instrument. The release usually occurs upon the payment of a specified sum o f money.

PARTITION ACTION

A legal action by which co-owners seek to sever their joint ownership . The physical division of property between co-owners, usually through court action.

PARTNERSHIP

An association of two or more persons to unite their property, labor or skill, or any one or combination thereof, in prosecution of some joint business, and to share the profits in certain proportions. An agreement of two or more individuals jointly to undertake a business enterprise. If it is a general partnership, all partners have unlimited liability and, absent other agreements, share equally in the management and profits of the business.

PARITY WALL

A wall erected on the line between two adjoining properties that are under different ownership for the u se of both owners.

PATENT

Conveyance of title to government land.

PENNY

The term , as applied to nails, that serves a s a measure of nail length and is abbreviated by the letter d.

PERCENTAGE LEASE

A lease on property, the rental for which is determine d by the amount of business done b y the tenant, usually a percentage of gross receipts from the business, with provision for a minimum rental.

PERIODIC TENANCY

A leasehold estate that continues indefinitely for successive periods of time, until terminated by proper notice. When the periods are one month in duration, it is often called a month-to-month lease.

PERSONAL INJURY

A term commonly used in tort (e.g. negligence cases) indicating an injury to one's being or body (for example , cuts or broken bones ) as opposed to injury to his property.

PERSONAL PROPERTY

Any property that is not real property. (See Real Property.) Property that is movable, as opposed to real property, which is immovable; also includes intangible property and leasehold estates.

PETITIONER

A person who petitions the court on a special proceeding or a motion.

PLAINTIFF

The party who initiates a lawsuit; the person who sues another.

PLEDGE

Deposition of personal property by a debtor with a creditor as security for a debt or engagement. PLEDGER One who gives a pledge as security. (See Debtor)

PLOTTAGE INCREMENT

The appreciation in unit value created by joining smaller ownerships into one large single ownership.

POLICE POWER

The right of the state to enact laws and regulations an d its right to enforce them for the order, safety, health, morals, and general welfare of the public. The power of the state to prohibit acts that adversely affect the public health, welfare, safety, or morals. (Zoning and building codes are example s of exercise o f the police power.)

POWER OF ATTORNEY

An instrument authorizing a person to act as the agent of the person granting it. A special power of attorney limits the agent to a particular or specific act, as a landowner may grant an agent special power of attorney to convey a single and specific parcel of property.

POWER OF TERMINATION

The future interest created whenever there is a grant of a fee simple subject to a condition subsequent estate. The future interest matures into a present interest estate only if the holder timely and properly exercises h is right upon a breach by the current holder of the fee estate.

PREJUDGEMENT ATTACHMENT

An attachment of property made before the trial, with the intent of holding that property as security, to have an asset to sell if the court judgment is favorable to the attaching p arty.

PAYMENT CLAUSE

A provision in a promissory note, deed of trust, or mortgage, permitting the debtor to pay off the obligation before maturity.

PREPAYMENT PENALTY

Penalty for the payment o f a note before it actually becomes due. A fee or charge imposed upon a debtor w ho desires to pay off his loan before its maturity. Not all prepayment clauses provide for a penalty, and in many real estate transactions the law regulates the amount of penalty that may be changed.

PRESCRIPTION

Securing of an easement by open, notorious, and uninterrupted use, adverse to the owner of the land for the period required by statute, which, in California, is five years. A method of obtaining an easement by adverse use over a prescribed period of time.

PRESENT INTEREST

An estate in land that gives the owner the right to occupy his property immediately; as opposed to a future interest, which grants only the right to occupy the premises at some future date.

PRIMA FACIE

(1) Presumptive on its face. (2) Assumed correct until overcome by further proof. Facts, evidence, or documents that are taken at face value and presumed to be as they appear (unless proven otherwise).

PRINCIPAL

The employer of an agent. Someone who hires an agent to act on his behalf. The term also refers to the amount of an outstanding loan (exclusive of interest).

PRIVITY

Closeness or mutuality of a contractual relationship.

PROBATE

Court supervision of the collection and distribution of a deceased person's estate.

PROCURING CAUSE

That event originating from another series of events that, without a break in continuity, results in a n agent's producing a final buyer. Proximate cause. A broker is the procuring cause of a sale if his or her efforts set in motion an unbroken chain of events that resulted in the sale.

PROMISSORY NOTE

A written promise to pay a designated sum of money at a future date.

PRORATION OF TAXES

Division of the taxes equally or proportionately between buyer and seller on the basis of time of ownership.

PUNITIVE DAMAGES

Money awarded by the court for the sole purpose of punishing the wrongdoer, and not designed to compensate the injured p arty for his dam ages.

PURCHASE MONEY INSTRUMENT

A mortgage or deed of trust that does not permit a deficiency judgment in the in the event of foreclosure and sale o f the secured property for less than the amount due o n the promissory note. It is called purchase money since the deed of trust and mortgage was used to buy all or part of the property.

PURCHASE-MONEY MORTGAGE OR

A mortgage or deed of trust given as part or all of the consideration

PURCHASE-MONEY DEED OF TRUST

for the purchase of property or given as security for a loan to obtain money for all or part of the purchase price.

 
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SAFETY CLAUSE

In a listing agreement, a provision that if
anyone found by the broker during his listing period purchases the property within a specified time after the expiration of the listing, the broker receives his full commission.

SALE-LEASEBACK

A situation in which the owner of a piece of property sells it and retains occupancy be leasing it from the buyer.

SALES CONTRACT

A contract between buyer and seller setting out the terms of sale.

SALESPERSON

An individual licensed to sell property, but who must at all times be under the supervision and direction of a broker.

SANDWICH LEASE

A leasehold interest that lies between the primary lease and the operating lease. Example: A leases to B; B subleases to C; C subleases to D. C's lease is a sandwich lease.

SASH

A wood or metal frame containing one or more windowpanes.

SATISFACTION

Discharge of a mortgage or deed of trust lien from the records upon payment of the secured debt. Discharge of an obligation or indebtedness by paying what is due.

SEAL

An impression mark or stamp made to attest to the execution o f an instrument.

SECONDARY FINANCING

A loan secured by a second mortgage or a second deed o f trust.

SECTION

A square mile of land, as established by government survey, containing 640 acre s.

SECURED DEBT

An obligation that includes property held as security for the payment of that debt; upon default, the property may be so ld to satisfy the debt.

SECURITY AGREEMENT

An agreement between the secured party and the debtor that creates a security interest in personal property. It replaced such term s as chattel mortgage, pledge, trust receipt, chattel trust, equipment trust, conditional sale, and inventory lien.

DEPOSIT

A deposit made to assure performance of an obligation, usually by a tenant. A sum of cash given as collateral to ensure faithful performance of specified obligations.

SECURITY INTEREST

A term designating the interest of a secured creditor in the personal property of the debtor.

SEIZIN

The possession of land under a claim of freehold.

SENIOR LIEN

A lien that is superior to or has priority over another lien. Also, the first deed of trust or lean o n a property.

SEPARATE PROPERTY

Property that is owned by a husband or wife and that is not community property. It is property acquired by either spouse prior to marriage or by gift or inheritance after marriage; also, in California, it is the income from separate property after marriage. Property held by a married person that is not community property; it includes property owned before marriage and property acquired after marriage by gift or inheritance.

SERVIENT ESTATE

That parcel of property which is burdened by and encumbered with an easement.

SERVIENT TENEMENT

An estate burdened b y an easement.

SET-BACK ORDINANCE

An ordinance prohibiting the erection of a building or structure between the curb and the set-back line. (see Building Line)

SEVERALTY

Sole ownership of property. Ownership by one person.

SEVERALTY OWNERSHIP

Ownership by only on e person; so le ownership.

