Real Estate Key terms 9-15

asbestos

 a mineral once used in insulation and other materials that linked to respiratory diseases

building codes

regulations established by state and local governments setting forth the structural requirements for building

building permit

written governmental permission for the construction, alteration, or demolition of an improvement, showing compliance with building codes and zoning ordinances

carbon monoxide

a colorless, odorless gas that occurs as a by-product of fuel burning. This poisoning has been linked to dizziness, nausea, and death

CERCLA

A federal law administered by the EPA that establishes a process for identifying parties responsible for creating hazardous waste sites, forcing liable parties to clean up toxic sites, bringing legal action against responsible parties, and funding the abatement of toxic sites.

Certificate of Compliance

 inspectors statement that property is fit for human habituation

Certificate of Occupancy(CO)

document issued by a municipal authority stating that a building complies with building, health, and safety codes and may be occupied

condemnation

court action by which a government takes private property, exercising the right of eminent domain

deed restriction

 an imposed restriction in a deed for the purpose of limiting the use of the land by future owners

Department of environmental protection (DEP)

New Jersey agency overseeing natural resources

Eminent Domain

the right of a government or quasipublic body to acquire property for public use through a court action called condemnation

Escheat

the reversion of property to the state or county, as provided by state law, in cases where a decedent dies intestate without heirs capable of inheriting or when the property is abandoned

Exclusionary Zoning

local regulations that discriminate, usually against low-income housing

inverse condemnation

 an action brought by a property owner seeking just compensation for diminished use and value of land because of adjacent properties public use

lead-based paint

paint or other surface coating that contain lead

Master plan

a comprehensive plan to guide the long-term physical development of a particular area

nonconforming use

a use of a property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area

police power

the government's right to impose laws, statutes, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, and welfare

radon

a naturally occurring radioactive gas that is suspected of causing lung cancer

urea-formaldehyde

 a foam material that was once used for insulating purposes in residential construction

variance

permission obtained from zoning authorities to build a structure or conduct use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances

zoning ordinances

an exercise of police power by a  municipality to regulate and control the character and use of the property

Comparative Market Analysis(CMA):

study intended to assist an owner in establishing a listing price for a property

Exclusive agency listing:

a listing contract under which the owners appoint a real estate broker as their exclusive agent for a designated period of time to sell the property on their stated terms, for a commission. The owners reserve the right to sell on their own without paying anyone commission

Exclusive right to sell listing:

a listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time, to sell the property on the owners state terms, and agrees to pay the broker a commission when the property is sold, where the broker, the owner, or another broker

Multiple listing service:

an organization in which brokers share listings with each other

Net listing:

a listing based on the net price the seller will receive if the property is sold. Under this the broker is free to offer the property for sale at the highest price he or she can get to increase the commission. This type of listing is illegal in NJ

Open listing:

a listing contract under which the brokers commission is contingent upon the brokers producing a ready, willing and able buyer before the property is sold by the owner or another broker

addendum

any provision added to an existing contract without altering the content of the original. Must be signed by all parties

amendment

a change to the existing content of a contract(if words or provisions are added to or deleted from the body). Must be initialed by all parties

assignment

The transfer, in writing, of interest in a contract, mortgage, lease, or other instrument

bilateral contract

 an agreement entered into by two or more legally competent parties that is binding on all parties

breach of contract

violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due

Competent parties:

those recognized by law as being able to contract with others usually those of legal age and sound mind

Consideration

something of value that induces a person to enter into a contract. may be valuable or good(love and affection)

Contingency:

certain happening without which a contract will not be valid

contract

an agreement entered into by two or more legally competent parties by the terms of which one or more of the parties, for a consideration, undertakes to do or refrain from doing some legal act or acts

Counteroffer:

a new offer made as a reply to an offer received

Earnest money:

money deposited by a buyer that is applied to the purchase price if the sale is closed

Equitable title:

the interest held by a vendee under a land contractor or an installment contract; the equitable right to obtain absolute ownership to property when legal title is held in another's name

Escape clause:

protection for seller with a contract, is subject to the sale of buyers present home

Executed contract:

1. A contract in which all parties have fulfilled their promises and thus performed the contract. 2. A signed contract

Executory contract:

a contract under which something remains to be done by one or more of the parties

Express contract:

an oral or written contract in which the parties state the contract terms and express their intentions in words

Implied contract:

a contract under which the agreement of parties is demonstrated by their acts and conduct

land contract

lease-option

Liquidated damages:

sum agreed upon to serve as compensation if one party defaults

Novation:

substitution of a new contract for an existing one

Offer and acceptance:

two essential components of a valid contract; a meeting of the minds, when all parties agree to exact terms

