Starred Definitions TX Real Estate

Intermediary practice

Dual agency permitted with written consent of all parties

Duties to client

Honest, loyalty, confidentiality, accounting, disclosure, skill & care (minimum services)

Statute of frauds

Contracts for sale/lease over 1 year must be in writing

Community property

50/50 ownership of property acquired during marriage

Mechanic’s & materialism’s liens

Contractors can place liens for unpaid work

Equitable interest

Buyer may hold equitable title before closing

Immobility

A fundamental physical characteristic indicating that land and its permanent improvements (houses, buildings) cannot be moved from one geographic location to another

Indestructibility

Refers to physical permeanance of land, a fundamental characteristic stating that land cannot be destroyed or consumed

Uniqueness

(also known as non-homogeneity or heterogeneity) is a foundational legal and physical characteristic of land, stating that no two parcels of real estate are exactly alike

Permanence

This represents the long-term, stable nature of investments in infrastructure—such as sewage, drainage, and electricity—which cannot be easily moved or removed

Area preference

This refers to people’s choices and preferences for a particular area based on factors like proximity to work, school, or amenities

Ordinary life estate

A form of joint property ownership created by deed or will, granting a “life tenant” the right to possess, use, and enjoy a property for their lifetime

Pur autre vie life estate

Life estate is a form of ownership where a person (the life tenant) holds a legal interest in a property based on the lifespan of a third party, rather than their own

Estate for years

A leasehold interest with a fixed, predetermined start and end date, such as a six-month lease or a two-year commercial contract. It automatically terminates at the end of the term without requiring notice from either party

Periodic estate

A leasehold agreement that continues for successive, automatic renewal periods (e.g., month-to-month, week-to-week) without a specified end date

Tenancy at will

An informal, often verbal, rental arrangement where a tenant occupies property with the landlord’s consent without a fixed term or specific end date. Either party can terminate the agreement at any time, though reasonable notice is generally required

Tenancy at sufference

When a tenant remains in possession of a property after their lease has expired without the landlord’s consent

Tenancy in common

The default form of co-ownership for two or more people in Texas, where each party holds an undivided, separate interest in the property without a right of survivorship

Joint tenancy

A form of co-ownership where two or more individuals hold an equal, unidvided interest in real estate, typically featuring a right of survivorship

Tenancy by entirety

A specialized form of joint ownership for married couples, providing right of survivorship and protection against individual

General lien

Attaches to all of a debtor’s assets, including real estate and personal property, usually arising from court judgements or unpaid taxes

Specific lien

Attaches only to one particular property (e.g., a mortgage or mechanic’s lien)

Appurtenant easements

Attaches to and benefits a specific parcel of land (the dominant estate), running with the land regardless of ownership changes

Easement in gross

Benefits a specific individual or entity (e.g., utility companies) rather than a property, and generally does not transfer with the land

Nonjudicial foreclosure

The predominant method, allowing lenders to sell a property via a trustee without court involvement, typically taking 60-90 days, provided the deed of trust contains a “power of sale” clause

Judicial foreclosure

Requires a lawsuit to obtain a court order before selling the property, which is rare and generally used only when a power of sale is absent

General warranty

The strongest form of property transfer, where the seller (grantor) guarantees a clear, defect-free for the entire chain of ownership, extending back of sovereign

Special warranty

A legal document transferring real estate ownership where the seller (grantor) only guarantees the title against defects or claims that arose during their specific period of ownership

Bargain & sale

Transfers real estate ownership from grantor to grantee, implyiing the seller holds title and the right to convey it, but offering no warranties against prior liens or defects

Quitclaim

A legal document that transfers whatever interest (if any) a grantor has in a property to a grantee, without making any guarantees about the title’s validity

Chain of title

The chronological, public record of ownership transfers for a specific property, tracing it from the current owner back to the original grantor

Actual notice

Direct, personal knowledge of a fact (seeing a deed or being told of a claim)

Constructive notice

Information the law deems a party should know, such as records properly filled in county clerk’s offices

Express

Is a relationship created through a direct, explicit, and usually written agreement between a principal and a licensee

Implied

Is created by the actions and conduct of the parties, suggesting representation exists despite lacking a formal, written agreement

Ratification

When a principal retroactively approves or accepts the benefits of an agent’s unauthorized action, creating a binding agency relationship after the fact

Estoppel

Occurs when a property owner’s (principal’s) words or conduct lead a third party to reasonably believe another person is their agent, even without a formal agreement

Fulfillment

Refers to the premature cancellation of a purchase contract, often occuring because a contractual condition—or “contingency” —was not met or satisfied by the required deadline

Operation of law

Refers to the automatic transfer of property rights, title, or obligation due to established legal principles, rather than by a direct contract, sale, or voluntary action

FHA

A government-backed mortgage insured by the Federal Housing Administration, designed to make homeownership more accessible for modernate-to-low-income borrowers, first-time buyers, or those with lower credit scores

VA

A 0% downpayment mortgage, program for veterans, active-duty service members, and eligible surviving spouses, guaranteed by the U.S. Department of Veteran Affairs

USDA

A 0% down payment mortgage backed by the U.S. Department of Agriculture, designed for low-to-moderate-income buyers purchasing homes in eligible rural and suburban areas

USTs

Are defined as any tank, including connected underground piping, that has at least 10% of its combined volume underground and is used to store petroleum products or certain hazardous substances

Steering

The illegal practice of influencing a buyer’s or renter’s choice of housing—directing them forward or away from specific neighborhoods or homes-based on race, color, religion, sex, national origin, familial status, or disability