SHERIFF'S DEED

A deed given by court order in connection with the sale of property to satisfy a judgment.

SILL

The board or piece of metal forming the lower side of an opening, such as a door sill or window sill.

SINKING FUND

(1) A fund set aside from the income from property that, with accrued interest, will eventually pay for replacement of the improvements. (2) A similar fund set aside to pay a debt.

SMALL CLAIMS COURT

A branch of the Municipal Court. The rules of this court forbid parties to be assisted by attorneys, dispense with most formal rules of evidence, and have all trials heard by judges. The monetary limit of cases before the court is $1,500.

SOIL

sole ownership carrying waste from the house to the main sewer line.

SOLD TO THE STATE

A bookkeeping entry on the county tax rolls indicating that the property taxes are delinquent. The entry begins the five-year redemption period, after which the property ma y be physically sold to the public for back taxes.

SPAN

The distance between structural supports, such as walls, columns, piers, beams, and girders.

SPECIAL ASSESSMENT

Legal charge against real estate by a public authority to pay the cost of public improvement, as distinguished from taxes levied for the general support of government.

SPECIFIC PERFORMANCE

A legal action to compel performance of a contract; for example a contact for the sale of land. A contract remedy by which one p arty is ordered by the court to comply with the terms of the agreement.

SPOUSE

A person's husband or wife.

SRA

The Society of Re al Estate Appraisers.

STARE DECISIS

A fundamental principle of law, which holds that courts should follow prior decisions on a point of law. A proper decision is a binding precedent on equal or lower courts having the same facts in controversy.

STATUTE

A written law.

STATUTE OF FRAUDS

The state law that provide s that certain contracts must be in writing in order to be enforceable in the courts. Examples: real property leas ed f or m ore than one year or a n agent's authorization to sell real estate. A law that require s certain con tracts (including most real estate contracts) to be in writing to be enforceable.

STATUTE OF LIM ITATIONS

A statute that requires lawsuits to be brought within a certain time to be enforceable. The basic periods are one year for personal injury, two ears for oral contracts, three years for damages to real or personal property, four years for written contracts, and three years from date of discovery for fraud.

STEPPED-UP BASIS

A higher, increased tax value of property given as the result of most sales or taxable transfers. The tax basis is used in computing capital gains and losses on the transfer of property.

STOP NOTICE

A notice served on the owner of property or custodian of funds. It requests, with certain penalties for noncompliance, that any funds due to a general contractor be paid to the claimant, laborer, or material man.

STRAIGHT-LINE DEPRECIATION

An accounting procedure that sets the rate of depreciation as a fixed percentage of the amount to be depreciated; the percentage stays the same each year.

STRAIGHT MORTGAGE OR DEED OF

A mortgage or deed of trust in which there is no reduction of the

TRUST

principal during the term o f the instrument. Payments to interest are usually made on an annual, semiannual, or quarterly basis.

STRAIGHT NOTE

A promissory note that is unamortized. The principal is paid at the end of the term of the note.

STRING, STRINGER

(1) A timber or other sup port for cross-members (2) In stairs, the support on which the stair treads rest.

STUDS OR STUDDING

Vertical sup porting timbers in walls and partition s..

SUB CHAPTER-S CORPORATION

A corporation that, for federal tax purposes only, is taxed similarly to a partnership. The corporate entity is disregarded for most federal tax purposes, and the shareholders are gene rally taxed as individual partners.

SUBJACENT SUPPORT

Support that the soil below the surface gives to the surface of the land.

SUBJECT TO

(1) Burdened by and liable for an obligation. (2) A method of taking over a loan without becoming person ally liable for its payment.

"SUBJECT TO" MORTGAGE OR DEED

When a grantee takes a title to real property subject F TRUST to a mortgage or deed of trust, he or she is not responsible to the holder of the promissory note for the payment of any portion of the amount due. The most that he or she she can lose in the event of a foreclosure is his o r her equity in the property. In neither ca se is the original maker of the note released from his or her responsibility. (See also Assumption of Mortgagor Deed of Trust.)

SUBLEASE

A lease given by a tenant.

SUBORDINATE

To make subject or junior to.

SUBORDINATION AGREEMENT

In a mortgage or deed of trust, a provision that a later lien shall have a priority interest over the existing lien. It makes the existing lien inferior to a later lien, in effect exchanging priorities with that later lien.

SUBORDINATION CLAUSE

Senior lien that makes it inferior to what would otherwise be a junior lien.

SUBROGATE

To substitute one person for another's legal rights to a claim o r debt.

SUBROGATION

The substitution of another person in place of the creditor with regard to an obligation.

SUCCESSION

The inheritance of property.

SUCCESSOR IN INTEREST

The next succeeding owner of an interest in property. The transferee or recipient of a property interest.

SUPERIOR COURT

The principal trial court of the state; a court of unlimited monetary and subject matter jurisdiction, and an appeal court for decisions of municipal courts and small claims courts.

SUPREME COURT

The highest court in the California and the federal court structure. This court is almost exclusively an appeals court, accepting (by certiorari) only those cases that, in the court's desecration, involve issues of significant magnitude and social importance.

SURETY

One who guarantees the performance by another, a guarantor.

SURVEY

The process by which a parcel of land is located on the ground and measured.

SYNDICATION

A group of individuals pooling their re sources to purchase property through the holding vehicle of a partnership, corporation, or other association. Each individual owns share in the legal entity formed to acquire and hold title to the property.

 
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VALID

(1) Legally sufficient and authorized by law. (2) Having force or binding force . Fully effective at law; leg ally sufficient.

VALLEY

The internal angle formed by the junction of two sloping sides of a roof.

VALUATION

(1) Estimated worth or price. (2) The act of valuing by appraisal.

VARIABLE INTEREST RATE

An interest rate that fluctuates in a set proportion to changes in an economic index, such as the cost of money.

VARIANCE

An exception or departure from the general rule. An exception granted to a property owner, relieving him from obeying certain aspects of a zoning ordinance. Its granting is discretionary with the zoning authorities and is based on undue hardship suffered by the property owner because of unique circum stances affecting his property.

VENDEE

Purchase r or buyer o r real property.

VENDOR

Seller of real property.

VENEER

Thin sheets of wood placed over another material.

VENT

A pipe installed to provide a flow of air to or from a drainage system or to provide a circulation of air within such system to protect trap seals from siphonage and back pressure.

VENUE

The location in which a cause of action occurs; it determines the court having jurisdiction to hear and decide the case. For real estate, the court having proper venue is one in the county in which the property is located.

VERIFICATION

A sworn statement before a duly qualified officer as to the correctness o f the contents o f an instrument. Written certification under oath and/o r penalty of perjury, confirming the truth of the facts in a document.

VERSUS

Against (abbreviated v. or vs.). Used in case names, with the plaintiff's name given first.

VESTED

Bestowed upon someone, such as title to property. Absolute, not contingent or subject to being defeated.

VETERAN'S EXEMPTION

A deduction from the annual property tax allowed to a qualified veteran residing on residential property. Since July 1978, it has amounted to $40 off the normal tax bill.

VOID

To have no legal force or effect; that which is unenforceable. Unenforceable, null, having no legal effect.

VOIDABLE

An instrument that appears to be valid and enforceable on its face but is, in fact, lacking some essential requirement. May be declared void, but is valid unless and un til declared void..

VOLUNTARY LIEN

Any lien placed on property with the consent of the owner or as a result of the voluntary act of the owner.

 
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ZONE

The area set off by the proper authorities in which the real property can be used for only specific purposes.

ZONING

Act of city or county authorities specifying the type of use to which property ma y be put in specific areas . A government's division of a city or other geographic area into districts, and the regulation of property use s within each district.