Option:

an agreement to keep open for a set period an offer to sell or purchase property

Parol evidence rule:

agreement that the written contract overrides spoken promises

recission

the act of rescinding a contract

Right of first refusal:

a provision in a lease or other document that allows, but does not require, a potential interested party to make an offer for a property before the seller negotiates or accepts any other offer

Specified performance:

a legal remedy whereby one party seeks to force another party to perform the promises specifically made in the contract

Statute of frauds:

the part of state law requiring certain instruments such as deed, real estate contracts, and certain leases to be in writing for them to be legally enforceable

Statute of limitations:

that law pertaining to the period of time within which certain actions can be brought to court

Time is of the essence:

a phrase in a contract that requires the performance of a certain act within a stated period of time

unenforceable contract:

a contract that seems on the surface to be valid, yet neither party can sue the other to force performance of it

Unilateral contract:

an agreement that is binding on only one of the parties

Valid contract:

a contract that comp[lies with all the essentials of a contract and is binding and enforceable on all parties to it

voidable contract:

a contract that seems to be valid on the surface but may be rejected or disaffirmed by one of the parties

Actual eviction:

action whereby defaulted tenant is physically ousted from rental property pursuant to a court order

Americans with Disabilities Act(ADA):

mandates certain adaptations of real estate to accommodate various disabilities

Constructive eviction:

landlord actions that so materially disturb or impair the tenants enjoyment of the leases premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent

Demise:

transfer of property by lease

Estate for years:

an interest for a certain, exact period of time in property, leased for a specified consideration

Gross lease:

a lease of property under which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, and insurance

Ground lease:

a lease of land only, on which the tenant usually owns a building or constructs a building as specified in the lease

Holdover tenancy:

a tenancy whereby a lessee retains possession of leased property after his or her lease has expired and the landlord, by continuing to accept rent, agrees to the tenants continued occupancy

Implied warranty of habitability:

landlords responsibility for decent living conditions

Lease:

written or oral contract between a landlord and a tenant that transfers the right to exclusive possession and use of the landlord real property to the lessee for a specified period of time and for stated consideration

Lessee:

in a lease, the tenant

Lessor:

in a lease, the landlord

Management agreement:

a contract between the owner of income property and a management firm or individual property management firm or individual property manager that outlines the scope of the manager authority

Net lease:

a lease requiring the tenant to pay not only the rent but also some or all costs of maintaining the property, such as taxes, insurance, utilities and repairs

Percentage lease:

a lease commonly used in malls; rent is based on the tenant gross sales

Periodic estate:

an interest in leased property that continues from period to period- week to week, month to month or year to year

Property manager:

someone who manages real estate for another person for compensation

Sublease:

a transfer of a portion of an existing lease in which a new tenant who pays them, the existing tenant, directly

Suit for possession:

landlords court action to evict tenant

Summary proceeding:

court action by which landlord seeks to evict a tenant who has breached their lease. Also known as dispossess proceeding

Tenancy at sufferance:

a situation in which a tenant comes into possession of land by lawful title and keeps it afterward without any right at all

Tenancy at will:

an estate that gives the lessee the right of possession until the estate is terminated by either party; the term of this estate is indefinite

Truth-in-renting:

New Jersey requirement that tenants be informed of their rights; the notice must be available in English and Spanish

Acceleration clause:

the clause in a note or mortgage that can be enforced to make the entire debt due immediately if the mortgagor defaults

Alienation clause:

the clause in a mortgage stating that the balance of the secured debt becomes immediately due and payable at the mortgagee's option if the property is sold or title is otherwise transferred

Bond:

the instrument that creates a personal obligation for debt that is secured by a mortgage or other lien on real estate

Default:

the nonperformance of duty whether arising under a contract or otherwise; failure to meet the obligation when due

Defeasance clause:

a clause used in leases and mortgages that cancels specified right upon the occurrence of a certain condition, such as cancellation of a mortgage upon repayment of the mortgage

Deficiency judgement:

a personal judgement levied against the mortgagor when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full

Estoppel certificate:

a document in which the borrower certifies the amount he or she owes a mortgage loan and the rate of interest

Foreclosure:

a procedure whereby the property pledged as a security for a debt is sold to pay the debt in the event of default in payments or terms

Hypothecation:

a pledge of property as security for a loan without giving up possession of it

Mortgage:

a conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien

Mortgagee:

a lender in a mortgage loan transaction

Mortgagor:

a borrower who conveys his or her property as security for a loan

Note:

an instrument of credit given to attest a debt

Prepayment:

process by which a borrower pays down the principal on a loan before the amount is due

Real estate owned(REO):

property acquired by banks and other lenders through foreclosures

Reduction certificate:

the document signed by a lender indicating amount required to pay a loan balance in full and satisfy the debt; used in settlement process to protect both sellers and buyer interests