Blockbusting

An illegal, discriminatory practice where agents include homeowners to sell quickly—often below market value—by exploiting fears that minority groups are moving into the neighborhood

Redlining

The illegal, discriminatory practice where lenders and insures deny or limit financial services—such as mortgages or home insurance—based on the racial or ethnic composition of a neighborhood rather than an applicant’s creditworthiness

Negligence

Occurs when a party—property owner, broker, or agent—fails to use reasonable care, resulting in damages, injuries, or financial loss to another

Accretion

The slow, gradual accumulation of soil, sand, or sediment along a shoreline or riverbank caused by natural water movement

Avulsion

The rapid, perceptible loss or addition of land caused by a sudden natural event, such as a flood, hurrican, or a river rapidly changing its channel

Bundle of rights

Refers to the set of legal privileges—possession, control, exclusion, enjoyment, and disposition—acquired with property ownership

Emblements

(also known as fructus industriales) refer to annual crops cultivated by a tenant farmer on land leased from someone else. Considered personal property of the tenant

Novation

A legal process where all parties mutually agree to replace an existing contract with a new one, extinguishing the original obligations and substituting a new party or terms

Assignment

The transfer of a buyer’s equitable rights and obligations under a purchase contract to a new party (assignee) before closing

Addendum

A legally binding, supplemental document attached to a purchase contract to add, clarify, or modify terms before the contract is fully executed, ensuring specialized conditions are met

Reprimand

A severe form of warning. While it does not immediately suspend or revoke a license, it signals that the licensee has committed a violation that is now a public record

Commingling

The mixing of separate property (owned before marriage, inherited, or gifted) with community property (acquired during marriage) in a way that makes them difficult to distinguish. Ex. depositing personal, pre-marital funds into a joint bank account, using personal funds to pay for repairs on a spouse’s home, or combining funds to purchase a new property

Earnest money

A “good faith” deposit made by a buyer to the seller, typically 1%-3% of the purchase price, to demonstrate a serious intent to purchase

Seller’s agent

Represents the seller or landlord. Relationship established through written listing agreement

Buyer’s agent

Represents the buyer or tenant. Usually created by a written buyer representation agreement

Subagent

A license holder who works with a buyer but actually represents the seller. If you are a buyer and have not signed a representation agreement, any agent showing you a house is technically a subagent of the seller. Must treat you honestly but owe their fiduciary loyalty

Intermediary

A broker who facilitates a transaction where the buyer and seller are both clients of the same brokerage

Option period

A negotiated number of days after a contract is executed during which a buyer has the unrestricted right to terminate the contract for any reason

Financing addenda

Specialized legal documents attached to a real estate purchase contract that outline how a buyer will fund the property and established conditions under which they can terminate the contract if that funding fails

Disclosure notices

Mandatory documents used to reveal material facts about a property’s condition and the nature of the legal relationships involved

Self-dealing

Refers to a situation where a real estate license holder—who has a fiduciary duty to act in their client’s best interest—instead prioritizes their own personal gain or the interests of a closely related party in a transaction

Trust account

A specialized financial account maintained by a broker to hold “trust money” - funds belonging to others, such as earnest money or security deposits—separate from the broker’s personal or business funds

IABS timing

Refers to. thestrictly regulated moment a real estate license holder must provide the Information About Brokerage Services (IABS) form to a consumer

Deposit deadline

Earnest money must be deposited by the close of business on the second working day following recipet, unless otherwise agreed

Disbursement deadlines

Funds must be disbursed within 30 days of a written demand or upon a signed agreement changing disbursement terms

Commission withdrawal

Earned commissions in the trust account must be removed within 30 days of the broker becoming entitled to them

Record keeping

Documents must be retained for four years

Metes & bounds

A system for legally describing property by detailing its perimeter using specific directions, distances, and physical landmarks (bounds) from a “defined” point of beginning,” creating precise boundaries for irregularly shaped parcels

Lot & block

Method for legally describing and identifying specific properties, most commonly in suburban and urban residential subdivisions

Government survey (or recentagular survey system)

Destines land using a grid of Principles Meredians (N-S) and base lines (E-W), creating townships (6×6 miles) and sections (1×1 miles/640 acres)

(CC&Rs)

Legally binding rules, typically by a developer or HOA, that limit property use for community harmony, preserving values, and aesthetics, covering things like fence height, paint colors, pet types, and “run with the land,” binding all future owners

General warranty deed

Protects the buyer (grantee) against title issues for the property’s entire history, with the seller (grantor) guaranteeing a clear title from the beginning

Special warranty deed

Guarantees the title is free from claims or defects that arose during the seller’s ownership, offering less protection as it doesn’t cover issues from prior owners, and is common in commerical sales or foreclosures

Statute of limitations

Sets time limits for filing lawsuits, most commonly four years for actions like breach of contract, fraud, specific performance of a property contract, or breach of fiduciary duty, starting when the claim accrues

Exclusive right to sell

The agent gets paid no matter who finds the buyer (even the seller)

Exclusive agency

The seller keeps the right to find a buyer themselves and pay no commission to the agent, though the agent still markets it and earns a commission if they find the buyer

Lien theory state

The borrower holds both legal and equitable title, and the mortgage acts merely as a lien against the property until paid off, impacting foreclosure procedures

Title theory state

The lender technically holds the property’s title via a deed of trust until the loan is paid, while the borrower keeps equitable title (night to use/possess)

360 day closing day ownership

30-day months often used for loan interest

365-day closing day ownership

Methods for prorating items like property taxes or HOA dues depends on the specific item and local custom with 365 (actual days) used for most expenses like taxes (closer to reality)