 

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BACKFILL

The replacement of excavated earth in a hole or against the side of a structure.

BALANCE SHEET

A financial statement showing a person's assets, liabilities, and net worth.

BALLOON PAYMENT

When the final payment on a note is greater than the preceding normal installments, the final installment is termed a balloon payment. An installment promissory note providing for the last payment to be much larger than any previous payment. By statute, any payment more than twice the smallest payment is a balloon payment, although in practice generally the term refers only to the last payment.

BASE AND MERIDIAN

Imaginary lines used by surveyors from which they find, measure, and describe the location of lands.

BASEBOARD

A board that goes around the room against the wall and next to the floor.

BENCH M ARKS

A location indicated on a permanent marker by surveyors.

BENEFICIARY

(1) One entitled to benefit from a trust. (2) The lender on the security of a note and deed of trust. The creditor (lender) under a of trust.

BENEFICIARY STATEMENT

(See Offset Statement.)

BEQUEATH

To leave by will.

BILATERAL CONTRACT

A contract in which the consideration given by each party is a promise: that is , a promise for a promise.  

BILL OF SALE

A written instrument given by the seller to the buyer to pass title to person al property.

BINDER

A written statement that binds the parties to an agreement until formal contracts can be drawn; an agreement to cover a down payment as evidence of good faith.

BLACKTOP

Asphalt paving used in streets and driveways.

BLANKET DEED OF TRUST

A deed of trust binding more than one parcel of property as security. It is frequently encountered in subdivisions, where every lot in the subdivision is bound by the same deed of trust. As the lots are sold, they are released from the deed of trust by a partial release provision.  

BLANKET MORTGAGE

One mortgage or deed of trust that covers mo re than one piece of real property.

BLIGHTED AREA

An area in which real property is declining in value because of destructive economic forces.

BOARD FOOT

A unit of measurement for lumber: one foot wide, one foot long, one inch thick (144 cubic inches).

BONA FIDE

Good faith.

BONA FIDE PURCHASER (BFP)

A purchaser who pays fair value for property in good faith, and without notice of adverse claims. BOND An obligation under seal. Real estate bonds are issued on the security of a mortgage or deed of trust. A certificate representing a contract for the payment of money, often used to repay certain loans or he ld as security to ensure the performance of a stated act.

BOOK VALUE

An accounting term which is the difference between cost and the total amount of depreciation that has been taken.

BRACING

Frame lumber nailed at an angle in order to provide stability to the structure.

BREACH

The breaking of or failure of duty, either by an act or omission. The violation of or failure to perform an obligation.

BROKER

An agent who earns income by arranging sales and other contracts. A real estate broker is an individual licensed by the state of California to arrange the sale or transfer of interests in real property for compensation.

BTU British Thermal Unit

the quantity of heat required to raise the temperature of one pound of water one degree Fahrenheit..

BUILDING LINE

Often called a setback line, a building line is a line running a certain distance from the street, in front of which an owner cannot build. These lines are set by law.

BUILT-INS

Cabinets and other features built in as a part of the house.

BUSINESS AND PROFESSIONS CODE

One of the 25 California codes containing the laws passed by the state legislature. It contains the statutes regulating the conduct of real estate brokers and establishes the Department of Real Estate.

 
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DAMAGES

The indemnity recoverable by a person who has sustained an in jury to either his or her person, property or rights through the act or default of another. Compensation ordered by the courts for the loss of or injury to one's person o r property.

DEALER

A person who holds property primarily for sale to his or her customers in the ordinary course of his or her business.

DEBTOR

(1) A party who "owns" the property that is subject to a security interest. (2 ) A person who owe s a debt. DEBT SERVICE The sum of money needed each payment period to amortize the loan or loans.

DECK

Usually an open porch on the roof or another part of the structure.

DECLARATORY RELIEF

A court's decision on the rights of the parties in a question of law, without ordering anything to be done.

DEDICATION

An appropriation of land by its owner for some public use and accepted for such u se by authorized public officials on behalf of the public. A gift of privately owned land to the public or for public use. It may be voluntary or involuntary.

DEED

A written instrument that when properly executed and delivered conveys title.

DEED OF TRUST

A security instrument transferring title to property to a third person (trustee) as security for a debt or other obligation.

DEFAULT

(1) Failure to fulfill a duty or promise or to discharge an obligation. (2) Omission or failure to perform any act. Failure to perform a legal duty or to discharge a promise...

DEFAULT JUDGMENT

A judgment obtained because the defendant failed to appear and defend his case.

DEFEASANCE CLAUSE

The clause in a mortgage or deed of trust that gives the borrower the right to redeem his or her property upon the payment of his or her property upon the payment of his or her obligations to the lender.

DEFEASIBLE

Capable of being defeated. A defeasible estate is one that has a condition attached to the title, which if broken causes the termination of that estate.

DEFENDANT

The party being sued in a lawsuit; the party against whom an action is filed.

DEFERRED MAINTENANCE

Maintenance and accumulated repairs that have been postponed.

DEFICIENCY JUDGEMENT

A judgment given for the unpaid balance of a debt remaining after the surety is so ld. A court decree holding a debtor personally liable for the shortage or insufficiency realized on the sale of secured property. The debtor owes the difference between the sale price of the property and the amount of the secured debt.

DELIVERY (OF A DEED )

The unconditional, irrevocable intent of a grantor immediately to divest (give u p) an interest in real estate by a deed or other instrument. DEPOSIT Money given to another as security to ensure the performance of a contract. The money is usually intended to be applied toward the purchase price of property, or forfeited on failure to complete the con tract.

DEPOSIT RECEIPT

A contract used in the he re al estate business that includes the terms of the contract and acts as a receipt for "earnest money" to bind an offer for property by the prospective purchaser. The name given to most real estate contracts containing the terms of the sale of real estate, and receipt for earnest money deposited).

DEPRECIATION

A loss in value from any cause. This loss in value to real property may be caused by age or physical deterioration, or by functional or economic obsolescence.

DESIST AND REFRAIN ORDER

An order that the Real Estate Commissioner is empowered by law and refrain from committing an act in violation of the Real Estate Law.

DETERIORATION

The process of gradual worsening or depreciation.

DEVISE

A gift of real property by deed.

DEVISEE

One who receives real property under a will.

DICTUM

A written observation, remark, or opinion by a judge to illustrate or suggest an argument or rule of law not incidental to the case at hand, and which, therefore, although persuasive, is not binding on the judge.

DIRECTIONAL GROWTH

The direction in which the residential sections of a city see .destined or determined to grow.

DISCLOSURE STATEMENT

A statement that the Truth-in- Lending Law requires a creditor to give a debtor showing the finance charge, annual percentage rate, and other required information.

DISCOUNT

To sell a promissory note before maturity at a price less than the outstanding principal balance of the note at the time of sale. It may also be the amount deducted in advance by the lender from the face of the note.

DISCOUNT POINTS

A fee charged by the lender when making an FHA or VA loan to offset the lower interest rate the lender will receive compared with conventional loan interest rates. One point is equal to 1 percent.

DISCOUNT RATE

The interest rate that is charged on money borrowed by banks from the Federal Reserve System.

DISSOLUTION OF MARRIAGE

A divorce.

DISTRICT COURT

The main trial court in the federal court system and the lowest federal court. It has jurisdiction in civil cases where the plaintiffs and defendants are from different states (diversity of citizenship) and the amount in controversy is over $10,000, and in cases involving a federal question.

DIVESTMENT

The elimination or removal of a right or title, usually applied to the cancellation of an estate in land.

DOMICILE

A person's permanent residence.

DOMINANT TENEMENT

The tenement obtaining the benefit of an easement appurtenant. That parcel of land that benefits from an easement across another parcel of property (SERVIENT tenement).

