Real Estate State Exam Vocabulary

Bundle of Rights

Bundle of Rights

The rights of an owner to possess, control, enjoy, and have disposition of the property.

Real Property

Land and everything permanently attached to it that is immovable and runs with the land.

Personal Property

Movable items that does not go with the land when it is sold.

Fixture

Personal property that has been converted to real property by being permanently fixed to the land. (Example: Chandelier)

Trade Fixture

Personal property that is owned by and needed for a tenant's business, and does not stay with the land despite being fixed to it.

Riparian Rights

Rights granted to owners of land located along moving bodies of water such as a river or a stream.

Littoral Rights

RIghts granted to owners of land located along static bodies of water such as a lake, sea or ocean.

Accretion

Increase in amount of land due to natural causes. (Example: Waters receding)

Avulsion

The sudden tearing away of land by water.

Reliction

Gradual recession of water leaving land permanently uncovered.

Appurtenances

Real property that goes with the land. (Example: easements, documents of water companies, covenants and minerals in the ground)

Fee Simple Defeasible

Conditions, on the use of the property if the conditions are violated you can have a loss of title.

Fee Simple Estate

A type of freehold estate, can be sold and inherited and is not free of encumbrances. Fee simple absolute is the most interest one can hold in the land.

Life Estate

An interest in real property that lasts the length of someones life. It is a type of freehold estate because of it's indefinite duration.

Life Estate pur autre vie

Interest in real property that lasts the length of someone's life who is not the life tenant. It is a type of freehold estate because of its indefinite duration. When measuring life ends title reverts to owner.

Less Than Freehold Estate

Title is held for a defined length of time

Estate for Years

Estate or a tenancy lasting for a fixed period of time, with no notice of termination being needed. (Ex: memorial day to labor day weekend summer rental)

Periodic Tenancy

A less then field estate, when tenancy is renewed periodically. (Ex: week to week, month to month or year to year.)

Estate at Sufferance

A type of less than free old estate where the tenant continues to occupy the property after the lease or rental agreement has ended.

Estate at will

A less than free old estate that can be ended at anytime by the landlord or the tenant.

Chattel Real

Tangible movable personal property

Leases

A leasehold estate contract between a lesser and lesse which gives possession but not ownership to the lessee. The tenant does not need to sign a lease to become a lessee acting as a lesse is enough. Considered personal property.

Percentage Lease

A lease where the amount of rent paid by the lessee is a percentage of the gross income of the lessee's business. (Ex: A commercial parking lot)

Net Lease

Is a lease in which the tenant pays for insurance and maintenance in addition.

Gross Lease

A lease in which the tenant pays a fixed amount to the land lord. (Ex: Paying a thousand dollars a day.)

Sandwich Lease

When a existing tenant sublets the property to a third party. The lessee in this situation is also the lessor. Because They have a lessor above them but they also have a lessee below them.

Sale lease back

The selling of an owned asset to a lessor and the leasing of the asset back. The vendor becomes the lessee.

Tenant Improvement Allowance

The amount a landlord is willing to spend so the tenant can renovate a commercial space to be more appropriate for whatever it is they are doing.

Abandonment

Voluntarily giving up the rights and responsibilities of possession of a property.

Subleases

When an existing tenant sub-lets (or leases again) the property to a third party. The lessee becomes the lessor.

Assignment

When one party passes responsibility on to another.

Surrender

Giving up possession of the property

Constructive Eviction

When a landlord does something or fails to do something that they are legally obligated to do rendering the property uninhabitable. (Ex: Making sure the water doesn't work or that there's no heating when it's freezing.)

Estoppel Statement

A signed statement certifying that certain facts are correct. Which cannot be later contradicted by the signer. (Ex: That a lease exists or that is rent is paid to a certain date.)

Deed

Evidence of property transfer, as opposed to title, shows ownership. (Ex: Shows ownership transferred from one party to another. Like a receipt.)

Grant Deed

A deed that includes two implied warranties. One, the grantor has not already given the title to another person. Two the estate has no undisclosed encumbrances.

Quitclaim Deed

A deed that operates as a release, it transfers property quickly without any warranties on the title of any kind. (Ex:Typically used when transferring ownership from father to a son or close friends.)

Warranty Deed

A deed in which a property owner transfers the title warrants that he owns the property free and clear of all liens. (Ex: its saying no money is owed

Special warranty deed

A deed in which the grantor warrants only against defects that occurred during their ownership. The grantor does not provide any warranty or guarantee against any defects that existed before they owned it.

General warranty deed

A type of deed where the grantor or the seller guarantees that he or she holds clear title to a piece of real estate and has a right to sell it. The guarantee is not limited to the time the grantor owned the property and extends back to the property's origins.

Bargain and sale deed

A deed that conveys real property without covenants and the grantor is implied to hold title and possession. But there is no warranty against encumbrances.

Reconveyance deed

A deed that indicates the borrower is released from mortgage debt and transfers the property title from the lender or beneficiary to the borrower. (Most commonly issued when a mortgage has been paid in full.)

Title

Shows ownership of the bundle of rights of property. (Hint: T)

Chain of title

A record of all previous owners of a particular parcel of land. (Hint: It is important when deciding to issue title insurance to know who owned it previously)

Abstract of title

A summary that provides details of the titles deeds and documents that proves an owners right to dispose of the land together with any encumbrances that relate to the property.

Cloud on title

Shows defects in the title (Ex: An unreleased lien or encumbrances that may invalidate or impair a title.)

Quiet title action

A court action to remove a cloud on the title or another claim that has been placed on title to a property. Thus quieting any challenges or claims to the title.

Alienation of title

A loss of title.

Title Insurance

Ensures against any losses due to defects or problems with the title after it has been searched or examined. It ensures buyer is getting a clean title.

Standard policy of title insurance

A Insurance policy most buyers get to protect themselves from forgery in the chain of title or defective delivery of a deed. (Does not cover a site of inspection or a survey)

Extended policy of title insurance.

A insurance policy with increased coverage, it helps with the dispute over property lines which are disclosed by a survey and it covers improvements on an adjoining land.

Estate in severalty

A property owned by just one individual or corporation.

Concurrent estate

A property owned by more then one person.

Joint tenancy

A type of concurrent ownership with unities of time title interest and possession. (Hint: Right of survivorship.)

Tenancy in common

A concurrent ownership with unity possession only. It does not have the other unities that joint tenancy has. (Hint:There is no automatic right of survivorship.)

Encumbrances

A burden on the property it is a claim, lien, charge and a liability attached to real property. The title can still be transferred.

Easement

The right to enter or use someone else's land for special purposes within limits. (Hint: a land that has this condition is encumbered.)

Dominent tenement

A land enjoying an easement that could terminate an easement by recording a quitclaim deed.

Servient tenement

A land burdened by an easement. (Hint: Much larger then the dominant tenement.)

Easement by prescription

A easement granted after someone has used or entered the land for a period of time that is given a legal right to continue to do so.