DONEE

The person to whom a gift is made.

DONOR

The person who makes a gift.

DOUBLE ESCROW

An escrow that will close only upon the condition that a prior escrow is consummated . The second escrow is contingent upon and tied to the first escrow . While double escrow is not illegal, unless there is full and fair disclosure of the second escrow, there may be a possibility of fraud or other action able conduct by the parties. DOWER The right that a wife has in her husband's estate a t his death. Dower has been abolished in California.

DUE-ON-ENCUMBRANCE CLAUSE

A clause in a deed of trust or mortgage that provides that upon the excretion of additional deeds of trust or other encumbrances against a secured parcel of property, the lender may declare the entire unpaid balance of principal and interest due and owing.

DUE-ON-SALE CLAUSE

An acceleration clause that grants the lender the right to demand full payment of the mortgage or deed of trust upon sale of the property. A clause in a deed of trust or mortgage that provides that if the secured property is sold or transferred, the lender may declare the entire unpaid balance immediately due and payable. Its use has been severely limited by recent court decisions. Also called an alienation clause.

DUE PROCESS OF LAW

A constitutional guarantee that the government will not interfere with a person 's private property rights without following procedural safeguards prescribed by law.

DURESS

Unlawful constraint by force or fear.  
 
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EARNEST MONEY

A deposit of money paid by a buyer for real property as evidence of good faith.

EASEMENT

A right, privilege, or interest that one party has to use the land of an other. Example: A right of way. A legal right to use another 's land for one's benefit o r the benefit of one 's property (right-of-way).

EASEMENT APPURTENANT

An easement created for the benefit of a particular parcel of property. There is both a dominant and a servant estate. The easement is annexed to and part of the dominant property.

EASEMENT IN GROSS

An easement that benefits a particular individual, not a parceling of property. Involves only a servant estate. A public utility easement is an example.

EAVES

The lower projecting edge of a roof over the wall.

ECONOMIC LIFE

The remaining useful life of an improvement or structure; that period during which an improvement will yield a re turn on the investment.

ECONOMIC OBSOLESCENCE

The loss in value to property due to external causes such as zoning or a deteriorating neighborhood. It is also referred to as social obsolescence.

EFFECTIVE GROSS INCOME

The amount of net income that remains after the deduction from gross income of vacancy and credit losses.

EGRESS

Exit; the act or a venue or leaving property.

EIR

Abbreviation for Environmental Impact Report.

EMBLEM ENTS

Things that grow on the land require annual planting and cultivation.

EMINENT DOMAIN

The right of the government and certain others, such as public utilities, to acquire property for public or quasi-public use by condemnation, upon payment of just compensation to the owner. The constitutional or inherent right of a government to take private property for public good upon the payment of just compensation.

ENCROACHMENT

The projection of a structure onto the land of an adjoining owner. A structure or natural object that unlawfully extend s into another 's property.

ENCUMBRANCE

Any claim, interest, or right improperly possessed by another that may diminish the true owner's rights or value in the estate. Examples include mortgages, easements, or restrictions of an y kind. A claim , lien, or charge on property.

IMPACT REPORT

A report that must be prepared whenever any agency or individual considers a project that may have a significant impact on the environment, as directed by the California Environmental Quality Ac t.

EQUAL PROTECTION

The Fourteenth Amendment to the U.S. Constitution and similar provision s in the California Constitution require each citizen to receive equal protection of the laws. There are no minimum standards of protection; all equally situated individuals must simply be treated equally. (The due process clause of the Constitution imposes certain minimum standards o f protection.)

EQUITY

(1) The interest or value that on owner has in real property over and above the liens against it. (2) A part of our justice system by which courts seek to supplement the strict terms of the law to fairness under the circumstances, rather than on fixed legal principles or statutes. (3) Ownership in property, determined by calculating the fair market value less the amount of liens and encumbrances. EQUITY BUILD-UP The increase of the owner's equity due to mortgage principal reduction and value appreciation.

EQUITY OF REDEMPTION

The right to redeem property during the foreclosure period. In California the mortgagor has the right to redeem within 12 months after the foreclosure sale.

EROSION

The wearing away of the surface of the land by the action of wind, water, and glaciers, for example.

ESCALATOR CLAUSE

A clause in a contract that provides for the upward or downward adjustment of certain item s to cover the specific contingencies set forth. A clause in a promissory note, lease, or other document that provides that upon the passage of a specified time or the happening of a stated event, the interest rate shall increase.

ESCHEAT

The reversion of property to the state when there are no devisees or heirs capable of inheritance. Reversion of property to the state upon the death of an owner who h as no heirs able to inherit. ESCROW The deposit of instruments and funds with a third neutral party with instructions to carry out the provisions of an agreement or contract. A complete or perfect escrow is one in which everything has been deposited to enable carrying out the instructions. The neutral third party (stakeholder) who holds deeds or other documents pursuant to instructions for delivery upon completion or occurrence o f certain conditions.

ESTATE

The degree, quantity, nature, and extent of the interest that a person has in real property. (1) Ownership interest in real estate. (2) T he quality and quantity of rights in property.

ESTATE AT WILL

The occupation of real property by a tenant for an indefinite period. It may b e terminated at will by one or both parties. A leasehold tenancy, which at common law could be terminated b y either party at an y time, without advance notice. Thirty days' notice are now required to terminate this type of estate in California..

ESTATE FOR LIFE

A freehold estate whose duration is measured by and limited to the life or lives of one or mo re persons.

ESTATE FOR PERIOD TO PERIOD

A leasehold tenancy that continues indefinitely for successive periods of time, until terminated by proper notice. W hen the periods are one month in duration, it is often called a month-to-month tenancy.

ESTATE FOR YEARS

A lease that will expire at a definite time or date. A leasehold tenancy of a fixed duration, being a definite and ascertainable period o f a year or any fraction of multiple thereof. It has a definite beginning and ending date, and hence a known and definite duration.

ESTATE OF INHERITANCE

An estate that may go to the heirs of the deceased. All freehold estates are estates of inheritance, except life estates.

ESTOP

To ban, stop, or impede.

ESTOPPEL

A doctrine whereby one is forbidden to contradict or deny his or her own previous statement, act, or position. The doctrine that prevents a person from exercising a legal right, because that person previously acted in an inconsistent manner, so that a third person detrimentally relied on the earlier acts.

ET AL

Abbreviation meaning and others (other person).

ET UX

Abbreviation meaning and wife.

ETHICS

A standard of conduct that all members of a given profession owe to the public, clients or patrons, and to other members of that profession.

EVICTION

Dispossession by legal process, as in the termination of a tenant's right to possession through re-entry or other legal proceedings.

EVIDENCE

All relevant information, facts, an d exhibits admissible in a trial.

EXCEPTION

(See Reservation.)

EXCHANGE

A reciprocal transfer of properties between two or more parties.

EXCLUSIVE AGENCY

A contract hiring the broker as the exclusive agent for the seller. If anyone, except the seller, finds a buyer, the broker has earned the commission.

EXCLUSIVE AGENCY LISTING

A written agreement giving one agent the exclusive right to sell property for a specified period of time, but reserving the right of the owner to sell the property himself or hers elf without liability for the payment of a commission.

EXCLUSIVE-RIGHT-TO-SELL LISTING

A written agreement giving one a gent the exclusive right to sell property for a specified period of time. The agent may collect a commission if the property is sold by anyone, including the owner, during the term of the listing agreement.

EXCLUSIVE RIGHT TO SELL AGENCY

A contract hiring the broker as the only person authorized to sell property. If anyone, including the seller, finds a buyer, the broker earns the commissions.

EXCULPATORY CLAUSE

A provision in leases and other instruments see king to relieve one party of liability for his negligence and other acts. In residential leases such clauses are invalid, and in other leases the courts have limited the land lord 's ability to escape liability for intentional acts, and for acts of affirmative negligence.

EXECUTE

To complete, make, perform, do or to follow out. To sign a document, intending to make it a binding instrument. The term is also use d to indicate the performance of a contract.

EXECUTION LIEN

A lien arising because of an execution on property. A judgment is not self-executing ; however, w hen a writ of execution has been obtained, the sheriff will levy (seize) property, which creates a lien on the property.

EXECUTOR

A person named by the testator of a will to carry out its provisions as to the disposition of the estate. A personal representative appointed in a will to administer a decedent's estate.

EXPARTE

By only one party or side. For example, an injunction obtained by evidence presented by only one side, without notice to the other parties.

EXPANSIBLE HOUSE

A home designed for expansion and additions in the future.

EXPANSION JOINT

A fiber strip used to separate units of concrete to prevent cracking due to expansion as a result of temperature changes.


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FACADE

The face of a building, especially the front face.

FAIR MARKET VALUE

The amount of money that would be paid for a property offer ed on the o pen mark et for a reasonable length of time with both the buyer and the seller knowing all uses to which the property could be put and with neither party being under pressure to buy or sell. See market Value.

FANNY MAE

The Federal National Mortgage Association

(FNMA).

FEDERAL DEPOSIT INSURANCE

A federal corporation that insures deposits in commercial

CORPORATION

banks (FDIC).

FEDERAL HO ME LOAN BANK (FHLB)

A district bank of the Federal Home Loan Bank System that lends only to savings and loan associations who are members.

FEDERAL HOME LOAN MORTGAGE

A federal corporation that provides savings and loan CORPORATION (FHLMC) associations with a secondary mortgage money market for loans. It is also known as Freddy Mac.

FEDERAL HOUSING ADMINISTRATION

An agency of the federal government (FHA) that insures mortgage loans.

FEDERAL NATIONAL MORTGAGE

A federal corporation that provides lenders with a secondary

ASSOCIATION (FNMA)

mortgage money market.

FEDERAL RESERVE SYSTEM

The federal banking system of the United States under the control of a central board of governors (Federal Reserve Board). It involves a central bank in each of 12 geographical districts, with broad powers in controlling credit and the amount of money in circulation.

FEDERAL SAVINGS AND LOAN

A federal corporation that insures deposits in savings and loan

INSURANCE CORPORATION (FSLIC)

associations.

FEE

An estate of inheritance in real property for life.

FEE SIMPLE

An estate in real property by which the owner has the greatest possible power over the title. In modern use it expressly establishes the title of real property with the owner without limitation o r end. He or she may dispose of it by sale, trade, or will, as he or she chooses. In modern estates the terms "Fee" and "Fee Simple" are substantially synonymous.

FEE SIMPLE ABSOLUTE

The highest estate known at law. A freehold estate of indefinite duration, incapable of being defeated by conditions or limitations. Sometimes simply called fee or fee estate.

FEE SIMPLE DEFEASIBLE

A fee simple estate to which certain conditions or limitations attach, such that the estate may be defeated or terminated upon the happening of an act or event. Also called a fee simple subject to a condition subsequent estates.

FEE SIMPLE SUBJECT TO

A fee simple defeasible estate that requires the holder

CONDITION SUBSEQUENT

of the future interest to act promptly to terminate the present interest, in order for that interest to be terminated.

FIDUCIARY

A person in a position of trust and confidence, as between principal and broker. A fiduciary may not make a profit from his or her position without first disclosing it to the beneficiary.

FINANCING STATEMENT

The instrument filed to perfect the security agreement and give constructive notice of the security interest, thereby protecting the interest of the secured parties. (See Security Agreement; Security Interest; and Secured Party.) The security interest in personal property. It is analogous to a mortgage on real property, except that it secures personal property. Under the U.C.C., it may be filed in Sacramento with the secretary of state.

FINDER'S FEE

Money paid to a person for finding someone interested in selling or buying property. To conduct any negotiations of sale terms, the finder must be a licensed broker or he violates the law.

FIRST AMENDMENT

The constitutional amendment guaranteeing freedom of speech, press, assembly, and religion.

FIXTURE

An item of personal property that has been so attach ed to real property as to be considered p art of that real property.

FOOTING

The base or bottom of a foundation wall, pier. or column.

FORCIBLE DETAINER

Wrongful retention of property by actual or constructive force.

FORCIBLE ENTRY

Entry into property without the consent of the owner, by acts hat constitute more than m ere trespass.

FORECLOSURE

A legal proceeding to enforce a lien on such as a mortgage or deed of trust. The process by which secured property is seized and sold to satisfy a debt. A mortgage or involuntary lien must be sold b y a court-ordered sale; a sale under a deed of trust may be either by court action or through a private trustee's sale.

FORFEITURE

Loss of a legal right, interest, or title by default.

FORMAL WILL

A will signed by the testator in the presence of two or m ore witnesses , who must them selves sign the will.

FOUNDATION

That part of a structure o r wall wholly or partly below the surface of the ground that is the base or supp ort, including the footings.

FOURTEENTH AMENDMENT

The constitutional amendment that directs that no state can deprive a person of life, liberty ,or property without due process or equal protection of the law.

FRAUD

Deception that deprives another person o f his her rights or injures him or her. False representation or concealment of material facts that induces another justifiably to rely on it to his detriment.

FREEHOLD

An estate of fee . An estate in real property that is either a life estate or an estate in fee.

FRONT FOOT

Property measurement for sale or valuation purposes. The property measurement is along the street line, and each front foot extends to the depth of the lot. It is usually used in connection with commercial property.

FROST LINE

The depth of frost penetration in the soil.

FRACTIOUS

Fruits, crops , and other plants. If the vegetation is produced b y human labor, such as crops, it is called fructose industrials; vegetation growing naturally is called fructose naturals.

FURRING

Strips of woo d or metal fastened to wall to even it, form air space, or to give the wall greater thickness.

FUTURE ADVANCES

Future (additional) loan s made b y a lender and secured under the original deed of trust. The advances may be either optional or obligatory, but the deed of trust or mortgage must provide in the security instrument that it will cover any such future advances.

FUTURE INTEREST

An estate that does not or m ay entitle one to possession or enjoyment until a future time.

 

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ILLUSORY CONTRACT

An agreement that gives the appearance of a contract, but in fact is no t a contract because it lacks one of the essential elements.

IMPLIED

Not expressed by words, but presume d from facts, acts, or circumstances.

IMPOUND ACCOUNT

A trust account established by the lender to pay property taxes and hazard insurance.

INCOME APPROACH

An appraisal technique used on income producing properties. Also known as the capitalization approach.

INCOMPETENT

Someone incapable of managing his or her own affairs by reason of age, disease, weakness of mind, or any other cause.

INDEBTEDNESS

A debt or obligation.

INDEMNIFICATION

Compensation to a person who has already sustained a loss. For example, insurance payment for a loss under policy.

INDORSEMENT

(1) The act of signing one's name on the back of a check or a note, with or without further qualification. (2) The signature described above.

INGRESS

The act o f or avenue for entering property.

INHERIT

To take property through a deceased's estate.

INJUNCTION

A court order prohibiting certain acts, or ordering specific acts.

INSTALLMENT

A partial payment of a debt due in a series of payments.

INSTALLMENT NOTE

A note that provides that payments of a certain sum or amount be paid in more than one payment on the dates specified in the instrument.

INSTALLMENT-SALE METHOD

A method of reporting capital gains by installments for successive tax years to minimize the impact of capital gains tax in the year of the sale.

INSTALLMENT SALES CONTRACT

Also known as an agreement of sale or a land contract.

INSTITUTIONAL LENDER

Lenders who make a substantial number of real estate loans, such as banks, savings and loan associations, and insurance companies.

INSTRUMENT

A written legal document created to affect the rights of the parties.

INTEREST

The charge or cost for the use of money.

INTEREST RATE

The percentage of a sum of money charged for its use.

INTESTATE

A person who dies with out a will.

INVOLUNTARY CONVERSION

The loss o f real property due to destruction, seizure, condemnation, foreclosure sale, or tax sale.

INVOLUNTARY LIEN

Any lien imposed on property without the consent of the owner.

IRREVOCABLE

Incapable of being recalled or revoked; unchangeable.

IRRIGATION DISTRICTS

Quasi-political districts created under special laws to provide for water services to property-owners in the district.

 

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MAI

A term that designates a person who is a member of the American Institute of Appraisers of the National Association of Realtors.

MANDAMUS

A court decree ordering a lower court judge, public official, or corporate officer to perform an act acquired of that office.

MARGINAL LAND

Land which barely pays the cost of working or using it.

MARGIN OF SECURITY

The difference between the amount of secured loan(s) on a property and its appraised value.

MARKETABLE TITLE

Title free and clear of reasonable objections and doubts; also called merchantable title.

MARKET DATA APPROACH

(See Comparative Market Analysis.)

MARKET PRICE

The price paid regardless of pressures, motives, or intelligence.

MARKET VALUE

(1) The price at which a willing seller would sell and a willing buyer would buy, neither being under abnormal pressure. (2) As defined by the courts, it is the highest price estimated in terms of money that a property will bring if exposed for sale in the open market, allowing a reasonable time to find a purchaser with knowledge of the property's use and capabilities for use.

MATERIAL FACT

A fact that would be likely to affect a person's decision in determining whether to enter into a particular transaction.

MECHANIC'S LIEN

A lien given by statute to persons supplying labor, materials or other services to improve real property. Whenever a contractor, laborer, o r material ma n provide s labor or materials to improve real property and is not paid, that person is entitled to a lien against the property a s a means o f securing payment. Certain statutory steps must be taken ton file, record, and foreclose the lien. Memo to set: A document filed in a lawsuit which asks to be placed on the waiting list ("docket") for the next available court date.

MENACE

A threat to use duress. (See Duress.)

MERCHANTABLE TITLE

(See Marketable Title.)

MERGER OF TITLE

The combination of two estates. Also refers to the joining of one estate burdened by an encumbrance and another estate benefited by the encumbrance. Whenever a benefit and a burden are merged, the encumbrance is extinguished.

MERIDIANS

Imaginary north-south lines that intersect base line s to form a starting point for the measurement of land.

METES AND BOUNDS

Terms used to describe the boundary lines of land, setting forth all the boundary lines together with their terminal points and angles. Metes means measurements Bounds means boundaries.

MINOR

(1) A person under the age of majority. (2) In California all persons under eighteen years of age - the age of majority in California. Someone under age 18.

MINUS CASH FLOW

An event that takes place w hen there is not enough cash to cover expenses and service the mortgage debt.

MISREPRESENTATION

An intentional or negligent suggestion o r statement of a material fact in a false manner with the intent of deceiving someone into taking a course of action he would no t otherwise normally pursue .

MITIGATION

Facts or circumstances that tend to justify or excuse an act or course of conduct.

MONTH-TO-MONTH TENANCY

A lease of property for a month at a time, under a periodic tenancy that continues for successive months until terminated by proper notice, usually.30 days.

MOLDING

Usually patterned strips used to provide ornamental variation of outline or contour, such as cornices, bases, window and door jambs.

MONUMENT

A fixed object and point established by surveyors or others to establish land locations.

MORATORIUM

The temporary suspension, usually by stature, of the enforcement of liability for debt.

MORTGAGE

An instrument by which property is hypothecated to secure the payment of a debt or obligation.

MORTGAGE

A contract by which property is hypothecated (pledged without delivery) for the repayment of a loan.

MORTGAGEE

A mortgagor gives a mortgage to secure a loan or performance of an obligation: the lender under a mortgage. (See Secured Party.) A creditor (lender) under a mortgage.

MORTGAGE GUARANTY INSURANCE

Insurance against financial loss available to mortgage lenders from the Mortgage Guaranty Insurance Corporation, a private company organized in 1956.

MORTGAGOR

One who gives a mortgage on his or her property to secure a loan or assure performance of an obligation; the borrower under a mortgage. (See Debtor.) A borrower (property owner) of money under a mortgage.

MULTIPLE LISTING

A listing, usually an exclusive-right-to-sell, taken by a member of an organization composed of real estate brokers with the provisions that all members will have the opportunity to find an interested client; a co operative listing. A listing taken by a broker and shared with other brokers through a specialized distribution service, usually provided by the local real estate board. Generally, such listings are exclusive right to sell listings.

MUNICIPAL COURT

An inferior trial court having jurisdiction in cases involving up to $15,00 0 in money damage s and in unlawful detainer actions in which the rental value is under $1,000 per month.

MUTUAL ASSENT

An agreement between the parties in a contract. T he offer and acceptance of a con tract.

MUTUAL WATER COMPANY

A water company organized by or for water-users in a given district, with the object of securing an ample water supply at a reasonable rate. Stock is issued to users.

 

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OBLIGEE

A promisor, a person to whom another is bound by a promise or another obligation.

OBSOLESCENCE

Loss in value due to reduced desirability and usefulness of a structure because its design and construction become obsolete; loss because of becoming old-fashioned and not in keeping with modern needs.

OFFER

A proposal to create a contract, which signifies the present intent of the offeror to be legally bound by his proposal.

OFFEREE

A person to whom an offer is made.

OFFEROR

A person who makes an offer.

OFFSET STATEMENT

Statement by owner of a deed of trust or mortgage against the property, setting forth the present status of the debt and lien. Also called a beneficiary statement.

OPEN-END MORTGAGE OR DEED OF

A mortgage containing a clause that perm its the mortgagor or trustor to

TRUST

borrow additional money without rewriting the mortgage or deed of trust.

OPEN LISTING

An authorization given b y a property-owner to a real estate agent in which the agent is given the nonexclusive right to secure a purchaser. Open listings may be given to any number of agents without liability to compensate any except the one who first secures a buyer ready, willing, and able to meet the terms of the listing or who secures the acceptance by the seller of a satisfactory offer.

OPTION LISTING

A listing that also includes an option, permitting the broker to buy the property at the stated price at any time during the listing period.

ORAL CONTRACT

A verbal agreement, one not reduced to writing.

ORDINANCE

A law passed by a political subdivision of the state (such as a town, city, or county).

ORIENTATION

Placement of a house o n its lot with regard to its exposure to the rays of the sun, prevailing winds, privacy from the street, and protection from outside noises..

R-MORE CLAUSE

A simple prepayment clause that permits the borrower to make a normal payment or any larger amount, up to and including the entire outstanding balance, without a prepayment penalty.

OVER IMPROVEMENT

An improvement that is not the highest and best use for the site on which it is placed, by reason of excessive size or cost.

OWNERSHIP

The right o f a person to use and possess property to the exclusion of others.

 

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QUARTER ROUND

A molding whose profile resembles a quarter
of a circle.

QUASI

Almost as if it were.

QUASI-CONTRACT

A contract implied by law ; that is, the law will imply and consider certain relationship s as if they were a contract.

QUIET ENJOYMENT

The right o f an owner to the use of property without interference with his or her possession or use.

QUITE TITLE

A court action brought to establish title and to remove a cloud from the title.

QUIET TITLE ACTION

A lawsuit designed to remove any clouds on a title to property. It forces the claimant of an adverse interest in property to prove his right to title; otherwise he will be forever barred from asserting it.

QUITCLAIM DEED

A deed to relinquish an y interest in property that the grantor may have, but implying no warranties. A deed that transfers only whatever right, title, or interest, if any, the grantor owns, without implying any warranties.

 

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RADIANT HEATING

A method of heating, usually consisting of coils or pipes placed in the floor, wall, or ceiling.

RAFTER

One of a series of boards of a roof designed to support roof loads.

RANGE

A strip of land six miles wide, determined by a government survey, running in a north-south direction.

RATIFICATION

The adoption or approval of an act performed on behalf of a person without previous authorization. Approval and confirmation of a prior act performed on one's behalf by another person with out previous authority.

READY, WILLING, AND ABLE BUYER

A purchaser of property, w ho is willing to buy on terms acceptable to the seller, and who further possesses the financial ability to consummate the sale. Producing such a buyer sometimes earns the broker a com mission, even though a sale is not forthcoming.

REAL ESTATE BOARD

An organization whose members consist primarily of real estate brokers and salespersons.

REAL ESTATE INVESTMENT TRUST

A specialized form of holding title to property that enables investors to pool their resources and purchase property, while still receiving considerable tax advantages, without being taxed as a corporation. Also known as REIT.

REAL ESTATE TRUST

A special arrangement under federal and state law w hereby investors may pool funds for investments in real estate and mortgages and yet escape corporation taxes.

REAL PROPERTY

Land and anything affixed, incidental, or appurtenant to it, and anything considered immovable under the law. Land, buildings, and other immovable property permanently attached thereto.

REALTOR

A real estate broker holding active membership in a real estate board affiliated with the National Association of Realtors.

RECAPTURE

(1) The rate of interest necessary to provide for the return of an investment. (2) A provision in tax laws that reduces certain benefits from claiming depreciation.

RECONVEYANCE

A conveyance to the landowner of the legal title held by a trustee under a deed of trust. The transfer of property back from a lender who holds an interest as security for the payment of a debt. In a deed of trust, the beneficiary reconveys property upon satisfaction of the promissory note.

RECORDATION

Filing of instruments for record in the office of the county recorder. The act of having a document filed for record in the county recorder's office. Once recorded, the instrument gives constructive notice to the world.

REDEMPTION

Buying back one's property after a judicial sale. The repurchasing of one's property after a judicial sale.

REINSTATEMENT

A right available to anyone under an accelerated promissory note secured by a deed of trust or mortgage on property. If a deed o f trust is foreclosed by trustee's sale, the debtor may have up to three months from the recording of the notice of default to pay the amount in arrears plus interest and costs, thereby completely curing the default (reinstating) without penalty.

REJECTION

Refusal to accept an offer. Repudiation of an offer automatically terminates the offer.

RELEASE

To give u p or abandon a right. The release of rights may be voluntary, as when one voluntarily discharges an obligation under a contract. The release may be involuntary, by operation of the law; for example, one's wrongful conduct may bar him from asserting his rights. In deeds of trust a partial release clause frees certain property from the security of the deed of trust upon the payment of specified sums of money.

RELEASE CLAUSE

A stipulation in a deed of trust or mortgage that upon the payment o f a specific sum o f money to the holder of the deed of trust or mortgage, a particular lot or area shall be removed from the blanket lien on the whole area involved.

RELICTION

The gradual lowering of water from the usual watermark.

REMAINDER

An estate that vests after the termination of the prior estate, such as after a life estate. Example: A life estate may be granted to Adam s, with the remainder granted to Baker. Most commonly, an estate (future interest) that arises in favor of a third person after a life estate.

REMAND

To send back to a lower court for further action.

REMEDY

The means by which a right is enforced, preserved, or compensated . Some of the more common remedies are damage s, injunctions, rescission, and specific performance.

RENT

The consideration p aid by a tenant for possession of property under a lease.

RESCISSION

The unmaking of a contract, and the restoring of each party to the same position each held before the contract arose.

RESCISSION OF CONTRACT

The cancelling of a contract by either mutual consent of the parties or legal action.

RESERVATION

A right or interest retained by a grantor when conveying property; also called an exception.

RESIDUE

That portion of a person's estate that has not been specifically devised.

RESPONDEAT SUPERIOR

This Latin phrase, "let the master answer," means that an employer is liable for the tortuous acts of an employee, and a principal is liable for the acts of an agent. To be liable, the acts must be within the "course and scope" of the agency or employment. For example, an employer would not be liable for the acts of an employee while at home and not doing work for the employer.

RESPONDENT

The person against whom an appeal is taken; the opposite of an appellant.

RESTRICTION

A limitation on the use of real property arising from a contract or a recorded instrument. An encumbrance on property that limits the use of it; usually a covenant or condition.

RETALIATORY EVICTION

A landlord's attempt to evict a tenant from a lease because the tenant has used the remedies available under the warranty o f habitability.

REVERSION

The right a grantor keeps when he or she grants someone an estate that will or may en d in the future. Examples: The interest remaining with a landlord after he or she grants a lease, or the interest an owner of land has after he or she grants someone a life estate. Any future interest (estate) left in the grantor. The residue of an estate left in the grantor after the termination of a lesser estate.

REVOCATION

Withdrawal of an offer or other right, thereby voiding and destroying that offer or right. It is a recall with intent to rescind.

RIDGE

The horizontal line at the junction of the top edges of two sloping roof surfaces. (The rafters at both slopes are nailed at the ridge.)

RIDGE BOARD

The board placed on edge at the ridge of the roof to support the upper ends of the rafters; also called roof tree, ridge piece, ridge plate, or ridgepole..

RIGHT OF SURVIVORSHIP

The right to acquire the interest of a deceased joint-owner. It is the distinguishing feature of a joint tenancy.

RISER

(1) The upright boa rd at the back of each step of a stairway. (2) In heating, a riser is a duct slanted upward to carry hot air from the furnace to the room above.

RULE AGAINST PER PETUITIES

A complex set of laws designed to prevent excessive restrictions on the transferability of property. T he rule hold s that "no interest is good unless it must vest, if at all, no t later than 21 years after some life in being at the creation of the interest."

 

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TAX

A compulsory charge on property or individuals, the payment
of which sup ports a government.

TAX BASIS

The tax value of property to the taxpayer. It is a figure used to compute capital gains and losses.

TAX DEED

Deed issued to the purchaser at a tax sale.

TAX SALE

Sale of property after a period of nonpayment of taxes.

TENANCY

A leasehold estate. (For specific types of leases see Estates.)

TENANCY-IN-COMMON

Ownership by two or more persons who hold an undivided interest in real property, without right of survivorship ; the interests need not be equal.

TENANT

One who leases real property from the owner.

TENEMENTS

All rights in real property that pass with a conveyance of it.

TENTATIVE MAP

The Subdivision Map Act requires subdividers initially to submit a tentative map of their tract to the local planning commission for study. The approval or disapproval of the planning commission is noted on the map. Thereafter, the planning commission requests a final map of the tract embodying any changes.

TENURE IN LAND

The manner in which land is held.

TERMITES

Ant like insects that feed on wood.

TERMITE SHIELD

A shield, usually of non-corrodible metal, placed on top of the foundation wall or around pipes to prevent passage of termites.

TESTAMENT

The written declaration of one's last will.

TESTAMENTARY DISPOSITION

A gift passing b y will.

TESTATE

Describe s a person w ho dies leaving a will.

TESTATOR

A person who makes a will. Technically, a testator is a male and a testatrix is a female, although in common use testator refers to anyone who makes a will.

THIRTY-DAY NOTICE

A notice terminating a periodic tenancy without cause, by ending a tenancy thirty days from date of service.

THREE-DAY NOTICE

A notice giving a tenant three days in which to cure a default or quit the premises. It is the first step in an unlawful detainer action, as the means of terminating a lease for cause. W hen rent is delinquent, it is sometime s called a notice to quit or pay rent.

THRESHOLD

A strip of wood or metal beveled on each edge and used above the finished floor under outside doors.

"TIME IS OF THE ESSENCE"

These words, when placed in an agreement, make it necessary that all time limitations and requirements be strictly observed.

TITLE

Evidence of the owner's right or interest in property. (1) The right of ownership. (2) The evidence of a person's ownership or interest in property.

TITLE INSURANCE

Insurance written by a title company to protect a property-owner against loss if title is defective or not marketable. A special policy of insurance issued by a title company, insuring the owner against loss of or defect in title to the insured property. The policy may be either a CLTA policy, issued to the property owner and to non-institutional lenders, or an ALTA policy, issued to institutional endears.

TOPOGRAPHY

Nature of the surface of the land. Topography may be level, rolling, or mountainous.

TORRENS TITLE

A title included in a state-insured title system no longer used in California.

TORT

(1) A wrongful act. (2) A wrong or injury. (3) Violation of a legal right. A civil wrong, not arising from a breach of contract. Most torts lie in negligence, although they could also be intentional torts (such as assault and battery, trespass) or strict liability torts.

TORTFEASOR

A person who commits a tort.

TORTUOUS

Conduct which amounts to a tort.

TOWNSHIP

A territorial subdivision that is six miles long and six miles wide and that contains 36 sections, each one mile square.

TRADE FIXTURES

Articles of personal property that are annexed to real property but that are necessary to the carrying on of a trade an d are removable by the owner. Fixtures installed to further one 's trade, business, or profession. They are an exception to the general rule that fixtures are part of a building. Such fixtures installed by a tenant may be removed before the expiration of the tenancy.

TRADE-IN

Method of guaranteeing an owner a minimum amount o f cash on the sale of his or her p resent property to permit him or her to purchase another. If the property is not sold within a specified time at the listed p rice, the broker agrees to arrange financing to purchase the property at an agreed-upon discount.

TRANSFER

Conveyance; passage of title.

TRANSFEREE

The person to whom a transfer is made.

TRANSFEROR

The person who makes a transfer.

TREADS

Horizontal board s of a stairway.

TRESPASS

An invasion of an owner's rights in his or her property. (1) Unauthorized entry onto another's land. (2) Invasion o f another's rights or property.

TRESPASSER

One who trespasses. The importance of this classification of individuals on property is created by the methods for removal and the liability of the property owner if the trespasser is injured o n his property.

TRIM

The finish materials in a building, such as moldings applied around openings (window trim, door trim) or at the floor and ceiling (baseboard, cornice, picture molding)..TRUST A right of property, real or personal, held by one party called the trustee for the benefit of another party called the beneficiary. Arrangement whereby one person holds property for the benefit of another under fiduciary (special confidential) relationship.

TRUST DEED

Deed given by a borrower to a trustee to be held pending fulfillment of an obligation, which is usually repayment of a loan to a beneficiary. A deed of trust.

TRUSTEE

One who holds property in trust for another. The person who holds property in trust for another. In a deed of trust, the person who hold s bare legal title in trust.

TRUSTEE'S DEED

The deed issued by the beneficiary after the foreclosure and sale under a de ed of trust.

TRUSTEE'S SALE

The private sale of property held b y a trustee under a deed of trust as part of the foreclosure proceedings.

TRUSTOR

(1) One who conveys his or her property to a trustee. (2) T he borrower or debtor under a deed of trust.

TRUTH IN LENDING LAW

A complex set of federal statutes designed to provide a borrower with a means of discovering and comparing the true costs of credit. Under Regulation Z of the act, certain borrowers of property have three days after accepting a loan to rescind without cost or liability.

 

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UNDUE INFLUENCE

Taking any fraudulent or unfair advantage of another's necessity or weakness of mind. Using a position of trust and confidence improperly to persuade a person to take a course of action By relying on the trusted confidant, the decision maker fails to exercise is free w ill and independent judgment.

UNEARNED INCREMENT

An increase in value of real estate due to no effort on the part of the owner, often due to an increase in population.

UNENFORCEABLE

Incapable of being enforced at law. An example of an unenforceable contract is an oral listing agreement to pay a broker a commission.

UNIFORM COMMERCIAL CODE

A group of statutes establishing a unified and comprehensive scheme for regulation of security transactions in personal property and other commercial matters, superseding the existing statutes on chattel mortgages, conditional sales, trust receipts, assignment of accounts receivable, and other similar matters.

UNJUST ENRICHMENT

A legal doctrine that prevents a person from inequitably benefiting from another 's mistake, poor judgment, or loss. In a land sales contract the vender m ay no longer keep both the property and the buyer's excess payments (over his damages) in the event of breach, because to do so would unjustly enrich him at the buyer's expense.

UNLAWFUL

Illegal.

UNSECURED DEBT

A debt no t backed b y specific property to satisfy the indebtedness in case of default.

URBAN PROPERTY

City property; closely settled property.

USURY

Claiming a rate of interest greater than that permitted by law. Charging Charging a greater rate of interest on loans than the rate allowed by law (10 percent in many cases).

 

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WAIVE

To give u p a right.

WAIVER

Giving up of certain rights or privileges. The relinquishment may be voluntary and knowing, or it may occur involuntarily thro ugh action o f the parties. T he action resulting in the waiver is unilateral, and requires no action or reliance by the other party.

WARRANTY

An absolute undertaking or promise that certain facts are as rep resented. Occasionally used interchangeably with guarantee.

WARRANTY DEED

A deed that is used to convey real property and that contains warranties of title and quiet possession; the grantor thus agrees to defend the premises against the lawful claims of third persons. It is commonly used in other states, but in California the grant deed has replaced it. Used predominantly in states that do not have title insurance companies. This deed contain s six full warranties o f protection to the buyer, including warranties that the seller own s the property, that it is unencumbered, an d that the seller will defend title against any defects.

WARRANTY OF HABITABILITY

Implied warranty in residential leases. The landlord covenants by implication that the premises are suitable for human occupancy. The implied warranties are found in the statutes and implied by common law.

WASTE

The destruction, or material alteration of or injury to premises by a tenant-for-life, or tenant, or tenant-for-years. Example: a tenant cutting down trees or mining coal. The destruction, in jury, material alteration, or abusive use of property by a person rightfully in possession, but who does not own the fee or entire estate (for example, by a lessee or life tenant).

WATER TABLE

Distance from the surface of the ground to a depth at which natural ground water is found.

WILL

A document that directs the disposition o f one's property after death.

WITNESSED WILL

A formal will, signed by the testator in the presence of two or more witnesses, each of whom must also sign the will.

WRAP AROUND MORTGAGE

(DEED OF (See All-Inclusive Deed o f Trust.) TRUST)

WRAP-AROUND DEED OF TRUST

A sophisticated financing package that permits the seller to sell his property without paying off the outstanding deed of trust. The buyer's larger loan, which is used to purchase the property, includes provisions for paying off the seller's existing loan.

WRIT

A process of the court under which property may be seized. An order from the court to the sheriff or other law enforcement officer directing and authorizing a specific act.

WRIT OF ATTACHMENT

A writ authorizing and directing the physical attachment (seizure ) of property.

WRIT OF EXECUTION

An order directing the sheriff to seize property to satisfy a judgment.

WRIT OF IMMEDIATE POSSESSION

An order authorizing a landlord to obtain immediate possession of a tenant's premises, pending the outcome of an unlawful detainer action or other court proceeding.